t /t Cl Cornell University Library KF1135.P27 V.2 A treatise on the law of marine insuranc 3 1924 018 936 371 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31 92401 8936371 THE LAW OF MARmE INSURANCE. VOL. II. TREATISE LAW OF MARINE INSURANCE GENERAL^ AVERAGE. THEOPHILUS JPARSONS, LL.D., BASE PKOFESSOH OF LAW IN HAEVAED UMIVEESITY, AT CAMBRIDGE. IN TWO VOLUMES. VOL. II. BOSTON: LITTLE, BROWN, AND COMPANY. 1868. fopG ■i. A 3T/S" Entered according to Act of Congress, in the year 1868, by THEOPHILUS PAE80N8, in tile Clerli's Office of tlie District Court of tlie District of Massacliusetts. University Press: Welch, Bigelow, & Co., Cambridge. CONTENTS OF VOLUME II. CHAPTER I. Op Deviation. SECTION I. Pagb What is meant by Deviation 1 SECTION II. Of the Effect of a Deviation 5 SECTION III. What is a Deviation from the Proper Course of a Voyage . . 6 ' SECTION IV. Of Liberty Pohcies 16 SECTION V. That a Deviation must be Voluntary .28 SECTION VI. Of Intended Deviation . . . . . . . . .36 CHAPTER II. * Of the Termini op the Voyage, and of the Kiss. SECTION I. That these Termini must be distinctly stated 43 IV CONTENTS OF VOLUME H. SECTION II. Of the Commencement of the Risk 43 SECTION III. Of the Termination of the Risk 53 SECTION IV. Of a Loss after the Expiration of the Risk . . . . .65 CHAPTER III. Of Actual Total Loss • .68 Actual Total Loss on Cargo ........ 93 Of the English Doctrine of Loss at the Port of Destination . 96 Of the English Doctrine of Loss at an Intermediate Port . 99 Of the American Doctrine of Loss at the Port of Destination . 102 Of the American Doctrine of Loss at an Intermediate Port . 103 CHAPTER IV. Of Constructive Total Loss and Abandonment. SECTION I. Of the Distinction between Actual and Constructive Total Loss . 107 SECTION II. Of an Abandonment IH SECTION ni. Of Abandonment of the Ship 120 r SECTION IV. Of Abandonment of the Cargo . . . . . . .151 SECTION V. Of Abandonment of Freight, Profits., and Commissions . . .160 CONTENTS OF VOLUME U. T SECTION VI. Of the Form and Manner of Abandonment 172 SECTION VH. Of the Acceptance of Abandonment 177 SECTION VIIL At what Time the Abandoment may or should be made . . . 179 SECTION IX Of the Revocation of the Abandonment 190 SECTION X. Of the Effect of an Abandonment 194 CHAPTER V. Genebai, Average. SECTION I. Of the Meaning of General Average 201 SECTION II. That there must be a Voluntary Sacrifice of Property for the Benefit of other Property 210 SECTION III. The Sacrifice must not be caused by the Fault of the Owner . . 217 SECTION IV. The Loss must not be caused by a mere Peril of the Sea . . 227 SECTION V. Of the Consequences of a Sacrifice 232 SECTION VI. Of Voluntary Standing 241 VI CONTENTS OF VOLUME D. SECTION VII. Of a Sale by the Master 247 SECTION VIII. What Expenses come into General Average ..... 252 SECTION IX. The Sacrifice must be Successful . 276 SECTION X. The Sacrifice must be Necessary . 282 SECTION XI. Where the Property sacrificed wquld hf^ve been inevitably lost . 287 SECTION XII. The Claim on the Insurers 289 CHAPTER VI. Adjustment of General Average. SECTION I. What Losses are adjusted on General- Average Losses . . . 294 SECTION II. When the Loss of the Ship is to be adjusted as a General-Average Loss 301 SECTION III. When the Cargo should be contributed for 306 SECTION IV. When Loss of Freight is to be adjusted as a General- Average Loss 309 SECTION V. When a Loss of Profits is so adjusted 311 CONTENTS OF VOLUME n. TU SECTION VI. What Expenses are adjusted as a General- Average Loss . . 311 SECTION VII. Of the Value of the Contributory Interests 326 A. Of the Ship 326 B. Contributory Value of the Freight 332 SECTION VIII. What Goods contribute, and what is their Contributory Value . . 337 SECTION IX. A. Of the Force and Effect of an Adjustment . . '. . 348 B. Of a Foreign Adjustment 360 SECTION X. Of the Enforcement of the Payment of Contributory Shares . . 371 CHAPTER VII. Of Partial Loss or Particular Average .... 377 SECTION I. Partial Loss of the Ship 379 SECTION II. Partial Loss of Goods 399 SECTION III. Partial Loss of Freight 402 SECTION IV. Of the Adjustment of Partial Loss ...... 405 A. Of the Adjustment of a Partial Loss on the Ship . . 406 B. Of the Adjustment of a Partial Loss on Goods . . . 408 VIU CONTENTS OF VOLUME H. CHAPTEE VIII. Op Agents. SECTION I. Of Insurance Agency in General ....... 416 SECTION II. Of the Powers of Agents ...» 418 SECTION III. Of the Duties of Agents 424 SECTION IV. On the Eights of Insurance Agents 432 SECTION V. Of Voluntary Agents 4.35 Of Class A 435 Of Class B 436 CHAPTER IX. Of Action. SECTION I. Of the Form of the Action 441 SECTION II. Who can bring an Action on a Policy ...... 442 SECTION IIL Against whom the Action may be brought ..... 468 SECTION IV. Of Rights of Action acquired by Insurers 488 CONTENTS OF VOLUME II. IX SECTION V. Of the Rights of Insurers as Assignees by Abandonment * . . 492 SECTION VI. Of an Action by one effecting or ordering Insurance through an Agent 500 CHAPTER X. Of Evidence 503 SECTION I. Of the Making of the Contract 508 SECTION II. Compliance with Warranties and Conditions . . . . .510 SECTION III. Proof of Interest 511 SECTION IV. Proof as to a Sufficient Description . . . . . .517 SECTION V. Proof of Loss 518 CHAPTER XI. Jurisdiction 539 CHAPTER XII. Stamps 548 SECTION I. Of Alterations or Additions 554 * In the body of the work, the title of the third section was repeated as that of the fifth, by mistake. VOL. II. b THE LAW OF MARINE INSUEANCE. CHAPTER I. OF DEVIATION. Section I. — What is meant by Deviation. The basis upon which the contract of insurance, and all the law regulating that contract, rest, is, that the insurers agree to indemnify the assured against certain perils, in consideration of a premium paid by the insured, and, that the contract may be fair between the parties and useful to the commercial public, it is obvious that this premium must be adequate, or in due proportion to the risks. This, however, is impossible, unless the risks can be to a certain extent known beforehand, and therefore estimated. For this purpose, the voyage, where the insurance is upon a voy- age, must be distinctly stated ; and, its course and termini being known, the insurers may then judge of the risks to be encoun- tered on that voyage. If, however, the insured is to be at liberty to vary the voyage at his own pleasure or convenience, it is plain that he may vary the risks in the same, and then that the estimate of the insurers must be of no use. It is, therefore, a perfectly well-established rule of law, that the vessel must not deviate from the proper course of the voyage. But the principle on which this prohibition rests extends to all other things which enter as elements into the calculation that determines the amount of premiiim. The result of this is, that although " deviation " in the law of insurance originally meant, no doubt, only a departure from the course of the voyage, it is now always understood in the sense of any material departure from, or change in, the risks insured against, without just cause. In a recent case in Pennsylvania it VOL. II. 1 THE LAW OF MARINE INSURANCE. [CH. I. was held that the risk insured against must not be changed Jdj the manner of conducting the voyage, and that the risk is changed, if, without a necessity arising from a danger insured against, the usual manner of conducting the voyage is changed. It was fur- ther held that a party procuring insurance on a voyage to be con- ducted in a prescribed mode is to be understood as stipulating that that particular mode is practicable and will be followed, and that he has no insurance if the mode is not practicable at a particular stage of water, and he attempts it then. The insured has no right to change the terms of the policy by starting at a time that makes the change necessary. The only change which justifies a deviation as one 'of necessity is one arising from a cause discovered after the beginning of the voyage.^ Nor is it necessary, to constitute a deviation, that the change in the risks should be an increase of them ; it is enough that the parties have agreed that the insurers shall assume certain risks, and no others ; and the insured have no right to substitute any others in the place of those assumed, whether they be greater or snjaller.^ ' Merchants' Ins. Co. v. Algeo, 32 Penn. State, 330. In this case a policy of insurance was effected on an ice- boat from Freeport to Nashville, "to be brought down 'to Pittsburg by sweeps, and to be towed thence by steamboat." The pilot, instead of stopping at Pitts- burg, proceeded to a landing about three miles below, in pursuance of a previous determination, and not to es- cape any danger insured against ; before arriving at which the boat was lost by perils of the river. Held, that this was a change in the voyage insured, and discharged the underwriters. ' In Maryland Ins. Co. v. Le Roy, 7 Cranch, 26, the vessel had liberty to touch at the Cape de Verd Islands for the purchase of stock, such as hogs, goats, and poultry, and taking in water. The judge in the court below instructed the jury, that the taking in of four jack- asses did not avoid the policy, unless the risk was thereby increased. The jury having found for the plaintiffs, the judg- ment was reversed on account of the above ruling. Mr. Justice Johnson said : " The discharge of the underwriters from their liability in such cases depends, not upon any supposed increase of risk, but wholly on the departure of the in- sured from the contract of insurance. The consequences of such violation of the contract are immaterial to its legal effect, as it is, per se, a«discharge of the underwriters, and the law attaches no importance to the degree, in eases of voluntary deviation." And Lord Mans- field, C. J., in a case where a ship had been turned into a factory-ship for the slave-trade, said, in substance : The single point here is, whether there has not been what is equivalent to a devia- tion, — whether the risk has not been varied. It is not material whether or not the risk has been greater. If a ship insured for a trade is turned into a floating warehouse, or a factory-ship, the CH. I.] WHAT IS MEANT BY DEVIATION. For example, if goods are transshipped from one vessel to another, this is a change of risk, which discharges the insurers, without inquiry whether the new vessel be better or worse than the old one.i In practice, however, it is generally true, as the cases in our notes to this chapter will show, that a slight change, which does not increase the risk, is Hot considered a deviation. Nor is the question, whether such a change is a deviation or not, that is, whether it proceeded from a sufiBcient cause or not, to be judged of by the event. For this might show that no necessity really existed, although any prudent man would have believed at the time that circumstances required or compelled the change that was made, and therefore the deviation was justified ; or, it might make it evident, that a change, for a cause altogether too slight to justify it, did in fact, from circumstances not known or considered, save the vessel from great but unknown dangers. The rule, therefore^ is, that the necessity for the change, or the justification of it, must be judged of and determined by the cir- cumstg,nces of the case, as, at the very time, they came or could risk is different, it varies the stay, for while she is used as a warehouse no cargo is bought for her. Hartley v. Bug- gin, 3 Doug. 39. See also Child v. Sun Mutual Ins. Co., 3 Sandf. 26. So, where a vessel, insured from Gib- raltar to the United States, with liberty to proceed to the Cape de Verd Islands for salt, arrived at the Isle of May, and found that there were so many ves- sels waiting, thaf her turn to load would not come for several weeks, but the governor of the island proposed that the captain should make a voyage to two of the other islands for provisions, and should load immediately on his return. This was done, and the vessel was loaded sooner than would otherwise have been the case. The intermediate voyage was, nevertheless, held to be a deviation. Kettell V. Wiggin, 13 Mass. 68. See also Robertson v. Col. Ins. Co., 8 Johns. 491. ' Emerigon, c. 12, § 16 (Meredith's ed.), 339 ; Bold v. Rotheram, 8 Q. B. 797 ; Paddock v. Commercial Ins. Co., 2 Allen, 93. And in Winthrop v. Union Ins. Co., 2 Wash. C. C. 7, 20, where part of the cargo insured was taken out and sold' under pretence that the ship was overladen, and a lighter cargo bought and put on board, Mr. Justice Washington said : " The changing of the cargo was sufficient to avoid the policy, if, under the circumstances of the case, it were imputable to the plaintiff. The reason is not, that the risk insured is increased, but that it is not the risk in- sured ; and therefore it could be no ex- cuse to say, that the load was lightened by the change. If a necessity exists to throw overboard or to land a part of the cargo, the act of doing so may be excused, but in this case there is no evidence of any necessity to lighten the' vessel." See also Phoenix Ins. Co. v. Cochran, 1 P. F. Smith, 143. THE LAW OF MARINE INSURANCE. [CH. I. come before the consideration of the assured or his represent- ative.^ As deviation now means more than a change in the course of a voyage, there may be a deviation while the ship is in port ; ^ or where the insurance is on time, no voyage being indicated.^ And as the reason of this rule applies to all navigation, so does the rule itself, and the law of deviation is in full force in refer- ence to all river and lake navigation.* ' Byrne v. La. State Ins. Co., 19 Mart. La. 126 ; Gazzam v. Ohio Ins. Co., Wright, 202. And in Stewart v. Tenn..Mar. & F. Ins. Co., 1 Humph. 242, it was held, that though generally it would be a deviation to lash a flat-boat, descending the Mississippi, laden with produce, to a steamboat to be towed, yet, if the flat-boat had been damaged by a collision, and the master, believing the danger to be imminent, should cause his boat to be taken in tow, although this enhanced the danger and contrib- uted to the loss, if it was honestly in- tended by the master for the preser- vation of the boat, the underwriters were liable. The same principle was established in Gazzam u. Ohio .Ins. Co., supra, where a steamboat, while being moved from a wharf to her landing place, by a line and yawl, steam not being up, was struck by a sudden flaw of wind and thrown upon some rocks. The court held, that, if there was a usage in respect to the inode of moving a steamboat from one wharf to another, the master was bound to foUow it, and a variation from it would be a deviation ; but if there was no usage, and the mas- ter acted honestly in moving the boat in the manner described, it was no deviation, though other masters, of equal ability and fairness, stated that they would have acted differently under the same circumstances. ^ Gazzam v. Ohio Ins. Co., Wright, 202. See also note, supra. In v. Westmore, 6 Esp. 109, the vessel was in- sured " during one month's remaining in Portsmouth Harbor, securely moored." The vessel was moved twice. Lord EUenborough- held, that this did not change the risk. So, in Bell v. Western Mar. & F. Ins. Co., 5 Bob. La. 423, where the marshal of a court in which the vessel had been libelled removed her from one side of the river to the other, and there kept her, the under- writers were held liable, there being no proof that the risk was at all increased. • See cases in the preceding note. In Stuart V, Columbian Ins. Co., 2 Cranoh, C. C. 442, a vessel was insured for six months, and described in the policy as " now bound on a voysige from George- town to Madeira and a market between Finisterre and Naples, with liberty, after the expiration of six months, to freight or trade for six months more," at an additional premium. Held, that the policy for the second six months was on time only, and that the vessel had a right to go to Brazil during that time. * Hermann v. Western Mar. & F. Ins. Co., 13 La. 616 ; Gazzam v. Ohio Ins. Co., Wright, 202 ; Jolly v. Ohio Ins. Co., Wright, 539 ; Bell v. Western F. & M. Ins. Co., 5 Bob. La. 423 ; Natch- ez Ins. Co. V. Stanton, 2 Smedes & M. 340. CH. I.] THE EFFECT OF A .DEVIATION. Section II. — Of the Effect of a Deviation. It is -perfectly well settled, that any deviation whatever dis- charges the insurers from all further responsibility ; leaving them, however, liable for any loss occurring before the deviation, and caused by a peril insured against.-* Nor are they discharged, if the change of risk is merely temporary, and, when it ceases, all subsequent risks are precisely and certainly the same as they would have been had no deviation taken place. In this case, the effect of the deviation is only to suspend the responsibility of the insurers, and discharge them from any liability for a loss which occurs during the existence of the deviation. But it is obvious that there are very few changes of risks that can be said to leave all the subsequent perils in precisely the same condition as if there had been no change ; and this exception, therefore, is sel- dom applicable.^ In a recent case in Missouri, this question is considered or im- plied. A time policy was issued upon a steamboat on time. There was an express exception of the navigation of certain waters. After the issue of the policy, the boat made a trip upon the excepted waters, and returned safely to port, and while in port was destroyed by fire. The court held that the insurers were liable, reversing the judgment of the court below .^ ' Hare y. Travis, 7 B. & C. 14; Rich- tion, but not for a subsequent loss. Thus, ardson v. Maine F. & M. Ins. Co., 6 if a steamboat which makes regular Mass. 102. trips between two ports is insured for ' Mr. -Justice Sedgwick, in delivering one year, and if, after the trip for the the opinion of "the court, in Coffin v. day is ended, she should tow a vessel Newburyport Mar. Ins. Co., 9 Mass. 436, or do any other similar act, the under- 449, said : " It is undoubtedly true, that writers might be liable if she were the shortness of the time, or the distance subsequently lost on a regular trip or of a deviation, makes no dilFerence as while lying in port, although not if she to its effect on the contract. Whether were lost while engaged in towing, for one hour or one month, or for one ^ Greenleaf v. St. Louis Ins. Co., 37 mile or one hundred miles, the conse.- Missouri, 25. Wagner, J., says : " The quence is the same. If it be voluntary words without the exception would em- and without necessity, it puts an end to brace all the tributaries of the above- the contract." It would seem, how- mentioned river. The exception has ever, that there may be a temporary the effect of restraining or suspending deviation, which would exonerate the the liability of the underwriter in a underwriters for loss during such devia- certain event. If the intention had THE LAW OF MAEINE INSURANCE. [CH. I. Section III. — What is a Deviation from the Proper Course of a Voyage. The deviation which is most usual is a departure from the proper course of the voyage ; and that is the most proper course which is the usual course, if there be a usage in this respect. This is a question of fact. No master of a ship is bound to go just where one, two, or three who have preceded him chose to go. Nor is he, indeed, entitled to do this, if it be out of the direct course of the voyage.^ But if the usage is made out, it will jus- tify the departure.^ The criterion is this : Has the customary course of ships on that particular voyage been so long established and so well known, that the insurers are justified in calculating upon that course as the one the ship will, if possible, pursue ? If there be no such usual course, then the master is bound to pro- ceed to the destined^ terminus in the most natural, direct, safe, and advantageous way.^ been that the policy should be defeated on any of the excepted rivers, (hat intention would have been expressed. This is not like the case of Stevens v. Conn. Mut. Ins. Co., 6 Duer, 594. There the policy of insurance on which the action was founded contained a war- ranty, that the vessel insured should not use any port or ports in the Gulf of Mexico, and there was a breach of the warranty on the part of the assured." ' Martin v. Delaware Ins. Co., 2 Wash. C. C. 254. See also Folsom v. Merchants' Mut. Mar. Ins. Co., 38 Maine, 414. ' Bentaloe v. Pratt, J. B. Wallace, 58 ; Kettell v. Wiggin, 13 Mass. 68. So a vessel, on whose cargo insurance has been made, may stop in descending a river for the purpose of taking in further cargo, or passengers, if such stoppages are conformable to the usages of trade, and are of no unusual length. Lockett V. Merch. Ins. Co., 10 Kob. La. 339. But a usage of this nature seems to have been disregarded in Eliot v. Wilson, 4 Brown, P. C. 470. In Mey V. South Carolina Ins. Co., 3 Brev. 329, the underwriters refused to insure a vessel at and from Amsterdam, but afterwards insured it from Amsterdam. It was then the custom of vessels of a certain tonnage to take in part of their cargo at Amsterdam, and the rest at the Texel, one hundred miles distant. The vessel sailed from Amsterdam, but while lying in the Texel, waiting for cargo, was damaged by a storm, and the underwriters were held liable. ' Martin v. Delaware Ins. Co., 2 Wash. C. C. 254. The voyage in this case was " at and from Kingston, in Jamaica, to the island of Aruba, and at and from thence back to Kingston, with liberty to touch at Rio de la Hache." Permission was afterwards given to take in the whole or any part of the cargo at Coro. The vessel sailed for and arrived at Aruba, sailed thence for Coro, took in part of her cargo, and then returned CH. I.] WHAT IS A DEVIATION. If a reasonable usage requires that a master, on reaching a certain point, should then and there decide, on consideration of the wind and currents and other circumstances as then existing, which of two or more routes is the best, and he, without so decid- . ing, takes one of them in obedience to the sailing orders of his owners, this would be a deviation. For the insurers have not only a right to this exercise of his judgment, but a right to conr sider, when they estimate the risk, that he will be in entire liberty when lie reaches that point to take what seems the best course.^ It must not be inferred, however, that if a master honestly mis- takes the course, when one is marked out by usage, that is never a deviation. For where there is a course so prescribed and defined, the assurers have a right to require that the master shall know it, and shall follow it.^ But if no course be in this way determined, to Aruba, and was captured while in that port. Held, that the return from Coro to Aruba was a deviation. So, where a vessel, on a voyage from one port to another, puts into an inter- mediate port. Fox V. Black, Park, Ins. 387 ; Townson v. Guyon, Park, Ins. 388 ; Salisbury v. Townson, Millar, Ins. 418, Park, Ins. 411. And in Brown v. Tayleur, 4 A. & E. 241, 5 Nev. & M. 472, where a vessel, insured "at and from her port of lading in North Amer- ica to Liverpool," took in part of her cargo at Cocagne, New Brunswick, and then sailed to Buktouche, seven miles distant, and not in a line from Cocagne to Liverpool, where she took in the rest of her cargo, then returned to C, took in her stores and sailed for L., the voyage from C. to B. was held to be a deviation. Both of these ports were within the jurisdiction of the custom- house at St. Johns, New Brunswick. 1 Middlewoodw. Blakes, 7 T. R. 162. See this case stated at length, ante, Vol. L p. 487, n. 1. ' Phyn V. Koyal Exch. Ass. Co., 7 T. K. '505. In this case, the jury found that the deviation was owing either to the ignorance of the captain, or to some- thing else, but that it was not fraud- ulent. Held, that the underwriters were not liable. This question was much considered in the case of Brazier V. Clapp, 5 Mass. 1. The vessel was in- sured on a voyage from Boston to New Orleans, and back. It appeared by the log-book, that, when the ship was up with Cape Cod, the captain ordered the ship to be hauled up for Nantucket, in- tending to go through the Vineyard Sound. It was proved at the trial, and the jury so found, that the usual route was by the South Channel. The judge charged, that, if there had been a depar- ture from the usual course, they should find whether it was from necessity or mistake, in either of which cases they should find for the plaintiff". The jury being unable to agree, they were ftir- ther instructed, that they should find merely whether the deviation was through necessity. A verdict being rendered for the defendants, the plain- tiff excepted. In delivering the opinion of the court, Sedgwick, J., said: "A 8 THE LAW OP MARINE INSURANCE. [CH. I. then they can only require that the master shall find, as well as he can, what is the proper course, that is, the most direct course that is safe ; and if he takes the course which he judges to be this, it is no deviation, although he ought to have judged differently. If, indeed, he wanders so widely, that no master of ordinary skill, sense, or knowledge could have done so, this is a deviation ; be- cause it would be beyond those limits of choice and reasonable possibility which the insurers had a right to contemplate in cal- culating the risks upon an unusual voyage. As touching at a port, not in the course of the voyage, is a de- viation, so, a fortiori, is an intermediate voyage ; ^ but a usage may exist which will justify either of these things.^ This has been well illustrated in a recent case in New York. The voy- age was described as at and from Santa Martha on the Main to New York, with liberty of touching at two other ports. Liberty was afterwards given of performing a voyage from Santa Martha to Chagresj and back to Carthagena, and also to use three addi- tional ports on the voyage from the Spanish Main to New York. The vessel used six ports on the Main before she sailed for New York. It was shown to be the usage for vessels to visit different ports on the Main, and then sail for home without touching at any ports on the way. The court held that the voyage was referred to as a whole from Santa Martha to New York, that the word general position, that the mistake of the charge of the judge was given, of which captain, under no circumstances, forms the plaintiffs complain, it was ascer- an excuse for a deviation, is certainly tained by the jury that the route pur- not true. The most skilful, discreet, sued was not the usual course, and that and prudent master may,, and probably it was less safe than that which was in almost aU long voyages does, commit departed from ; and this at the com- mistakes, by which his ship may be taken mencement of a voyage, when every out of the most direct and shortest necessary information might be easily course. Such is not a deviation that obtained." The verdict for the defend- will discharge the underwriters. On ants was accordingly sustained. the contrary, I believe that in all in- • Kettell v. Wiggin, 13 Mass. 68. stances, where a captain of ordinary ^ As in the Newfoundland trade, skill and discretion forms the best judg- Vallance v. Dewar, 1 Campb. 503; ment he can under the existing circum- Ougier v. Jennings, 1 Campb. 505, n. stances, for the interest of aU concerned. So, in the East Indian. Salvador v. the contract of insurance remains un- Hopkins, 3 Burr. 1707; Gregory v. impaired by his pursuing that judg- Christie, 3 Doug. 419; Farquharson v. ment. But in this case, before the Hunter, Park, Ins.- p. 67. CH. I.] WHAT IS A DEVIATION. •9 "from" did not necessarily exclude ports on the Main, and that by the course of trade they were included.^ Even a slight deviation, or what might seem to landsmen a very slight deviation, may suffice to discharge the insurers, as many cases show. Doubtless, the common rule, that the law de mini- mis non curat, would apply here as elsewhere. But if it be a deviation for a vessel to go designedly and unnecessarily an hour out of her course, or to lie by a ship for that time, only to save endangered property, it is obvious that any actual and substantial change of risk is a deviation, although it be a very small one.^ An unreasonable and unnecessary delay in commencing a voy- age, where the risk begins with the sailing of the vessel from the port,^ or a similar delay in port, where the insurance is " at and from " a port,* and the risk has commenced, or an unusual, ex- '■ Depeyster v. Sun Mut. Ins. Co., 19 N. Y. 272. ^ See ante, p. 5, n. 2, and post, in regard to saving property. ' Where the insurance was " from " a port, it was held, that a delay of six months after the policy was made, it not appearing that the vessel was detained by fraud or any sinister de- sign, nor that the risk was thereby en- hanced, was not a deviation, the jury having found that the delay was not un- reasonable. Earl V. Shaw, 1 Johns. Ca. 313. But see Hinely v. S. Car. Ins. Co., 3 Const. R. 154. In Driscol v. Passmore, 1 B. & P. 200, a vessel having sailed on a voyage from Lisbon to Madeira, from Madeira to SafE on the coast of Africa in ballast, and from thence back to Lisbon, a policy of in- surance on the freight of the voyage from Saffi to Lisbon was obtained on the representation that the vessel had ar- rived at Madeira and was about to pro- ceed on her voyage immediately. On the arrival of the vessel at Madeira, all the crew except two, being alarmed by reports that some Moorish cruisers were off Saffi, left the ship and refused to return, unless the captain would sail im- mediately for Lisbon. On the arrival of the vessel at Lisbon, the charterers insisted on the captain's proceeding directly to Saffi, which he did, and the vessel was lost on the return voyage from Saffi to Lisbon. The underwriters were held liable. * Chitty V. Selwyn, 2 Atk. 359 ; Hull V. Cooper, 14 East, 479 ; Hartley v. Buggin, 3 Doug. 39 ; Seamans v. Loring, 1 Mason, 127 ; Himely v. S. Car. Ins. Co., 3 Const. K. 154 ; Palmer v. Mar- shall, 8 Bing. 79. In this case, insur- ance was effected on the yacht Ruby, " at and from Bristol to London." The policy was dated Jan. 28, 1831. The yacht remained at Bristol till the 1 7th of the following May, when she com- menced her voyage. The plaintiff was nonsuited, on the ground that the delay to sail amounted to a deviation or vari- ance of the risk. On a motion for a new trial, 8 Bing. 317, Tindal, C. J., said : " What I have to consider, there- fore, is whether any facts have been stated by the plaintiff to account for this delay. I find none suggested, beyond the circumstance that this vessel was de- 19 THE LAW OP MARINE INSURANCE. [CH. I. traordinary, and unnecessary extension or protraction of a voyage, either at sea or in a foreign port, is a deviation, because it is cer- tainly a cliange, and indeed an increase of tlie risk.^ And, if scribed as a yacht upon the policy, and that yachts are usually l^id up in winter. But if the plaintiff meant to rely on that, he should have taken a policy adapted to his purpose. He might have insured his vessel in port for a definite time, and on the voyage to be commenced afterwards." In a subsequent action against another underwriter on the same policy, Palmer v. Penning, 9 Bing. 460, it appeared, in addition to the facts above stated, that at the date of the policy, and subsequently, the yacht was put up for sale at Bristol, and that the master proceeded from London to Bristol and fitted out the vessel for the voyage a few days only before she sailed. The jury found for the plain- tiff, on the ground that the delay was reasonable, as yachts did not usually sail in winter. The verdict was set aside and a new trial granted, on the authority of Palmer v. Marshall. See also Mount v. Larkius, 8 Bing. 108. In this case, the insurance was on a vessel " at and from Sinoapore to the ship's port of discharge in Europe." Owing to a delay on the outward voyage to Sincapore, she did not arrive at that port till the 30th of March, and sailed from thence on the 3d of May. The jury found that there was unreasonable and upjustifiable delay between the making of the poUcy and the com- mencement of the risk. It was there- fore held, that the underwriters were discharged. This case is cited and the doctrine approved of by Parke, B., in Small V. Gibson, 16 Q. B. 141, 3 Eng. L. & Eq. 299, 306. » Hamilton d. Sheddon, 3 M. & W. 49. The jury found, in this case, that a delay of thirteen months at Benin, in Africa, was unreasonable, and the court refused to set the verdict aside. See Murden v. South Carolina Ins. Co., 3 Const. R. 200 ; Coffin v. Newburyport Mar. Ins. Co., 9 Mass. 436. In Williams V. Shee, 3 Campb. 469, goods on board a vessel were insured " at and from Lon- don to Berbice, with liberty to touch and stay at any ports and places what- soever and wheresoever, and for all pur- poses whatsoever, particularly to land, load, and exchange goods, without being deemed a deviation." The vessel sailed with a fleet under convoy. On arriving at Madeira, she put in there to land some goods, and was detained till after the convoy sailed, and was subsequently captured. Held, that this was a devia- tion. So, if a vessel which has been captured remains, after her release, in the port to which she has been carried by her captor longer than is necessary to prepare for her voyage, this is a de- viation. Kingston v. Girard, 4 Dall. 274. In Inglis v. Vaux, 3 Campb. 437, the ship was insured at and from Liver- pool to Martinique, and all or any of the windward islands. Most of the outward cargo was disposed of at Mar- tinique ; with the rest, the captain sailed for Antigua, where he remained eight days, partly to dispose of the outward cargo, and partly to procure a home- ward one. Lord Ellenborough, C. J., held, that, as soon as the disposal of the outward cargo ceased to be the sole reason of his stay at Antigua, the under- writers were discharged. But if the delay had not been increased by the en- deavor to procure a homeward cargo, we think it clear that the underwriters should CH. I.] WHAT IS A DEVIATION. 11 goods are insured until safely landed, an unusual and unnecessary delay in discharging them will exonerate the insurers.^ But the •mere lapse of time is no proof of such a deviation. It enters importantly into the question, and is, indeed, the basis of it. But this question is, as in all cases of deviation : Has there been any voluntary, extraordinary delay, not justified by necessity, or some cause equivalent .to necessity ? ^ have been held responsible. In Upton V. Salem Comm. Ins. Co., 8 Met. 605, 611, Mr. Justice WUde, speaking of this case, said : " For aught that appears in the report of the evidence, the remnant of the outward cargo might have been disposed of immediately on the arrival at Antigua, if the vessel had not been detained for the purpose of procuring a homeward cargo. On no other principle can the decision in that case be main- tained." In Warre v. Miller, 4 B. & C. 538, 7 Dow. & R. 1, insurance was ef- fected on freight, at and from Grenada to London. The vessel sailed, and ar- rived at Grenada, discharged part of her cargo at three different bays, and was going to the fourth to discharge the re- mainder, and to take in part of her homeward cargo, when she was lost. The underwriters were held liable. If the insurers know that the vessel they are insuring is to sail in company with another, and that they are not equally fast sailors, the vessel insured may delay a reasonable time for the other, if they are separated on the voy- age. Coles V. Marine Ins. Co., 3 Wash. C. C. 159. ' Parkinson v. Collier, Park, Ins. 416. See Noble v. Kennoway, 2 Doug. 310. ^ Langhorn v. Allnutt, 4 Taunt. 511 ; Cleveland v. Union Ins. Co., 8 Mass. 308, 318. In Grant v. King, 4 Esp. 175, insurance was made on an American vessel, at and from Brest to London, against British captures. The policy was taken out in August, but the vessel did not sail till the month of March fol- lowing. The port of Brest was block- aded by an English squadron, and the master was obliged to go to London to procure American sailors to navigate the vessel. The underwriters were held liable. Lord Ellenhorough said : " To discharge the policy, there must be a clear imputation of waste of time. Mere length' of time lapsing between the sailing of the vessel and the under- writing of the policy is not of itself suf- ficient to avoid the policy ; it is capable of explanation." So where the insur- ance was " at and from Pillau," and the vessel arrived there in an unseaworthy condition, and was detained some time for repairs. Smith v. Surridge, 4 Esp. 25. Lord Tenterden, in Bain v. Case, 3 Car. & P. 496, left it to the jury to de- cide whether the delay of one hundred and nine days in port was unreasonable, the captain having stated that he re- mained there with the hope of getting permission to land his cargo, as negotia- tions were then pending with the gov- ernment for that purpose. In Suydam V. Mar. Ins. Co., 2 Johns. 138, a delay of twenty days at the port of destina- tion, for permission to enter, was held not unreasonable, the master having reason to believe that a permission to enter would be granted. In Col. Ins. Co. V. Catlett, 12 Wheat. 383, Story, J., said : " A delay which is necessary to accomplish the objects of the voyage, according to the course of the trade, if bona fide made, cannot be admitted to 12 THE LAW OF MARINE INSURANCE. [CH. I. Going into a port which did not belong to the established or the natural and proper voyage is certainly a deviation, and, in avoid the insurance.'' And it was held, that a delay for the purpose of selling the cargo was not a deviation, although the delay was owing to the master being instructed not to sell the cargo at less than a specified price. But, said Story, J. : " If the owner should limit the price to an extravagant sum, or the master should delay after all reasonable expec- tations of a change of market were extinguished, such circumstances might properly be left to a jury to infer a delay amounting to a deviation.'' And in Gilfert v. Hallet, 2 Johns. Ca. 296, a delay of nineteen weeks far the purpose of selling the cargo, and the remaining three days oflf another port to inquire about a market, were held not to be deviations. So in Phillips u. Irving, 7 Man. & G. 323, where the ship was in- sured " at and from London to Bombay, and thence to China, and back to the United Kingdom, with liberty to touch, stay, and trade at all ports and places on this side, at or beyond the Cape of Good Hope," a delay of seven months was held not to be unreasonable, under all the circumstances of the case. The first three months were taken up in get- ting the vessel repaired. The rest of the time was occupied in seeking for a cargo, which could not be obtained. Tindal, C. J., delivering the opinion of the court, said : " It may be collected from numerous cases, that delay before or after the commencement of a voyage insured is not equivalent to a deviation, unless it be unreasonable. And we think that no certain and fixed time can be said to be a reasonable or unreasonable time for seeking a cargo in a foreign port ; but that the time allowed must vary with the varying circumstances, which may render it more or less difficult to obtain such cargo." In Oliver v. Maryland Ins. Co., 7 Cranoh, 487, insurance was effected " at and from Baltimore to Bar- celona, and at and from Barcelona back to Baltimore." A usage of trade was proved, that vessels might take in part of their cargoes at Barcelona, and then go to Salou, about sixty miles further south, and take in the rest. The ma- jority of the court were of the opinion, that, although the vessel might remain at Barcelona during the time usually employed in loading a cargo, yet, when this time was exhausted, she could not sail for Salou. And a delay of five months to claim a cargo, which.had been seized by gov- ernment, was held not to be a deviation. Stocker v. Harris, 3 Mass. 409. And, in another case, where the master, being directed to take his vessel into the king's dock at Deptford, moored her near the dock gates, and, no order for her admis- sion being received, remained there from the 18th to the 27th of February. The order for admission arrived on the 21st. The jury having found that the delay was not owing to the fact that the order for admission was not received before, but was caused by a quantity of ice in the river, the underwriters were held liable. Samuel v. Royal Exch. Ass. Co., 8 B. & C. 119. In Schroder v. Thompson, 7 Taunt. 462, 1 J. B. Moore, 163, a vessel was chartered on a voyage to Norfolk, in Virginia, with liberty to call at St. Ubes and take in a cargo of salt, and to bring home a return cargo of timber. She entered Norfolk, with the salt on board, during an embargo, under which per- mission was given to return with the CH. I.] WHAT IS A DEVIATION. 13 fact, a very common one. So is the entering into a port which does belong to the voyage, but, by the usual course of it, should not have been entered at that time or in that order. The ques- tions which cases of this kind usually present are these : In the first place, did the port belong to the voyage, according to either the established usage or the reason of the thing ? If it did not, was the entering into it for a good and sufiicient cause ? In the next place, if the port did belong to the voyage, in what order or succession, as to other ports, did this" come, if the voyage required that it should be entered ? In a recent case in Massachusetts, the whole subject was consid- ered. A vessel was insured from New York to ports in South America, and thence to ports of discharge in the United States, with an indorsement thereon of " liberty to deviate by going to port or ports in Europe, by paying an equitable premium there- for." She sailed from New York to South America, and at Rio Janeiro she was chartered to take coffee to Malta and Constanti- nople ; from this port she went to the Crimea, and then from Con- stantinople she went to Smyrna- " seeking business," 9,nd thence sailed with a cargo for Boston, and was lost on our coast. The plaintiffs rested their case mainly on evidence of an established usage, whereby a vessel under such a liberty is permitted to make intermediate voyages between any ports in that quarter of the globe which she has leave to visit. It was, however, held that such a policy covers one round voyage, with the ports which be- long to it, but does not include a distinct and independent voyage, having no connection with the general objects and purposes of the voyage insured,^ and that no such usage as that which it was attempted to prove could be permitted to affect the construction of the policy. The plaintiffs also offered to show that, in conver- sation with the defendants' agent, he was informed that the vessel might take such a course as she did in fact, and that the agent said the phrase " ports in Europe " would cover such a voyage. But the evidence was not received. . In a late case in New York, a somewhat similar question as to cargo which she then had on board, or ward cargo, sailed, and was lost. . The in ballast. The captain, however, re- underwriters were held liable, mained there eighteen months, till the ' Seccomb v. Provincial Ins. Co., 10 embargo ceased, then shipped his home- Allen, 305 ; opinion by Bigelow, C. J. 14 THE LAW OF MARINE INSURANCE. * [CH. I. the voyages covered by a policy came up for consideration. The insurance was on freight and on time. The policy contained a ■written clause, limiting the voyage to which the insurance was to attach in these words : " To be confined to the trade between Atlantic ports of the United States, or the ports of London, Liver- pool, and Havre, and the Pacific Ocean, China Seas, including Australia, Van Dieman's Land, and ports in the Indian Ocean." It contained no other description or limitatio"n of the voyage or voyages covered by the policy. At the time of making the in- surance in question, the vessel, freight of which was insured, was on a voyage from Singapore to Bombay ; from thence she sailed to Liverpool, discharged her cargo, and took on board a new cargo for New York, for which place she sailed, and during the voyage thitherward she was lost. The court held that the insurance did not, as matter of law, extend to this voyage made by the vessel in question from Liverpool to New York.^ ' Mallory v. Commercial Ins. Co., 9 Bosw. 101, opinion by Robertson, J. : . " It is plain, from the language of the written clause of the policy in question, which determines the employment of the vessel whose freight is the subject of insurance therein, that such employ- ment is controlled by a trade and not mere voyages. A trade between places comprehends voyages between them, but may include something more, es- pecially when so wide a latitude is given to its boundaries as the principal ports in the United States and Europe, and the Pacific and Indian Oceans, and China Seas'. The principal if not gnly embarrassment, in interpreting the clause in question, arises from the difficulty of determining whether a single trade or two trades are described in it. Two different trades, one between the United States Atlantic ports and the Pacific and other oceans spoken of in such claiise, and the other between the therein designated European ports and the same oceans, may be known to dealers in insurance ; Coit v. Comm. Ins. Co., 7 Johns. 385 ; or there may be but one kind of trade in which the same oceans may furnish one of the termini of the voyages in such trade, and the same American or European ports indiscrimi- nately the other ; and the word ' trade,' in the singular, may have been em- ployed for that reason. It would also be possible that the course of trade might permit a reinvestment in Europe of the proceeds of a cargo brought from Asia to Europe, in a cargo for the American market, so as to preserve, the continuous unity of the trade ; or it might be only necessary and sufficient, for the same purpose, to bring to the United States part of the cargo shipped in Asia after landing another part in Europe ; or, vice vers%, the reinvests ment in Europe of the proceeds of a cargo brought from America in a cargo suited to the Asiatic market, or a reser- vation of a part of it for the final port, might still keep the adventure single, or a round voyage. The court, how- CH. I.] WHAT IS A DEVIATION. 15 It has been recently held that it is not a deviation for a vessel driven into a port by stress of weather to proceed in good faith for repairs to a neighboring port where her owners reside, although she might have been repaired at the first port.^ ever, cannot take judicial notice of the character of such trade or trades ; Child V. Sun Mut. Ins. Co., 3 Sandf. 26 ; and no evidence was furnished on the trial relating to them; indeed, the defend- ant was precluded from introducing any evidence on the subject. On the other hand, the plaintiffs did not introduce any evidence, either to show that the loss occurred in any special trade, or to sustain the allegation in the com- plaint, that a trade between each and all of the places or ports named in the policy was usually designated by the terms employed therein. They rest their right to recover, therefore, sole- ly on the position that the word ' or,' which creates an alternative, is to be read 'and' (or rather, perhaps, as there is a subsequent copula, be actu- ally omitted), and then, voyages be- tween any of the places and ports named and any other of them are to be assumed as intended by 'the trade' between them ; and they claim that without such a change the clause would be insensible and void, because it con- tains an alternative without the means of determining it. I do not perceive that the proposed change of substitut- ing ' and ' for ' or,' or even dropping the last altogether, without some other change, would materially aid the plain- tiffs without some other change, as there are no less than three other ' ands ' in the sentence', which seriously affect its construction ; that one which connects the three named European ports to- gether, literally construed, requires the particular ttade to be conducted by voyages between all those ports and any other named place ; while the last one would require the trade to be conducted by voyages between the Pacific Ocean, China Seas (including the places named), and ports in the In- dian Ocean, and any other named place. To makfe the sentence complete so as to read as the plaintiffs' case demands, it requires the words ' or any one or more of them ' to be added after the enu- meration of the European ports named, and the words ' or anywhere in such ocean, seas, or ports ' after the names of the specified sea or ocean. It would then read, ' between the Atlantic ports' of the United States and the ports of London, Liverpool, ' and Havre, or any one or more of them, and the Pa- cific Ocean, China Seas (including &c.), and ports in the Indian Ocean, or any- where in such oceans, seas, or ports.' The voyage in which the vessel in question was actually lost was not in a trade be- tween America and the ports of Lon- don, Liverpool, and Havre, but between it and Liverpool alone, being only one of such ports. The changes and addi- tions thus rendered necessary for the plaintiffs' purposes seem to be too ex- tensive for any rule of mere interpre- tation to justify." ' Silloway v. Nept. Ins. Co., 1 2 Gray, 73. 16 THE LAW OF MARINE INSURANCE. [CH. I. Section IV. — Of Liberty Policies. Most of the preceding questions frequently occur under liberty policies, as they are sometimes called, or policies in which the assured expressly stipulate for liberty to do certain things which they could not do without deviation, or a change of risk, unless the insurers give them this liberty. Such expressions therefore often occur, as " with liberty to enter the port of ," being some place off the course, and which |he ship therefore could not otherwise have visited. Now, such a liberty is construed strictly. A vessel that has liberty to " enter " or " touch at " a port, may, it is said, go in and come out ; but she must come out as soon as may be, that is, without any avoidable delay, because the liberty to "enter" or "touch at" does not include a liberty to "stop" or " stay." Hence it is common to say, " to touch at and stop " or " stay" ; and if a vessel has this liberty as to a certain port, this, it has been said, is no liberty to trade, and her hatches must not be opened in that port.^ And even if she is at liberty to touch, or stop, or stay, and " discharge her cargo," this is not a liberty to take in a new cargo, and such a proceeding has been held to be a deviation.^ But it is obvious, from both the reason of the thing and the best authorities, that no precise construction of such phrases can exist, as a rule of law. The privilege granted must be con- sidered in connection with the character and circumstances of the ' Stitt V. Wardell, 2 Esp. 610, Park plaintiff's counsel, said he should have on Ins. 388. In this case insurance was been of the same opinion if the break- effected on goods on a voyage from ing bulk had been at Cork. The re- Whitehaven to St. Michael's. As re- port in 2 Esp. is somewhat different, ported in Park, liberty was given to The liberty " to stay " is not mentioned, touch and stay at any place or places and nothing is said about Cork, whatsoever,' and particularly at Cork in ' In Sheriff w. Potts, 5 Esp. 96, the her passage out. The vessel was driven vessel was insured " at and from Guern- by stress of weather into Dublin, where sey to Gibraltar, with liberty to touch she unloaded and sold part of her cargo, and discharge goods at Lisbon.'' Held, and then proceeded on her voyage and that the taking in a cargo for Gibraltar was lost. Lord Kenyan, C. J., held, while waiting for convoy at Lisbon was that, as the liberty was given only to a deviation, although the vessel had a touch and stay, but not to trade, the right to wait, under the policy. See unloading and selling of the cargo was a also United States v. The Paul Shear- breaking bulk, and avoided the policy, man. Pet. C. C. 98, 104, per WasUng- And, on the question being asked by the ton, J. CH. I. j LIBERTY POLICIES. 17 voyage, in order to draw from thence a rational inference as to what was the meaning and intention of the parties ; and this is to be followed so far as may be permitted by a reasonably strict con- struction of their words.^ Generally, if a ship is lawfully at a ^ Urquhart v. Barnard, 1 Taunt. 450. Insurance, in this case, was made on goods from Madeira to Santos, with lib- erty to touch at the Cape de Verd Islands. A letter was shown to the agent of the defendant, who signed the policy for him, in which it was men- tioned that the vessel would touch at one of the islands named for the purpose of taking in salt. The vessel stopped at Bona Vista, one of the Cape de Verd Islands, where she remained several days taking in salt. Sir James Mansfield, C. J., delivering the opinion of the court, said : " It is doubtful, nor can I find it anywhere defined, what is the precise meaning of 'liberty to touch,' as contradistinguished fi-om the mean- ing of ' liberty to touch and stay.' No case decides this difficulty, though there must be some difference between the two phrases ; but the time of staying in both instances is perfectly undefined ; and no case decides how long or for what purposes a ship may stay under the license of these clauses." It was held that, since the taking of salt would . have been justified had there been a usage to that effect, the underwriters being presumed to have knowledge of usages of trade, therefore the direct knowledge of the intention of the in- sured communicated to the insurers, and not dissented from, would have the same eflfect. In Gregory v. Christie, Park on Ins. 67, hord^ Mansjleld, C. J., is reported to have said : " The policy in question differs from others, because it contains a permission to trade, as well as to touch and stay, at any ports or places, which is VOL. n. 2 not usual in policies of this nature ; for in general they only permit them to touch and stay, which words can only be intended to give a permission so to do if necessity oblige them." In 3 Doug. 419, where the case is report- ed much more briefly, this dictum is omitted. Sir James Mansfield, C. J., after citing this opinion as above, said : " This cannot be the true construction. The clause is not required for that pur- pose ; for any ship, without any memo- randum for that purpose, has liberty to do what is necessary in order for^the preservation of the vessel and the lives of those on board her ; as, to take in provisions to save the crew from starv- ing, or to prevent her from sinking by going into port to be repaired. Such acts, though done without the sanction of these words, are no deviation. I know not who was the author of that note, and perhaps it may have been incor- rectly taken.'' Mr. Phillips', in his work on Insurance, § 1005, speaking of the language as given by Park, says : " It would require a very strong authority for imputing such a proposition to Lord Mansfield, and a still greater than his own to give it any weight, since it would, as Sir /. Mansfield remarks, an- nul the clause, as necessity of itself au- thorizes touching." This reasoning is not altogether con- clusive, for in many policies permission is expressly given to deviate in a case of necessity, although the law would un- doubtedly give it without this clause, and the opinion of Lord Mansfield is susceptible of a meaning which is not open to the objections of Sir James 18 THE LAW OF MARINE INSUEANCE. [CH. I. port, she may do anything there which does not increase or ma- terially vary the risk.^ Thus, liberty to touch at a port for any Mansfield and Mr. Phillips. A vessel may deviate on account of want of pro- visions. Now if the vessel was well supplied in the first place, and the sub- sequent want was owing to a peril in- sured against, the deviation would be justifiable on the ground of necessity. But if the want was owing, not tq a peril, . but to the insufficiency of the supply in the first place, then, although it would be necessary to deviate, still the devi- ation would not be justifiable so as to make the underwriters responsible. Lord Mansfield may have meant merely this : Under a liberty to touch at a port, the master may touch there if compelled by any necessity, although it was caused by the vessel not being provided for the whole voyage. This construction seems to be adopted by the Supreme Court of South Carolina, in Cross v. Shutlifie, 2 Bay, 220, where, speaking of a clause which Was construed to insure a vessel on a voyage from Charleston to Africa, with leave to touch at the Cape de Verd Islands, the court said : " If this be the true construction which should be given to this policy, it ought to be regarded as a privilege or indulgence, and not as an obligation ; that is, if the situation of the crew and ship were such in the course of the voyage as to make it necessary to put in there for supplies, the captain was at 'liberty so to do, but if not, then it was his duty to make the best of his way to the end of his voyage." If, however, Lord Mansfield used the word " necessity " in the sense understood by Mr. Phillips, it is clear that his opinion has not' been sustained ,by subsequent authorities. Thus, in Metcalfe v. Parry, 4 Carapb. 123, where the vessel was insured "at and from Antigua to England, with lib- erty to touch at all or any of the West India islands, Jamaica included," the vessel went to St. Kitts and remained there two months taking in cargo. It was contended that this was a deviation, but Gibbs, C. J., held that the whole scope, of the policy showed that the ves- sel might go from island to island seek- ing freighti and added : " What could be the object of the liberty given her to touch at Jamaica, if she could not stay there to take in goods ? Was she to go five hundred miles out of her way for the mere pleasure of viewing that island, and asking for news ? " See also Ash- ley V. Pratt, 16 M. & W. 471, 1 Exch. 257; Gilfert v. Hallet, 2 Johns. Ca. 296. And in Chase v. Eagle Ins. Co., 5 Pick. 51, where goods were insured from New York to Lynn, the vessel hav- ing liberty to call at Newport, at which place the deck load was discharged, this was held not to be a deviation. ' As where the vessel is at a port be- longing to the voyage. Cormaok v. Gladstone, 11 East, 347; Laroche v. Oswin, 12 East, 131 ; Ashley v. Pratt, 16 M. & W. 471, 1 Exch. 257; Thorn- dike V. Bordman, 4 Pick. 471. So, if the vessel puts into port through neces- sity, she may discharge or take in cargo there, provided the risk is not thereby increased. Kaine v. Bell, 9 East, 295 ; Chase v. Eagle Ins. Co., 5 Pick. 51, 53. So where a vessel was driven from her loading port to another, and, not being able to return, completed her loading at the latter port. Delaney v. Stod- dart, 1 T. K. 22. Or where a vessel deviated to save life on board, and at the port of necessity took in additional cargo. Perkins v. Augusta Ins. & Bank- CH. I.J LIBERTY POLICIES. 19 purpose whatever is said to include liberty to touch there for the purpose of taking on board part of the goods insured.^ And if liberty is given to stop at all places, or specified places, for trade, refreshment, and recruiting, the vessel is not thereby deprived of her right to stop at other places for purposes connected with the voyage.^ So, if liberty is given to stop at a port to ascertain whether there are any hostile men-of-war off the port of destina- tion, the vessel may remain at that port until the danger has passed away.^ It seems to be clear, that the most general liberty of touching, or staying at any port or ports, with or without naming them, must ing Co., Sup. Jud. Ct., Mass. Nov. T. 1855. In this case, Merrick, J., stated the law as follows: "If a ship under the terms of a policy, or for any suffi- cient legal cause, is justified in origi- nally entering into the port, her subse- quent trading by breaking bulk, loading or unloading, during the period of her lawful stay and detention there, al- though such trading, loading, and un- loading are foreign to the main pur- pose of the adventure, or not specifically provided for by the terms of the policy, will not be held to amount to a devia- tion. But it would be otherwise if those caused additional delay, or otherwise substantially enhanced or varied the risk." In Kane v. Columbian Ins. Co., 2 Johns. 264, there appears to have been a necessity for selling the cargo, and the case may not therefore be an authority in point. In Kingston v. Gi- rard, 4 Dall. 274, it was held that a ship detained in port by captors might trade. So in Hughes v. Union Ins. Co., 3 Wheat. 159, where the vessel had liberty to stop at a port to ascertain whether there were any men-of-war off her port of destination. In Lapham v. Atlas Ins. Co., 24 Pick. 1, it was held that a vessel insured to a port of dis- charge in the United States might put into port to inquire for a market, and. while there, might take a cargo for the port of destination. In Kaine v. Bell, 9 East, 195, the insurance was on the ship and freight, and Lord Ellenhor- ougTi, C. J., said : " I reserv.e giving any opinion as to the operation of a change in the state of the cargo in the case of a policy on goods ; because the taking in of other goods in the course of one en- tire voyage, where it is not provided for, may be contended to constitute a diiferent adventure from that on which the ship started with her original car- go.'' B.ut in Laroche v. Oswin, 12 East, 131, the insurance was on goods, and this was held to make no difference. So in Thorndike v. Bordman, 4 Pick. 471 ; Chase v. Eagle Ins. Co., 5 Pick. 51. ' Violett V. Allnutt, 3 Taunt. 419; Hunter v. Leathley, 10 B. & C. 858, 7 Bing. 517. ' Child V. Sun Mut. Ins. Co., 3 Sandf. 26. The vessel in this case was insured on a whaling voyage by a policy con- taining this clause. It was held that this did not prevent her from entering bays, or touching and staying at islands for the purpose of taking whales or sea elephants, if these were shown to be the proper purposes of a whaling voyage. " Hughes V. Union Ins. Co., 3 Wheat. 159. 20 THE LAW OF MARINE INSUKANCE. [CH. I. be construed in reference to the voyage itself, and is so far limited that it will not justify an entrance into- any port, if it has no con- nection -with the purposes of the voyage.^ Nor will a liberty to touch at ports, without naming them, justify the master in wan- dering more widely from his course than a reasonable interpreta- tion of such a liberty will permit.^ So too, if a port be named, it 1 Hammond v. Reid, 4 B. & Aid. 72. The vessel, in this case, put into port to learn the state of the market with refer- ence to another adventure. It was held to be a deviation. So where a ship was insured " at and from London to Ber- bice, with liberty to touch and stay at any ports and places whatsoever and wheresoever, and for all purposes what- soever, particularly to land, load, and exchange goods," Lord Ellenborough, C. J., said : " The liberty in the policy must be construed with reference to the main ■scope of the voyage insured." Williams V. Shee, 3 Campb. 469. In Solly v. Whitmore, 5 B. & Aid. 45, insurance was elFected on a vessel " at and from Hull to her port or ports of loading in ihe Baltic Sea and Gulf of Finland, with liberty to proceed to, and touch and stay at, any port or ports whatsoever for any purpose, particularly at Elsi- nore, without being deemed a devia- tion." The vessel, loaded with goods for Elsinore, Dantzic, and Pillau, which last was her intended port of loading, sailed and delivered the goods at Elsi- nore and Dantzic, and was lost on the voyage to Pillau. Abbott, C. J., deliver- ing the opinion of the court, said : " The liberty given by this policy to touch at any ports for all purposes must, be con- ' strued to mean purposes connected with the voyage. Here the voyage was from Hull to a loading port in the Baltic, and if the ship had gone to Elsinore or Dantzic to see if she eould get a cargo, that would have been a purpose con- nected with the voyage, and con- sequently would not have been a devia- tion. But the vessel, in fact, went to those ports for the purpose of delivering goods, which was wholly unconnected with the object of the voyage insured. I am therefore of opinion that this was a deviation." See also Clason v. Sim- monds, cited 6 T. E. 533 ; Langhorn v. AUnutt, 4 Taunt. 511. In Rucker v. AUnutt, 15 East, 278, the policy gave the vessel liberty to touch and stay at any ports and places for all purposes whatsoever. Afterwards there was a clause making it lawful for the ship to proceed, sail to, and touch and stay at any ports and places whatsoever or wheresoever, particularly with leave to wait for information off any ports Or places. The port of discharge was any port or place in the Baltic. It was held that the vessel might wait either in or off ports for the purpose of obtaining in- formation. ^ In Bottomley v. Bovill, 5 B. & C. 210, the ship was insured from London to New South Wales, and at and from thence to all ports and places in the East Indies or South America, with liberty for the said ship to proceed, sail to, touch at, and stay at any ports or places whatsoever, with leave to take in and discharge goods and passengers to all ports and places in the Channel, Cork in Ireland, Madeira, Cape of Good Hope, St. Helena, and wheresoever the ship might proceed to, as well on this as on the other sides of the Capes of Good CH. I.J LIBERTY POLICIES. 21 is a deviation to enter another port not named in the stead of that which is named, altliough tlie substituted port is no farther oif, Hope and Horn, and for all purposes whatsoever ; particularly to trade and sail backwards and forwards, and for- wards and backwards. The court held that the voyage insured was from Lon- don to New South Wales, and thence to South America or the East Indies, and that, although the words above cited would allow of intermediate voy- ages, yet only such as were undertaken with a view to an accomplishment of one or other of the voyages pointed out by the policy. So in Hogg v. Horner, Park on Ins. 394, where a ship was in- sured " at and from Lisbon to a port in England, with liberty to call at any one port in Portugal for any purpose what- ever,'' it was held that this would not authorize a voyage from Lisbon to Faro, to complete the loading of the ship. Faro being to the southward of Lisbon and out of the course from Lisbon to England. And in Ranken v. Reeve, Park on Ins. (8th ed.), 627, where a ship was insured at and from Africa to the Canaries, Madeira, and Lisbon, with liberty to touch, stay, and trade at all ports, in the voy^e, it was held, that, after the inception of the risk in Africa, the vessel could proceed only to the northward towards Europe, and not to the southward. In Lavabre v. Wilson, 1 Doug. 284, the voyage was described in these words : " At and from Port L'Orient to Pondicherry, Madras, and China, and at and from thence back to the ship's port or ports of discharge in France, with liberty to touch, in the outward or homeward bound voyage, at the Isles of France and Bourbon, and at all or any other place or places what or where soever." There was also this clause : " And it shall be lawful for the said ship in this voyage to proceed and sail to, and touch and stay at any ports or places whatsoever, as well on this side as on the other side of the Cape of Good Hope.'' It was at first contended that the vessel might go to Bengal, and that the ship being there, the voyage might be abridged, and her further pro- gress to China abandoned, on the ground that vessels insured might always return back from any point within the limits of the voyage contained in the policy. But, says the reporter : " Lord Mansfidd having intimated a clear opinion that the general words were, by the expres- sions of ' in the outward or homeward bound voyage,' and ' in this voyage,' qualified and restrained so as to mean, 'all places whatsoever in the usual course of the voyage to and from the places mentioned in the policy,' this ground was immediately abandoned." See Coles v. Marine Ins. Co., 3 Wash. C. C. 159. In Winthrop v. Union Ins. Co., 2 Wash. C. C. 7, the insurance was on goods " at and from New York to the Cape of Good Hope, with liberty to pro- ceed to and trade at the Isle of France, and any other port or ports ■ in the In- dian seas, and at and from these ports back to New York," with liberty to touch and trade as usual on the outward and homeward voyages. The vessel sailed from New York to the Cape of Good Hope, touched at the Isle of France, went thence to the island of Ceylon, thence to Madras, where part of the cargo was sold, and an order on Tranquebar taken in return ; she then sailed to this port, purchased some goods, and then went to Batavia, where the remainder of the outward cargo, and that purchased at Tranquebar, were 22 THE LAW OF MARINE INSURANCE. [CH. I. and in no way increases the risk.^ And if the vessel is unable to enter the port by reason of a municipal regulation, the liberty is construed so strictly that she cannot go to any other port.^ So, if permission is given to deviate on the occurrence of certain specific events, these precise events must take place to give that liberty.* And a liberty to cruise six weeks means only six successive weeks from the commencement of the cruise.* It is sometimes intended by the parties, that the ship shall have two termini, the beginning and end of the voyage, but may make intermediate passages, backwards and forwards, between these ter- mini. Perhaps the most usual way of meeting the exigencies of such a case as this is by a policy on time, which permits the in- sured to go where he will. But it may be provided for by cer- tain liberties, expressly given. For this purpose, liberty is some- times given " to go backwards and forwards," or " to make any intermediate passages," or " to touch and return," or " to touch one or more times," or the like.^ If, however, after performing sold, and the proceeds invested in a return cargo, with which the vessel sailed. Held, no deviation. In Lam- bert V. Liddard, 5 Taunt. 480, the in- surance was on a vessel at and from Pernambuco, or any other port or ports in the Brazils, to London. Not being able to obtain a cargo at Pernambuco, the captain sailed to St. Salvador, a port six hundred miles to the south- ward, and more distant from London than Pernambuco. This was held not to be a deviation. ' As the stopping at Morrison's Haven instead of Leith, on a voyage from Car- ron to Hull, with liberty to call at Leith. Eliot V. Wilson, 4 Brown, 470. ' Stevens v. Comtuercial Mut. Ins. Co., 6 Duer, 594. The insurance in this case was by a time policy, which contained this clause.: " Warranted not to use ports and places in Texas, except Galveston, nor foreign ports and places in the Gulf of Mexico, nor places on or over Ocrocoke Bar." Permission was afterwards given to use the port of Laguna for one voyage. When the vessel arrived at Laguna, she was not permitted to enter under a regulation made prior to the permission, until she had entered at a neighboring port, Laguna not being a port of entry. The vessel went to Sisal for that purpose, and was there lost. Held that this was a deviation which discharged the under- writers. ' Duerhagen v. United States Ins. Co., 2 S. & R. 309. Goods were in- sured in this case from New York to Bremen. Liberty was given the cap-' tain on arriving on that coast to enter a Dutch port, if he could do so with safety. Hearing that he could proceed to Amsterdam, without being molested by the British, he attempted to enter that port, and was captured by the French. This was considered a devia- tion. * Syers v. Bridge, 2 Doug. 527. ' In Thorndike v. Bordman, 4 Pick. CH. I.] LIBEETY POLICIES. 23 these intermediate voyages, tlie vessel is to sail thence to a home port, she cannot after sailing for home put back, unless through an excusing necessity ; ^ and " to such a port and a market " covers 471, the insurance was on the vessel and cargo from Boston to any port or ports beyond the Cape of Good Hope, one or more times to the same port, for the purpose of selling the outward and procuring a return cargo, and at and from thence to a port of final -discharge in Europe, or the United States, with liberty to stop at the usual places for refreshments, and to trade thereat. The master sailed for Cochin China, with directions to purchase a cargo, of sugars ; but as he had only gold coin on board, with which he could not trade, he sailed thence to Manilla, with the intention of there purchasing a cargo of sugars, or of exchanging the gold for silver, and returning to Cochin China. This latter intention was exe- cuted, and he proceeded to Saigon, a port to which an American vessel had never before been. Here he obtained part of his return cargo, and sailed for Batavia, where being unable to obtain any sugars, except at a great expense, he went to Samarang, an outport of the island of Java ; but before sailing he was obliged, by a law of the island, in order to proceed to S., to discharge the sugar brought from Cochin China. At Samarang, the cargo was completed, and the vessel sailed for Holland and was lost. Held, that neither the return- ing from Manilla to Cochin China, nor the selling at Batavia of the sugars pur- chased in Cochin China, and going thence to Samarang and there taking in a full cargo, was a deviation. See also Bize v. Fletcher, 1 Doug. 284. A very liberal construction was given to the policy in Hunter v. Leathley, 10 B. & C. 858. Goods were insured " at and from Singapore, Penang, Malacca, and Batavia, all or any, to the ship's port or ports of discharge in Great Britain, or to any port or ports in the United Netherlands, or to Altona or Hamburg, or all or any, with leave to touch, stay, and trade at all or any ports or places whatsoever and where- soever in the East Indies, Persia, or elsewhere." Liberty was given to pro- ceed to any ports and places what- soever and wheresoever, in any direc- tion and for any purpose necessary or otherwise, etc. The court held that the assured must have intended to protect himself against loss at what- soever places in the East the goods might be put on board. Part of a cargo of coffee was put on board at Batavia, with the intention of taking it to Antwerp ; but, there not being enough, the vessel went to Sourabaya, another port in the island of Java, and there loaded more coffee, with the intention of taking it to Antwerp, returned thence to Batavia, and thence sailed to Ant- werp. Sourabaya is not in the direct course from Batavia, Singapore, Pe- nang, or Malacca, to Europe, nor in the direct course of any one of those four places to any other of them. The under- writers were held liable. AflSrmed. Leathly u. Hunter, 7 Bing. 517, 5 Moore & P. 457, 1 Cromp. & J. 423, S. C. at Nisi Prius, Lloyd & W. 244. ' Burns v. Holmwood, Q. B. 1856, 19 Law Reporter, 163. The policy was on goods on a voyage " at and from Liverpool to Cardiff, whilst there, and thence to all or any part or parts, place or places, islands and settlements on the west coast of America, in the Pacific, 24 THE LAW OF MARINE INSUBANCE. [CH. the vessel while on her way from that port to any other port, in search of a market, to which it is usual to go for that purpose under such a clause, or which is actually within what must be deemed a reasonable distance.^ and seas adjacent, particularly Acapulco and Panama on the outward voyage, and the Chincha Islands on the hdmeward, backward and forward, or forward and backward, in any order or succession, during the vessel's stay, trading, dis- charging, and loading there, and thence back to a port or ports of discharge in the United Kingdom.'' The vessel arrived at Callao, and sailed thence for the Chincha Islands, and took a full cargo of guano, with which she returned to Callao, at which place vessels from the Chincha Islands clear, and sailed on her homeward voyage. After being at sea a day or two, the vessel sprung a leak, and was compelled to return to Callao. It was necessary to unload the cargo, which was sold for less than it cost to take it out of the vessel. After the vessel was repaired, she returned to the Chincha Islands, took in another cargo and sailed for home, and was lost on the way. Held a deviation, because the vessel had once begun her home- ward voyage. But it is sometimes dif- ficult to determine when the outward voyage terminates. In Ashley v. Pratt, 16 M. & W. 471, a ship was insured " at and from Liverpool to ports and places in China and Manilla, all or any, during the ship's stay there for any pur- poses, and from thence to her port or ports of calling and discharge in the United Kingdom." The vessel went to Tongkoo in China, discharged part of her cargo there, sailed thence to Manilla, and there discharged most of the re- maining cargo. Freights being low at Manilla, a cargo of opium was taken on board for Tongkoo, with the intention of there seeking a freight back to the United Kingdom. On the voyage to Tongkoo the vessel was lost. It was contended that the voyage back from Manilla to Tongkoo was a deviation ; but the court held that from thence meant not from Manilla only, but from any place in China or Manilla. This case was affirmed on appeal. Pratt v. Ashley, 1 Exch. 257. In Coffin V. Newburyport Mar. Ins. Co., 9 Mass. 436, a ship and cargo were insured from Newburyportto one or more porta beyond the Cape of Good Hope, one or more times, at. and from them, or either of them, to her port of dis- charge in the United States, with lib- erty to touch and trade at any ports and places on the outward or homeward voyages. The vessel arrived at the Cape of Good Hope, and sailed thence for the Isle of France. It was held that an intermediate voyage from the Isle of France to the Cape of Good Hope, and back to the Isle of France, would not be protected by the policy. See also Depeyster v. Sun Mut. Ins. Co., 19 N. Y. 272. ' Thus, where a vessel was insured " at and from Boston to St. Thomas, and a market in the West Indies, and at and from thence to a port of discharge in the United States," it was held, that, if there was no market at St. Thomas, the master might go from thence to any port in the West Indies for a market, and after leaving that port might re- turn, if such return were with the honest intent of finding a market, and might visit the islands in any order. Deblois v. Ocean Ins. Co., 16 Pick. 303. CH. I.] LIBERTY POLICIES. 25 In a late case insurance was made in an open policy on property on board vessel or vessels at and from any port or ports in the United States, with liberty to stop at any ports for trade, adding to the premium one eighth per cent for each port. There was indorsed on the policy, " Schooner Potowmac, Norfolk to Salem or Boston." She reached Salem, was ordered at once in Salem to go to Boston, and was wrecked on the way. It was held that the risk terminated at Salem, because, previous, to her arrival there, there had been no selection of Boston as the final port of destination before the ar- rival at Boston. The insured offered evidence that their vessels had gone, under similar policies, first to Salem, and then to Bos- ton, payi]ig one eighth per cent. But it was held inapplicable.^ Tlie question of the order in which ports should be visited is presented, either when many ports are named, or when there is ' liberty to touch or trade at ports between certain termini, or em- braced within a certain country, district, or coast. Under such a liberty all need not be visited. The insured is never bound to ex- ercise a mere liberty, and the mere omission to do so is never a deviation.^ It must be noticed, however, that, although the voy- See also Maxwell v. Kobinson, 1 Johns, in possession of Leghorn, the vessel took 333, where, however, the court said they goods and cleared for Naples only, and did not mean to say that the same con- was captured before arriving at the struction was to be given to a policy in dividing point. It was held that the any other trade than that to the West vessel had a right to go to Naples alone, Indies. and that the underwriters were liable. In Smith v. Bates, cited 2 Johns. Ca. So, where insurance was effected on 299, the court said, that on a policy to goods from Boston to Terceira and back a market in the West Indies, the vessel to a port of discharge in the United might go from market to market until States, a quarter per cent to be added the whole cargo was disposed of. And for every other port used in the Western in Gaither v. Myrick, 9 Md. 118, it was Islands besides Terceira, and the vessel held that the description " to Valparaiso went immediately to Graciosa, one of and a market," would authorize the ship the Western Islands, it was held not to to visit ports other than that named. be a deviation. Hale v. Mercantile Mar. ' Dodge u. Essex Ins. Co., 12 Gray, Ins. Co., 6 Pick. 172. The rule has been 65. laid down the same way in New York. ' In Marsden v. Reid, 3 East, 572, Kane v. Columbian Ins. Co., 2 Johns, goods were insured " at and from Liver- 264. The voyage in this case was from pool to Palermo, Messina, Naples, and New York to Antigua, and at and from Leghorn, provided the French should thence to Curacjoa. It was held that not be at Leghorn." Intelligence hav- . the vessel might go to Curaqoa, without ing been received that the French were going to Antigua, although she sailed 26 THE LAW OF MARINE INSURANCE. [CH. age may thus be shortened by the omission of a terminus ad quern, it must not be by the omission of the terminus a quo, as by com- mencing the voyage at a point in the route at which the vessel had only liberty to stop.^ If any or all of these ports are visited, they must be visited in their proper order. What this order is, it may not always be easy to determine by rules of law. We should say, however, first, that if the ports be named in the policy, they must be visited in the order in which they are named,^, unless the policy itself, the on a voyage to the latter-named port, and the intention to go to Cura9oa was formed while- in a port of distress. So, in South Carolina, Cross v. Shutliffe, 2 Bay, 220, where the vessel was insured on a voyage from Charleston to Capg de Ver^^ Islands, and from thence to the coast of Africa, it was held that the ves- sel might go directly to Africa, the evident intention of the parties being that the vessel should have liberty to stop at the Cape de Verd Islands, which liberty the master was not bound to exercise. And where a vessel was in- sured from St. Johns to Kingston, and a market in Jamaica, with orders to proceed to Jamaica, and, when off the east end of that island, to proceed to Port Maria, if in season to fulfil a con- tract for the delivery of goods at that place, but otherwise to proceed to King- ston, and then go to Port Maria, it was held that the vessel might go directly to Port Maria, although these orders were not communicated to the underwriters. Houston V. New England Ins. Co., 5 Pick. 89. But in Marine Ins. Co. v. Stras, 1 Munf 408, where insurance was made, " at and from Norfolk to Curaijoa, with liberty of going to any other island in the West Indies, or any other port on the Spanish Main, and at and from thence back to Richmond," it was held that the vessel was bound to proceed to Cura9oa first, and could not stop at St. Thomas and sail from thence home. ' As where a ship and freight were insured "at and from Calcutta, with liberty to touch at Madras, for trade, and to take in a part of her cargo," . beginning the- said adventure " at and from Calcutta, and to endure until her arrival at New York,'' it was held that a voyage from Madras to New York, the vessel not having been at all at Calcutta, was not covered by the policy. Murray V. Columbian Ins. Co., 4 Johns. 443. In Maryland Ins. Co. u. Bossiere, 9 Gill & J. 121, insurance was effected on the return cargo of a vessel, at and from St. Andreas to Baltimore, with the lib- erty of two other ports on the Spanish Main, and at and from any of them to Baltimore. In the order for insurance, mention was made that the vessel was reported as having sailed from San Bias for St. Andreas. The vessel had sailed from St. Andreas for Cordea and San Bias, and was proceeding from the latter place to St. Andreas, when she was lost. The court held that the risk had not commenced. ^ Thus, in Beatson v. Haworth, 6 T. E. 531, the policy was on the ship, " at and from Fisherrow to Gothenburg, and back to Leith and Cockenzie." On the homeward voyage, the ship put into Cockenzie before going to Leith. The latter port was farther from Gothenburg than Cockenzie, but it was held to be a deviation to put into Cockenzie first. CH. I.J LIBERTY POLICIES. 27 order of the enumeration, the character of the voyage, or other similar circumstances, show that this order was accidental, and not intended to prescribe the course of the voyage. Secondly, if the ports are not enumerated, or are mentioned in an order not intended to direct the coitrse of the voyage, the ports entered tnust be visited in their geographical order.^ This generally, but not always or necessarily, means the order in which they would stand on a map ; because it may differ from this order, for what is intended is that order which is most consonant with, or conducive to, the progress of the ship to its ultimate destination.^ This last is the rule which in fact enters into all the others. Thus, whether an island is to be included in a designation in the policy is to be determined, not by the geography, but by commer- cial usage.^ And, generally, whatever be the words used, or how- ever wide the liberty given, if there be a definite ultimate destina- tion, this liberty must be construed and exercised in such a way as shall be, on the whole, reconcilable with the proper progress of the vessel toward that destination.* • If such ultimate destination is not designated, then it seems that any permitted port may be visited in any order, for the pur- pose of obtaining instructions or orders which shall determine the final destination of the ship.^ In a late case, the voyage was from ' See Clason v. Simmonds, cited 6 Sir James Mansfield, C. J., held tliis not T. E. 533. to be a deviation. ' See Gairdnerw. Senhouse, 3 Taunt. ' Mellisli u. Andrews, 16 East, 312, 2 16. M. & S. 27; 8. c. Andrews v. Mellisli, ' Robertson v. Clarke, 1 Bing. 445, 8 5 Taunt. 496. The policy in this case "Moore, 62-2 ; Kobertson v. Money, Ryan was from London to the ship's port or & M. 75. ports in the Baltic. It was held, that * A very liberal construction was put before the port of discharge was selected, upon the policy in Bragg v. Anderson, the vessel was not confined to take the 4 Taunt. 229. The insurance was " at ports in a successive order, but might and from Martinique, and all or any of return to a port she had quitted for the West India islands to London, the orders as to her port of discharge ; and ship to have liberty to proceed, sail to, it was said, that, after the port of dis- and to touch and stay at any ports or charge is selected, the ship must proceed places whatsoever." The ship sailed direct, touching at ports only in a suc- from Martinique to St. Domingo, which cessive order. In Armet v. Innes, 4 J. was much out of her direct course to B. Moore, 150, the policy was, " at and London, took in her cargo at St. Do- from London to New South Wales, and mingo, and sailed thence for Loudon, from thence to the ship's loading port or 28 THE LAW OF MARINE INSURANCE. [CH. I. New York to Gibraltar, and at and from thence to Tarragona, with liberty of using one other port between Tarragona and Gibraltar, and at and from thence to New York. By a subsequent indorse- ment, permission was given to stop at one other port between Tarra- gona and Gibraltar. The court held, that this latter clause gave the right to stop at one other port between the places mentioned, on the homeward voyage ; but not to stop at Gibraltar also.^ Section V. — That a Deviation must he Voluntary. Deviation applies only to a voluntary act'. The very definition shows that any change which can be justified, or shown to pro- ceed from a just cause, is not a deviation. And, of course, no act done under compulsion can be regarded as a deviation .^ The ports in the East Indies and elsewhere, forwards and backwards, and backwards and forwards, as well on the other side as at and on this side the Cape of Good Hope, in ports and at sea, at all times and in all places, on all services, until her safe arrival at her port of dis- charge in Great Britain." It was also provided, that " it should be lawful for the vessel in the voyage insured to pro- ceed and sail to, and touch and stay at, any ports or places whatsoever and wheresoever and for any purpose what- soever." The vessel went with convicts from London to New South Wales, thence in ballast to Batavia, where she took on board a quantity of iron in bars, which she discharged at Sourabaya, and was there loaded with a full cargo of rice, with which she sailed for the Mau- ritius, where part was unloaded ; and the vessel, being injured, was broken up. Held to be no deviation, partly on the ground of the existence of a usage for vessels in voyages of that description to trade. See also Ashley v. Pratt, 16 M. & W. 471, 1 Exch. 257. ' Perkins v. Augusta Ins. and Bank- ing Co., Sup. Jud. Ct., Mass., Nov. T. 1855. ' Winthrop v. Union Ins. Co., 2 Wash. C. C. 7. In this case the vessel was put in the hands of the American consul at the Isle of France, on account of the death of her officers. The un- derwriters were held liable for acts done by the consul, which, had they been done by the owners or their agents, would have discharged them. So, where a vessel was carried out of her course and detained about six weeks by a cruiser, it was held to be no deviation. Scott v. Thompson, 4 B. & P. 181. In Phelps V. Auldjo, 2 Campb. 350, it was held, that, where the master of a. merchant vessel was ordered by a man- of-war to go out to sea to examine a strange sail, and the master did so with- out, remonstrance, this was a deviation, it not being proved that the master acted under any duress or compulsion. Lord Ellenborough, C. J., said, it would have been otherwise " if a degree of force was exercised towards him, which either physically he could not resist, or morally, as a good subject, he ought not to have resisted." CH. I.J DEVIATION MUST BE VOLUNTARY. 29 chaiige of risk, to.operate as a " deTiation," must be not only vol- untary but unnecessary ; or rather, if it be necessary, it must be considered as compelled, rather than as voluntary. If, therefore, it be necessary to go out of the course for repairs, to obtain pro- visions, or for any such sufficient cause, it is no deviation ; ^ but it ' In Pouverin v. La. State M. & F. Ins. Co., 4 Hob. La. 234, it was held, that a vessel insured from New Orleans to Vera Cruz might, on her way- through Lake Borgne, touch at the Bay of St. Louis for a pilot to conduct her through Pass Christian. When a vessel is damaged by a peril of the sea, she may go out of her course to refit. Motteux v. London Ass. Co., 1 Atk. 545 ; Gilbert v. Keadshaw, Marsh. Ins. 208, nom. Guibert v. Read- shaw, Park, Ins. 402 ; Coffin v. New- buryport Mar. Ins. Co., 9 Mass. 436, 447 ; Coles v. Marine Ins. Co., 3 Wash. C. C. 159 ; Akin v. Miss. M. & F. Ins. Co., 16 Mart. La. 661 ; Hallu. Franklin Ins. Co., 9 Pick. 466 ; Turner v. Pro- tection Ins. Co., 26 Maine, 515. And if, after the risk has commenced, the vessel becomes so short of hands that the voyage cannot safely be performed, a deviation to obtain a crew is justifiable. Cruder v. Philadelphia Ins. Co., 2 Wash. C. C. 262. In this case, the vessel was at a port when the loss took place, but, as no crew could be obtained there, a voyage to another port was held justi- fiable. See Cruder v. Penn. Ins. Co., 2 Wash. C. C. 339. So, where the loss took place at sea. Winthrop v. Union Ins. Co., 2 Wash. C. C. 7. Where a vessel is driven out of her course by stress of weather, of course, this is no deviation. Campbell v. Wil- liamson, 2 Bay, 237 ; Miller v. Russell, 1 Bay, 309. But after the storm has subsided, or the necessity which com- pelled the deviaton ceases to exist, the vessel should pursue the direct course for the port of destination. Harrington V. Halkead, Park, Ins. 403 ; Lavabre v. Wilson, 1 Doug. 284. See Neilson v. Col. Ins. Co., 3 Caines, 108, 1 Johns. 301. And in Delaney v. Stoddart, 1 T. R. 22, it was held, that, where a ves- sel in her loading port was driven out into another port by a storm, she might continue her voyage from there, without going back to the port from whence she was driven. If a vessel cannot enter her port of destination, on account of the lowness of the water, or remain off the port for fear of shipwreck, she may go to another port. Byrne v. La. State Ins. Co., 19 Mart. La. 126. In Stocker v. Harris, 3 Mass. 409, a vessel insured " under whatever papers she might sail," went out of her course to obtain papers. Held, that this was not such a necessity as would justify a deviation. In Wiggiu V. Amory, 13 Mass. 118, the vessel was loaded at Bayonne, and in attempting to go out of the harbor struck on a bar, and was obliged to put back for repairs. " It was found neces- sary, or most for the interest of all con- cerned, to send part of the cargo round to Passage to be there reladen." After the repairs were finished, the vessel went to Passage, took in her cargo, and pro- ceeded on her homeward voyage. Held, not to be a deviation. The master is not obliged, before de- viating, to sacrifice a deck load, unless perhaps the whole trouble is caused by his being overloaded. American Ins. Co. V. Francia, 9 Barr, 390. 30 THE LAW OF MARINE INSURANCE. [CH. I. becomes a deviation if carried beyond the necessity. Thus, if a master meets with an accident, or finds his ship for any cause .in need of repair and refitting, it is his duty, supposing the need to be of sufiicient magnitude, to go to the nearest and most acces- sible port in which he can obtain all that he wants. And if on reaching that port, or by information received on the way thither, he learns that he cannot get the necessary repairs or supplies there, he may go to another port, and then, under the same con- dition, to another, until his ship be repaired and refitted, and it will be no deviation, — provided, that he use all proper means and diligence to loge as little time in this way, and depart as little from the voyage intended, as may be consistent with the effectual repair or supply which he needs.^ For, whatever be the necessity, unnecessary delay or waste of time or wandering under that ne- cessity will be a deviation.^ But if a vessel is driven by a strict necessity into a port, which it would have been a deviation to enter without such necessity, this is not made a deviation by proof that the master, before the necessity and without reference to it, intended to enter that port; provided the necessity occurred before he took any steps to carry that intention into effect.^ So too it is, if not a necessity, or a compulsion, yet a justifying 1 Hall V. Franklin Ins. Co., 9 Pick. 466, 483 ; Motteux v. London Ass. Co., 1 Atk. 545. ^ Turner v. Protection Ins. Co., 25 Maine, 515. The vessel, in this case, was insured on a voyage from Havana to St. Petersburg. Soon after leaving port, the vessel met with a disaster, and the master was compelled to seek a port for repair. He altered his course for Boston, which was not the nearest port, and when within fourteen miles of Cape Cod, the weather being thick and hazy, he ran into Portland. The court said : " To determine what port to seek for repair, the master should consider the extent of the danger, its position, as near to or more distant from the course of the voyage, and the facility and speed with which the necessary machin- ery, materials, and labor can be pro- cured and applied to the vessel's use. The master, in most cases, must be the principal judge of the degree of peril to which his vessel is exposed, and of her ability to proceed with safety to a nearer or to a more distant port, and of the facilities for repairing her at different ports. If he is competent and faithful, his decision respecting these matters, made in good faith, should be satisfac- tory to all interested, although he should err in judgment." It was accordingly held, that the master had not acted im- properly in selecting Boston as the port of repair, and that, on arriving off that port, be exercised a wise discretion in going to Portland. " Kingston v. Phelps, cited 7 T. R. 165 ; Hobart v. Norton, 8 Pick. 159. CH. I.] DEVIATION MUST BE VOLUNTAKY. 31 cause for a change of risk, that it was undergone for the purpose of avoiding a peril.^ Thus, if a ship, to avoid seizure in port, goes to sea before she is properly loaded, and is thereby obliged to put into a port out of the course of her voyage, the insurers are still liable.^ So, if the port of destination is obstructed by ice, the vessel may put into a neighboring port.^ Questions similar to those we have already considered occur here also. Was the peril so escaped of sufficient reality and magnitude to justify the departure from the usual course ? and was the departure no greater in extent, either of space or time, than was reasonably necessary to make this" escape effectual ? * Nor does it seem to be ' As capture. DriscoU v. Bovil, 1 B. & P. 313 ; Whitney v. Haven, 13 Mass. 172 ; Eeade v. Comm. Ins. Co., 3 Johns. 352 ; Post V. Phoenix Ins. Co., 10 Johns. 79 ; Goyon v. Pleasants, 3 Wash. C. C. 241 ; Lee v. Gray, 7 Mass. 349, 352. In Govemeur v. United Ins. Co., 1 Caines, 592, the captain of a Danish vessel, fearing capture by the British, put his vessel under the protection of an American ship of war, the captain of which sent the vessel home as a prize ; and, it being captured oa the way, the underwriters were held liable. ' O'Reilly V. Gonne, 4 Campb. 249. ' Graham v. Comm. Ins. Co., 11 Johns. 352. * In Oliver v. Maryland Ins. Co., 7 Craneh, 487, Marshall, C. J., states the law as follows : " No douht is enter- tained that the danger of capture from the Algerines, if proved to be real and immediate, would justify the continu- ance in port. And the apprehension of such danger, if founded on reasonable evidence, would produce a like eflfect. But, in each case, the danger must not be a mere general danger, indefinite in its application and locality. If it were so, in time of war, any delay, however long, in a port would become excusable, for there would always be danger of capture 'from tbe enemy's cruisers. Nor is it sufficient that the danger should be extraordinary, for then any consider- able increase of the general risk would authorize a similar delay. The danger, therefore, must be obvious and imme- diate in reference to the situation of the ship at the particular time. It must be such as is then directly applied to the interruption of the voyage, and immi- nent ; not 'such as is merely distant, contingent, and indefinite." See also Riggin V. Patapseo Ins. Co., 7 Harris & J. 279, where it was held, that a devia- tion to avoid a capture which would not be justified by the law of nations was not justifiable, the captain having no valid reason to suppose that the force in possession of the place which he avoided would violate the rights of a neutral. In Murden v. South Carolina Ins. Co., 3 Const. R. 200, the terminus ad quern was changed, on the ground that the vessel was importing slaves, and that this was prohibited by an act of Con- gress, and also, on the ground that the master apprehended that war had broken out. The latter was considered a groundless pretext, and it was held, that, as both parties knew of the act of Congress, it furnished no excuse for the deviation. In Riggin v. Patapseo Ins. 32 THE LAW OF MARINE INSURANCE. [CH. I. material that the peril which the ship thus endeavors to escape should be one that is insured against. This may not be certainly the law, but assuredly a change of risk would be no deviation, when it was made to avoid a peril, which, although not insured against, wbuld naturally aifect, if it were encountered, other risks that were insured against. And most real and substantial risks are so far connected that those insured against can seldom be wholly independent of, or unaffected by, others against which in- surance is made.^ Co., supra, it was held, that, though a vessel may deviate to obtain information in regard to her port of destination being in possession of the enemy, yet, if there is a port in the direct line of the voyage, she cannot go to one out of the course. ' In O'Reilly v. Royal Exch. Ass. Co., 4 Campb. 246, the goods were war- ranted free of capture and seizure in port. To avoid seizure, the vessel left port in an unseaworthy condition, and was obliged to put into another port, out of the course of the voyage. Held, that the underwriters were not liable, on the express ground that the devia- tion was to avoid a peril not insured against. Breed v. Eaton, 10 Mass. 21, seems to be to the same effect. Goods were insured on a voyage from Liver- pool to Savannah. On arriving off Savannah, the master learned that the non-importatiOn act was in force, and that under it his goods were liable to seizure and confiscation. To avoid this, and for no other reason, the master deviated. The case is briefly reported. The defence was twofold,' — that the un- derwriters were not liable for a devia- tion to avoid a peril not insured against, and that no insurance against the laws of their own country could bind the insurers. The reporter then adds: " And the court being of this opinion, the plaintiffs were nonsuit." It does not then appear directly, from this state- ment, on which ground the opinion of the court proceeded. But, as the case was argued on an agreed statement of facts, part of which was that the plain- tiff should become nonsuit if the court should be of opinion that the deviation discharged the underwriters, we may infer the case was decided on this ground, more especially as it is not very apparent how the question as to the legality of the insurance could arise. But, however this may be, the weight of authority seems to be in favor of the view, that a departure from the course to avoid a peril, although that peril is not insured against, is- no deviation. This must not be confounded with thef question before discussed, of an aban- donment of the voyage on account of a peril. In Robinson v. Marine Ins. Co., 2 Johns. 89, the vessel was insured against sea risks only, and a deviation to avoid capture was held to be justifi- able. This case was decided principally on the authority of Scott v. Thompson, 4 B. & P. 181, where it was held, that if a ship is insured against sea risk and fire only, and is carried out of its course by a peril not insured against, the un- derwriters are liable for a loss by one of the perils insured against. To the same point is Green v. Elmslie, Peake, N. P. 212. Mr. Arnould, 1 Ins. 406, distin- guishes between a vessel being com- CH. I.J DEVIATION MUST BE VOLUNTARY. 33 If a ship is warranted to depart with convoy, it is no deviation if she sail' to the port of rendezvous for convoy.^ And the law permits her to do this, if she is not warranted to sail with convoy.^ So, too, a deviation on the voyage,^ or a delay in port,* for the pui-pose of joining convoy, is justifiable, if reasonably necessary for that purpose. But it seems that, if only liberty to join convoy be given, the insured is not bound to join convoy, but may waive his right.^ It is quite certain that a delay or a departure from the course to save life on board another vessel, or even to give assistance to those in distress, is not a deviation.^ Always provided, however, that the change of course, or the delay, was no greater and no longer continued than the cause for it actually required. Nor is it a deviation for a vessel to go out of her course three miles to speak another at sea, on seeing a signal for that purpose, nor to delay three hours to take from a foreign ship, bound to a foreign port, shipwrecked mariners of the United States for the purpose of bringing them direct to the United States.'^ Whether it is a sufficient excuse or necessity for a deviation, that it was intended to save life on board the vessel insured, may not be so certain. "We should say, generally, it would be a sufficient excuse. But if the pelled to deviate, by a peril not insured ' Heselton v. Allnutt, 1 M. & S. 46. against, and a deviation to avoid a peril ° There can be no doubt at the pres- ,of this description, holding the insurers ent day but that a deviation to save life not liable in the latter case. This dis- on board another vessel is justifiable, tinction is repudiated by Mr. Phillips, 1 In the case of The Schooner Boston, 1 Ins. §1023. All the authorities, however, Sumner, 328, Mr. Justice Story said: ■which he cites to this point do not sup- " The stopping for this purpose could port his opinion. In Riggin v. Patapsco not, in my judgment, be deemed by any Ins^ Co., 7 Harris & J. 279, a strong tribunal in Christendom a deviation from opinion was expressed in favor of hold- the voyage, so as to discharge any in- ing the underwriters liable in case of a surance, or to render the master crimi- deviation to avoid a peril not insured nally or civilly hable for any subsequent against, but the point was not decided. disasters to his vessel occasioned there- ^ See cases Vol. 1, p. 356, n. 6. by." See also Bond v. Brig Cora, 2 " Bond V. Nutt, 2 Cowp. 601. Wash. C. C. 80; Lawrence v. Sydebo- ' Enderbyi). Fletcher, Park, Ins. 410; tham, 6 East, 45 ; The Ship Henry D'Aguilar v. Tobin, Holt, N. P. 185, 2 Ewbank, 1 Sumner, 400 ; Settle v. St. Marsh. 265 ; Patrick v. Ludlow, 3 Johns. Louis Perpet. M., F., & L. Ins. Co., 7 Mo. Ca. 10. 379; Walsh u. Homer, 10 Mo. 6. * Snowden v. Phoenix Ins. Co., 3 ' A Box of Bullion, Sprague, 57. Binn. 457. VOL. n. 3 34 THE LAW OF MARINE INSUEANCE. [CH. I. necessity arose from not having sufficient means of cure on board, and they were such as the vessel should carry, then it would be a deviation and would discharge the underwriters.^ But it seems to ' The question as to the right of mas- ter to deviate, in order to save life on board his own vessel, is not without its difficulty. There can be no doubt that if so many of the crew become disabled by sickness that the vessel cannot be navigated iii safety to her destined port, a deviation to obtain a crew is justifia- ble. So, too, if the provisions give out through no fault of those on board the vessel, there being no question as to the ^vessel's sea-worthiness in this respect when she left port, the underwriters are liable for a loss, notwithstanding a deviar tion. But if a person rightfully on board be taken sick, and for the sole purpose of saving his or her life the master puts into port, the question is one of some difficulty whether the un- derwriters are not thereby discharged. In Perkins v. Augusta Ins. & Banking Co., Sup. Jud. Ct., Mass., Nov. T. 1855, the wife of the captain was on board in a pregnant condition, and fell down the cabin stairs, injuring herself badly. To obtain medical assistance and advice, the captain deviated from his course and put into Gibraltar. The court decided that a deviation to save life on board was justifiable, provided it was necessary. Merrick, 3; said : " To make the excuse valid and efiectual, it must, without doubt, be shown that there was a real ne- cessity for the departure of the vessel from its proper course. The exigency which demands relief must be equal in importance to the intervention which is required in its behalf. Whether it ex- ists and what it is must always be a ques- tion of fact. To determine this rightly, all the circumstances of infirmity and suffering and of relief afforded on the one hand must be considered in con- nection with the increased length of the voyage, the prolonged time required to accomplish it, and the additional risk incurred on the other." It was then stated that if these conflicted, it became the duty of the master to deviate. The case was sent back to the jury to deter- mine whether " the brig was taken into the port of Gibraltar, and detained there, solely for the purpose of affording succor to the distressed upon a fit and proper occasion." See also Brown v. Overton, Sprague, 462. The same question arose in the early case of Woolf v. Claggett, 3 Esp. 257. A deviation was attempted to be justi- fied on the ground that "the captain was taken ill with a severe fit of the gravel ; that the' mate, having pricked his finger by accident, his hand and arm swelled to such a degree as to" render him incapable of doing his duty ; and that they put into Plymouth for the pur- pose of procuring medical assistance." Lord Eldon held, that it was incumbent on the plaintiff to show that he had provided against accidents of this na- ture by every proper precaution, as to medicines and necessaries for the voyage, as much as he was bound with respect to the tightness of the ship. That the plaintiff should show that the surgeon on board the vessel was provided with such medicines and instruments as would probably become necessary in the course of the voyage, arising from the common casualties of mankind. In this case the ship's surgeon was unprovided with a syringe, which was considered to'be an instrument very necessary for the gravel, CH. I.] DEVIATION MUST BE VOLUNTARY. 35 be held that a delay or a departure for the purpose of saving property is, under all circumstances, a deviation ; ^ perhaps for the reason that, if the property be saved, the salvors may claim out of it a recompense by way of salvage, and in decreeing salvage an admiralty court may, and in practice always does, allow for the loss of insurance. A delay for the purpose of towing a vessel is certainly a deviation ,2 unless there are persons on board the vessel towed who can be saved in no other way.^ If an entirely new voyage is undertaken, the old one being wholly abandoned, this is of course a deviation, and the widest dfeviation ; and it must be very seldom that such undertaking of a new voyage could be so far justified by necessity, or by any circumstances, as would prevent it from being a deviation, and still hold the insurers.* and Lord Eldon was of the opinion, upon the whole evidence, that the plain- tiff had failed to make out a case of necessity. So in Kettell v. Wiggin, 13 Mass. 68, where a vessel, insured from Gibraltar to the United States, with liberty to proceed to the Cape de Verd Islands for salt, on arrivel at the Isle of May, finding that there was a scarcity of provisions and water there, made an intermediate voyage to procure them, it was held to be a deviation. This was decided on the ground that the vessel should have been sufficiently provided at Gibraltar to have enabled her to stay and load at the Isle of May without depending on procuring provisions there. See Thomas v. Eoyal Exch. Ass. Co., 1 Price, 195. ' Bond V. Brig Cora, 2 Wash. C. C. 80; Mason u. Ship Blaireau, 2 Cranch, 240 ; Warder v. Goods, etc., 1 Pet. Adm. 31. ' Hermann v. Western M. & F. Ins. Co., 13 La. 516 ; Natchez Ins. Co. v. Stanton, 2 Smedes & M. 340. ' Crocker v. Jackson, Sprague, 141. * In Winter v. Delaware Mut. Ins. Co., 30 Penn. State, 344, insurance was ef- fected on a vessel and cargo from Balti- more to Portland in Oregon. The ves- sel put into Kio Janeiro in distress, and the only way in which she could be re- paired was by funds raised on a bottomry bond payable in San Francisco. The ship sailed for this port, but was again obliged to put back to Rio Janeiro, where she was condemned, and sold, together with the cargo. It was con- tended that the deviation by sailing on the voyage to San Francisco discharged the underwriters. The court, per Low- rie, C. J., said : " It was certainly the duty of the master, under the circumstan- ces, to provide for the transportation of the merchandise to its destination by the best means in his power, and, so carried, it would still be under the pro- tection of the insurance. If he could not send it by the direct route, he would be justified in sending it by another ; or in taking it by another in his own vessel, if he could not get it re- paired so as to go directly. So far, then, as relates to the merchandise, the acci- dent, and the necessary means of repair- ing it, justified the change of route by San Francisco." See post, p. 42, n. 1. 36 THE LAW OF MARINE INSURANCE. [CH. I. Section VI. — Of Intended Deviation. If, before the policy attaches, the insured, acting in good faith and for sufficient reason, wholly abandons, his intended voyage, and substitutes another, the insurers never assume, in fact, any risk, because no risk under their policy ever exists. They there- fore, in commercial phrase, do not earn the premium, and it may be reclaimed by the insured.^ And if an entirely different voyage be intended, for any reason, the policy upon the voyage insured never attaches, although the ship is at the proper port, and sails from it at the proper time ; for she never sails on that voyage. It is sometimes a little difficult to reconcile the cases which come under this rule with those to which another rule is applicable, namely, that which declares that no intended change shall amount to a deviation, until the insured has at least begun to carry it into effect ; for a mere intention is not an act, and an intention to deviate is not carried into effect, although something is done to forward it, unless that something is an actual change of risk. Thus, if a vessel not insured as a letter of marque takes out let- ters and arms herself, it has been held, by some authorities, that this act does not discharge the insurers;^ nor if she defends her- ' See ante, Vol. 1, ch. 15, § 2, p. 505. this is evidently considered as the ground ^ In Denison v. Modigliani, 5 T. R. on which the case was decided, in Moss 580, the ship and cargo were insured v. Byrora, 6 T. E. 379, by Lord Z'eni/on, from Liverpool to Oporto. After the C. J., who gave the opinion of the court policy was taken out, the insured asked in Denison v. Modigliani. In Moss v. permission to take guns on board, and Byrom, the letter of marque was taken to have a letter of marque. The latter with the view of inducing the seamen was refused, but it was nevertheless to ship, but as it did not have the neces- taken out. The ship was taken without sary certificate, it was invalid, and the having used the letter in any way. The question presented in the case of Deni- Tinderwriters were discharged, on the son v.~ Modigliani was not decided, ground that the captain had " a strong There are some dicta in England on temptation to deviate," and that this this subject, which clearly show that the was " an essential alteration of circum- mere taking a letter of marque would stances from the condition of the vessel not avoid the policy. Thus, in Eaine at the time of the insurance." It is to v. Bell, 9 East, 195, 201, Lawrence, J. be observed, however, that permission said : " If an intention to deviate, not to take the letter of marque was asked carried into effect, wUl not avoid a pol- and refused, which was strong evidence icy, still less can a temptation to deviate, of the intention of the parties. And If the doing of a thing do not alter the CH. I.J INTENDED DEVIATION. 37 self ; but it certainly becomes a deviation as soon as she chases, or even lays to, for the purpose of making a prize. ^ risk of the underwriter, and be not ex- pressly prohibited to be done, I cannot say that it vitiates the policy as upon the breach of an implied condition." And Lord Ettenborough, C. J., in Jarratt V. Ward, 1 Campb. 263, 266, said: "I believe the general opinion nOw is, that a mere irritation of this sort shall not operate as a deviation." In this country the authorities are in accordance with the view that the mere taking a letter of marque does not dis- charge the underwriters. Wiggin v. Amory, 13 Mass. 118, 14 Mass. 1, 10; Wiggin V. Boardman, 14 Mass. 12; Haven v. Holland, 2 Mason, 230. ' One of the earliest cases on this subject is Cock v. Townson, Park, Ins. 396, where a vessel bound from Cork to Jamaica cruised during the night in hopes of meeting with a prize. This was held to be a deviation. In Jolley V. Walker, Park, Ins. 396, "the ship was warranted to proceed on that voy- age with sixty men, and equipped with twenty-two guns, eighteen and six pound shot, and'sheathed with copper." The ship sailed with letters of marque, and was directed not to cruise, but to chase, take, and make prize of an enemy's ship, if one should be met in the direct course of the voyage. The question arose whether, if an enemy's . vessel was pursued and lost sight of, the chase could be kept up* Lord Mans- field, C. J., left it upon the evidence to the jury, who found for the plaintiffs. In Parr v. Anderson, 6 East, 202, 2 Smith, 316, a vessel, insured "with or without letters of marque," saw a sail to leeward, altered her course a quarter of a point, and pursued the vessel about fifteen minutes, and then continued her voyage. At the first trial before the jury. Lord Ellenhorough was of the opinion " that the mere liberty to carry a letter of marque would not justify such a deviation, nor give the assured a liberty of engrafting on a commercial adventure an adventure for hostile cap- ture." His lordship then added : " But if it were for the purpose of defence, which might happen in various ways, as by making a show of confidence in the face of an enemy with a view to deter them from an attack, or, if that could not be accomplished, with a view to obtain some advantage in the conflict, or the like," the verdict should be for the plaintiff. The jury having found a verdict for the defendant, a rule nisi was obtained, and the case argued be- fore the King's Bench, and sent back to a jury to ascertain the^usage of trade, if any, in similar cases. The case of Jolley V. Walker was distinguished on the ground that it contained no liberty to take letters of marque, and that the warranty in regard to the number of men and guns showed that the inten- tion was to use the vessel as a private ship of war. Of the further progress of the case of Parr v. Anderson we have only a brief note by Mr. Park, as fol- lows : " This case came on to be tried again before Lord Ellenhorough, and a special jury. From- my memory of what passed, having been one of the counsel in it, aided by a note which I have seen, his lordship was strongly of opinion, on the evidence, that this vessel had cruised, which of course, if the jury so thought, would put an end to the ques- tion. The jury found for the defend- ant; and I have no doubt, upon that ground, from the evidence of the plain- 38 THE XAW OF MARINE INSURANCE. [CH. I. If the owner of a vessel, insured at Boston on a voyage from Boston to New Orleans, changes his mind after the insurance is tiff's own witnesses." Park, Ins. 398. But this seems to confine the use to which a letter of marque may be put ■within rather narrow limits. In Hooe V. Mason, 1 "Wash. Va. 207, it was held that a merchant vessel with a letter of marque was not obliged to act merely on the defensiye, but might attack and chase an enemy in sight, but could not cruise out of her course to look for prizes. And Mr. Justice Jackson, in Wiggin I). Amory, 13 Mass. 118, 127, said : " The only material difference be- tween a privateer and a ship sailing under a letter of marque is the use to be made of their commissions. The one intends to cruise in search of prizes, and the other intends to attack and take only what may fall in her way." In Wiggin «. Amory, 13 Mass. 118, it was held that the capture of a vessel, although the vessel did not go off of her course, but merely delayed for a few hours, was a deviation, the underwriters not knowing that a letter of marque was taken. In Wiggin v. Boardman, 14 Mass. 12, the facts were the same except that the jury found that the defendant knew before he subscribed the policy that the ship was armed and equipped, and commissioned as a letter of marque. The court said: "The knowledge that a vessel is armed, and has a commission, does not necessarily carry with it an assent that the vessel shall do anything which may cause a delay of her voyage, or that her com- mission shall be used, except for de- fence. It may be that she is armed only for the purpose of defence, and that her commission is to' be used only to justify the attack of such vessels as may come in her way ; and possibly the capture of such vessels, if that can be done without delaying the voyage." The underwriters were therefore held not to be liable. In Haven v. Holland, 2 Mason, 230, which was an action on a policy of in- surance upon merchandise on board the same vessel, the Volant, Story, J., in- structed the jury that if, when the Volant wore round to attack the other vessel, " it was for the purpose of self- defence, to intimidate the enemy, and to repel a meditated attack, before the Volant should herself be disabled," the act was not a deviation, but otherwise, if it was done without any view to self- defence, and for the mere purpose of making a prize. He also ruled that, if the capture was Inade in self-defence, the master had a right to take 'possession of the prize, and man it, if he could do so without injuriously weakening his own crew. In regard to what would be an act of self-defence the learned judge said : " If a vessel, supposed to be an enemy's cruiser, be in sight, and ap- parently intend an attack upon a mer- chant vessel, the master of the latter is bound to exercise his best skill and judgment as to the time and mode of his defence ; and if he act honestly and fairly, he will be justified, whatever may be the event. He is not bound to endeavor to make his escape in the first instance, and on failure of this, to meet the enemy ;■ nor is he bound to lay by or fly until an attack is commenced upon him, and he has received injury, and then, and not before, to exert his right of self-defence. The law vests him with a large discretion for the benefit of all concerned- He is to con- CH. I.] INTENDED DEVIATION. 39 effected, and the vessel sails from Boston for Liverpool, this is no deviation, because the policy never attaches. The voyage in- sured never begins, although it is true that, until the vessel leaves Boston Harbor and passes the lower light, her route will be the same for both voyages.^ But if a vessel, after being insured on such a voyage, receives goods on board to be left at Savannah on her way to New Orleans, and sails with this intention, it seems that it would be a sailing upon the voyage to New Orleans, with an intention to deviate from it as soon as the vessel reached that point at which a vessel bound for Savannah would bear away for that port. The poUcy would therefore attach ; and until the ves- sult the safety of the persons and prop- erty on board, in the best manner he can. He may lay to, or chase the enemy's ship, if he deem that the most effectual means of securing his object. It may be his best course, to begin the attack, and to attempt to cripple the enemy, or to encourage his own crew by commencing a chase, or to intimidate the enemy by laying to, and showing a determination to resist any attack." Mr. Phillips mentions a subsequent suit between a shipper of goods and the owners of the vessel, in which it ap- peared " that the taking possession of the captured vessel was a defensive measure, for the purpose of preventing intelligence of the course of The Volant to British cruisers, whereby she might have been exposed to capture." It was accordingly held not to be a deviation. Gray v. Thorndike, Sup. Jud. Ct., Mass. Suffolk, Nov. T. 1817. 1 Phil- lips, Ins. § 1030. We have examined the records of the court, but have been unable to find on what precise grounds the verdict of the jury was rendered. If a vessel on a fishing voyage has lib- erty to chase, capture, and man prizes, she cannot lie nine days off a port wait- ing for an enemy's ship to come out, although she should be during that time within the limits of her fishing-ground. Hibbert v. Halliday, 2 Taunt. 428. If liberty is given to see a prize into port, the ship will not be authorized to re- main in port, while the prize is under- going repair. Jarratt v. Ward, 1 Campb. 263. If a vessel has liberty to cruise and capture, she may convoy her prizes, if she does not go out of her course for that purpose, and the risk is not increased thereby. Ward v. Wood, 13 Mass. 539. But if the vessel short- ens sail, or lays to in order to let the prize keep up with her, this is a devia- tion-. Lawrence v. Sydebotham, 6 East, 45. ■ ^ Wooldridge v. Boy dell, 1 Doug. 16 ; Tasker v. Cunninghame, 1 Bligh, 87 ; Way V. Modigliani, 2 T. K. 30. In Forbes v. Church, 3 Johns. Ca. 159, a cargo was insured from New York to Andero. The vessel cleared for Ham- burg, but on the way she altered her course with the intention of proceeding to St. Andero, and going thence to JHamburg at a more favorable season, but was captured on the way. Held, that the voyage insured had never commenced. See Bain v. Kippen, ■Millar, Jns. 445, and cases infra, p. 40, n. 1. 40 THE LAW OF MARINE INSURANCE. [CH. I. sel actually changed her course there would be no deviation, and the insurers would be liable for a loss occurring while the vessel was on the route which she would have pursued had she been bound to New Orleans alone^ but not for a loss which happened after she had entered upon a course which she took only because she was bound to Savannah-^ In neither of these cases, perhaps, could any question arise ; but it is obvious that in other cases, which come, as it were, between these, there might be much difficulty in determining whether the vessel sailed on the voyage proposed,*but with the intention to de- > Foster v. Wilmer, 2 Stra. 1249; Carter v. Royal Bxch. Ass. Co., Id. ; Thellusson v. Fergusson, 1 Doug. 361 ; Kewley v. Ryan, 2 H. Bl. 343 ; Hare v. Travis, 7 B. & C. 14 ; Marine Ins. Co. V. Tucker, 3 Cranch, 357 ; Thompsons. Alsop, 1 Root, 64 ; Henshaw v. Marine Ins. Co., 2 Caines, 274 ; Hobart U.Nor- ton, 8 Pick. 159 ; Winter v. Delaware Mutual Ins. Co., 30 Penn. State, 334. In Heselton v. Allnutt, 1 M. & S. 46, insurance was effected at and from Heli- goland to Memel, with liberty to touch at any ports whatsoever. The captain sailed with written orders to go to Got- tenburg, and there ascertain whether he should proceed to Anholt or Memel. The vessel was lost before she arrived at Gottenburg. The underwriters were held liable, on the ground that there was a good inception of the voyage from H. to M., subject to be changed according as circumstances might require. A similar question was presented in Law- rence V. Ocean Ins. Co., 11 Johns. 241, under circumstances somewhat more favorable for the underwriters, but they were nevertheless held liable. The risk- was " at and from New York to Gotten- burg, and at and from thence to a port in the Baltic." On arrival at Gottenburg the assured elected St. Petersburg as the ultimate port of destination, and sailed for the same, but being compelled to go into Carlsham, the vessel wintered there, and, before leaving, the super- cargo determined to go to Stockholm instead of to St. Petersburg, and sailed for that port. While on the route com- mon to the two the vessel was captured. The Supreme Court held that this was but an intended deviation, and not an abandonment of the voyage. Of the five judges who at that time constituted the court, one dissented and one gave no opinion, not having heard the argu- ments. On appeal to the Court of Er- rors, in a case against another company, depending on the same facts, the decis- ion of the Supreme Court was affirmed, Chancellor Kent dissenting. New York Firem. Ins. Co. v. Lawrence, 14 Johns. 46. Tlie case of Silva v. Low, 1 Johns. Ca. 184, where the voyage was from Wilmington to Falmouth, and the mas- ter, before the vessel sailed, declared his intention to put into New York for sea- men, and the underwriters were accord- ingly discharged, is not in conflict with the cases above cited. It was so decided, not on the ground of a deviation, but because this intention was considered as showing either that the vessel was uu- seaworthy when she left Wilmington, or that the seamen were not shipped for the whole voyage. CH. I.] INTENDED DEVIATIQN. 41 viate, or upon a different voyage. We know of no rule or prin- ciple wliich could always answer this question. It seems to be one of mixed law and fact. We should say, in general, that if the proposed change in the voyage was suf&cient in extent, quantity, and importance to make it a change of the whole voyage from the beginning, then there was an abandonment of the voyage intended and the substitution of another ; for it is quite certain that if a vessels sails from the place at which the insurance should attach and the risk commence, but not on the voyage insured, the policy does not attach. ^ But if the change be not enough for this, then it must be regarded only as an intention to deviate, which has no eiFect whatever upon the rights or obligations of either party, until it is carried into effect. If the vessel sails with the intention not to go to the terminus to which she is insured, but to some other port or place, it would seem to be very difficult to construe this as a mere intention to deviate, or as anything less than another voyage, although the ves- sel sail through much the larger part of her course in the direction which led to the proper terminus ; although, perhaps even here, if the change took place only at a very short distance, the two ports being very near to each other, this might be construed as the same voyage, with an intention to deviate ; but we should prefer the former construction even in this case.^ If the ship actually sails ^ Sellar v. M' Vicar, 4 B. & P. 23. So, the insurer. If it has any defect, it is in in Lippincourt u. La. Ins. Co., 2 La. 399, not extending far enough the claim to an insurance for six months' trading be- indemnity, as the terminus ad quern may, tweeu New Orleans and any port in in many instances, be relinquished with- the West Indies, United, States, or Gulf out any possible increase of risk, or even of Mexico, was held not to protect a -without varying the risk, excepting only voyage between the West Indies and a as to lessening its duration. I will in- port in the United States other than stance the case of an insurance from New Orleans. America to St. Petersburg, when the ^ In Marine Ins. Co. v. Tucker, 3 vessel, in fact, is to terminate her voyage Cranch, 357, Mr. Justice Johnson said: at Copenhagen; or the case of an insur- " The ordinary rale for ascertaining the ance to Alexandria, in Virginia, when identity of a voyage insured is by ad- the vessel is to terminate her voyage at verting to the termini. A rule which Georgetown, in Maryland." But see is certainly correct as far as it extends. Marine Ins. Co. v. Stras, 1 Munf. 408, but in the rigid application of which it where the taking a return cargo to Nor- is easy to conceive that cases may occur folk, in Virginia, instead of to Richmond in which it would bear injuriously upon in the same State, which latter was her 42 THE LAW OF MARINE INSURANCE. [CH. I. on the voyage intended, the fact that she cleared for a different voyage does not discharge the insurers.^ It may be added, that, after a deviation has taken place, the for- feiture incurred by it may be waived by an agreement to that effect.2 port of destination, was held a devia- tion. In Stoeker v. Harris, 3 Mass. 409, the ship, cargo, and freight were insured from Boston to the Canaries, at and from thence to any port or ports in Spanish America, in the Atlantic or Ethiopic Ocean, at and from thence to her port of discharge in the United States. After performing her outward voyage, the vessel cleared with a cargo for the Havana. On the passage, but be- fore she had left the track she must have taken if coming to the United States, the vessel was captured. The underwriters were held not to be liable. See also Merrill v. Boylston Ins. Co., 3 Allen, 247. ' Planch^ V. Fletcher, 1 Doug. 251 ; Barnewall v. Church, 1 Caines, 217; Talcot V. Marine Ins. Co., 2 Johns. 130 ; McFee v. South Carolina Ins. Co., 2 McCord, 503. In Winter v. Delaware Mut. Ins. Co., 30 Penn. State, 334, the vessel was compelled to put into an in- termediate port for repairs, and the master .could only obtain money for that purpose by giving a bottomry bond pay- able on the arrival of the vessel at a port other than that to which she was insured. She accordingly was repaired and sailed for the substituted port. It was held, that, while she was still on the track to the original port of destination, there was merely an intention to devi- ate, and not an abandonment of the original voyage, if the jury should find that the intention was, after leaving the substituted port, to proceed to the origi- nal port of destination. * Warren v. Ocean Ins. Co., 16 Maine, 439; Crowningshield v. New York Ins. Co., 3 Johns. Ca. 142. In Glidden v. Manufacturers' Ins. Co., 1 Sumner, 232, the vessel was insured from Newcastle, Maine, to her port of discharge in Mar- tinique, and at and from thence to her port of discharge in the United States. The vessel went to Mariegalante, took on board a return cargo, and sailed for Damariscotta, Maine. She touched at St. Eustatia, and was afterwards lost on the way to Damariscotta. After it was known that the vessel had been at St. Eustatia, the following memorandum was added to the policy by consent : " It is now understood that the within insured vessel has been to St. Eustatia, and sailed thence for Boston about twenty- five days since, which deviation shall not prejudice the within insurance. Story, J., said : " The question is, whether this memorandum helps the plaintiff's case. I am of opinion it does not. In the first place, it waives noth- ing more than the deviation from the voyage, by going to St. Eustatia, and not that by going to Mariegalante and not going to Martinique. In the next place, this waiver is only upon a state- ment in the memorandum, that the voyage was from St. Eustatia to Boston ; whereas it was, in fact, to Damariscotta." It has been held, that if a vessel is in- sured after the voyage has commenced, but the risk is to begin from the commencement of the voyage, the un- derwriters are discharged by a deviation, although they knew of it when the pol- icy was made. Redman v. Lowdon, 5 Taunt. 462, 1 Marsh. 136, 3 Campb. 503. CH. n.] THE TERMINI MUST BE DISTINCTLY STATED. 43 CHAPTER II. OF THE TERMINI OP THE VOYAGE, AND OF THE RISK. Section I. — That these Termini must he distinctly stated. In the preceding chapter we have seen the importance of ascer- taining the termini of the voyage, because on this may some- times depend the question of deviation. A more frequent refer- ence to the termini is required for the purpose of deciding whether a loss has happened before, after, or during the voyage insured, or the risk insured against. Tlie first rule on this subject is, that the policy must state specifically what these termini are. Thus, a policy from to , or from to A, or from A to , is incomplete, and never attaches.^ So it is, if the termini are named and de- scribed, but in such a way as has no meaning, or leaves a sub- stantial doubt as to what is meant by the description. Section II. — Of the Commencement of the MisJc. To determine when the risk begins, the date of the policy is some- times important ; for it takes effect from that date, although the ' Molloy, Book 2, ch. 7, § 14. See that the vessel was at a certain port also Manly v. United M. & F. Ins. Co., when the policy was executed, and 9 Mass. 85, 89, per Sewall, J. In there took on hoard the property in- Folsom V. Merchants' Mut. M. Ins. Co., sured, and sailed from thence on the 38 Maine, 414, insurance was eflfected voyage, was admitted to determine the " on the outfits of schooner Pilot, for a terminus a quo. In Cleveland v. Union fishing voyage to the Banks and back Ins. Co., 8 Mass. 308, it was contended to a port of discharge in the United that the description " at and from Salem States." It was held, that though the to any port or ports, place or places, commencement and termination of the backwards and forwards, round the risk were not distinctly stated, yet the globe, one or more times, during her policy was valid, if the intention of the stay and trade at all such places, until parties could be satisfactorily gathered her return to her port of discharge in from its provisions, and that any obscurity the United States," was too loose and could be removed by reference to the indefinite, but the court held it to be situation of the parties, and evidence sufficient. 44 THE LAW OF MARINE INSURANCE. [CH. 11. insurers do not deliver it to the insured until afterwards, if the contract were fully made at the time of the date.^ The insurers can, if such be the intention and agreement, make themselves responsible for a loss which has already happened when the policy is made, and even if that loss be total, so that the sub- ject-matter of the insurance is then non-existent. This is usually done by the words, " lost or not lost," which are introduced into most policies ; but any language indicating the same purpose would have the same effect. Nor is,there any sufficient reason why this already existing loss should be wholly unknown to both parties. If known to the assured, he must of course communicate it ; but then, if neither the amount, nor any circumstances which would determine the amount are known, the insurers may, if they please, take this risk upon themselves.^ So, too, if insurance is effected on goods " lost or not lost," the underwriters are liable for a partial loss which took place before the insured acquired any interest in the goods.^ If a policy is to take effect on the occur- rence of a certain event, it will attach, although the event has taken place before the date of the policy, if at the time of the date the subject insured is in the condition described in the policy.* If insurance is made to commence " on " a certain day, it be- gins at the beginning of the day, and covers all losses occux-ring in any part of it. If the word used be " from " a certain day, strictly speaking it should exclude the whole of that day ; and such would be the construction, if there are no facts or admissible ' See anie, Vol. 1, p. 36, n. 5; p. 44, in this case was, "lost or not lost, n. 5. S 10,000 on the bark Esperanza, build- ^ Mead v. Davison, 3 A. & E. 303 ; ing at Perry, to take effect as soon as Gladstanes u. Koyal Exch. Ass. Co., water-borne." The policy was execut- cited atiie, Vol. 1, p. 332, n. 3. ed November 15, and the vessel was ' Sutherland v. Pratt, 11 M. & W. launched on the preceding day. It was 296, Parke, B., said : " It operates just contended that the policy was to attach in the same way as if the plaintiif, only on the happening of an event sub- having purchased goods at sea, the de- sequent, namely, the vessel being water- fendant (the insurer), for a premium, borne; but the court held, that, even if had agreed that, if the goods had at the the words " lost or not lost " did not time of the purchase sustained any dam- make the policy attach the moment the age by perils of the sea, he would make vessel was water-borne, yet, as the ves- it good." sel was in the situation described when * Cobb V. New England Mutual M. the policy was executed, the policy at- Ins. Co., 6 Gray, 192. The insurance tached from that time. CH. n.] COMMENCEMENT OF THE KISK. 45 evidence to control it.-' A distinction has been taken between "from the date," which is held to include the day, and " from the day of the date," which excludes it.^ But this distinction seems almost too nice for practical use ; and we shoiild say that either of these phrases, or any one of like character, would be always open to construction upon the evidence, and the circumstances of each case.^ If the insurance be on goods, it may be said, as a general rule, that the policy attaches to them when it would attach to the vessel carrying them, if she were insured. If the risk is to begin at a certain time, and this be definitely fixed, and the policy also pro- vides that the insurance shall begin upon the ship " at " a certain place, the policy may attach at that time, although the ship be at another place, if the whole policy and all the circumstances make it certain that the name of the place is either surplusage or a mere term of description.* ' In Chiles v. Smith, 13 B. Mon. 460, it was held, that, if time is to be com- puted from an act done, the day on ■which the act was done must be in- cluded, but if the computation is to be made from the day itself, then the day must be excluded, on the authority of Bellasis v. Hester, 1 Ld. Raym. 280. In Lorent v. South Carolina Ins. Co., 1 Nott & McC. 505, the question was, whether a policy issued on the day of the passage of the embargo act was valid or not. The embargo was laid for the term of ninety days, from and after the passage of the act. The court held, that it did not go into opera- tion till the day after the passage of it, and the policy was, therefore, valid. ^ Sir Robert Howard's Case, 2 Salk. 625. ' This subject was elaborately con- sidered by Lord Mansfield, C. J., in Pugh V. Leeds, Cowp. 714. He held, that the word " from " might be either inclusive or exclusive, according to the context and subject-matter, and that " the day," and " the day of the date,'' meant in every case the same thing, and said : " The date is a memorandum of the day when the deed was delivered. In Latin it is datum, and datum tali die is delivered on such a day. Then, in point of law, there is no fraction of a day ; it is an indivisible point. What is ' the day of the date ' ? It is ' the day the deed is delivered.' ' The date,' therefore, being also defined to be the day the deed is delivered, ' the date,' and ' the day of the date,' must mean the same thing. The day of the date is only a superfluous expression." ■' Manly v. United Mar. & F. Ins. Co., 9 Mass. 85. In Martin v. Fishing Ins. Co., 20 Pick. 389, a vessel was insured " at and from Calais, Maine, on the 1 6th day of July, at noon, to, at, and from all ports and places, to which she may proceed in the coasting business, for six months." The court held, that the policy attached, although there was no evidence that the vessel was at, or prosecuting her voyage from Calais on the day named. See also Grousset v. Sea Ins. Co., 24 Wend. 209. And in Kent V. Manuf. Ins. Co., 18 Pick. 19, the vessel was insured at and from Bos- 46 THE LAW OF MARINE INSURANCE. [cH. n. If the words used be " at and from " a certain place, to which the ship is sailing, the risk begins when the vessel is at that place, in such condition as is contemplated by the policy ; and, in geni' eral, this must be a safe condition. It is said, indeed, that the policy does not attach, unless the vessel is there in safety.^ But we do hot see that she needs, always, to be there in safety. If, for instance, one policy insures her " to " such a place, and a sec- ond is made upon her " at " that place, for the obvious purpose of attaching when the first ceases, and the ship arrives at the. place in a violent and dangerous storm, which continues until the first pol- icy is discharged, we do not see that the danger prevents the sec- ond policy from attaching. If the policy on the homeward voy- age is stated to be in continuance of the policy on the outward, it would certainly take effect on the termination of the outward, but perhaps not otherwise.^ ■ In a very late English case a ship ton to certain places. The policy was dated October 18th. There was a previous policy on time, for one year, which expired October 20. The vessel sailed from Boston on the 18th or 19th of October and was never heard from. The court held, that the second policy attached on the 20th of October, al- though the vessel was at sea, and if she was lost after that time the underwriters were liable. ' Upon the question, whether the risk on a ship " at and from " a port commences on her arrival, or whether it begins when she has been moored twenty-four hours in safety, see Gar- rigues v. Coxe, 1 Binn. 592, where the latter rule was adopted. In Patrick v. Ludlow, 3 Johns. Ca. 10, 14, Kent, J., said : " The true rule on this subject is, that at and from, when applied to a ship, includes the period of her stay in the port from the time of her arrival there." The question before the court was distinct from this, and the remarks of the learned judge were altogether obiter. In Motteux v. London Ass. Co., 1 Atk. 545, 548, Lord Chancellor Hard- wicke said : " There was a case before me, upon a trial at Guildhall, where it was then debated, whether the words ' at and from Bengal to England ' meant the first arrival of the ship at Bengal. And it was agreed that the words ' first arrival' were implied and always un- derstood in policies." It is to be ob- served, in regard to this case, that the chancellor did not intend to distinguish between the moment of arrival and the being moored twenty-four hours, but the case was mentioned as bearing on the question, whether, under the words used, the assured might leave the port, make an intermediate voyage, and then return and sail for the port of destination. See also Parmeter v. Cousins, 2 Campb. 235, in whichLord jB/ZenSorout/S, C. J., held, that the policy did not attach until the ship was in safety. See ante, Vol. 1, p. 386, n. 4. And in Bell v. Bell, 2 Campb. 475, 478, Lord Ellenhorough, said : " The safety required to give a good commencement to the risk on the ship is a physical safety from the perils insured against, and not a freedom from political danger.'' ^ Spitta V. Woodman, 2 Taunt. 316. CH. II.] COMMENCEMENT OF THE RISK. 47 ■was insured " at and from Havana to Greenock," and the dec- laration alleged that the ship, when at Havana, and after the com- mencement and during the continuance of the risk, sustained in- jury by the perils insured against. In the harbor, and while in charge of the pilot, the ship was crossing a shoal, and was seen to stir the mud, but was not felt to take the ground. The pilot then gave orders to let go the anchor, which was done, and the next day the captain, attempting to turn her, found he could not, and then ascertained that she had sustained damage from the anchor of another ship. There was some conflict of evidence as to whether the ship struck the anchor and was stopped by it, or whether she settled down upon it on the falling of the tide. It was held that the policy had attached when the injury took place.^ The greater part of the policies of the present day contain a clause, by reason of which the outward voyage does not expire till the vessel has been moored twenty-four hours in safety. And this question would not then arise. If the words are " at and from " a certain port, although the insurance begins only at that port, the word may comprehend an open roadstead, or any places included naturally or usually within the port named, as places at which vessels receiving cargoes are considered as " at " the port. It is sometimes a difficult question of mixed law and fact, whether a certain place is really within the scope of the word " port " or is a part of a place named ; and this question can only be answered by usage and the nature of the case.^ ' Houghton V. Empire Mar. Ins. Co., menced." It is plain, however, that the Ct. of Exch. Hilary Term, 1866. Chan- ship was not safely moored, and the legal nel, B., said : " In my opinion she was at inference from this case must be that the that time at Havana, and consequently words " at and from " are to be construed the risk under the policy had attached, in their geographical sense, and there- The damage occurred at Havana, geo- fore the policy attaches as soon as the graphically speaking, and'there is noth- vessel arrives within the port named, ing which to my mind shows that the although not safely moored. parties at the time this policy was un- ' De Longuemere v. Firem. Ins. Co., derwritten oontempl3,ted any other 10 Johns. 126. In Higgins v. Aguilar, meaning of the word ' at.' " Pigott, B., cited 2 Taunt. 406, on a policy, at and also said : " As the ship has arrived geo- from Demerara to London, it was held, graphically within the harbor of Havana, that a loading at Essequibo was a load- and was in safety there before the in- ing at Demerara. This was decided jury was received, the risk then com- upon the particular usage of the trade. 48 THE LAW OF MARINE INSURANCE. [cH. n. The words " at and from " are often, if not always, especially in a home port, intended to cover a ship while in the port prepar- ing for her voyage, as well as after she begins it. And there may not only be a " deviation " in the port, springing from unreason- able slowness or entire suspension of the preparations, but the policy may never attach from the want of the preparations, or its attachment be delayed by a delay in the preparations ; so that where a vessel has been a long time in a port, the risk seems not to commence until preparations are begun for the voyage insured.^ If the insurance be " from " only, and not " at," it does not be- gin until the vessel leaves the port or place ; that is, weighs anchor, or casts off her moorings with the preparations which she pur- poses made, and with the intention of sailing.^ But the word And in Mo Cargo v. Merchants' Ins. Co., 10 Kob. La. 334, slaves, taken on board in Hampton Roads, were held to come within a policy " at and from Norfolk." So insurance on goods at and from the ship's loading port or ports in Amelia Island will cover goods taken in at Tigre Island, there being no port at Amelia Island and the usage of the trade being for ships to lie at Tigre Island to take on board their cargoes and then clear from Amelia Island. Moxon V. Atkins, 3 Campb. 200. So, Grass Island has been held to be within the port of Limerick. Bell v. Mar. Ins. Co., 8 S. & R. 98. See, generally, as to the meaning of the word " port," Hull Dock Co. V. Browne, 2 B. & Ad. 43 ; Stockton R. Co. v. Barrett, 7 Man. & G. 870; Cockey v. Atkinson, 2 B. & Aid. 460. In Payne v. Hutchinson, 2 Taunt. 405, note, goods were insured " at and ftom Caermarthen to London." The vessel took in her cargo at Llanelly and sailed thence for London. Llanelly is a member of the port of Caermarthen, but there is a distinct custom-house at each of these places.- Caermarthen lies higher up the river, and is accessible only by an intricate navigation. The vessel cleared at L. It was held, that the risk had not commenced. See also Constable v. Noble, 2 Taunt. 403; Brown v. Tayleur, 4 A. & E. 241. ^ Seamans v. Loring, 1 Mason, 127, 140; Kemble v. Bowne, 1 Caines, 75. See also ante, p. 9, n. 4. In Lam- bert V. Liddard, 5 Taunt. 480, a vessel which was then cruising was insured " at and from Pernambuco or any other port or ports in the Brazils, to London, beginning the adventure on the termi- nation of the cruise, and preparing for her voyage to London." The vessel, at the end of the cruise, was off the coast of Brazil to the northward of Pernam- buco. The master sent a boat ashore to see if a cargo could be obtained at Per- nambuco, and finding that it could not, he set sail for St. Salvador, for the pur- pose of obtaining a cargo, and the vessel was lost on the way. It was held, that the risk attached from the time the master sent the boat ashore, on the termination of the cruise, that being considered pre- paring for the voyage within the policy. ^ See Mey u. South Carolina Ins. Co., 3 Brev. 329, and cases ante, Vol. 1, p. 357-363. CH. II.] COMMENCEMENT OF THE RISK. 49 " from " has a more extended meaning when applied to an inter- mediate port. Thus, if a vessel be insured at and from A to B, from thence to C and back to A, a loss at B will be covered.^ If the insurance is on goods " at and from " a place, it does not begin (unless expressly so provided in the policy) ,2 until the goods come under a marine risk, that is, until they are laden on board the vessel, or whatever else it is customary to use in loading them, as a boat or lighter.^ And this applies equally to insurance against lake or river risks. In some cases of insurance on goods, these words, " to begin from the loading of the goods on board," are held to define the terminus a quo so distinctly, that, if there be no loading at the designated place, there is no such terminus, and no beginning of the insurance. So, if there were insurance on cargo on a voyage from A to B, beginning the adventure from the load- ing of the goods on board at A, if the goods are laden on board before the vessel reaches A, and are not reladen at A, the adven- ture never begins, and the policy never attaches.* And, even if ' Bradley u. Nashville Ins. Co., 3 La. Ann. 708. In Bell 0. Marine Ins. Co., 8 S. & E. 98, a vessel was insured at and from Philadelphia to Cork and back to Philadelphia. After discharging her outward cargo at Cork, the vessel went to Limerick, and the captain wrote home, communicating this fact, and stating that his ship was then lying at Grass Island. This letter was shown to the underwriter, who thereupon made the following memorandum on the policy : " It being represented by the assured that The Amiable was ordered from Cork to Limerick, and had arriyed th§re, it is hereby agreed that, for a fur- ther consideration of one per cent, we engage to see the said ship from thence, instead of Cork, back to Philadelphia." The court held that the vessel was cov- ered while at Limerick, as well as from that port, such being the manifest in- tention of the parties. " See Kennebec Co. v. Augusta Ins. and Banking Co., 6 Gray, 204. VOL. II. 4 ' In Coggeshall v. Am. Ins. Co., 3 Wend. 283, the vessel was on a trading voyage on the western coast of South America. The policy covered goods laden on board the vessel during a specified period. Within this time a basket of virgin silver was lost while being brought from the shore to the vessel in a flat-boat. Held, that, this being the customary mode of taking goods on board, the underwriters were liable. So, during the voyage, goods in boats are as much protected while the boats are " employed as auxiliary to the legitimate purpose of the voyage " as they are while on board the ship. Parsons v. Mass. F. & M. Ins. Co., 6 Mass. 197, 208. ' Hodgson V. Richardson, 1 W. Bl. 463 ; Horneyer v. Lushington, 15 East, 46, 3 Campb. 85; Robertson v. French, 4 East, 130 ; Grant v. Paxtou, 1 Taunt. 463 ; Park v. Hammond, 6 Taunt. 495 ; Rickman v. Carstaips, 5 B. & Ad. 651, 2,Nev. & M. 562; Graves v. Marine 50 THE LAW OF MARINE INSUBANCE. [CH. 11. the goods are insured from A to B, beginning the adventure from the loading of the goods, without specifying wliere, the policy does not attach, unless the goods are laden at A.^ If similar words are used, they are prima facie subject to this construction, as the only grammatical construction. There are, however, many cases in which it is obvious that they are not used, either in this sense, or for this purpose, but only as words of description, which are to be considered, construed, and applied in connection with the language of the whole policy and all the circumstances of the case. And if these make it apparent that it was not the intention of the parties to make the attachment of the policy dependent upon the fact of the loading, it would seem to us a departure, not only from natural justice, but from the true and rational princi- ples of commercial law, to give these words this construction and effect.^ The fact that the cargo is valued is not evidence that the risk was to attach on the outward cargo.^ Ins. Co., 2 Caines, 339 ; Scriba v. Ins. Co. of N. A., 2 Wash. C. C. 107; Kichards v. Marine Ins. Co., 3 Johns. 307. ' Spitta V. Woodman, 2 Taunt. 416 ; Mellish V. Allnutt, 2 M. & S. 106; Langhorn v. Hardy, 4 Taunt. 628. See also the next note. = In Bell V. Hobson, 16 East, 240, 3 Campb. 272, goods were insured at and from Gottenburg to any port in the Baltic, beginning the adventure from the loading of the goods on board. The policy was declared to be in continua- tion of other policies which were on the same goods from Virginia to any port in the United Kingdom, but the de- fendant was not an underwriter upon any of the former policies. Lord Ellen- iorough, C. J., said: "A very strict, and certainly a construction not to be favored, and still less to be extended, was adopted in the case of Spitta v. Woodman, where it was holden that the words, 'beginning the adventure from the loading on board,' were to be confined to the place from whence the risk commenced. But if there be any- thing to indicate that a prior loading was contemplated by the parties it will release the case from that strict con- struction. . Then, can there be any- thing more indicative of such an under- standing between the parties, than the statement, made at the foot of this policy, that it was in continuation of former policies, which were distinctly upon a voyage from Virginia ? This was taking up the voyage from a period in the former policies. The conclusion, therefore, which was drawn in Spitta v. Woodman, is completely rebutted by the reference in this policy to an ante- cedent loading." In Spitta V. Woodman, 2 Taunt. 416, the defendant had insured the same goods from London to Grottenburg, the outward voyage, and therefore knew that the subsequent policy was on the same goods ; but, notwithstanding this, " Kickman v. Caigtairs, 5 B. &. Ad. 651. CH. n.] COMMENCEMENT OF THE RISK. 51 It is very clear, that, if goods are insured " at and from " a cer- tain place, they are covered, although previously loaded at an- other place.^ And goods subsequently loaded are covered, if such is the manifest intention of the parties, although the risk he was exonerated. So, in Langhom V. Hardy, 4 Taunt. 628, where the jury expressly found that the defendant knew at the time of executing the policy that the cargo was put on board at London, and was intended to con- tinue on board during the voyage in- sured, the policy describing the risk to commence from the loading of the goods on board at Gottenburg. The case of Vredenbergh v. Gracie, decided Jan. T. 1799, 4 Johns. 444, note, and referred to in Graves v. Marine Ins. Co., 2 Caines, 339, 342, was this: Goods were insured on board the brig Nancy, at and from any port or ports in the West Indies, and at and from thence to New York, " beginning the adventure oh the said goods from the loading thereof on board in the West Indies." The goods were shipped in New York, and were not insured on the outward voyage. At the time of the insurance, the vessel was in the West Indies, and the under- writer was informed that the goods were shipped in New York ; a letter was also shown him, in which it was stated that the vessel had arrived at Cape Nicolas Mole, and, after disposing of part of her cargo there, had proceeded to St. Marks with the rest. " It was also," says Thompson, J., in 2 Caines, 342, " by the express understanding of the underwriter, a policy on goods shipped at New York; and, the vessel being already in the West Indies, that part of the world was only mentioned as the place where the risk was to com- mence." In Gladstone v. Clay, 1 M. & S. 418, goods were insured " at and from Per- nambuco to Maranham, and at and from thence to Liverpool, beginning the adventure from the loading of the goods wheresoever," etc. The underwriter was held liable for loss happening to the goods on the voyage between Pernam- buco and Maranham, although the goods were laden at London. In regard to what is to be considered as a loading at the port at which the risk is to commence, see Nonnen v. Keid, 16 East, 176, where part of the goods were unloaded and landed on the wharf, sufficient in quantity to enable the custom-house officers to examine the whole cargo on board, and then that taken out was reladen. This was con- sidered as a reloading of the whole. In Murray v. Col. Ins. Co., 11 Johns. 302, the whole cargo was hoisted on deck at the loading port, in order to take on board some salt as ballast, and it was then examined and restowed. It was held, that the policy attached on the salt only. ' Gardner v. Col. Ins. Co., 2 Cranch, C. C. 473. The voyage described in the policy was " at and from Rio Ja- neiro to Santos, and two»ports in South America, and at and from either of them to a port of discharge in the West Indies, or Europe, or the United States," and the risk was declared to be on goods " at and from Eio Janeiro until safely landed at Santos." It was held, that goods laden on board at Ca- diz, which were lost between Rio Ja- neiro and Santos, were covered. See also Silloway v. Nept. Ins. Co., 12 Gray, 73. 62 THE LAW OF MARINE INSURANCE. [cH. n. was to commence from the loading on board at the port of de- parture.^ The word "at," especially in connection with "to" and "from," may apply to an island, or region of coast or district, in such a way as to cover the vessel while sailing from port to port, or place to place, within that district. Whether it shall have this effect must depend upon the construction which is required by usage, by the context of the policy, and by the facts of the case.^ If the insurance be on a certain joyage, the presumption of law — liable to be rebutted only by very strong evidence — would confine this to the next voyage which comes under this descrip- tion.^ But the attachment of the policy may be delayed, and not prevented by a different voyage previously, under circum- stances of necessity or compulsion,* or by a voyage permitted by usage .^ ^ In Grant v. Delacour, 3 Taunt. 466, " the policy was at and from London to all. ports and places, on this side, and on the other side, of the Cape of Good Hope, forwards and backwards at sea, at all times, on all services, and in all ports and places, until the ship's safe arrival back again at her last station of discharge at Blackwall, or Deptford, upon any kind of goods in the Bruns- wick, beginning the adventure upon the said goods from the loading thereof on board the said ship at London, and so should continue.'' The court held, that though these words literally applied only to goods taken on board at London, yet, as the course of such a voyage was to trade away the goods taken out, the words would apply to any goods ac- quired by trading, wherever loaded on board. But in Grant v. Paxton, 1 Taunt. 463, where goods were insured " at and from China to all or any ports or places whatsoever and wheresoever in the East Indies, Persia, or elsewhere, beyond the Cape of Good Hope, in port and at sea, in all places, at all times, and in all services, until the ship's safe arrival at London," which was not the last place of discharge, the court held, that only goods put on board at China were covered, and not those loaded elsewhere on the voyage from China to London. Insurance on goods at and from Plym- outh to Malta, with liberty to touch at Penzance for any purpose whatever, beginning the adventure from the load- ing thereof on board as aforesaid, will cover goods taken on board at Pen- zance. Violett V. Allnutt, 3 Taunt. 419. See also Barclay v. Stirling, 5 M. & S. 6 ; Hunter v. Leathley, 10 B. & C. 858, 7Bing. 517. ^ Dickey v. Baltimore Ins. Co., 7 Cranch, 327; Cruikshank v. Janson, 2 Taunt. 301 ; Camden v. Cowley, 1 W. Bl. 417; Warre 'v. Miller, 4 B. & C. 538. ' Courtenay v. Miss. M. & F. Ins. Co., 12 La. 233. * Driscol V. Passmore, 1 B. & P. 200. ' See ante, p. 8, n. 2. CH. II.] TERMINATION OF THE EISK. 63 Section III. — Of the Termination of the Risk. Insurance to a place, or to a port of discharge, or until arrival in port, must terminate at the first place or port of arrival which distinctly and certainly answers to the description. But, if the ship reaches a port only for the purposes of inquiry or advice, and leaves it at once, or is instantly ordered by the owners to another port, there to discharge the cargo, the first port would not be a port of discharge.^ And if the phrase be " a final port," or " to ports of discharge," the insurance will cease upon, such parts of the cargo as are landed at one port or another, but not on those remaining on board and in the ship, until the port is reached at which the whole of the cargo remaining is to be discharged.^ And whatever port may have been intended by ' Coolidge V. Gray, 8 Mass. 527 ; Lapham v. Atlas Ins. Co., 24 Pick. 1 ; King V. Middletown Ins. Co., 1 Conn. 184 ; Sage v. Middletown Ins. Co., 1 Conn. 239 ; King v. Hartford Ins. Co., 1 Conn. 333. And where a vessel is insured to two ports, either or both, she may put into a third port to inquire as to the state of the markets at these ports. Clark V. United F. & M. Ins. Co., 7 Mass. 365. In King v. Middletown Ins. Co., a ship was insured on her home- ward voyage to a port of discharge in the United States. She cleared for and arrived at New York. As soon as the owner heard of her arrival, he or- dered her to proceed to Middletown. To enable her to sail up the river, part of the cargo was taken out to lighten her. The cargo was entered at the custom- house and the duties paid. On the way to Middletown the vessel was wrecked, and the underwriters were held liable, on the ground that neither the clearing for New York, the arrival there, nor the waiting for orders and lightening the vessel, constituted New York the port of discharge, although it was said, that the unlading of the cargo would have had this effect. In Sage v. Mid- dletown Ins. Co., it was held, that the un- lading of part of the cargo, which was in a perishing condition, while waiting for orders, would not terminate the risk. And if the crew is discharged and another immediately reshipped at such a port, the underwriter is still liable for a subsequent loss. King v. Hartford Ins. Co., supra. ' Inglis V. Vaux, 3 Campb. 437; Preston v. Greenwood, 4 Doug. 28. In Moore v. Taylor, 1 A. & E. 25, a ship was insured at and from St. Vincent, Barbadoes, and all or any of the West India islands, to her port or ports of dis- charge and loading in the United King- dom, during her stay there and thence back to Barbadoes and all or any of the West Indies, until the ship should ar- rive at her final port, as aforesaid. The vessel took in a cargo at Liverpool, apd discharged the same at Barbadoes, ex- cept some coal and brick, which the jury found were kept on board merely 54 THE LAW OF MARINE INSURANCE. [CH. II. the parties, the port where the cargo is actually janladen from for ballast.. Held, that the risk ended as soon as the cargo was delivered, and did not continue- while the ship, in bal- last, was seeking for a new cargo. And in Upton V. Salem Coram. Ins. Co., 8 Met. 605, the court held, where a ves- sel was insured at and from Salem to her port or ports of discharge on the river La Plata, that the risk terminated when the cargo was substantially dis- charged. In Eichardson v. London Ass. Co., 4 Campb. 94, goods, the investment of the captain, were insured on an East India voyage, until their arrival at the last place of discharge on the outward voyage. The captain landed the whole of his investment at Calcutta, and sold part, but, not being able to find pur- chasers for the residue, determined to carry it on for a new market. The out- ward cargo had all been discharged, and the vessel was ordered to make an intermediate voyage to Madras, under the usual clause in the charter-party. On the voyage, the goods were lost. Held, that the risk, being on the out- ward voyage merely, had terminated. In Brown v. Vigne, 12 East, 283, a ship was insured to any port or ports in the river Plata, until her arrival at her last port of discharge. The master in- tended to discharge at Buenos Ayres, but, that place being in the hands of the enemy, he went to Monte Video, with the intent to make a full discharge there, if the market were favorable. But, not finding the market there so favorable as he expected, he deter- mined to go to Buenos Ayres, if it should be practicable, but while dis- charging his cargo a loss happened. The court held, that, as he could not legally go to Buenos Ayres, that place being in possession of the enemy, Monte Video was to be considered as the last port of discharge, and on the arrival of the vessel there the risk terminated. In Oliverson v. Brightman, 8 Q. B. 781, the goods were insured at and from Liverpool to Lintin, Hong-Kong, Ma- cao, Canton, or any other ports, etc., with liberty to transship or reship on board any other vessel at or off' any of the ports above mentioned, and with leave for that vessel to proceed, and dis- charge the goods at any of the places above mentioned, or to remain there till it should be deemed expedient to proceed, "continuing the risk by land and water, until the goods should be arrived at their final port of destina- tion." Before the arrival of the vessel at Macao, hostilities had taken place between the Chinese and the English, who in May had stormed Canton, but hostilities had been suspended, though peace was not declared till a year later. There had been no formal declaration of war. It not being considered safe for the ship to proceed to Canton, another ship, was chartered to accom- pany her to Hong-Kong, in order that the goods might be transshipped and examined, and kept there till they could be sent to Canton, or some other mar- ket. There was no market at Hong- Kong, and it was not intended to make it the final place of deposit for sale. While the goods were on board the second ship, they were lost by a peril of the seas, and the underwriters were held liable. In Stephens v. Beverly Ins. Co., Sup. Jud. Ct., Mass., Essex, 1820, where a vessel was insured from Beverly to Bilboa, or a port of dis- charge in Europe, it was held that the vessel could go only to Bilboa or some other port, and not to both. CH. n.] TERMINATION OF THE KISK. 55 the ship is " the port of discharge," and such a policy therefore terminates there. ^ It has been recently held that a policy of insurance upon a ship for a year, " and if she be then at sea at the end of the year, then to continue at a pro rata premium until she arrives at her port of destination," terminates when the ship at the end of the year is, or afterwards first arrives, at a place to which she is sent to take a cargo, although it is not a port by law, but an open road- stead, with no haven, harbor, or custom-house, and is not her final destination.^ The phrase " at sea " seems to be held as covering every place where the ship may be, from the commencement to the termina- tion of the voyage insured, although during parts of it she may have been actually anchored in ports, for shelter or otherwise. And the phrase " on a passage " has been held to be of equivalent import with " at sea." ^ But perhaps this construction should ' In Moflfat V. Ward, 4 Doug. 31, when the year expired, then until her note, it appeared that the ship had un- loaded all of her cargo at Madras, and was afterwards lost on her way to Ben- gal. The underwriters were exoner- ated, on the ground that the last port of discharge was not the port where she was originally destined to discharge part of her cargo, but that at which it was in fact discharged. In Shapley v. Tappan, 9 Mass. 20, the ship was in- sured from Boston to Tonningen, for the purpose of carrying a cargo there. She was driven by a storm into the river Elbe, seized at Gliickstadt, and afterwards liberated, and the cargo de- livered to the consignee there, by his consent. Held, that the risk was then terminated. ^ Cole V. Union Mut. Ins. Co., and Gookin V. N. E. Mar. Ins. Co., 12 Gray, 501. And see note to 12 Gray, 519. ' Bowen v. Hope Ins. Co., and The Same v. Merchants' Ins. Co., 20 Pick. 275, were two cases argued and de- cided as one. In the one the ship was insured for a year, and if " at sea " arrival at port. In the second, the in- surance was the same, excepting that the phrase " if at sea '' was, in this lat- ter case, " if on her passage." The year ended the 6th of October, 1834. On September 25th, the ship being at Bangor, in Wales, with her cargo on board, weighed anchor with the inten- tion of proceeding to Boston, and dropped down several miles below Ban- gor, but, not being able to get out of the Straits of Menai (on which Bangor is situated), on account. of head winds, came to anchor ; and on several days attemped to get out of the straits, but did not succeed until the 8th of Octo- ber. STiaw, C. J., said: "The term ' at sea ' may have different meanings, according to the connection in which it is used. Here it is used in contradis- tinction to ' arrival in port.' If the ves- sel has sailed, or commenced a, voyage from one port to another, she must be considered to be at sea, within the meaning of this clause, from the com- mencement to the termination of that 56 THE LAW OF MARINE INSURANCE. [CH. II. be applied especially to the case of a ship which, by the policy, is to be insured on a certain day " if at sea " ; in which case it may be reasonable to consider the word as meaning only " not at home." It is generally provided in time policies, that, if the ves- sel be " at sea " at the expiration of the time agreed on, the risk shall continue until her arrival at a port of discharge, or at her- port of destination.! If, then, before the expiration of the time. voyage, although during part8 of it she may have sought shelter in a place on the way In the other policy, the contingency upon which the risk is to continue at the end of the year, is a lit- tle differently expressed, the words be- ing; if the vessel shall then be ' on a passage.' We think the meaning and legal effect are the same in this as in the other policy." ' In Wood V. New England Mar. Ins. Co., 14 Mass. 31, a vessel was insured for twelve months, commencing on the 30th of December, from Newburyport to every place to which she might pro- ceed, the risk to continue until the ves- sel should arrive, and be moored twenty- four hours in safety, or until the expira- tion of twelve months. It was further provided, that, if the vessel should be at sea at the expiration of the above period, the risk should continue until her arri- val at a port of discharge. On the 14th of the following November the vessel sailed on a voyage from Beverly for Amsterdam, and on the 14th of Decem- ber was captured and carried into port, where she was detained until after the expiration of the twelve months, when the vessel was liberated, and sailed for Amsterdam. On the way she was cap- tured. Parker, C. J., in delivering the opinion of the court, said : " At the ex- piration of the year, the ship was not literally at sea ; but was in a British port, whither she had been carried against the will of the master. Was she then, within a fair construction of then contract, within the intent of the parties, at sea ? We think she was. She was absent on a voyage, which had been commenced within the time of the original risk. She would have been protected, upon that voyage, to Amster- dam and back again, because within the common meaning of the term ' at sea,' which was undoubtedly adopted by these parties. A vessel is considered in that condition, while on her voyage, and pur- suing the business of it, although during part of the time she is necessarily within some port, in the prosecution of her voyage. The intention in prolong- ing the risk beyond twelve months was unquestionably to give the ship protec- tion under the policy, in case that time should expire while the vessel should be employed in some unfinished voyage ; and whether in a foreign port, or ac- tually upon the high seas, we believe there was no difference in the contem- plation of the parties, when the contract was made.'' We consider this case as having been correctly decided ; but the language used by the court, as given above, went further than the facts of the case required, and cannot, it seems to us, with all deference to the learned judge who pronounced the opinion, be supported by principle or authority ; for the risk was to continue only to a port of discharge, and not to the port, which might perhaps be construed as meaning the final port of discharge. See Bowen CH. II.] TEEfflNATION OF THE RISK. 57 she has actually hroken ground for the voyage, or if she has sailed, and is, when the time expires, in a port of necessity, she is considered " at sea," and is covered by the policy until her arrival at her port of final destination, or at her port of destination in a particular country, provided the master does not unnecessarily de- lay his voyage thither after the time has expired.^ V. Hope Ins. Co., 20 Pick. 275, cited in the preceding note. The dictum of Parker, C. J., cited above, is directly opposed to a case de- cided in New Yorlc. American Ins. Co. V. Hutton, 24 Wend. 330, affirmed Hutton V. American Ins. Co., 7 Hill, 321. In this case a vessel was insured for a year, commencing January 21st ; if at sea at the expiration of the term, the risk was to continue until the arrival of the vessel at her port of destination, but the policy did not mention what the port was. The vessel sailed from New York on a voyage for St. Barts, Cura9oa, and Maracaibo, and thence back to the port of New York. Maracaibo being in a state of insurrection, the vessel put into St. Thomas, for the purpose of taking a cargo thence to Philadelphia or New York. She arrived at St. Thomas on the 6th of Januar)', but, extensive re- pairs being required, she was detained there for that purpose until after the 21st. After she was repaired, she took in her cargo, and sailed on the 30th of January, and was lost February 18. If the repairs had not been necessary, she would have sailed before the 21st. The insurers were exonerated, on the ground that the vessel was not " at sea " on the 21st, but was in a port of destination, although not in her final port. It was however admitted, that, if the vessel had put into St. Thomas through necessity, the underwriters would have been lia- ble. ' Union Ins. Co. v. Tysen, 3 Hill, 118. The policy provided, in this case, that if the vessel was at sea on the day the risk expired, October 7th, it should continue until she reached her port of destina- tion in the United States. On the 20th of September the vessel was at Rotter- dam, in a canal, discharging her cargo. Finding no return freight to the United States, the captain determined to gp to Newcastle-upon-Tyne, and thence home to New York. The ship was accord- ingly moved from the canal into the river Maese, about twenty-five miles from the sea, and was all ready for sea, but owing to contrary winds she did not sail until after the 7th of October. Held, that the moving from the canal was the commencement of the voyage, and that the vessel was protected till her arrival at her port of destination in the United States. In Eyre v. Marine Ins. Co., 6 Whart. 247, a vessel was insured for twelve months, from November 10th, with lib- erty of the globe, and, if at sea, etc., the risk to continue until her arrival at her port of destination in the United States. The vessel sailed from Philadelphia in November for South America, for the purpose of freighting, took a cargo on board at Kio Janeiro in South America, and sailed for the island of Jersey in the British Channel for orders. On the 10th of the following November she was at sea, and afterwards, having sustained heavy damage, she was compelled to put into Falmouth, England, for repairs. She then sailed for Altona, discharged her cargo, took another on freight, and in June sailed for New Orleans, where 58 THE LAW OF MARINE INSURANCE. [CH. n. If the insurance be to " a port " in a certain island or coast, or to " two ports " or more,^ the insured may select any which come within the district. But the risk terminates wheu the vessel has been moored twenty-four hours in safety at the first port in the island at which she arrives, if the insurance be to " a port " in that island, or to the island.^ If a vessel is insured on a fishing voyage, the risk does not terminate by her sending home part of her cargo which is damaged, and which, if suffered to remain on board, would injure the rest.^ A policy on time for a certain period terminates at the time as that exists at the place where the contract is made, unless it is otherwise mentioned in the policy.* If she arrived. The action was brought to recover for the damage done on the voyage to the island of Jersey. The court held that, if at the end of the year, the vessel was coming home, she was protected by the policy, but other- , wise not, and excluded evidence that the voyage insured was known by the name of a trading voyage, and that, by the usage of trade, the vessel might sail for any part of the globe to which she could get a freight, at any time during the year, and continue covered by the policy during such voyage, although this usage was alleged to be well known to the underwriters, and acted upon by them, at the port to which the vessel belonged. But the court in 5 Watts & S. 116, being of opinion that this evi- dence ought to have been admitted, granted a new trial. ' Vandervoort u. Smith, 2 Caines, 155. In Sea Ins. Co. of Scotland v. Gavin, 2 Dow & C. 125, insurance was effected at and from Leith to Shetland, and from thence to Barcelona, and at and from thence, and two other ports in Spain, to a port in Great Britain. The vessel discharged her cargo at Tarragona, and then proceeded to Saloe, where she was lost. It was objected that Saloe was not a port within the meaning of the policy, it being a mere roadstead protected by a headland ; but the court held that as it was usually designated as a port, and was not more open than other places on the Mediterranean, and as it had a custom-house and harbor-master, and port duties were levied there, it was a port within the meaning of that term in the policy. . ' Camden v. Cowley, 1 W. Bl. 417; Leigh V. Mather, 2 Esp. 412. This case is more fully reported in Park on Ins. 52, where it appears that the insurance was on the ship and goods " at and from Georgia to Jamaica." On the arrival of the ship in Montego Bay, most of the cargo was sold to merchants there, and the captain entered into a charter-par- ty with them to proceed to St. Anne's, and there take in a cargo for London. Most of the cargo was unloaded at Montego Bay, and it was verbally agreed that the remainder should be carried as ballast to St. Anne's. It was held, that as Montego Bay was the original destination of the cargo, and as the delivery of the whole there was prevented only by a new agreement, the risk did not continue after the de- parture of the vessel. See also Barras V. London Ass. Co., Park, Ins. 52. ' Phillips u. Champion, 6 Taunt. 3. * Walker v. Protection Ins. Co., 29 Maine, 317. CH. II.] TERMINATION OF THE RISK. 59 a ship is insured until "«he shall have ended and be discharged of her voyage," it seems that the risk continues till she is un- laden.i By the phrase usually contained in both the English policies and our own, the insurance continues on the vessel " until she shall be arrived and moored twenty-four hours in safety"; and on goods "until landed," or "safely landed." This means safety from the ■ perils insured against, and not to those of a merely local character and incident to the port, as bad moorings, etc.; otherwise the policy might attach all the time she lay there. But she must be moored as safely as that harbor or port permits, in the usual course of navigation. And if the vessel be ordered off, or into quaran- tine, before the twenty-four hours have passed, the policy does not cease to attach .^ And if she anchors and moors safely, and her actual safety continues through a storm or peril which begins be- fore or within the twenty-four hours, but does no harm until they have expired, she is considered as moored in safety during the twenty-four hours ; because otherwise the risk might never termi- nate ; for so long as the ship is in any port she must be in some degree of danger, or possibility of mischief.^ By arrival is meant the reaching the usual place of unloading;* and by safety, not '■ So held by the whole court on de- room on the inside, she was fastened on murrer in Anonymous, Skinner, 243. the outside of the tier of vessels, -and ^ Waples V. Eames, 2 Strange, 1243. after remaining in this position more ' Bill V. Mason, 6 Mass. 313. than twenty-four hours wEis lost. Held, * In Samuel v. Royal Exch. Ass. Co., that she had arrived. In Meigs v. 8 B. & C. 119, a vessel was insured at Mutual Mar. Ins. Co., 2 Cush. 439, the and from Sierra Leone to London, until insurance was on a vessel and her catch- moored twenty-four hours in safety, ings on a whaling voyage, the risk to The master, being ordered to take the continue on and during her voyage and vessel into the King's Dock at Deptford, back to M., " until she be arrived and moored the vessel near the docks, but moored twenty-four hours in safety." was not able to enter, on account of the ' On the return of the vessel to M., the ice. After lying several days in this water was not high enough to enable place, where cargoes were sometimes her to reach her wharf, which was her discharged, the vessel was totally lost, place of final destination. She was ac- Held, that the place where she had lain, cordingly anchored in the harbor, and, not being her place of ultimate destina- while being lightened and on her way tion, the underwriters were liable. In to the wharf with proper diligence, was Angerstein v. Bell, Park, Ins. 45, the destroyed by fire. This did not happen vessel arrived at the wharf where she until more than a week after her arrival was to be unladen, but, there not being in the harbor. The royal yards and 60 THE LAW OF MARINE INSURANCE. [CH. II. security from the hazard of every loss insured against, — for some of them, as fire, lightning, etc., remain always , — but the being moored in fact during twenty-fdur hours, safe in the sense of unin- masts, and top-gallant masts arid yards, were sent down, and all the sails unbent except the three topsails, spanker, and jib, which were left to work the ship to the wharf with. The court held that, under these circumstances, the insurers were liable, and said : " Reaching the harbor, therefore, cannot be arriving within the meaning of the policy ; and, if it do not mean that, it must mean that particular place or point in the harbor which is the ultimate destination of the ship. Until that point is reached, the voyage is not ended, and the ship has not arrived ; though she .may be ob- structed and delayed in her progress through the harbor, and for want of water, or by adverse winds, or other causes, be obliged to come to anchor, and remain at anchor twenty-four hours, and to take out some portion of her cargo. While she is properly pursuing hei> course to the place of her ultimate destination, and of complete and final unlading, and until she reaches that place, and has been moored there in safety twenty-four hours, she is insured and protected by the policy." This case is somewhat inconsistent with a case de- cided in England about the same time. Whitwell V. Harrison, 2 Exch. 127. The vessel was insured until moored at her discharging port in the United Kingdom, twenty-four hours, in safety. She was chartered to take a cargo of timber from Quebec to Wallasey Pool in the river Mersey, or as near thereto as she could safely get, and there discharge her cargo. The vessel arrived abreast of Wallasey Pool on the 5th of the month, but was not able to enter it for want of sufficient water. Most of the crew were discharged, and the vessel was lightened. On the 14th of the month she fell over and was injured. All the cargo was not out at this time, and it was the captain's intention to take the vessel into Wallasey Pool, with as much of the cargo on board as he could carry with safety. The court held that the vessel had arrived and been moored twenty-four hours in safety. Alderson, B., said : " It appeared in evidence, that the captain always in- tended ultimately to carry the vessel into Wallasey Pool with as much of the cargo on board as she could carry over the shallow part intervening between his original anchorage and the Pool. But it was also clearly established, that the discharge of the cargo was going on in due course, and that if the water were not sufficient, and no accident had occurred, the whole cargo would have been discharged in the place where the vessel was moored. Here the vessel was bound to Wallasey Pool, or as near thereto as she could safely get, and it is clear that that was the intended place for the discharge of her cargo." If this case can be distinguished at all from Meigs v. Mutual Mar. Ins. Co., it is on the ground that in the one the place of ultimate destination was the wharf, and in the other the Pool, or as near to it as the vessel could get. The port of Havana consists of an outer and inner harbor. The outer is near the Moro Castle, and is used for the purposes of visit and search. It is an exposed and dangerous place, and it has accordingly been held that the risk on a vessel does not terminate until she has been moored twenty-four hours ia CH. II.] TERMINATION OF THE RISK. 61 jured.^ But, if the vessel arrives a mere wreck, she cannot be said to have been in safety a moment.^ Nor if an embargo had been laid on all vessels previous to the arrival of the one insured, although she should not be arrested till the next day.^ If a vessel is insured from a place to any port or ports what- soever, for a certain space of time, an open roadstead which is the usual place of loading and unloading is a port within the mean- ing of that phrase in the policy.* Goods are within the policy as not safely landed so long as they are in boats or lighters, if this be the usual way of taking them from the ship to the port ; and we • should apply the same rule to any mode of conveyance by water, however unusual, which was made necessary, and there- fore justifiable, by the circumstances of the case.® If the con- signee sends his own lighter for the goods, the risk has been held to terminate on the delivery of the goods on board the lighter.^ safety in the inner harbor. Dickey v. United Ins. Co., 11 Johns. 358 ; Zacharie V. Orleans Ins. Co., 17 Mart. La. 637. In Gray v. Gardner, 17 Mass. 188, a contract was made which was to be void in case a certain quantity of oil arrived at Nantucket and New Bedford on or before a certain day. It was held that the word " arrived "meant that the vessel in which the oil was to be brought should drop anchor within the time, and the condition was not satisfied by the vessel merely being in the Nantucket Beads. 1 Bill V. Mason, 6 Mass. 313. The vessel in this case arrived in a gale of wind, but was not injured by it, until after she had been moored twenty-four hours. It was held that the under- writers were not liable. 2 Shaw V. Felton, 2 East, 109. ' Minett v. Anderson, Park, Ins. 45. So where a vessel's papers were taken, and her hatches sealed down imme- diately upon arrival, and orders given on the examination of the papers to seize the ship and cargo, which was done, and condemnation of them fol- lowed, it was held that the vessel had never been moored in safety. Horneyer V. Lushington, 15 East, 46. * Cockey v. Atkinson, 2 B. & Aid. 460. = Matthie v. Potts, 3 B. & P. 23 ; Stewart v. Bell, 5 B. & Aid. 238 ; Wadsworth v. Pacific Ins. Co., 4 Wend. 33 ; Osaoar v. Louisiana State Ins. Co., 17 Mart. La. 386. In this case the-ves- sel, whose cargo was insured, arrived in the roadstead of Soto La Marina, in Mexico, and anchored outside of the bar in the usual place twenty leagues from the town, and commenced to dis- charge her cargo in lighters, according to the usage of the trade. After part had been landed, the vessel was driven away by a tempest, and never heard from again. The court held that the plaintiflf was entitled to recover for all the goods not brought to the town. But the court said that if the goods had been landed on the beach and trans- ported to the town on the backs of mules, this would have been a land risk for which the underwriters would not have been liable. ° Sparrow v. Caruthers, 2 Strange, 62 THE LAW OF MARINE INSURANCE. [CH. II. The policy terminates when the goods are landed at the iisual place of discharge, although the consignees may not be able to obtain possession of them at once.^ There is some conflict of authority in regard to the point whether the risk continues tiU the whole cargo is delivered, or whether it is severable in its nature. On principle and on the preponderance of authority, we are inclined to adopt the latter view.^ 1236. But see Langloie v. Brant, cited 2 B. & P. 434, note. If he merely hires a lighter and pays for it himself, the risk continues till the goods are landed. Eucker v. London Ass. Co., 2 B. & P. 432, note; Hurry v. Royal Exch. Ass. Co., 2 B. & P. 430, 3 Esp. 289. In Strong v. Natally, 4 B. Se P. 16, the goods were taken out in a lighter hired in the usual manner, and the lighter brought to the wharf. Owing to the roughness of the weather, the goods could not be landed that night, and the lighterman asked the owner of the cargo whether he should stay and see the goods landed, to which the owner replied that he would look to the land- ing himself. In the night the lighter was sunk, and the court held that the underwriters were not liable, as the owner had taken the goods into his own care and possession. So, where the owner of goods, in consequence of the port of destination being blockaded, accepted them at an intermediate port, paying foil freight, and thence trans- ported them in lighters to their port of destination, it was held that he could not recover from the underwriter either the expenses of transshipping, and the freight paid for the lighters, or a premium of insurance paid for the risk in the lighters. Low v. Davy, 5 Binn. 595. ' Gracie v. Marine Ins. Co., 8 Craneh, 75. The insurance in this case was on the cargo of a vessel " at and from Bal- timore to Leghorn," the risk to continue until the goods should be Safely landed at Leghorn. By the laws of that place, ships and cargoes on arrival were obliged to perform a quarantine of thirty days before the cargo or any person on board could be admitted into the city. The cargo was taken from the ship in public lighters to the lazaretto by the officers of government ; and, until the " expiration of the quarantine, the con- signees could not remove the goods, and freight could not be collected. The court held, under these circumstances,, that the underwriters were discharged when the goods were deposited in the lazaretto. See also Brown v. Carstairs, 3 Campb. 161. In Mobile Mar. Dock & Mut. Ins. Co. V. McMillan, 27 Ala. 77, where goods were insured until safely landed at the port of New Orleans, the court held that the underwriters were discharged from liability after the cargo was discharged on the wharf, on the shore of Lake Ponchartrain. By the usage of trade, goods were sent forward from that place to the city of New Or- leans by railroad, but the court held that land risks were not covered by the policy. And in Osacar v. Louisiana State Ins. Co., supra, p. 61, n. 5, the court said that, if the goods were to be taken overland on mules to the port of delivery, the underwriters would not be liable, though the risk would continue if they were taken by water. ' The contract is considered as an CH. II.] TERMINATION OF THE RISK. The risk terminates as soon as the voyage insured is abandoned or broken up by a peril not insured against.^ If goods are in- sured on board a ship to a port, and from thence on board an- other ship to a final port, the risk continues while the goods are being removed in the usual manner from one ship to the other.^ Where the vessel is wrecked and the cargoes sent forward in an- other vessel to the port of destination, the underwriters are liable for a loss while the goods are in such substituted ship.^ entirety in Gardiner v. Smith, 1 Johns. Ca. 141, and in Fletcher v. St. Louis Mar. Ins. Co., 18 Mo. 193, and it is treated as severable in Gracie v. Mary- land Ins. Co., 8 Cranch, 84 ; Osacar v. Louisiana State Ins. Co., 17 Mart. La. 386 ; and Blobile Mar. Dock &Mut. Ins. Co. V. McMillan, 27 Ala. 77. In Ward v. Wood, 13 Mass. 539, the policy stated that the risk was to cease when the vessel should receive on board a cargo, with the intention of proceeding to the United States. This was held to mean a full cargo. ' See Brown v. Vigne, 12 East, 283, and cases cited anie,Vo!., 1 p. 585, n. 4. ^ Tierney v. Etherington, cited 1 Burr. 348. In this case goods were insured in a Dutch ship from Malaga to Gibraltar, and at and from thence to England and Holland, both or either. It was agreed that on the arrival of the ship at Gib- raltar the goods might be unloaded and reshipped in one or more British ship or ships for England and Holland. On arrival at Gibraltar, there being no Brit- ish ship there, the goods were put into a store-ship which was considered as a warehouse, and while there were lost in a storm. The underwriter was held liable. See Oliverson v. Brightman, 8 Q. B. 781, and cases ante, Vol. 1. p. 563, n. 1. ^ Plantamour v. Staples, 1 T. K. 611, note, 3 Doug. 1. . The ship and cargo were in this case insured at and from Marseilles to Madeira, the Cape, and the isles of France and Bourbon, and to all parts and places in the East Indies and Persia, or elsewhere beyond the Cape of Good Hope, from port to port, and during her stay and trade to all ports and places, until her safe arrival back at her last port of discharge in France. The vessel sailed with a cargo consisting of bullion and merchandise consigned to the plaintiff's correspond- ents at Pondicherry, with directions to barter and sell the same on their account, and to make the returns in other goods, the produce of India. The vessel was lost at the Isle of France, but the cargo was sent on in another vessel by the master to Pondicherry. It was there received by the plaintiff's correspond- ents, and the proceeds invested in other goo^s, and forwarded to France in another vessel. This vessel was also condemned at the Isle of France, and the goods sent on in another vessel. This last was captured, and, with the cargo, condemned. Held, that the pol- icy continued to attach, notwithstanding the change of vessels, and that the un- derwriter was liable. And if in conse- quence of a disaster the ship cannot pursue her voyage to the port of desti- nation in a direct manner, the under- writers on goods are liable notwithstand- ing the deviation. Winter v. Delaware Mut. Ins. Co., 30 Penn. State, 334. So, if it is necessary on account of the loss 64 THE LAW OF MARINE INSURANCE. [CH. II The parties may agree that the risk shall terminate at the option of the insured on part of the subject of the insurance, and they may do this by express terms or by the use of language which is fairly susceptible of this meaning. In a recent case in Massachu- setts, the policy was a valued one on the outfits of a whaling ship, giving liberty to touch at all ports or places for refreshments, and to sell her catchings, or ship them -home at the risk of the assured. The policy also provided that one fourth of the catchings should replace the outfits consumed, except that catchings shipped home from the Cape de Verd Islands, or this side thereof, should be at the risk of the assured, without diminution of the value of outfits at the time. It was held that the assured had the liberty to send home all the catchings from the Cape de Verd Islands, or three fourths afterwards, without diminishing the valuation in the policy, and that the risk terminated on the part sent home.^ The policy, if on time, frequently provides that if the vessel, at the expiration of the time, is on her way to her port of destination, the policy shall continue to attach until her ■ arrival at that port. The ques- tion may then arise, what is her port of destination ? In a recent case, a vessel so insured sailed under a charter-party providing that on her arrival at Woosung the captain should take his orders from the chief of the French Marine Service at that port, who would indicate to him within twenty-four hours whether he should discharge there or go thence to another port ; and that this officer might keep her at Woosung as long as' he should wish, and send her to any other safe and accessible port. This extension of the insurance was construed by the Supreme Court of Massachusetts to mean, that, if no orders to go to another port were received within twenty-four hours after notice of her arrival at Woosung to that officer, that port was her port of destination, and termi- nated the insurance.^ of the ship to carry the cargo over land • Mutual Marine Ins. Co. v. Munro, 7 to transship it, the underwriters are Gray, 246. liable while this is being done. Bryant ^ Wales v. China Mut. Ins. Co., 8 Al- 0. Commonwealth Ins. Co., 13 Pick, len, 380. 543, 555. CH. II.J LOSS AFTER THE EXPIRATION OF THE RISK. 65 Section IV. — Of a Loss after the Expiration of the Risk. The voyage may have terminated and the policy have expired by limitation, either of time or of space ; and even the risk may be said to be at an end ; and, after all this, a loss may occur for which the insurers are liable. But this can take place only when the cause of the loss was a peril insured against, which was en- countered and, became injurious to the property while it was cov- ered by the policy ; and when the ultimate loss was not only the effect of the injury so sustained, but an effect so direct, immediate, and inevitable, that the injury must be deemed to be the proxi- mate and only cause of the loss. This question is often considered as if it asked only whether, if a vessel or other insured property receives its death-blow during the policy, and dies after the policy expires, the insurers are liable. But there is some danger of being misled by this iigurative lan- guage, as was remarked in a recent case by Lord Campbell.^ The cases which present this question are not easily reconciled, and some of them are obscure ; the latest, Knight v. Faith, being, as we think, the best. But we cannot doubt that the true princi- ple is. that which we have already indicated. We might express it by saying, that, if insured property be injured by a peril insured against, the insurers are liable for the direct and immediate and inevitable consequences, wherever or whenever these may occur.^ ' In Knight v. Faith, 15 Q. B. 649. ship for six months, and, three days be- ' One of the earliest cases on this fore the expiration of the time, she re- subject is Meretony v. Dunlope, cited ceived her death's wound, but, by pump- 1 T. R. 260. The only original report ing, was kept afloat till three days after that we have of it is the citation of it the time ; there the verdict was given by Willes, J., in Lockyer v. Offley, 1 T. for the insurer, which was confirmed by R. 252, 260. He said: "It would be a the court. I will put another case; dangerous doctrine to lay down, that the suppose an insurance on a man's life for insurer should, in all cases, be liable to a year, and some short time before the remote consequential damages. This expiration of the term he receives a has been compared to a death's wound mortal wound, of which he dies after the received during the voyage, which sub- year, the insurer would not be liable." jected the ship to a subsequent loss. This case has been followed in Ohio. To this point, the case of Meretony y. Howell v. Protection Ins. Co., 7 Ohio, Dunlope (E. 23, Geo. 3) seems very 284, where a steamboat met with an material. That was an insurance on a accident during the existence of the VOL. II. 5 THE LAW OF MARINE INSURANCE. [CH. II. Possibly a distinction might be made in this respect between policies on time and those on a voyage ; because in the former policy, in consequence of which she sunk the same day, but after the risk had expired. It was held, that as the damage done by the accident, excluding that occasioned by the sinking of the boat, did not amount to fifty per cent, the assured could not abandon. In Furneaux v. Bradley, B. R. East., 20 G. 3, 2 Marsh. Ins, 584, the vessel was driven on the rocks and injured, but her condition could not be examined into till after the expiration of the policy. She was then found to be much dam- aged, but not irreparably so, but, a dif- ficulty having arisen on account of the want of materials, she was sold. Held, that the damage sustained by the run- ning on the rocks should be estimated as an average, and not as a total loss. In Coit V. Smith, 3 Johns. Ca. 16, horses were insured against all risks, until safely landed. During a gale, one of the horses was thrown down and in- jured, and he died after he was landed. It was held, that the death of the horse was to be put out of the case, and that the underwriters were liable for the in- juries which he had sustained up to the titue he was landed. lx^ Knight v. Faith, 15 Q. B. 649, the jury found a special case, to the efieet that the vessel was insured on time, from September 24, 1845, to September 24, 1846. The vessel was stranded and. brought into the harbor of Santa Cruz on the 16th of September, 1846. She re- mained there in safety till the middle of October, at which time, the cargo having been got out, it was found that the necessary repairs could ;not be made there, as there was no dock-yard, work- men, or materials at that place, and that she could not be taken to any other place to be repaired. She was accord- ingly sold by the master, who was also a part owner, for £ 77, 10s. No abandon- ment was made. It was held to be a case where the insured could not re- cover for a total loss, without an aban- donment, but the underwriter was held liaWe for a partial loss. Speaking of Meretony v. Dunlope, Lord Campbell, C. J., said: "We very much doubt whether any such doctrine ever was laid down by Lord Mansfield, and the de- cision of the court may have proceeded on a totally different ground. The doc- trine seems contrary to the principle of insurance law, that the insurer is liable for a loss actually sustained from a peril insured against during the continuance of the risk ; and if a ship insured for time, during the time, receives damage from the perils of the sea, although the amount of it be not ascertained till the expiration of that time, and she is kept afloat till then, upon the assured's taking proper steps by giving notice of aban- donment, or by obtaining evidence of the sum which would be required to re- pair the damage sustained, there does not appear any good reason why they may not, according to the facts, proceed against the insurers for a total loss or for a partial loss." We apprehend that Lord Campbell, by the words " amount of it be not ascertained " means not only, when the amount of money needed for repair be not ascertained, but when the extent and character of the injury are not and cannot be ascertained until the direct consequences are fully devel- oped. It was also contended in this case, that as a total loss had taken place, for which the defendants were not liable, CH. II.] LOSS AFTER THE EXPIRATION OF THE RISK. 6T the liability of the insurer expires at a certain hour, wherever the ship may be ; but in the latter the policy expires when the ship has been moored twenty-four hours in safety ; but she has never been moored in safety, if so injured that her destruction was inev- itable.i Upon the question of forfeiture and seizure, we have seen that the cases, although in some conflict,^ tend to the doctrine that the statute, together with the act or circumstance which forfeits the ship or cargo, has no effect in changing the property, or upon the rights or liabilities of owners or insurers, until actual seizure. If this be law, and the circumstance which causes the loss by forfeit- ure occurs while the policy attaches, but there is no seizure until after the policy expires, the insurers are not liable.^ If the ship arrives at her port of destination in a disabled state, and is de- tained there for repairs a longer time than would have been the case had no damage been sustained, and while there is seized in consequence of an embargo being laid, it has been held that the underwriters are not responsible for the loss by seizure.* the partial loss must be considered as merged in the total loss, and con- sequently that there was no liability at all, on the authority of Livie v. Janson, 12 East, 648, which case decided that, where a partial loss occurred and there was afterwards a total loss by an ex- cepted peril, the underwriters were not liable at all. But the eourt held, that there was no total loss in this case, as there was no such loss known in insur- ance law as a sale by the master ; and that, if there had been a total loss, the defendants were not at liberty to say, that the partial loss was not merged in the total loss. " Shawe V. Felton, 2 East, 109. See also Peters v. Phcenix Ins. Co., 3 S. & R. 25. 2 See ante, Vol. I. p. 239, n. 2. = Lockyer v. Offley, 1 T. R. 252 ; Mariatigue v. Louisiana State Ins. Co., 8 La. 65. See cases ante, p. 61, n. 3. The principal reason given by the court for their decision in Lockyer v. Offley was that, under the English statute, a seizure might be made at any time within three years, and the rights and liabilities of the parties could not be determined till the expiration of that time, if they were liable at all after the voyage had ended, whence it was considered that great inconvenience would arise. The court said : " There must be some certain and reasonable limitation, in point of time, laid down by the court when the insurer shall be released from his engagement. If he be liable for a month, he may be for a year, and so on. And we all think that the law on insurances would be left unsettled, and in much confusion, if any other time were suggested than that pre- scribed by the policy, namely, the contin- uance of the voyage, and the ship's being moored twenty-four hours in safety.'' * Roche V. Thompson, Millar, Ins. 205, Weskett, Ins. 196. 68 THE LAW OF MAKINE INSURANCE. [OH. III. CHAPTEE III. OF ACTUAL TOTAL LOSS. Total loss of maritime property under insurance is either act- ual (or, as it is sometimes called, absolute) or constructive (or, as it is sometimes called, technical). Let us first consider actual total loss. Text-writers and courts, in treating of actual total loss, often use the word " destruction " as of equivalent meaning ; but it is not so'.^ We do not now refer to the metaphysical objection, that nothing, strictly speaking, is ever destroyed ; as the most that can happen to anything is a change in its elements or in the form of its constituent parts. For the purposes of practice, and of insur- ance law, a vessel is totally lost when it is lost as a vessel,^ and goods are totally lost when they are lost as goods, and either ves- sels, or goods are totally lost, as to the insured, when he has lost all possession of, or power, or control of them, although they may continue to exist in specie as before. It is this last condition of loss to the assured that is usually intended when total loss is spoken of. " If," says Lord Abinger, " in the course of the voy- age, the thing insured becomes totally destroyed or annihilated, or if it be placed by the perils insured against in such a position that it is totally out of the power of the assured or the under- writer to procure its arrival, the latter is bound, by the very terms of his contract, to pay the whole sum insured." ^ There must be ' Walker v. Protection Ins. Co., 29 Ins. *1001. SoBeneckd: "When the TMaine, 317. Mr. Arnould, in his work property insured is either totally de- on Insurance, p. 990, enumerates two stroyed, as by shipwreck without sal vage, cases of actual total loss, thus: "1st, or irrecoverably lost, as by hostile cap- when the thing insured is wholly de- ture and condemnation." Beneck^ on stroyed or annihilated by the perils in- Mar. Ins. 336. See also Murray v. sured against ; and, 2d, when it is by the Hatch, 6 Mass. 465. same perils wholly and irretrievably lost ' Irving v. Manning, 1 H. L. Cases, to the assured, so that it is totally out 287. of his power or that of his underwriter ' Roux v. Salvador, 3 Bing. N. C. to procure its arrival." Arnould on 266. CH. III.] OF ACTUAL TOLAL LOSS. 69 no rational hope, no practicable possibility, of recovering possession of the property, and prosecuting the adventure to its termination ; for only when such hope and possibility have ceased is it an act- ual total loss. If a ship in mid-ocean springs a leak, fills, and goes down, this is an actual total loss of ship and cargo. It never happens, perhaps, in such a case, that some part of the ship or cargo does not float from her. These things may have a consider- able value, and may be saved by vessels which come near the place where she was submerged. It is nevertheless an actual total loss, for these parts or fragments cannot constitute a ship, and practically it is impossible that they should constitute a cargo. So if goods are in such a state from sea-damage, that, although they remain in the same species, they cannot with safety be re- shipped, and, if sent to their original destination, the species itself would disappear before they reached it, and on this account they are sold, this is an actual total loss.^ So if she be burnt to the water's edge, and still floats, incapable of repair, this is an actual total loss of the ship as a ship.^ But if the ship be submerged near shore, and in comparatively '' In the case of Koux v. Salvador, 3 Bing. N. C. 266, cited above, a cargo of hides was insured from Valparaiso to Bordeaux, " free from average unless general, or the ship be stranded." The ship, springing aleak, put into B,io, when the hides were found to be in a state of incipient putrefaction, and were sold, and tanned by the purchasers. It was contended, at the trial, that this was not a total loss, because the hides still re- mained in specie, and if tanned could have been carried to Bordeaux. Lord Ahinger, in his decision of the case, said : " If, before the termination of the original voyage, the species itself would disappear, and the goods assume a new form, losing all their original character; — in these cases the circumstance of their existing in specie at that forced termina- tion of the risk is of no importance. It appears to us therefore that this was not the case of what has been called a constructive [total] loss, but of an ab- solute total loss of the goods." See also Hagg v. Augusta Ins. Co., 7 How. U. S. 595 ; Tudor v. N. E. Mut. Mar. Ins. Co., 12 Cush. 554. ^ A vessel was wrecked in the Atlan- tic Ocean. The master and crew re- mained on board a day or two, when, there appearing no chance that the ves- sel could be saved, they abandoned her. Held, that this was an actual total loss. Walker v. Protection Ins. Co., 29 Maine, 317. In Murray v. Hatch, 6 Mass. 475, Sewall, J., says : " But in the technical sense of the words ' total loss,' and for every beneficial purpose in which a contract of insurance can be employed, a ship foundered and burnt at sea, or wrecked and broken upon the land, so as to be past relief or repair, is specifically and as a vessel totally de- stroyed ; and such an event is a total loss, .... though there be a considerable salvage remaining." 70 THE LAW OF MARINE INSURANCE. [CH. III. shallow water, there is no actual total loss until it becomes certain that she cannot be weighed and recovered.^ And if she be dam- aged by fire, and Tery badly, it is not an actual total loss if she is capable of repair.^ It therefore follows that either submersion ' Submersion is not per se a total loss, others, are the depth of the water, the distance from shore, the condition of the bottom whether soft or rocky, the roughness or smoothness of the sea, the season of the year, and whether the means of relief are at hand. The ulti- mate question is, Can she be raised and repaired at a reasonable expense of time and money ? " * The doctrine is laid down, in some of the earlier oases, that, so long as the thing insured continues to exist in specie, there can be no actual total loss. As in Mitchell V. Edie, 1 T. K. 613, 615; Davy V. Milford, 16 East, 565, 14 East, 466, 467. In Tunno v. Edwards, 12 East, 491, Lord EUenborough says: "Is it not an established rule of insurance law, that when the thing insured subsists in specie, and there is a chance of its recovery, in order to make it a total loss, there must be an abandonment ? " See also Hughes on Ins. 290. But this rule seems to have been stated too generally, and the more recent authorities have modified it. It is of no consequence that the thing exists in specie, provided no part of it comes into the hands, or is in any way available, for the benefit of the insured : it is still an actual total loss. Bondrett v. Hentigg, 1 Holt, 149. In Mullet V. Shedden, 13 East, 304, a cargo of saltpetre was seized at the Cape of Good Hope by a British cruiser, con- demned and sold by decree of the Court of Admiralty, which decree was after- wards reversed by the Court of Ad- miralty in England, and the saltpetre was ordered to be restored, or its value paid to the owner. After the condem- nation the insured claimed a total loss, though they made no abandonment ; and Vide Emerigon, ch. 12, §§ 12, 13 V. Withers, 2 Burr. 697; Anderson u. Koyal Exoh. Ass. Co., 7 East, 38; Davy V. Milford, 15 East, 563. In Sewall V. U. S. Ins. Co., 11 Pick. 90, the brig Marshal Ney, a new vessel, sailed from Boston for Baltimore on her first voyage. Three days after, she struck on a shoal, and, after bumping heavily there, was eventually driven over into deeper water, where she cap- sized and sunk in seven fathoms of water. The owners thereupon aban- doned. The brig remained under water about six weeks, some two miles from land, and was then raised and brought to Boston by the defendants, who ten- dered her to the plaintiffs, offering to bear the expense of repairs. This offer the plaintiffs refused. Thereupon the defendants repaired the brig, and again tendered her to the plaintiffs, offering to account with them and the other owners as for a partial loss, which offer the plaintiffs refused. It was proved that the brig was well repaired, and perfectly sound, and nearly as good as new. Shaw, C. J. : " We think that the cir- cumstance that a vessel is under water is not of itself sufficient to convert a partial into a total loss It will be admitted that when a vessel is sunk in the sea it affords strong prima facie evi- dence of total loss, because it would in general preclude all hope of recovering her. We think, therefore, it comes to this, that submersion, like stranding or other serious disaster, is to be taken in connection with other circumstances in determining whether the loss is or is not total. These circumstances, among CH. m.] OF ACTUAL TOTAL LOSS. 71 or fire is or is not a total loss, according to the circumstances of the case. So stranding, which means, as thus used, the being cast on shore,^ may or may not be an actual total loss. The mere fact it was held that an abandonment was unnecessary, as the insured property had been wholly lost to the insured by the unshipping and sale of it at the Cape by the decree of the court. In Cologan V. London Assurance Co., 5 M. & S. 447, where wheat which had been so damaged as to be worthless, though still existing in specie, was thrown overboard, and the insured abandoned and claimed a total loss, the court seem to have thought that the loss was actually total and the abandonment unnecessary. See Cambridge v. Anderton, 4 Dowl. & K. 203. In this case a ship was wrecked in the St. Lawrence, and, after a thor- ough survey, was judged to be unworthy of the expense of repairing, and sold. The insured, without abandoning, sued for a total loss. It appeared that the purchaser of the ship got her off at great expense, put a cargo on board, hired a crew at enormous wages in consequence of the unseaworthy character of the ship, and despatched her to England. She was found to be utterly unseaworthy, and was driven ashore on Prince Ed- ward's Island, where she was totally lost. Held, that the insured was justified in claiming a total loss, and that abandon- ment was unnecessary, because, though still existing in specie, she was for all purposes of a ship valueless. See also Dyson v. Rowcroft, 3 Bos. & Pul. 474. Strictly analogous to these cases is that supposed in the text of loss by fire. And whether there be an actual total loss must depend upon the same circumstan- ces as in loss by wreck, by submersion, or by decay ; and the mere fact that the thing insured exists in specie does not prevent a loss from being total. See Lord Kenyan, in Cocking v. Eraser, in Burnett v. Kensington, 7 T. R. 210, 2 Arnould on Ins. 1008, 1010. '■ To constitute a stranding the ship must be driven ashore by some force of ■ the elements out of the usual course of nature, or by unforeseen accident, and must remain there some little time. " If the ship touches and runs, the circum- stance " does not make a stranding. Har- man v. Vaux, 3 Campb. 429. It may be difficult at times to decide just what length of time a vessel must remain aground to constitute a stranding. In McDougle V. Royal Exch. Ass. Co., 4 Maule & S. 505, a minute and a half was held not to be long enough ; while in Baker v. Towry, 1 Stark. 436, the re- maining aground fifteen or twenty minutes, in consequence of which the vessel sustained material damage, was held sufficient to constitute stranding. In Barrow v. Bell, 4 B. & C. 736, half an hour was enough. The force that drives the vessel ashore must be some- thing extraordinary ; thus, when a ves- sel in charge of a pilot, going up a har- bor, took the ground on two successive days at low tide, and on the third, hav- ing been moored at her wharf, took the ground again at ebb tide, made a list and was much injured, it being proved that it was usual for vessels to take the ground in this way in that harbor, this was held to be no stranding. Hearne v. Edmunds, 1 Bro. & Bing. 388, where a vessel grounded in a canal, in conse- quence of the water being necessarily drawn off, and struck on some piles which were not previously known to be 72 THE LAW OF MARINE INSURANCE. [CH. III. that she rests on land or rock, and at low tide is high and dry there, does not of itself constitute this total loss ; ^ for the next there, tliis was held to be a stranding, as the cause was out of the usual course of navigation. Rayner v. Godmond, 5 B. & Aid. 225. Even if there be no actual force so as to drive the vessel aground, still there may be a stranding from the mere accidental want of some- thing that would prevent her from stranding. As in Bishop v. Pentlaud, 7' B. & C. 219, where a ship in a tide har- bor, at her wharf, had been fastened by tackle to posts on shore to prevent her from falling over at low tide, the rope, not being strong enough, broke, and she fell over and was much damaged. Held, that this was a stranding, notwithstand- ing that the master's neglect in provid- ing a weak rope might have been a re- mote cause of the accident. In Hughes on Insurance, p. 304, note, a case is re- ferred to where a vessel was driven ashore in consequence of being run into by two brigs, and remained ashore nearly an hour, but was held not to have been stranded. The principle of this case is by no means clear, and its authority may be doubted. The vessel was driven ashore by an unforeseen accident, out of the course of nature, and remained ashore too long a time to be considered " a touch and go." And this certainly comes within Mr. Justice Bayley's defi- nition of a stranding, which is : " When a ship takes the ground, not in the ordinary course of navigation, but by reason of some unforeseen accident." Bishop V. Pentland, supra. It matters not what the ship strikes on, whether the shore or piles, under water. Dobson V. Bolton, 1 Park, Ins. 238. See also Bennett v. Kensington, 7 T. R. 20, 1 Esp. 416 ; Carruthers v. Sydebotham, 4M. & S. 77: Kingsford v. Marshal, 8 Bing. 458 ; Wells v. Hopwood, 3 B. & Ad. 20. See Emgrigon, Tom. i. ch. 12, § xiii. for a definition of stranding. The books recognize a "voluntary stranding," which is, when the ship " is intentionally run on shore, either to pre- serve her from a worse fate, or for §ome fraudulent purpose." Marsh. Ins. B. 1, ch. xiii. § 1 ; 2 Phillips, Ins. 1313, etseq. Emerigon also enumerates several kinds of stranding, — " Echouement purement casuel," " Echouement voloutaire pour sauver le tout," "Echouement occasionne par la faute du capitaine," "Echouement avec bris," and "Echouement sans bris.'' Tom. 1, ch. 12, § 13. Reynolds v. Ocean Ins. Co., 22 Pick. 191 ; Barnard V. Adams, 10 How. 270, 302. For oth- er principles and authorities concerning stranding, see ante. Vol. I. ch. 17, § 12, B., p. 629, and post, chapter on General Average. ' Peele v. Merch. Ins. Co., 3 Mason, 42; Wood V. Lincoln & Kennebec Ins. Co., 6 Mass. 479; Patrick v. Com. Ins. Co., 11 Johns. 9. In. this case, Kent,C. J., says : " It is well understood that stranding is not ipso facto a total loss. It may be and it often is followed by shipwreck, or becomes by other means a total loss ; but it is not of itself a total loss." See also King v. Middle- town Ins. Co., 1 Conn. 201. In Peele v. Sufi"olk Ins. Co., 7 Pick. 254, a ship was cast away " on a ledge of rocks near Portsmouth, N. H., and immediately bilged. She was in such a desperate condition that it was nine chances out of ten that she would be totally lost and wrecked in twenty-four hours." In the decision of the case, Parker, C. J., says : " That the ship, at the time of the ofier to abandon, was in a state of peril to CH. III.] OF ACTUAL TOTAL LOSS. 73 high tide may lift her from the bottom, and if it cannot do this without assistance, it may be practically possible to use means to draw her off. If it be physically impossible to draw the vessel off, not in a theoretic, but in a practical point of view, or if she is so much injured by the wreck that she could not float or be repaired, this would be an actual total loss. It would be shown to be this by the test above given, which is always applied.^ It is often very important as well as sometimes difficult to de- termine whether the vessel be thus totally lost ; for if it be so, the insured may claim payment of the insurers as for a total loss, with- out further action on his part,^ but not otherwise.^ And various phrases are used in different cases and by different writers to de- scribe the condition of the ship thus actually totally lost. . Thus it is said : " If the subject-matter of the insurance remain a ship, it is not a total loss ; but if it were reduced to a mere congeries of planks, the vessel was a mere wreck. The name you may think fit to apply to it cannot alter the nature of the thing." And again : justify that offer, cannot be doubted. She was upon the rocks, and whether she could be got off or not was altogether uncertain. Subsequent events must de- termine whether the loss was then total or not. The mere stranding, however perilous, is not of itself a total loss, for the vessel may be relieved and the dam- age may be small." The vessel was got off and repaired. See also King v. Hartford Ins. Co., 1 Conn. 422. ' Vide supra, p. 70, n. 2. 2 Smith V. Manuf. Ins. Co., 7 Met. 448 ; Peirce v. Ocean Ins. Co., 18 Pick. 83 ; 2 Arnould on Ins. *1001. In Portsmouth Ins. Co. v. Brazee, 16 Ohio, 81, a flat-boat, having on board a cargo of flour, insured, sunk. Without the knowledge of the owner of the flour, the cargo was raised and sold. The in- sured brought an action, claiming for a total loss ; and it was held that the in- sured should recover, Avery, J., say- ing : " There was no actual abandon- ment, indeed, but this is not always ne- cessary. . . , . There was nothing left but the money" for which the flour had been sold, " and it would have been an idle ceremony to attempt a formal abandonment." So Emerigon : " En cas de perte entiere le d^laissement est une formalite inutile." See Mellish v. Andrews, 15 East, 13; Mullet v. Shed- den, 13 East, 304, 310; Abel v. Potts, 3 Esp. 244 ; Gordon v. Bowne, 2 Johns. 155. The mere fact that there still exists a spes recuperandi, as, in case of capture, it is possible that the hostile government may restore the property captured, does not prevent the insured from recovering the whole amount of his insurance. See, in Gracie v. N. Y. Ins. Co., 8 Johns. 237, the decision of Chief Justice Kent, denying the au- thority of Watson V. Ins. Co. ofN. A., 1 Binney, 47 ; Gordon v. Mass. F. & M. Ins. Co., 2 Pick. 267; Wein v. Colum- bian Ins. Co., 12 Pick. 280 ; Patapsco Ins. Co. V. Southgate, 5 Pet. 604 ; Gor- don V. Bowne, 2 Johns. 150. ' 2 Marsh, Ins. ch. 14, § 1. 74 THE LAW OF MARINE INSUEANCE. [CH. IH. " I take the legal principle to be this : if, by means of any of the perils insiired against, the ship ceases to retain that character, and becomes a wreck, that is a total loss, and the master may sell her, and the assured may recover for a total loss, without notice of abandonment." ^ In another case it is said : " She was therefore no longer to be deemed a ship, but rather materials for another ship." 2 And elsewhere the phrases are used, " dismembered by the perils of the sea," " wrecked in pieces," " her planks and ap- parel scattered about in the sea." It must be remembered that an actual total loss of insured property occurs, either if the thing insured is wholly destroyed as that thing, or if the property insured, while remaining in specie what it is, is wholly lost to the insured, which means that it is en- tirely out of his power or that of the insurer to recover the property.^ Of the last kind of total loss a good example is that of capture and condemnation.* So, too, if the ship has not been heard from for a sufi&cient time, a legal presumption will arise of an actual total loss,^ and it is entirely immaterial whether circumstances and evi- ' Cambridge v. Anderton, 2 B. & C. ry's note to Abbott on Shipping (6th 691. American ed.), p. *26 ; Hudson v. Gues- ' Per Lord Tenierden, in Allan v. tier, 4 Cranch, 293 ; Wheelwright v. Seegrue, Dans. & L. 192. Depeyster, 1 Johns. 471 ; Rose v. ' Arnouldonlns. *1001 ; Beneck^on Himely, 4 Cranch, 508. As to how Mar. Ins. 336 ; Roux v. Salvador, 3 far a sentence of condemnation is neces- Bing. N. C. 266 ; Hagg v. Augusta sary to change the title to property be- Ins. Co., 7 How. 595; Tudor v. N. tween enemies, there seems to be conflict E. Mut. Mar. Ins. Co., 12 Cush. 554 ; of authority. See Story's note to Ab- Walker v. Protection Ins. Co., 29 Maine, bott on Shipping (6th Am. ed.), p. *26. 317 ; Bondrett v. Hentigg, 1 Holt, 149 ; If, therefore, a ship be captured and Mullet V. Shedden, 13 East, 304 ; Colo- lawfully condemned, the insured has suf- gan V. London Ass. Co., 5 M. & S. 447 ; fered an actual total loss, and an aban- Cambridge v. Anderton, 4 Dowl. & R. donment would seem to be nugatory. 203 ; Dyson v. Rowcroft, 3 Bos. & Pul. The extent of the meaning of the word 474. "capture" has been considered when * In Goss V. Withers, 2 Burr. 683, it treating of the risks insured against, is decided that the property in the ship ^ What this time shall be, must, of is not changed till decree of condemna- course, depend on the circumstances of tion. In the United States a "sen- each case, such as the length of the tence of condemnation is necessary to voyage, &c. In Gordon v. Bowne, 2 transfer property captured as prize, and Johns. 150, a vessel sailed on a voyage originally belonging to neutrals." Sto- from a port in North Carolina to New CH. in.] OF ACTUAL TOTAL LOSS. 75 dence lead to the probability that the vessel was sunk, or burnt, or destroyed by wreck, or, on the other hand, was taken possession of, and run away with, by mutineers or by pirates ; for in either case, let the vessel be where or what it may, she is totally lost to the owner. So where a ship was wrecked and a considerable part of the goods were saved, and got on shore, but were there in part destroyed and in part stolen, this was held to be an actual total loss of the cargo, because " the portion of the goods which were saved from the wreck, though got on shore, never came again into the hands of the owners. It is therefore a total loss to them." ^ There are several cases applying the same principle of law and working out by it this distinction ; where goods are seized and confiscated by a foreign government, either because it is hostile or for any other reason, and some efforts are made or some process begun to recover the propei'ty so seized, which are in the end suc- cessful, if the action is brought as for actual total loss before the property or any material part of it is restored, this action may be maintained ; but if the action be brought after such restora- York, and was never again heard from, nine months, was presumed to be lost. Held, that a lapse of a year from the See also Green v. Brown, 2 Strange, time she sailed was sufficient to raise a 1199. But it must be proved that the presumption of total loss, and entitle vessel actually sailed on the voyage in- the insured to recover without abandon- sured. Koster v. Innes, Ky. & Moody, ment. In Brown v. Milson, 1 Gaines, 333 ; Koster v. Eeed, 6 B. & C. 19. 525, a vessel was insured on time, four It is not necessary to show that the ves- months, from Norfolk, Va., to New sel never arrived at the port of destina- Tork. She did not arrive within the tion ; it is enough to prove that she time insured. Two severe storms had never was heard from at home after she occurred, one within the time and the sailed. Twemlow v. Oswin, 2 Campb. other without. It was proved that the 85 ; Newby v. Kead, 1 Park, Ins. (8th usual time of such a trip was from five Eng. ed.), p. 148. See Paddock v. to seven days, while there had been an Franklin Ins. Co., 11 Pick, 227; and instance of a safe arrival after a passage .in Ruan v. Gardner, 1 Wash. C. C. 145, of sixty days. The judge observed where a vessel was proved to have been that it was for the jury to determine taken by a privateer, it was held that which storm had destroyed the vessel, this afforded sufficient evidence of a and that, if a vessel did not arrive within total loss after three years, during which the usual limits of the voyage she was nothing had been heard of the vessel or prosecuting, she ought to be presumed to cargo, to enable the assured to recover be lost. In Hurstman v. Thornton, 1 without abandonment, and without prov- Holt, 242, a vessel insured from Havana ing a condemnation, to the Netherlands, and not heard of for ^ Bondrett v, Hentigg, 1 Holt, 149. 76 THE LAW OF MARINE INSURANCE. [CH. in. tion has been made, there is no longer an actual total loss, but at most a constructive total loss, that is, a loss which may be made total by abandonment.^ This kind of total loss we shall speak of presently, saying now only that we should think the principles which determine what is actual total loss would prevent this from being so considered, so long as there was a reasonable prospect of ' In Tunno v. Edwards, 12 East, 488, the defendant shipped sixty hogsheads of sugar at London for Kotterdam, and got it insured at a value of £1,500. The plaintiff was one of the underwriters. The sugar was seized, confiscated, and sold by order of the government of Holland. The underwriters thereupon agreed with the defendant to pay him £ 50 per cent on account, which was done. A few months after, the Dutch government consented to restore half the proceeds of the cargo of sugar, and the sum of £ 1,551 and upwards was paid to the consignees of the sugar at Kotterdam, and by them transferred to the defendant. The plaintiff sued to re- cover the £50 per cent that he had paid. Lord Ellenborough said : " But now, though the assured has lost half his goods, and only half, and the under- writer has paid but for half, the latter claims to be repaid his £ 50 per cent, upon the ground that this was a total loss, and that the assured has received the full value of the sum insured out of the proceeds of the other half; but in order to have made it a total loss, there ought to have been an abandonment, which there has not been ; therefore there is no ground for the underwriter's claun." In Mullet v. Shedden, 13 East, 304, an American, having a license un- der the authority of the British govern- ment to export saltpetre from Calcutta to America, shipped a cargo, and got it insured, with leave to stop and trade at all ports, &c. The cargo was seized and condemned at the Cape of Good Hope ; but the sentence was afterwards reversed on appeal, and the property ordered to be restored on payment of costs, &c. After the reversal of the de- cree, a notice of abandonment was given to the defendant, an underwriter ; no part of the saltpetre or its proceeds hav- ing been received from the Cape by the owner or his agents. The question which came before the court was, whether the plaintiffs were entitled to recover a total loss. In the course of the argument Lord Ellenborough re- marked : " The assured stands upon the actual destruction, as to him, of the thing insured, which precludes the ne- cessity of any notice to abandon it." And Bayley, J., remarked : " No circum- stance has happened since to make the original detention less than a total loss.'' And in the final judgment by Lord Ellenborough : " If instead of the salt- petre having been taken out of the ship and sold, and the property divested, and the subject-matter lost to the owner, it had remained on board the ship, and been restored at last to the owner, I should have thought that there was much in the argument, that in order to make it a total loss there should have been nptice of abandonment, and that such notice should have been given sooner ; but here the property itself was wholly lost to the owner, and therefore the necessity of any abandonment was altogether done away." See also Hel- lish V. Andrews, 15 East, 13. CH. m.] OP ACTUAL TOTAL LOSS. 77 recovering the property.^ We believe the weight of authority as well as the practice and usage in this country, and,perhaps now in England, would make abandonment necessary .^ ' Hughes on Ins. 293, 295. The case of Goldsmid v. Gillies, 4 Taunt. 803, was an action on a valued policy of in- surance on a quantity of coffee that had been confiscated and sold by the enemy. But the foreign consignee of the coffee •was permitted to retain from the pro- ceeds the amount of his acceptances on bills drawn by the plaintiffs. The de- fendant, afler advice of the seizure, ad- justed a loss of 35 per cent on account. A verdict was taken for the plaintiffs for £ 44, 16s., subject to the opinion of the court whether the plaintiffs were en- titled to recover from the defendant the amount for which the verdict was tfiken, or any and what other sum. HeaUe, J., said : " It is in the plaintiff's option to make it either an average or a total loss, and he makes it an average loss." Gibbs, J., said : " If the plaintiff had brought an action after this salvage for a total loss, the defendant would have nonsuited him for want of an abandon- ment. I do not state that, upon seizure by the Danes or Swedes, the plaintiff" might not sue for a, total loss without abandonment ; but after the restoration, no abandonment having been declared in the mean time, that which was for a time a total loss became an average loss; and then all that is restored is restored for the benefit of the assured, not of the underwriter." See preceding note. ^ The practice in this country seems to be invariably to abandon in case of loss by capture, as for instance in the cases following : Mar. Ins. Co. v. Tucker, 3 Cranch, 357 ; Post v. Phoenix Ins. Co., 10 Johns. 79 ; Lee v. Boardman, 3 Mass. 237 ; Dorr v. N. E. Mar. Ins. Co., 4 Mass. 221 ; Lovering v. Merc. Mar. Ins. Co., 12 Pick. 348. The number of cases, however, which hold abandon- ment necessary is not very great ; still, as there seems to be no case which decides that a simple capture is an actual total loss, if action is brought be- fore restoration is made, the principle in the text must be considered as the American law- The following cases il- lustrate the subject : In Rhinelander v. Ins. Co. of Pa., 4 Cranch, 29, Chief Justice Marshall says : " When there is a complete taking at sea by a bel- ligerent, who has taken full possession of the vessel as a prize, and continues that possession to the time of the abandonment, there exists in point of law a total loss." And there is a simi- lar dictum in Marshall v. Del. Ins. Co., 4 Cranch, 202. But a stronger case is Tucker v. United M. & P. Ins. Co., 12 Mass. 296, where a ship had been cap- tured, taken to England, and afterwards liberated. No abandonment was made during the detention by capture ; but afler the release of the vessel, the French decrees making it dangerous for her to sail, her cargo was sold in England. The plaintiff claimed a total loss, but the court say : " We do not think that this temporary detention by capture, no abandonment having been made during its existence, can have any effect." But the strongest case, and one which seems to settle the ques- tion, is that of Barney v. Maryl. Ins. Co., 5 Harris & J. 139. The facts were as follows: The schooner Hawk, insured by the defendant, sailed from Baltimore, and on her voyage was captured by Preneh vessels and taken to Spain, to a 78 THE LAW OF MARINE INSURANCE. [CH. m. There is yet another kind of loss by ■which it may not, perhaps, be quite certain whether it may be of itself an actual total loss. It occurs when a wrecked vessel is sold by the master under cir- cumstances and in a manner which justify the sale. It is quite certain that, by the maritime law which governs all commercial nations, the master of a ship has no authority as mas- ter to sell either the ship or the cargo. This is no part of the duties of his office.^ But it is equally certain that he has this port there held by the French. The captors detained her for some time, till at length she was taken into the service of the French government by order of the Minister- of Marine, and was never . restored. Two or three notices of aban- donment were given to the defendant, which defendant did not accept. The policy contained a warranty, " not to abandon in case of capture until con- demned." The plaintiflF claimed for a total loss. Buchanan, J., said: The fact that the Hawk was " taken into the service of the French government, by or- der of the Minister of Marine was not a condemnation within the terms of the policy The plaintifi therefore had no right to abandon, and the case stands as if there had been no abandon- ment, or offer to abandon But it is said that the stipulation by the plaintiff not to abandon could not operate to prevent his recovering as for a total loss, in any case in which abandonment would not be necessary, as where noth- ing remained to be abandoned, and that this is such a case. That admitting the order of the Minister of Marine not to be a condemnation within the terms of the policy, yet that the taking the vessel into the service of the French government placed her so entirely without the control of the plaintiff, as to be equivalent to a final sentence of con- demnation. But there is a mistake in the supposed legal effect of the order of the Minister of Marine. It did not divest the plaintiff of his right of prop* erty. The vessel was not destroyed, but specifically remained, and the spes recuperandi, however remote and weak, was not extinguished. If, therefore, nothing else had stood in his way, the plaintiff could not have claimed as for a total loss without abandoning ; for as it is settled that the insured can never recover for any greater injury than he has sustained, he must, before he can sue as for a total loss, renounce to the insurer all his right and title to what- ever may be saved ; leaving to him the spes recuperandi, that he may have the benefit of a recapture, or any other accident by which the thing may be re- covered ; and thus justice is done to both, — to the insured by giving him an indemnity for all the loss he has sus- tained ; and to the insurer by putting him in place of the insured, in case any- thing should ever be recovered. The insured has his election to abandon or not, and, until he has made that election, no right can vest in him as for a total loss." The reasoning in this opinion is sound, and the doctrine it inculcates worthy to be the law. ' Abbott on Shipping, *7 et seq. The laws of Oleron, Art. 1, declare : " The master may not sell or dispose of the ship without a special procuration from the owners." See the translation of some of the Ancient Sea Laws in Ap- CH. m.] OP ACTUAL TOTAL LOSS. 79 authority from necessity, in cases which leave to him no other alternative but to sell the ship as she lies, or let her inevitably perish, with no advantage or saving whatever to the owner.^ Before considering the effect of such a sale upon the rights and relations of the insured and insurer, supposing the sale to be justi- fied, it may be well to inquire what circumstances justify the sale. Many foreign ordinances in early times expressly prohibited the master from selling the ship under any circumstances.^ And it seems probable, from the earliest English authorities, that the com- mercial law of England gave him no such power.^ A case in Jen- pendix to 1 Pet. Adm. R. ; Laws of Wisbuy, Art. 13; Laws of Hanse Towns, Art. 57 ; Ord. de la Marine, liv. 2, tit. 1, § 19 ; Consolate del Mer. cap. 156. It will be seen that each one of these codes contains a positive prohibi- tion against a sale by the master, unless he has express authority so to do. See also Arnould, Ins. *189. The master is an agent of the owners for a particular purpose, and, of course, in the general principles of agency can do no act not within the scope of his office. ' The authority of the master to sell in case of necesssity is completely estab- lished by a multitude of cases. Story on Agency, § 118, after stating the usual limit of the master's authority, says : " But he may, under circum- stances of great emergency, acquire a superinduced authority to dispose of it [the ship], from the very nature and necessity of the case." Milles v. Fletch- er, Doug. 231 ; Green v. Royal Exch. Ins. Co., 6 Taunt. 68; Idle v. Royal Exch. Ins. Co., 8 Taunt. 755. These three cases wiU be quoted at more length below. American Ins. Co. v. Ogden, 15 Wend. 532 ; Roux v. Salvador, 3 Bing. N. C. 266 ; Somes v. Sugren, 4 Car. & P. 276 ; Hunter v. Parker, 7 Mees. & W. 342 ; Gordon v. Mass. F. & M. Ins. Co., 2 Pick. 249 ; Pierce v. Ocean Ins. Co., 18 Pick. 83 ; Robinson v. Common- wealth Ins. Co., 3 Sumn. 220 ; Brig Sarah Ann, 2 Sumn. 206 ; Schooner Tilton, 5 Mass. 475 ; Patapsco Ins. Co. V. Southgate, 5 Pet. 604 ; New England Ins. Co. V. The Sarah Ann, 13 Pet. 387. " Magens on Ins., 107; and see the Sea Laws cited in p. 78, n. 1, supra; also Warder v. Goods, &c., 1 Pet. Adm. 37. ' 2 Magens on Ins. 107. Molloy, B. 2, ch. 14, says : " He [the master] can- not sell without an authority or license from the owners," which are the very words used in the Laws of Oleron. In Tremenhere v. Tresilian, 2 Keble, 91 ; S. C. Siderfin, 432, the court held a special authority necessary to justify a sale by the master. This case is recognized as authority by Lord Elleriborough in Hay- man V. Molten, 5 Esp. 65. In Eakins V. East India Co., 1 P. Wms. 395, 2 Bro. Pari. Ca. 382, it is stated that the master had no power to sell the ship, but here it was.found that there was no necessity for a sale. The case in Jen- kins, Centuries, p. 165, mentioned in the text, seems to be the earliest case that admits the master's authority to sell even in an emergency. But it is now well settled that he may sell in case of necessity (see cases cited note 1, supra,) and many courts have shown a disposi- tion to relax the old rule so far as to allow him to sell whenever, in his judg- 80 THE LAW OF MAEINE INSURANCE. [CH. III. kins' s Centuries^ says that he may do so in a case of famine; and this may be the beginning of the rule that he may sell the ship in the case of necessity. He always had, undoubtedly, the power to borrow money on the credit of the ship,^ and in one case where a master gave a bill of sale of the vessel, Lord Raymond considered the instrument void as such, but valid as a hypothecation of the vessel.^ We are not aware of any other case in which such a course has been taken. The English cases went on until they extended the authority of the master in this respect quite too far. It was held that if the sale of the ship by the master was in the exercise of an honest discretion, and for the beneiit of all concerned, the sale was au- thorized.* It is not so considered now,^ although there are cases which seem to approach this view.^ We suppose it to be now well- settled law, that the mere exercise of an honest discretion, with the purpose of benefiting all concerned, is not enough to justify ment, that is the wisest course to pur- sue. Dr. Lushington, in the case of The Catherine, 1 Eng. L. & Eq. 679, 681, says: "In later days I think a ■wiser view of the question has been taken, because I take the law now to be that, where an urgent necessity exists, which the master cannot meet, it is competent to him to sell the ves- sel." ' Page 165. ' Consolate de la Mer. (Boucher), c. 156 ; Laws of Oleron, Arts. 1 & 22 ; Laws of Wisbiiy, Art. 13 ; Laws of the Hanse Towns, Art. 57 ; Ord. de la Ma- rine, liv. 2, tit. 1. And the Laws of Wisbuy allowed the master in a " case of great necessity " to -sell part of the merchandise and pay the owner for it when he reached his destined port. Art. 35. See also MoUoy, B. 2, ch. 14 ; Ho- bart, fbl. 10, 11 (Bridgeman's case). In this case Bridgeman, a bottomry bond-holder, proceeded against the ship in the Admiralty Court. A prohibition against the admiralty was granted, on the ground " that by the Common Law the master could not impawne the ship ; for no property generall or speciall, nor such power is given unto him by the constituting of him master." But the court said : " I was of opinion clearly that the Admirall law is reasonable, that if a ship be at sea and take leake, or otherwise want victuall, or other neces- saries, whereby either herselfe be in danger or the voyage defeated, the mas- ter may impawne." ' Johnson v. Shippen, 2 Ld. Ray- mond, 982. * See Phill. on Ins. 1569, 1570, 1583 ; Doyle V. Dallas, 1 Mood. Se Rob. 48 ; Milles V. Fletcher, Doug. 231. ' See notes, infra. ° See opinion of Chief Justice Dallas in Read v. Benham, 3 Brod'. & Bing. 147 (1821), and in Idle v. Royal Exch. Ass. Co., 8 Taunt. 755 ; Am. Ins. Co. M. Center, 4 Wend. 45. In this case the court say : " Where there is a techni- cal total loss, the master is under no obligation to repair, where it is not for the interest of the owner to do so." But see next note. CH. III.] OF ACTUAL TOTAL LOSS. 81 the sale.^ In the words of Dr. Lushington : " In later days a wiser view of the question has been taken ; the law now being, that ' On pp. 78, u. 1, 79, n. 2 and 3, will be found the authorities for the statement that the early sea laws, as well as the old common law of England, recognized no authority in the master to sell the ship under any circumstances. When, with the increase of commerce and civiliza- tion, it became necessary to adopt a dif- ferent rule, the tendency was at first in many cases to rush to the opposite ex- treme, and allow the master to sell when in his judgment it was best to do so. In Milles v. Fletcher, Doug. 231, Lord Mansfield instructed the jury that, " if they were satisfied the captain had done what was best for the benefit of all concerned, they must find as for a total loss." The facts were that the plaintiif 's ship was captured by Ameri- can privateers, stripped of her rigging and part of her cargo, afterwards re- captured and taken to New York, where she was delivered to her captain. The ship was found to be leaky, and she could not be repaired without un- loading her cargo, and the owners had no storehouses in New York where ' it could be stored, nor had they any agent there to advise the captain. No sail- ors were to be had. The cost of re- pairs would have exceeded the freight. There was an embargo which would have detained the ship at New York till five months after the time she should have arrived at London, her port of destination. Under these circumstan- ces the jury gave a verdict for the plaintiff. Lord Mansfield said further : " The captain, when he came to New York, had no express order, but he had an implied authority from both sides to do what was right and fi to be done." This case occurred in 1779. In 1815 VOL. II. 6 the case of Green v. Royal Exch. Ins. Co. came up, and the court said : " It ought therefore to be left to the jury, whether a prudent man would have sold the ship in these circumstances, or have repaired her and proceeded with her." Idle v. Royal Exch. Ins. Co., 8 Taunt. 755 (1819), recognizes the au- thority of Milles V. Fletcher, supra. In Read v. Bonham, 3 Brod. & Bing. 147 (1.821), the court, Chief Justice Dallas, after expressing its approval of the cases above cited from Douglas and Taunton, says : " The jury have found that what was done was done in the exercise of an honest discretion, and for the benefit of all concerned ; and I see no reason to overturn the conclusion to which they have come." In this case Rich- ardson, J., dissented from the majority of the court. Perhaps the case of Am. Ins. Co. V. Center, 4 Wend. 45, may lean this way. There is great confu- sion of language in the cases on this point, and the abstract of a case will sometimes contain two opposite doctrines. Some cases limit the master's right to sell to " absolute necessity," and then go on to say he may sell when that course appears to be the best. It may be said that the master is bound to exhaust every other means of raising money before he can sell the ship ; then, and not till then, he may begin to consider whether he would be justified in selling. See Underwood v. Robertson, 4 Campb. 138. 3 Kent, Comra. *1 73, recognizes the rule of "su- preme necessity." In Hayman v. Mol- ten, 5 Esp. 6.5, Lord Ellenhorough said : " I am disposed to go as far as I can to support what has been contended for, that [in a case of urgent necessity an 82 THE LAW OF MAEINE INSURANCE. [cH. in. •where an urgent necessity exists, which the master cannot meet, it is competent to him to sell the vessel." ^ It is of course difficult, extraordinary difficulty, where a ship had received irremediable injury] the eaptain, acting bona fide and for the bene- fit of the owners, might sell the ship. This is the disposition of my mind, but I cannot lay it down as positive law. At all events, it can only be justified by ex- treme necessity and the most pure good faith." This case was tried in 1803, some time previous to Chief Justice Dallas's decisions cited above. To the same efieot will be found Roux v. Sal- vador, 3 Bing. N. C. 288; Somes v. Seegrue, 4 Car. & P. 276. In this case Chief Justice Tindal says : " A captain has no power to sell, except from neces- sity, considered as an impulse, acting morally, to excuse his departure from the original duty cast upon him of navi- gating and bringing back the vessel." See Doyle v. Dallas, 1 Mood. & R. 48, where the sale was by the owner. In The Fanny & Elmira, 1 Edw. Adm. 117, an American vessel got on the rocks on the Irish coast ; and after a survey by competent persons, who es- timated that it would require a sum ex- ceeding the value of the vessel to repair her, and advised selling her, this was done. The vessel was got off by the purchaser, an American, sailed to Rus- sia, was captured by the Danes and re- captured. The purchaser in Ireland then claimed her. In giving judgment Sir WiUiam Scott said : " It is contended that such a sale, made under the pres- sure of necessity, will convey a vahd title to the purchaser. But in the first place it must be shown that there was a necessity, and then it remains to be considered whether it was such as by law would give the master a right to sell There must be the clearest proof of the necessity ; it must be shown, not only that the vessel was in want of repair, but likewise that it was impossi- ble to procure money for that purpose." And he ordered the possession of the vessel to be restored to those who ap- peared by her register to be the own- ers, without prejudice to such rights as the purchaser had acquired, as shall ap- pear to the proper court of justice in America. Also see of English cases the following: Hunter v. Parker, 7 Mees. & W. 322; Cannan v. Meaburn, 1 Bing. 243.; Meaburn v. Leckie, 4 Dow. & R. 207, n. ; Tanner v. Bennett, Ry- an & M. 182 ; Robertson v. Clarke, 1 Bing. 445 ; Cambridge v. Anderton, '2 B & C. 693; Ireland v. Thompson, 4 C. B. 149. In Gardner v. Salvador, 1 Moody & R. 116, Mr. Justice Bailey remarks : " If the situation of the ship be such that by no means within the master's reach it can be treated so as to retain the character of a ship, then it is a total loss. If the captain by means within his reach can make an experi- ment to save it, with a fair hope of re- storing it to the character of a ship, he cannot by selling turn it into a total loss.'' Most of the American cases are clear in insisting upon the rule of necessity. In Massachusetts, one of the leading cases is Gordon v. Mass. F. & M. Ins. Co., 2 Pick. 249, which occurred in 1824. The facts were as follows : " The brig Enterprise put into the harbor of St. Domingo, having lost her foremast. While lying at anchor she was struck » The Catherine, 1 Eng. L. & Eq. 681. CH. m.] OF ACTUAL TOTAL LOSS. 83 if not impossible, to determine, by a precise and satisfactory defi- nition, when the necessity is sufficient to have this effect. Tindal, by a gale and blown on the rocks. She was got off and carried up to the town, when a survey was held. A report was made that the brig was badly damaged, and that it would cost more to repair her than she would be worth ; and she was condemned to be sold. The purchaser repaired her at no great ex- pense, and took her to Boston. The question was. Was the master justified in selling ? The jury found for the plain- tiff. A motion was made for a new trial, on the ground of a misdirection of the judge, who directed the jury 'that as the vessel had come to damage un- questionably by perils insured against, if the proceedings of the captain in re- lation to the survey were hona fide, and the surveyors conducted themselves honestly in examining the vessel, and reporting their opinion that she ought to be condemned and sold, the sale was justifiable,'" &c. A new trial was granted. Chief Justice Parker, in giv- ing the opinion of the court, observed : " It is certain that the master of a vessel as such has no authority to sell the vessel or the cargo, unless in a case of extreme necessity, and when he acts with the most perfect good faith for the interest of those who are concerned in the property." After reviewing several English and New York cases, in which the same principle is held, he goes on to say : " This necessity must be of a moral nature, resulting from certain facts and circumstances, which are to be judged of first by the master himself and afterwards by a jury, and perhaps with some strictness, on account of the danger there may be of an abuse of this authority, by collusion between the master and owners to the prejudice of the underwriters, or by the fraud of the master alone, to answer some pri- vate purpose of his own, or to defraud the owners." This doctrine has been followed in Massachusetts in all the subsequent cases. Winn v. Col. Ins. Co.j 12 Pick. 279, where the court say : " It must be made to appear, not only that there was an actually existing in- evitable necessity for breaking up the voyage and abandoning the ship, but that in determining upon that measure the master acted with competent skill and judgment, with due care, diligence, and attention, and with strict fidelity." Also Hall V. Franklin Ins. Co., 9 Pick. 466; Peirce v. Ocean Ins. Co., 18 Pick. 83. Among the cases in the United States courts, see Pope v. Nickerson, 3 Story, 465, 503. In this case, when proceed- ings were threatened under a bottomry bond, and the master sold the vessel, and applied the proceeds to the pay- ment of the bond, Mr. Justice Story held that the master was excused, if not strictly justified, in selling the vessel; since, if he had not done so, the result would have been an expensive litigation and a forced sale. Brig Sarah Ann, 2 Sumn. 206 ; Robinson v. Com. Ins. Co., 3 Sumn. 220 ; The Schooner Tilton, 5 Mass. 465. In Patapsco Ins. Co. v. Southgate, 5 Pet. 604, the court say : "Necessity and good faith must con- cur The professional skill, the due and proper diligence of the master, his opinion of the necessity, and the benefit that would result from the sale to all concerned, would not justify it, unless the circumstances under which the vessel was placed rendered the sale necessary in the opinion of the jury." N. E. Ins. Co. V. Brig Sarah Ann, 13 84 THE LAW OF MARINE INSUEANCE. [CH. HI. C. J., seems to think the question is solved when it is said to be neither a legal necessity nor a physical necessity, but " a moral necessity." ^ And Mr. Justice Story speaks of this phrase as hav- ing been much criticised ; but he. entirely approves of it, and says, " It seems to indicate precisely what such a case requires." He then goes on to define this moral necessity. He says : " It arises where a duty is incumbent upon a rational being to perform, which he ought at the time to perform. It presupposes a power of volition and action, under; circumstances in which he ought to act, but in which he is not absolutely compelled to act by ovei'- whelming superior force." ^ We do not see that this rule and definition throw any strong light upon the question. And, without attempting a specific definition of our own, we should say it must be an " urgent necessity," in the words above quoted of Dr. Liish- ington ; " an imperious, uncontrollable necessity," in the language of Chief Justice Shaw.^ " The sale should be indispensably requi- site ; the reasons for it should be cogent ; we mean a necessity which leaves no alternative, — which prescribes the law for itself, and puts the party in a positive state of compulsion to act." * " The master may sell where the ship is a total wreck." ^ And the Supreme Court of the United States have held that where the sale was of a vessel wrecked in a distant ocean, where there was no market or competition, and the person who had it in his power to save the crew and the cargo preferred to drive a bargain with the master, " the necessity in such a case tnay be imperative, be- cause it is the price of safety ; but it is not of that character which permits the master to exercise this power." ^ Pet. 387; Scull v. Biddle, 2 Wash. C. was gone through with, the captains of C. 150. three other vessels being the bidders, ' Somes V. Seegrue, 4 C. &. P. 276. and the ship and tackle were sold for ^ The Ship Fortitude, 3 Sumn. 248. five dollars, and a part of the cargo at a " Peirce v. Ocean Ins. Co., 18 Pick, dollar and the rest at seventy-five cents 88. a barrel. The sale was held invalid. * Hall u. Franklin Ins. Co., 9 Pick. The court said : " All the cases assume 478. the fact of a sale in a civilized country ^ Cambridge v. Anderton, 2 B. & C. where men have money, where there is 693. market and competition. They have « In Post V. Jones, 19 How. 150, the no application to wrecks on a distant vessel was wrecked on the coast of ocean, where the property is derelict or Behring's Straits. The form of auction about to become so, and the person who CH. III.] OF ACTUAL TOTAL LOSS. 85 Perhaps a distinction may be taken between the case in which the question whether the sale be justified comes up between the former owner and the purchaser, and the other case where this question arises between the insurer and insured.^ It is this last case only that we are now considering. And here wo are satisfied that the question whether a prudent uninsured owner would prob- ably have sold the ship under the same circumstances, or, in other words, the question of an honest exercise of discretion, has little or no bearing on the main question, which is. Was the sale justi- fied, and the total loss thrown on the insurers ? And we should say it was not so justified, excepting by the urgent, imperious, and uncontrollable necessity spoken of in the cases above referred to. At the same time we should admit that the validity of the sale for any purpose is not to be judged of merely by the event. That may be an important fact. It may show that the danger, and the necessity springing from the danger, were erroneously esti- mated ; because the purchasers may succeed in recovering the vessel with more ease and less cost than were expected.^ But if, has it in his power to save the crew, and are aware that this is said to be a test save the cargo, prefers to drive a bar- in numerous cases ; but to show the gain with the master. The necessity in fallacy of it, let us take the case of such a case may be imperative, because "memorandum articles," where the rule it is the price of safety, but it is not of is ' that if the goods arrive in specie that character which permits the master there is no total loss. Nor is it prob- to exercise this power," able that in every case the best thing ' Where the master sells the ship, and that can be done is to sell the goods ; the vahdity of the sale is disputed by but it is certain that this will not be ta- the former owner, so that the only ques- ken as a criterion. See Wilson v. Mil- tiou is between him and the vendor, it lar, 2 Starkie, 1 ; Reid v. Darby, 10 may be said that the sale will be deemed East, 143 ; Freeman v. East India Co., 5 valid, if the circumstances attending it B. & Aid. 617; Hunter v. Parker, 7 Mees. were such that a jury would be war- & W. 322 ; Abbott on Shipping, *8. ranted in finding that a prudent owner ^ In The Brig §arah Ann, 2 Sumner, would have done as the mastef did. 206, 215, affirmed on appeal, N. E. Hayman v. Molten, 5 Esp. 65. But we Ins. Co. v. Brig Sarah Ann, 13 Pet. 387, are not prepared to carry the doctrine Mr. Justice Wayne, delivering the opin- of " prudent uninsured owner " further ion of the court in this case, said : " Nor than this. And in a ease of insurance, can the necessity of a sale be denied we should say, that, in judging of the when the peril, in the opinion of those necessity of the sale, what a prudent capable of forming a judgment, makes owner uninsured would have done, if a loss probable, though the vessel may present, should not be considered. We in a short time afterwards be got off and 86 THE LAW OF MARINE INSUEANCE. [CH. m. ■when the sale "was determined upon and took place, the circum- stances were sufficient to indicate to a reasonable person, compe- tent to judge of them, a necessity sufficiently stringent, the sale was justified. We should say also that this was a question of fact for the jury,i and perhaps that the presumption, as matter of law, would be that the master has done his duty in the right way.^ Still we are of opinion that the burden of proof lies on the pur- chaser to show that the sale was necessary, if the question was between him and the original owner ; and that it lay ^ upon the original owner, if the question was between him and his insurer.* Let us now suppose that the ship was justifiably sold by the master by reason of a sufficient necessity, springing from one of the perils insured against. Does this give a valid claim as for a total loss against the insurer, without abandonment ? We should put afloat. It is true, the opinion or judgment of competent persons may be falsified by the event, and that their judgment may be shown to have been erroneous by the better knowledge of other persons, showing it was probable that the vessel could have been extri- cated from her peril without great injury or incurring great expense ; and the master's incompetency to form a judg- ment or to act with a proper discretion in the case may be shown. But from the mere fact of the vessel having been extricated from her peril, no presump- tion can be raised of the master's in- competency, or of that of his advisers." See Idle v. Eoyal Exch. Ass. Co., 8 Taunt. 755. Fontaine v. Phoanix Ins. Co., 11 Johns. 293; Hall v. Franklin Ins. Co., 9 Pick. 466, 484 ; The Henry, 1 Bl. & Howl. Adm. 465; Gordon v. Mass. F. & M. Ins. Co., 2 Pick. 249, 263 ; Prince v. Ocean Ins. Co., 40 Maine, 481. ' Gordon v. Mass. F. & M. Ins. Co., 2 Pick. 249, 263. And in all the above- cited cases on this subject, the question was invariably submitted to the jury. " Kobinson v. Commonwealth Ins. Co., 3 Sumn. 220. A decree by a foreign vice-admiralty court, applied for by the master, authorizing the sale, is not conclusive evidence of the necessity of the sale. Idle v. Royal Exch. Ins. Co., 8 Taunt. 755 ; Van Omeron v. Dorrick, 2 Campb. 42. And see Reid v. Darby, 10 East, 143. !Nor is a report by survey- ors in a foreign port conclusive evidence that the ship is not worth repairing. Gordon v. Mass. F. & M. Ins. Co., 2 Pick. 249. ' Dictum of Mr. Justice Wayne, in N. E. Ins. Co. V. The Sarah Ann, 13 Pet. 387, 402; The Glasgow, 28 Law Times (Adm.), 13. * The fact that the master acted fairly, though of weight, is not sufficient to establish the validity of the sale. And in all the cases on this subject the burden is tacitly admitted to rest on the insured, and reasonably ; for a sale by the master is something extraordinary, which in the usual course of events is not allowed. Dodge v. Union Mar. Ins. Co., 1 7 Mass. 478 ; Bryant v. Common- wealth Ins. Co., 13 Pick. 543, 551, per Putnam, J. CH. m.] OP ACTUAL TOTAL LOSS. 87 say that it does give this claim.^ But at the same time it is to be remembered that, in the language of Mr. Justice Bayley, " there is no such head of insurance law as loss by sale." ^ The insured has this claim against the insiirer, because the loss by the wreck was an actually total loss of the ship as a ship. And this is proved by the fact that she was reduced by the peril to such a condition that nothing could be done with her but to sell her as she lay. The loss must in fact be total before the sale, and it must be. a loss made total by a peril insured against ; and sale is not such a peril.^ And we find in this principle, which we cannot doubt, ' In Idle V. Royal ExcL Ins. Co., 8 Taunt. 755, where a ship was wrecked and justifiably sold by the master, it was held that the insured could recover for a total loss on the freight without aban- doning. Cambridge v. Anderton, 1 R. & Mood. 60; Roux v. Salvador, 3 Bing. N. C. 288. ' Gardner v. Salvador, 1 Mood. & R. 117. And see Maule's argument in Roux V. Salvador, 3 Bing. N. C. 270. " It may be said that the cases which relate to the question of abandonment after a sale by the master are numerous and irreconcilable. But if it be remem- bered that it is the wreck by a peril insured against that makes the total loss, much of the difiSeulty will disap- pear. For the sale, if necessary, im- plies that the wreck could be turned to no account, either for the insured or the insurers. Immediately upon such a wreck the insured, of course, could re- cover without abandonment, and trans- fer the property to the insurers. This the law seems to take for granted as done, and casts upon the master the duty of doing the best he can for the insurers, where there is no one else to look after their interest. In England the question came up in AUwood v. Fenckell (1795), Park, Ins. 239 ; and Hodgson v. Black- iston, Park, Ins. 240, n. In these cases an abandonment was held to be neces- sary, but they were afterward overruled. In Martin v. Crockatt (1811), 14 East, 464, there had been a sale, but Lord Elleriborough said : " When the thing exists in specie as it did here, I cannot say but that an abandonment is neces- sary. In Bell V. Nixon (1816), 1 Holt, 423, a vessel was badly damaged, driven into Limerick where there were no docks large enough for her, and after survey she was broken up and sold. The court were of opinion that an abandon- ment was necessary. In Cambridge v. Anderton, 1 R. & Mood. 60, the jury found that a ship had been justifiably sold by the master, and the court held that an abandonment was unnecessary. This decision Wcis questioned in Roux V. Salvador, 1 Bing. N. 0. 488, by Tin- dal C. J. ; but, the case being carried to the Exchequer Chamber, the decision was reversed, and Cambridge v. Ander- ton was sustained. Lord A linger said : " When the subject-matter insured has, by a peril of the sea, lost its form and species, where a ship, for instance, has become a wreck or a mere congeries of planks, and has been hona fide sold in that state for a sum of money, the as- sured may recover a total loss without any abandonment." Roux v. Salvador, 3 Bing. N. C. 266. See also Gardner V. Salvador, 1 Mood. & R. 116 ; Doyle V. Dallas, 1 Mood. & R. 48 ; Tanner v. Bennett, Ryan & M. 182. It does not appear that if a ship were THE LAW OF MARINE INSURANCE. [CH. in. additional reason for holding that the necessity for the sale, to •work a total loss, must be as stringent and imperative as we have sold on the ground that the expense of repairs would exceed her value when repaired, and on that ground alone, a total loss could be recovered without an abandonment. Fleming v. Smith, 1 H. L. Ca. 513. In Koux V. Salvador, 3 Bing. N. C. 266, a distinction was taken between the case in which " it is wholly out of the power of the assured or of the un- derwriter " to procure the arrival of the thing insured, and the case in which goods " are not worth the expense of bringing them to their destination " ; and it was said that an abandonment was necessary in the latter case, and the court did not go so far as to hold that a sale in such a case would dis- pense with notice of abandonment, and no English case appears to have carried the doctrine so far since. See Rosetto V. Gurney, 11 C. B. 176, 7 Eng. L. & Eq. 461, a case in which notice of abandonment was given. In Fleming v. Smith, 1 H. L. Ca. 535, the vessel was repaired at an expense exceeding her value when repaired ; and it was held that the insured were not entitled to recover as for a total loss-, as no abandonment had been made in due season. Lord Camp- hell said : " According to all the old authorities, a constructive total loss can only entitle the owner to recover as for an actual total loss, by a notice of aban- donment ; for though, in the judgment of the insured, it may be better not to re- pair the vessel, the underwriters may, with different means, give directions to repair, or may direct and are entitled to direct how the wreck is to be disposed of. It would be an extreme hardship for them to be called on to pay as for a total loss, without having the opportu- nity of making the most of the ship in its disabled state. The law therefore requires that notice shall be given, in order to convert a constructive into an absolute total loss. In Cambridge v. Anderton, a notice of abandonment was not necessary. But why ? Because the ship met with a serious misfortune, and the captain, after having taken the best advice, thinking it not worth repair- ing, sold it at once and conveyed a good title to the purchaser. In such circum- stances there was nothing to abandon. The underwriters could not have taken possession of it [the ship], for it was lawfully transferred to the purchasers." In Knight v. Faith, 15 Q. B. 649, the , vessel was injured and carried into port, and it was found that the necessary re- pairs could not be made there ; nor could the vessel be taken to any other port where they could be made. She was accordingly sold by the master. No abandonment was made ; and it was therefore held that the assured could not recover for a -total loss. Lord Camp- bell, C. J., said: " For there is no such loss known in insurance law as a sale by the master, unless it be barratrous ; and a bona fide sale by the master can only affect the insurers when it be- comes necessary by prior damage, aris- ing from a peril for which they were answerable." In Irving v. Manning, 1 H. L. Ca. 287, 6 C. B. 391, where the expense of repairs would have exceeded the value of the ship when repaired, an abandonment was made, and the in- sured recovered. So in Young v. Twing, 2 Man. & G. 593 ; and the in- sured may not be entitled to recover in all cases, even if he abandons, as where CH. m.] OF ACTUAL TOTAL LOSS. 89 above said. Nor can we adopt the language of Mr. Arnoiald, that if tlie master, " acting lona fide, and as a prudent owner would if the damage of itself does not amount to a total loss, but the ship, on account of old age, is not worth repairing. Cazar let V. St. Barbe, 1 T. R. 187. The doctrine that there need be no abandonment, in case of a sale by ne- cessity, is supported by many cases. Fuller V. Kennebec Ins. Co., 31 Me. 325 ; Prince v. Ocean Iris. Co., 40 Mass. 481 ; Mutual Safety Ins. Co. v. Cohen, 3 Gill, 459. In Gordon i>. Mass. F. & M. Ins. Co., 2 Pick. 249, it was held, that as the legal title passed to the ven- dees when a ship was necessarily sold, no interest remained in the insured, they had nothing to abandon, and con- sequently no abandonment was neces- sary. See Orrok v. Com. Ins. Co., 21 Pick. 456, 464, per Putnam, J. ; Pa- tapsco Ins. Co. v. Southgate, 5 Pet. 604, 623. In Smith v. Manufactur- ers' Ins. Co., 7 Met. 448, the vessel was condemned and sold. She could have been repaired at an expense less than her value when repaired, and no aban- donment was made. Shaw, C. J., de- livering the opinion of the court, held, that the insured could not recover for a total loss, on the ground that the cost of repairs would not have exceeded her value when repaired, but expressed the opinion that but for this fact the insured would have been entitled to re- cover ; and speaking of Roux v. Salva- dor, as first decided, said : " But the subject has undergone an elaborate dis- cussion in a recent case, in which, after a full review of all the cases, it was held that, even where the property insured had been sold, and the news of the sale arrived as soon as that of the loss, and where there was a total loss, but not an actual total loss by the destruction of the thing itself, there could not be a re- covery for a total loss without abandon- ment, and this is well supported in prin- ciple as well as by the authorities." The above dictum, that, if the expense ^f repairs would exceed the value of the vessel when repaired, the insured might recover as for a total loss without an abandonment, is supported by Bul- lard V. Roger Williams Ins. Co., 1 Curt. C. C. 148, where the vessel was con- demned and sold. But in Am. Ins. Co. V. Francia, 9 Barr, 390, where the jury found that the cost ' of repairs would so far have exceeded the value of the ves- sel when repaired that no prudent man could have doubted as to the propriety of selling the vessel, and that the sale was made under circumstances which rendered it legal, the court held that the insured could not recover for a total loss without an abandonment. The result of the authorities appears to be, that in England the assured need not abandon in case of a valid sale ; but if there is no sale, he must abandon, if the vessel remain in specie, although the expense of repairs would exceed the value of the vessel when repaired. In this country, the authorities are so conflicting, that it is more difficult to deduce a general rule from them. The dictum of Shaw, C. J., supra, seems in- consistent with the rule, that the valua- tion is conclusive as to the value of the vessel at all times, which is the settled law in Massachusetts. In Greely v. Tremont Ins. Co., 9 Cush. 415, the ship remained in specie, and was sold by the master. The estimated amount of re- pairs, including the general-average charges, amounted to more than the value of the vessel, and to more than her 90 THE LAW OF MARINE INSUBANCE. [CH. HI. uninsured, sells the ship where she lies, the assured may treat this as an actual total loss of the ship, and recover the whole amount of the insurance without giving notice of the abandonment." ^ In this last phrase lies the gist of the question. That a sale may be helped by abandonment so as to throw the loss on the insurer we shall see ; but the question we have been considering is, what con- stitutes, of itself, and without abandonment, an actual total loss. It may be well to notice a question which has been raised, whether, if a vessel be wrecked in her own home port or near it, and retains the shape of a ship, although it would be impossible to repair her excepting at a cost which would be more than she would be worth when repaired, this would be an actual total loss. If wrecked in that place so that she fell to pieces, there would be no question.^ And it would therefore seem that the question now under consideration is simply this, whether a greater degree of damage is necessary if it be received in or near her home port, to constitute a total loss of the ship, than would be necessary if the damage occurred at a distance from that port. It is quite obvious that a vessel might often be repaired with less difficulty and less cost if the injury took place when she was in her home port than if she were then far from it. And the ques- valuatlon in the policy. Held, that the In Meigs v. Mutual Mar. Ins. Co., 2 sale did not render the loss an actual Cush. 439, a vessel was insured for a total one of itself, and that the general- whaling voyage, the risk to continue on average expenses were not to be added, and during her voyage and back to '■ 2 Arnould, Ins. *1010. Ma,ttapoisett ; on her return from the ^ So says Mr. Arnould also, who says voyage, after coming into the harbor of in substance, that, " If a ship be wrecked M., being unable, for want of sufficient in pieces off her home port, so that noth- depth of water, to reach the wharf ing but her fragments come to land, where she was to discharge her cargo, there can be no doubt that the assured she anchored at some distance in the may recover for a total loss without usual anchorage, and began to lighten abandonment, and the wreck will then herself in order to go up to the wharf, be a salvage loss for the benefit of the While doing this, with due diligence, underwriters." But if the ship comes she was destroyed by fire. It was held ashore in the shape of a ship, though that her ultimate destination was the wholly irreparable, except at a cost wharf, and until she had arrived there, greater than her value, he says that the and been moored twenty-four hours in safer practice would be to abandon, safety, the risk continued. Nothing See Samuel v. Koyal Exch. Ins. Co., 8 was said in the case about abandon- B. & C. 119 ; Dickey v. United Ins. Co., ment ; and the assured recovered for a 11 Johns. 358. total loss. CH. III.] OF ACTUAL TOTAL LOSS. 91 tion of actual total loss always is, -whether the ship be so far in- jured that she has ceased to be a ship, and cannot be again made a ship excepting by a repair which would be equivalent to rebuild- ing.^ And, for the reason above stated, an injury received abroad may be irreparable which would not be so if received in her home port. To this extent it may be true that the same sea damage which would amount to actual total loss of the ship, if it were sustained while she was at a distance from home, might not have this effect if she were then at home.^ Further than this, we see no reason for limiting or qualifying the general rule, that when the ship is at any place so far damaged by a peril insured against as to cease to be a ship, and not be capable of becoming a ship again without repairs which would cost more than she would be worth after they were made, this is an actual total loss of the ship. In the present nearly if not quite universal practice in this coun- try, of making an abandonment in all such cases, this question could seldom arise, excepting where an abandonment was withheld through accident or inadvertence, or made at a time or in a matf- ner which prevented it from being effectual. ' See supra, p. 69, n. 1, 2, &c. * In The Fanny & Elmira, 1 Edw. Adm. 117, the facts of which are stated on p. 82, n. 1, Sir William Scott recog- nizes the difference between a wreck in a foreign port and one in the home port as affecting the master's right to sell, saying, in substance, that an amount of damage might justify a sale in the former case, which would be insufficient to do so in the latter. And the case of Scull V. Biddle, 2 Wash. C. C. 150, is to the same effect. This latter case, however, is overruled in 13 Pet. 387; but we submit that the overruling ex- tends only to the assertion by Mr. Justice her afloat, or where there may be no materials or workmen for repairing the damage she may have sustained ; and in a case like this the voyage is lost, and the assured may abandon. But if the ship be stranded in a place where suf- ficient assistance can be obtained, and she may in a short time be got off, and repaired for the prosecution of her voyage, as neither the ship nor the voyage is lost, there is no ground on which the owner can abandon his ship and recover for a total loss.'' This is a case of constructive total loss ; but, if circumstances of time and place affect the owner's right to abandon, why should Washington, that the master can in no they not as well affect the question of case sell when bis ship is wrecked in the country where the owner lives. See also Wood v. Lincoln & Kennebec Ins. Co., 6 Mass. 479,482. In his opinion Parsons, C. J., says : " A ship may be stranded on a part of the coast where no assistance can be procured to get actual total loss ? See also, on this sub- ject, Shawe v. Feltori, 2 East, 108 ; Allen V. Seegrue, Dans. & LI. 188 ; Peters v. Phoenix Ins. Co., 3 Serg. & K. 25 ; Ralston v. Union Ins. Co., 4 Binn. 386. 92 THE LAW OF MARINE INSXJKANOE. [CH. III. It is quite certain .that the insured may claim as for actual total loss, if the property or interest insured be taken from him, al- though there may be a hope of recovery. This doctrine has been recently very strongly affirmed in Eng- land in a peculiar case. The plaintiff was a shareholder in the Atlantic Telegraph Company. The policy provided that the risk should commence at the lading of the cable on board the Great Eastern, and should continue until it was laid down and in use, and his interest was valued at & 200 on the Atlantic cable. Half the cable was lost by its breaking ; *one half was saved. It was held, first, that the policy was not on the cable, but on the plain- tiff's interest in the adventure, and that the adventure was the attempt to lay the cable on the voyage ; then, that the interest was an insurable interest ; and lastly, that the loss was total, be- cause, by the breaking of the cable, the probability of laying it was reduced to a mere chance. The court refer to the rule that the existence of a sfes recuperandi does not prevent a loss from being total. They illustrate this rule by the case of a ship the capture of which constitutes actual total loss, although there exists a well-founded hope of recapture or release.^ ' In Wilson U.Jones, Ct. of Exch. Hil- is distinctly and plainly within the ary T. 1866, Martin, B., in giving the words of the policy." The. words in the opinion of the court, said: "The second policy, to which the court refer, were question is, whether the loss be total or these : " This policy shall cover every partial. I think it total. The adven- risk and contingency attending the cou- ture in respect to which the insurance veyanee and successful laying of the was effected was the successful laying cable." down of the cable, which was loaded on This case was appealed to the Ex- board the Great Eastern, in one contin- chequer Chamber, and the decision of it uous length, between Ireland and New- there confirmed. Blackburn, J. : " Even foundland ; this has wholly failed, and, assuming the insurance to be on the in my opinion, the circumstance that one adventure of laying the cable generally, half the cable has been saved is im- and not limited to that particular occa- material. The assurance was upon the sion, is not the case analogous to the adventure; and, even if it had been case of the capture of a ship with a merely upon the cable, it was upon the spes recuperandi ? In such a case, the entire, continuous cable, and not on a loss is considered as total at the time of portion of it. It may possibly be, that capture, and unless the recapture is the loss in the present case is not a loss made before action brought, or, by the by perils of the seas ; but upon this it is American law, differing in that respect unnecessary to give an opinion, as I from ours, even though the recapture think the misfortune which has occurred is made before action brought, the as- CH. III.J OF ACTUAL TOTAL LOSS. 93 Actual Total Loss on Cargo. The same principles which pervade the law of insurance as to actual total loss of the ship are applied to actual total loss of the cargo, but with the difference which is made necessary by the dif- ference in the nature of the property. As before, goods may be totally lost by being submerged or by fire, but it should be remarked that the total loss of the ship in any way whatever does not necessarily produce or imply a total loss of the cargo. If she be submerged, a part of the goods may float away, and if she be burnt to the water's edge, a part of the cargo may still be recovered.^ On the other hand, there may be a total loss of the cargo, although the ship be not totally lost. Let us suppose, for example, a cargo of fruit so much damaged by sea-water which came to it through seams in the ship, which had been opened by a tempest, that the fruit became wholly rotten, and when it reached the port of destination it had become a mass of corruption, utterly value- less, no part of which could be separated and regarded as one of the original fruits. We should have not the least hesitation in sured is entitled to recover as for a total was interested, and whicli was intended loss. Now, here the chance of recov- to be realized in that attempt, then, by ering from this accident had not been the defeat of that attempt, there was a realized before action brought." Willes, total loss, on the same principle on which J. : " Assuming that there was a loss of a vessel is totally lost to the insured by the subject-matter of the insurance by ' capture by the enemy, although the the perils insured against, was there a presence of ships of war of its own na- total loss ? It was probably rightly tion makes it more probable that it will agreed, that if the insurance was on the be recaptured than that it will be taken cable, there was no total loss ; but it is into a hostile port. It is a total loss at not necessary to examine this, because the time. However subsequent events our construction of the policy is, that it might affect the result, the loss was pre- was not the cable, but the plaintiffs in- sumably and conventionally total at the terest in the adventure, which was the period when it occurred." subject of insurance. If, then, we con- £Zaci;Zium, J., concurred in the forego- sider the adventure as limited to that ing, adding : " The insurance was, in my one attempt, or if what was insured was opinion, for that voyage, and there was, the profit to be made by successfully therefore, nothing to abandon." Judg- laying down the cable on that occasion, ment affirmed. there is clearly a total loss ; if, on the ' As in Thompson v. Royal Exch. other hand, what was insured was the Ass. Co., 16 East, 214; Hedburgh v. whole adventure in which the plaintifi" Pearson, 7 Taunt. 154. 94 THE LA-Vy OF MARINE INSUEANCE. [CH. III. saying, on general principles, that this was a total loss of the cargo.^ But this question, Both in England and in this country, has been made difficult by the law and the practice in respect to what are called memorandum articles. It is obvious that of the many things carried in ships, and com- posing their cargoes, some things are more easily damaged than others, or are more injured by the damage they receive ; and some are so perishable in their own nature that very slight damage suf- fices to cause their destruction, and it is always doubtful whether they will reach their port of destination, even if they meet with no sea damage on the way. If they perish from internal causes, en- tirely unaffected by sea damage, there is, of course, no claim what- ever on the insurers for a loss so caused. But when such goods reach their destination, and are found to be more or less injured, it may be very difficult to determine whether any part of the loss, and, if so, what part or proportion of the loss, was caused by a peril against which the cargo was insured. The insurer of such arti- cles could have no adequate protection, unless by a premium which should cover in fact, not merely the sea risks, but those thus arising from the nature of the goods, and such a premium would be, practically, too high to be paid. To avoid this difficulty, a custom was introduced among English insurers, more than a century ago, to add to their policies a memorandum respecting such arti- cles.^ By this it was provided that upon certain articles peculiarly perishable the insurer should not be answerable for any partial loss whatever, and that upon others still less perishable he should ' See cases cited below. of the " memorandum clause," as it ' The difference of risk pertaining exists to-day, began in England in 1749. to different kinds of goods has been rec- In the policies of that day, corn, fish, ognized in insurance business for at least tobacco, and hides were free from all three or four centuries. The ordinance average, unless general, or the ship be publishedinFlorenceinl526says, "that stranded; sugar, rum, hemp, and flax under the name of merchandise shall free from all average under five per not be understood slaves, fruits, horses, cent, &c. See 1 Magens on Ins. 10 ; corn, wines, salted fish, &c." "And and the statement of Mr. Justice £ui/er whoever intends to have such sorts of in Cocking v. Fraser, 1 Park, Ins. ch. 6, goods insured shall be obliged to ex- § 13 ; 2 Strange 1065, note (1), to press them in the policy ; or it shall Boyfield v. Brown ; Boulay Paty Com. ipso jure be of no validity." Similar de Droit Com. Mar. tom. 4, tit. 10, § 18, regulations existed in most of the com- edit. 1823. mercial states of Europe.. But the use CH. ra.] OF ACTUAL TOTAL LOSS. * 95 be liable for partial losses only if they were more than five per cent. These articles are commonly called memorandum articles. The custom in regard to them has varied from time to time in England and in this country, but it is usual now, both there and here, to provide that the enumerated articles should be free from average, either altogether or under a given percentage, unless gen- eral, or the ship be stranded. An average, not general, is a par- ticular average, and this phrase is nearly, if not quite, synonymous "with partial loss. The meaning of this clause therefore is, that the insurers are not liable for any partial loss of the enumerated arti- cles, unless the vessel be stranded.^ We consider elsewhere this clause respecting stranding, and also the effect of limiting the lia- bility for partial loss, unless it amounts to a percentage. And also the question whether this clause excludes a constructive total loss.^ What we have to consider, then, is its effect upon the ques- tion of actual total loss. This subject may perhaps best be treated under four separate heads : — First, the English doctrine of loss at the port of destination. Second, the English doctrine of loss at an intermediate port. Third, the American doctrine of loss at the port of destination. Fourth, the American doctrine of loss at an intermediate port. ' The memorandum clause came be- Kensington, 1 Esp. 416, 7 T. E. 210, it fore the com'ts for construction first in was held that, if the ship be stranded, 1754, in Cantillon v. London Ass. Co., this operates as a performance of aeon- cited 3 Burr. 1553, where it is said the dition, and makes the insurers liable for court " and a special jury looked upon a subsequent loss of the cargo, though this as a condition, and that, by the the loss was in no manner a consequence ship's being stranded, the insured was of the stranding. This seems to be the let in to claim his whole partial-average judicial interpretation of the clause to- loss." In 1 764, the question arose day, though unquestionably contrary to whether the exception " free from aver- the intent of the originators of it. See age, unless general," let in a partial alsoBowring m. Elmslie, 7 T. R. 216, n. ; loss, when there was also a general Nesbitt v. Lushington, 4 T. E. 783 ; and average. Lord Mansfield said : " The Mr. Arnould's translation of the memo- insurer is liable for all losses arising from randum clause as interpreted by the the ship being stranded, and in all cases courts, 2 Am. Ins. 859, and Hoffman v. where there is a general average ; but Marshall, 2 Bing. N. C. 383. For the all other partial losses are excluded by meaning of the term " stranding," see the terms of the policy." Wilson v. p. 71, n I, supra. Smith, 3 Burr. 1550. In Bennet v. ' Vol. 1, oh. 17, § 12, B., p. 629. 96 * THE LAW OP MARINE INSURANCE. [CH. HI. Of the English Doctrine of Loss at the Port of Destination. In the English case which is often referred to as founding the doctrine on this whole subject, we have always thought that Lord Mansfield was greatly influenced by a belief that this memorandum was intended by the insurers to protect them against any claim for loss to the memorandum articles, unless that loss amounted to their actual destruction. The insurance was upon fish. The ship on her voyage encountered heavy storms, and was compelled to throw a part of the fish overboard. The ship was obliged to change her course, and to put into Lisbon, which was not her port of destination. The fish still on board was in such a condition as to demand a survey by the board of health of that city, and was declared to be, and in fact was, utterly valueless through sea dam- age ; and the fish' was not forwarded. And it would seem from the facts of the case that it could hardly have been sent forward. But Lord Mansfield said : " What is a total loss ? A total loss of the thing insured is the absolute destruction . of it ly the wreck of the shiiy. The fish may all come to port, though, from the nature of the commodity, it may be putrid, it may be stinking, still, as the commodity specifically remains, the underwriter is discharged." ^ This case was one of loss at an intermediate port, although the port of destination was very near to that into which the vessel went ; but it established the law in England for a considerable time, that if memorandum articles arrived at their port of desti- nation, although in a condition which made them utterly valueless for their ordinary use, the underwriters were not liable as for a total loss. It followed therefore that if at some intermediate port the goods were reduced to that condition, but still could be car- ried to their port of destination in specie, however valueless, there was no total loss.^ "We have already seen that it is the general ' Cocking V. Fraser, 1 Park, Ins. ch. 6, § 13, Marsh. Ins. 226, where a cargo 6, § 13. of peas arrived at the port of destina- ^ The case of Cooking v. Fraser, cited tion so much damaged that it was not above, was a case of loss at an interme- worth one fourth of the freight, it was diate port ; but if the question of loss at held, that the underwriters were liable, such a port depends upon the specific In Glennie v. London Ass. Co., 2 Maule existence of the cargo, a fortiori does & S. 371, rice, insured free of particu- that of loss at the port of destination, lar average, arrived within the home In Mason v. Skurray, 1 Park, Ins. ch. port ; but, before the ship could be CH. III.] OF ACTUAL TOTAL LOSS. 97 duty of the master not only to carry goods to their port of destina- tion in his own ship if he can, but to forward them in another sliip if he cannot carry them in his own.^ It is obvious, however, tliat there can be no reason whatever for his doing so if the goods have already perished as to their value. But what right would he have had to throw them overboard, if carrying them or forwarding them to their port of destination in specie discharged the underwriters? If, therefore, he could have so carried them forward, but threw them overboard as worthless, the underwriters would still be discharged, because the total loss would then have occurred through the doings of the master, and not by a peril insured against.^ Such would be the law if the ruling of Lord Mansfield remained in force ; but, says Mr. Arnould, " It seems better to consider this case as overruled in English law, than to endeavor to support it upon its facts." And he adds immediately after, that the Ian* guage of Lord Mansfield, is "undoubtedly opposed to the rule now understood to prevail."^ Lord Mansfield's decision was ren- dered in 1784 or 1785. In 1797* Lord Kenyon dissented from the ruling of Lord Mansfield. In 1803 Lord Alvanley gave a decision which would seem to be decidedly irreconcilable with the decision of Lord Mansfield.^ Here the cargo was fruit. It was so damaged by sea-water that it had rotted, and become putrid, and the government prohibited its being landed. It was thrown into the sea. The facts here are certainly stronger than those in Lord Mansfield's case, but it was held that the insured might recover, and the language of Lord Alvanley would seem just as applicable to the former case as to this. He says : " The commodity was annihilated by being thrown overboard. Had it not been so annihilated, it would have been annihilated by putrefaction ; and moored or unloaded, she was wrecked, seq. ; Rugely v. Sun Mut. Ins. Co., 7 and the rice so damaged that its value La. Ann. 279. was not enough to pay its freight. The ' Unless the goods were insured insured claimed a total loss ; but the against barratry. See 2 Arnould, Ins. court held.that this was a case of par- *819 et seq. ' ticular average only, and the insured " 2 Arnould, Ins.' *1022. could not recover. See also McAn- * Burnett v. Kensington, 7 T. K. 210, drews v. Vaughn, 1 Park on Ins. p. 155, 222. ch. 6, § 13 ; Marsh, on Ins. 233. ' Dyson v. Kowcroft, 3 Bos. & Pul. ' See Abbott on Shipping, *368 et 474. VOL. II. 7 98 THE LAW OF MARINE INSURANCE. [OH. HI. is it not as mijch lost to the insured by being tlirown overboard as tliough the captain had waited till it arrived at complete putre- faction ?....! never have understood that the underwriters insure fish and other articles against no perils which do not end in a total annihilation of the commodity." It is true that Lord Alvanley makes some effort to reconcile his decision with Lord Mansfield's, but we think he entirely fails to do so. Then, in 1816, Lord EUenborough said : " Considering the contract of insurance as a contract of indemnity, it surely cannot be less a total loss because the commodity subsists in specie, if it subsist only in the form of a nuisance. There is a total loss of the thing, if by any of the per- ils insured against it is rendered of no use whatever, though it may not be entirely annihilated." ^ Still more recently, in 1835, oc- curred the case of Roux v. Salvador. When this was tried be- fore the Common Pleas, that court returned to the principles of the earlier authorities, and the insured were held to be not liable.^ But the case went to the Court of Exchequer Chamber, and was there elaborately argued and decided.^ "We suppose the law of that case to be the law^ of England now on that subject ; and if it be so, then there is an actual total loss of the goods for which the underwriters are liable, without abandonment, if the goods are, by a peril insured against, so damaged that they no longer remain the same goods in fact and in substance, and as such goods are wholly valueless. That such is the law in England at this time, if the goods ai'e utterly valiieless from the effect of sea damage, at an intermediate port, we think is clear ; but that the same rule would be held to apply if goods in this condition reached their port of destination, may not be so certain. We think that even this may be inferred from the late English authorities.* ' Cologan V. London Ass. Co., 5 the underwriter is discharged; again, Maule & S. 447, 455. by Lord Alvanley, in Dyson v. Kow- ^ 1 Bing. N. C. 526; S. C. 1 Scott, 491. croft, 3 Bos. & Pul. 474. And again, * 3 Bing. N. C. 266 ; S. C. 4 Scott, 1. in Cologan v. London Ass. Co., Lord ' The decision in Cocl^ing v. Fraser EUenborough says that he should incline has been doubted' by Lord Kenyon, to the opinion of Lord Alvanley, rather in Burnett v. Kensington, 7 T. E. than to that of Lord MansfielU. To be 222, who says that he cannot sub- sure, these cases are all cases of loss at scribe to the dictum of Lord Mans- an intermediate port ; but it will be ob- Jield, in Cocking v. Fraser, that, if served, that the ground on which the the commodity specifically remain, judges rest their objections to the doc- CH. III.] OF ACTUAL TOTAL LOSS. 99 Of the English Doctrine of Loss at an Intermediate Port. The principles which we hare already considered, relative to the duty of the master to forward goods from an intermediate port to the port of destination, apply with still greater force to memoran- triDe of Cocking v. Fraser is, that the specific existence of the goods does not make the loss the less total, if the goods are absolutely valueless. Now, the lo- cality of the goods, whether at an inter- mediate port or at the port of destina- tion, can make no difierence, if the question of total or partial loss depends merely upon the value of the goods, and not upon their formal appearance. The common-sense view of the question is ■ this : the goods were shipped for sale as goods ; so long as they will answer this purpose, they are not lost. When they ceaSe to be fit for sale as goods, then they are lost, no matter what may be their outward appearance. In Roux v, Salvador, 3 Bing. N. C. 266, a cargo of hides was found to be so damaged, at an intermediate port, that they were un- loaded and sold there, as it was impos- sible to carry them to their destination, without losing them by putrefaction. The assured recovered as for a total loss. The hides were insured free from aver- age, unless general, or the ship be stranded. In the opinion of the Ex- chequer Chamber, as given by Lord Abinger, the Chief Justice says, that the question of total or partial loss does not depend upon the specific existence of the goods at the termination of the risk, but upon general principles. " The memorandum does not vary the rules upon which a loss shall be partial or total ; it does no more than preclude the indemnity for an 'ascertained total loss, except on certain conditions. It has no application whatever to a total loss, or to the principle upon which a total loss is to be ascertained." He goes on ■ " The argument [of the counsel] rests upon the position, that if, at the termina- tion of the risk, the goods remain in specie, however damaged, there is not a total loss. Now, this position may be just, if by the ' termination of the risk ' is meant the arrival of the goods at their place of destination, according to the terms of the policy." Lord Alvan- ley, it will be noticed, does not commit himself as to the soundness of this posi- tion with reference to the port of des- tination ; he only goes on to deny that it has any application to the " termina- tion of the adventure brfore " arrival at the port of destination, " by a peril of the sea " ; and, soon after, he lays down this proposition : " But the existence of the goods, or any part of them, in specife, is neither a conclusive, nor, in many cases, a materi^ circumstance, to the question, " whether the loss is total or par- tial." And again he says : " The loss is in its nature total to him who has no means of recovering his goods, whether his ina- bility arises from their annihilation or from any other insuperable obstacle." From these extracts, it will be seen that much of Lord Alvanley's reasoning ap- plies equally well, whether the loss takes place at an intermediate port or at the port of destination. And, drawing the best inference we can from the current of authority, we are led to the conclu- sion that, were a case now to dccur in England of memorandum articles arriv- ing in specie, but valueless at their port of destination, the insurers would be held liable for a total loss. 100 THE LAW OF MAKINE INSURANCE. [CH. III. dum articles. ,If the underwriters are not liable if the goods finally arrive in specie, it -would follow that it is the duty of the master if possible to effect that object by carrying them on. But if they must be of value on arrival, then, to determine whether they should be carried on, the expense of so doing must be taken into consideration. As long as the rule of an existence in specie at the port of destination prevailed, the underwriter was not liable, if the voyage was broken up at the intermediate port, merely be- cause the goods were not worth bringing on.^ We have seen that this doctrine Vas attacked at various times by different judges, although not distinctly overruled ,till within a comparatively re- cent period. By the law as we suppose it to be now established by the English courts, it becomes the duty of the master to send on the goods only when they can be of value on arrival. But it is ob- vious that the master is not obliged to incur every expense, how- ever great, to effect this object ; and the question soon arose as to what was his duty in this respect. At first, the court laid down the rule cautiously, but not very definitely, and held, that, if the ^ Cocking V. Fraser, Park on Ins. ]51, Marsh, on Ins. 227. Dyson v. Eowcroft, 3 B. & P. 474, is some- times referred to as contravening the doctrine of Cocking v. Fraser, but an examination of the facts of the case ■will show that the eases are entirely- consistent. The ship put into an inter- mediate port so much damaged that re- pairs were necessary to enable her to proceed on her voyage. To make these repairs it was necessary to unlade the cargo. But the cargo -was so much damaged that it -was injurious to the health of the cre-w, and the government refused to allow it to be landed. It ■was therefore thrown overboard. This was held to be a total loss. So, in Colo- ganw. London Ass. Co., 5 M. & S. 447, where the vessel was captured, and re- captured and sent into Bermuda, but was not allowed to proceed to her port of destination, and the cargo was there- fore sold, it was held to be a total loss. In Anderson v. Royal Exch. Ass. Co., 7 East, 38, the vessel was under water for more than a month. The cargo was then recovered, and kiln-dried, but not sent on, although it might have been. The court held, that, if the abandonment had been made while the goods were under water, there would have been a total loss, but otherwise not. In Parry V. Aberdein, 9 B. & C. 411, the goods were so much damaged at the interme- diate port, that they would have been worthless on arrival, and no ship could be obtained to take the goods on. This was held to be a total loss. See also Gernon w. Eoyal Exch. Ass. Co., 6 Taunt. 383. In Thompson v. Koyal Exch. Ass. Co., 16 East, 214 ; and in Hedburg v. Pearson, 7 Taunt. 154, it 'did not appear but that the car- goes might have been taken on. The underwriters were held not to be li- able. CH. ni.J OF ACTUAL TOTAL LOSS. 101 goods could be sent on in a reasonable time and at a reasonable expense, the master was bound to do it.^ The inconvenience of having a rule dependent upon what the jury might in each case find to be a reasonable time and a reasonable expense being very great, the courts established a rule which is practical, and can be applied to the generality of cases with the same result. It is this : All the expenses at the intermediate port are to be added to the extra freight, if the transit cannot be effected at the original rate of freight ; and if this exceeds the value of the goods on arrival, the loss is total ; if not, it is partial only.^ sailed from Odessa with a cargo of ' Navone o. Haddon, 9 C. B. 30. lie vessel in this case put into an in- termediate port in distress^ Part of the cargo, which consisted of bales of waste silk, was sold on account of dam- wheat on board, bound for Liverpool. She wEis stranded near Odessa, and to obtain funds for repairs a bottomry bond was given. When the vessel arrived age the rest arrived at the port of near the Cove of Cork, it became ne- destination. The court seem to have acted on the supposition that if some of the bales were totally destroyed, the insured might recover for them (a ques- tion we have already considered), and it became important therefore to con- sider the condition of the bales which were sold. And, being of the opinion that a, reasonable expense would have enabled the master within a reasonable time to dry the goods and forward them, the court held that the loss was not total. ^ In Keimer v. Ringrose, 6 Exch. 263, 4 Eng. L. & Eq. 388, the cargo, consisting of corn, was taken out at an intermediate port, in order that the ship might be repaired, and, being found to be much damaged, was sold. The jury found that the corn might, by the exer- cise of reasonable and proper care, have been brought home and sold as dam- aged corn. And the court held, that, as the expenses of bringing it home did not exceed the value when brought home, the loss was not total. In the subse- quent case of Eosetto v. Gurney, 11 C. B. 176, 7 Eng. L. & Eq. 461, the vessel cessary to run her ashore. She was af- terwards towed into the Cove of Cork, and salvage claimed. The vessel and part of the cargo were.sold by order of the Admiralty Court, and the proceeds divided between the salvors and the holders of the bottomry bond. The jury found that the cargo was much damaged, but might have been dried and carried on, at a reasonable ex- pense, and also that it would not have been prudent for an uninsured owner to enter into a controversy with the salvors and the holder of the bottom- ry bond in the Court of Admiralty. By direction of the court, the jury found for the plaintiff. On a motion for a new trial, the court said : " The question to be submitted to the jury will be. Was it ' practicable' to send the whole or any part of the cargo to its place of destination, Liverpool, in a marketable state ? To determine this question, the jury must ascertain the cost of unshipping the cargo, the cost of transshipping it into a new bottom, the cost of drying and warehousing it, and the cost of the difference of the 102 THE LAW OF MARINE INSURANCE. [oh. hi. Of the American Doctrine of Loss at the Port of Destination. The rule in this country on this subject was early established, at the time when the case of Cocking v. Fraser ^ was recognized as an authority in England. It is, therefore, well settled that, if the goods insured arrive at the port of destination existing in specie, the underwriters are not liable, although they are of no value whatever .2 Some question has arisen as to the meaning of the word " specie." The primitive meaning of the word is, undoubt- edly, appearance, and it is in this sense that it is commonly applied transit if it can only be effected at a v. Western Marine & F.Ins. Co., 19 La. higher sum than the original rate of 273. freight. Add to these items the salvage In Kobinson v. Commonwealth Ins. allowed in proportion to the value of Co., 3 Sumner, 220, 224, Mr. Justice the cargo saved, and the loss will be total, if ths aggregate exceed the value of the cargo when delivered at Liver- pool, the port of discharge ; but if the aggregate do not so exceed the value of the cargo, or of that part of it saved, the loss will be partial only." ' Park. Ins. 151, Marsh. Ifts. 227. " In Morean v. United States Ins. Co., 1 Wheat. 219, 3 Wash. C. C. 256, mem- orandum articles were insured on a voy- age from Cape Henry to Lisbon. The vessel was wrecked within the port of Lisbon, and part of the cargo was carried to that city and there sold. Mr. Justice Washington said : " If the property ar- rive at the port of discharge, reduced in quantity or value to any amount, the loss cannot be said to be total in reality, and the insured cannot treat it as a total, and demand an indemnity for a partial loss The only question that can possibly arise, in relation to memo- randum articles, is, whether the loss was total or not ; and this can never happen where the cargo, or "a part of it, has been sent on by the insured, and reaches its original port of destination." See also Brook« t'. La. State Ins. Co., 16 Mart. La. 640, 681, 17 lb. 530 ; Skinner Story said : " If the schooner had arrived at the port of destination, with the cargo on board, physically in existence, the plaintiff would not have been entitled to recover, however great the damage might have been by a peril insured against, even if it had been ninety-nine per cent, or in truth even if the cargo had there been of no real value." Nor, does this doctrine conflict with the case of Williams v. Cole, 16 Maine, 207, as has been sometimes supposed. This was a case of insurance upon a cargo of potatoes from Frankfort to Baltimore. The policy contained a clause that cer- tain articles, together with such as are esteemed perishable in their own nature, were warranted free from average, un- less it amounted to seven per cent. On the arrival of the vessel at Baltimore, the hatches were opened and the pota- toes .were found to be entirely rotten. The mayor of the city ordered the cargo to be carried below the fort, and to be thrown overboard. This was held to be a total loss, on the ground that the cargo existed merely as a nuisance ; but it must also be remembered that under the policy the underwriters were answer- able for a loss equal to seven per cent. CH. III.] OF ACTUAL TOTAL LOSS. 103 to memorandum articles. Thus, if the body of a chariot is lost, and nothing but the wheels remain, these cannot be said to have the appearance of a chariot, and consequently the article no longer exists in specie, and the underwriters are liable as for a total loss with salvage.^ But it has been held, that the value of the article has nothing to do with its existence in specie. Thus, fish, though absolutely putrid,^ and corn which was spoiled,^ were both held to exist in specie. And pork has been held not to lose its identity by being roasted.* Of the American Doctrine of Loss at an Intermediate Port. By far the most difficult questions on this subject have arisen in determining what is a total loss at an intermediate port. We shall here consider the law only as determined by the American author- ities generally, for if the fifty-per-cent rule applies to any kind of memorandum articles, as has been held in Massachusetts,^ they will be governed by the same rules as are applicable to other goods, and need not be considered here. In New York, the dictum of Lord Mansfield, in Cocking v. Fraser,® has been followed to its fullest extent, and the rule in that State is, that, if the goods exist in specie at the intermediate poi't, the insured is not entitled to recover. It is true that in some of the cases in that State there were facts which clearly showed that the loss was not total, and that the goods could 1 Judah V. Kandal, 2 Caines, Ca. was burned to the water's edge. The 324. bottom, however, floated down to New ^ Cocking V. Fraser, Park, Ins. 151, Orleans with some of the pork on Marsh. Ins. 227. board in a damaged, barbecued con- ^ Neilson v. Columbian Ins. Co., 3 dition. The quantity thus saved was Caines, 108. 7,723 pounds. It was represented by * Skinner u. Western Marine & F. the port>wardens as damaged more or Ins. Co., 19 La. 273. The action was less by fire, and unmerchantable, and it on a valued policy on pork in bulk, was sold at the rate of 2| cents per beans, and flour, valued at $ 3,480. The pound. This was held not to be a total risk was to continue until the flat-boat loss, on the ground that roasted pork in which the cargo was shipped was was still pork. landed safely in the port of New Or- " Kettell v. Alliance Ins. Co., 10 leans. On the way, the boat took fire Gray, 144, cited ^os«, p. Ill, n. 4. about nine miles above the city, and ' Park, Ins. 151; Marsh. Ins. 227. 104 THE LAW OP MARINE INSURANCE. [oh. III. have been carried on, so as to arrive in specie ; but these cases were decided on the ground that the goods existed in specie ; and there are also other cases which are not only inconsistent with the English rule, but also with that laid down in many American cases. ^ But the doctrine, that if the goods exist in specie at the inter- mediate port there is no total loss, is not founded on principle ; for the insurers guarantee that the goods shall arrive at the port of final destination in specie, and if, therefore, owing to the perils insured against, they cannot be carried forward so as to arrive in specie, the underwriters should, be liable, notwithstanding the goods exist in specie at the intermediate port.^ And if the goods ' Thus, in Maggrath v. Church, 1 Caines, 196, the cargo, consisting of corn, was found at an intermediate port to be entirely unmerchantable, and un- fit to be reshipped, yet the loss was held not to be total. In Depeyster v. Sun Mutual Ins. Co., 17 Barb. 306, the ves- sel put into an intermediate port, with a cargo of hides in a putrefying con- dition. It being thought impossible to carry the hides to the port of destina- tion, they were sold ; and it was held, that, as' they existed in specie, the loss was not total. See also Neilson v. Col. Ins. Co., 3 Caines, 108 ; Saltusu. Ocean Ins. Co., 14 Johns. 138._ The case of Depeyster v. Sun Mut. Ins. Co., came before the Court of Appeals, and from the report there it appears that at the time the judge ruled, that while the hides existed in specie and capable of transportation to the port of destina- tion, there could be no recovery for a total loss, unless the skins and hides were, in consequence of a peril insured against, in such a condition as to en- danger the lives of the orew of any ves- sel that should undertake to carry them on, and that, had an attempt been made to bring them to the port of destina- tion in any vessel, such vessel would. before her arrival, have either been left without hands to navigate her, or in such a state as to render the throwing overboard of the hides on the voyage indispensably necessary to save the ves- sel and crew. 19 N. Y. 272. In Bryan V. New York Ins. Co., 25 Wend. 617, 1,970 barrels of corn were insured on a voyage from Windsor, N. C, to New York. The vessel was wrecked on Beacon Island Shoals. The chance of recovering the corn was sold to different persons in lots, at a trifling sum per bar- rel. The risk and expense were so great, that some preferred to lose the money they had already spent, rather than to endeavor to recover any of the corn. Only twenty-seven barrels were saved. This was held to be a total loss, and Mr. Justice Nelson said : " It was in fact total, — as much so as if the cargo had gone to the bottom of the sea; upon every reasonable calculation, the amount saved was by mere accident and chance." " It was held, in Aranzamendi v. Louisiana Ins. Co., 2 La. 432, that, if a damaged cargo is sold at an intermediate port, this is not a total loss, unless the goods were in such a condition that they could not have been carried on. What CH. ni.J OF ACTUAL TOTAL LOSS. 105 are in such a condition at the intermediate port that they cannot may, perhaps, be considered the true doctrine, was laid down in Williams v. Kennebec Mutual Ins. Co., 31 Maine, 455. It was held, that if the article was in such a condition at the intermediate port, that, by the exercise of reasonable diligence and care, it could be carried to the port of final destination, so as to reach there in specie, although it might be worthless, the loss would be but par- tial, but otherwise if it would not arrive in specie. In Poole v. Protection Ins. Co., 14 Conn. 47, insurance was effected on 280 hides, from Mobile to New York. The vessel was wrecked near Nassau, and the hides were under water for more than a week. They were then recovered, taken to Nassau, and sold by the salvors. They were never in the possession of the assured or their agents. The court held that the loss was total. The case was probably correctly decided on all its facts, but there are many dicta in it, which do not seem to us to be correct. In Robinson v. Commonwealth Ins. Co., 3 Sumner, 220, the vessel was wrecked at an intermediate port ; the cargo consisted of potatoes, which were nearly all rotten, or so much injured as to be of little value. There was but one vessel in port, capable of taking on the cargo, and that vessel had a cargo on board, and was bound on another voyage. Story, J., held that it was an insurance on the cargo for the voyage ; and if, by reason of the perils insured against, the cargo was permanently pre- vented from arriving at the port of des- tination, that constituted a total loss, for which the insured was entitled to re- cover upon a policy like the present. And it was held, that, in determining whether there was a loss at the interme- diate port, the jury should find : "1. Whether the vessel could have been re- ■ paired at all, or at a cost not exceeding half her value after the repairs were made, in a reasonable time to carry on the cargo to the port of destination. 2. Whether, if she could be repaired for less than tlie half-value, she could have been repaired before the cargo would have been so deteriorated as to have lost all value, or to have been totally destroyed. 3. Whether, if the vessel were not so repairable, another vessel could have been procured to carry on the cargo to the port of destination, in its then dam- aged state." The case of Hugg v. Augusta Ins. & Banking Co., 7 How. 595, is an impor- tant one on this subject. The insurance was on the freight of the vessel at and from Baltimore to Rio Janeiro, and back to Havana and MatanzEis. The policy contained the usual memorandum clause. About four hundred tons of jerked beef were shipped to be delivered at Matan- zas. The vessel was obliged to put into Nassau, where the cargo was found to be so much damaged, that the Board of Health refused to allow but about one hundred and fifty tons to be landed. This portion was wet and heated, and not in a fit condition to be shipped. The vessel could not have been repaired, ex- cept at an expense exceeding half her value, so as to have carried the cargo to tbe port of destination, and there was no vessel in port which could have been procured to take it on. This fact is so declared in the statement of the case on page 596 ; but Mr. Justice Nelson, in delivering the opinion of the court, says, on page 605, that the point certified to the court assumes that the ship was capable of carrying on the cargo, and that the only question was, whether the 106 THE LAW OF MARINE INSURANCE. [CH. III. be carried forward consistently with the health of the crew and the safety of the vessel, the loss is considered as total.^ From the examination of the authorities which we have made in our notes, it is apparent that no case in this country distinctly decides the question, whether, in case the goods are in such a condition at the intermediate port, that the cost of unloading them, and drying them if necessary, together with the increased freight for sending them on, would exceed the value on arrival, the loss is total. The expenses may be separated into two classes. First, those incident to the delay at the intermediate port, such as the unloading and reloading of the goods, and all the expenses incurred to render them fit for reshipment. Second, the increased freight, if any. And, admitting that all these are properly chargeable to the underwriters on the memorandum articles, the question still re- mains, whether the insured is entitled to abandon the goods and recover for a total loss, if the goods would arrive in specie, though of no value, if these expenses should be incurred. ca^o was so much damaged as to have be earned by completing the voyage, dispensed with that duty. It was held, the underwriter on freight would have that if the repairing of the vessel or the had no right to insist upon this duty of procurement of another would neces- the master. sarily have produced such a retardation In Tudor v. New England Mutual of the voyage as would in all probability Ins. Co., 12 Cush. 554, insurance was have occasioned a destruction of the effected on a cargo of ice, a memoran- article in specie before it could have dum article. The vessel put into an arrived at the port of destination, or if, intermediate port, and it was found that from its damaged condition, it could not it would be necessary to unpack the ice, have been reshipped in time consistently in order to repair the vessel, and that it with the health of the crew or safety was so much melted, that the whole of of the vessel, or if it would not have it would be gone before the vessel could been in a fit condition from pestilential be repaired, so that it could be reshipped. effluvia, or otherwise, to have been car- Held, that there was a total loss of the ried on, it then was the duty of the ice. master to sell the goods for the benefit ' Hugg v. Augusta Ins. & Banking of whom it might concern. It was also Co., 7 How. 595 ; William v. Kennebee held, that unless another vessel could Mutual Ins. Co., 31 Maine, 455 ; Poole have been procured at an expense not v. Protection Ins. Co., 14 Conn. 47. exceeding the amount of the freight to QH. IV.] OF CONSTBUCTIVE TOTAL LOSS AND ABANDONMENT. 107 CHAPTEE IV. OF CONSTRUCTIVE TOTAL LOSS AND ABANDONMENT. Section I. — Of the Distinction between Actual and Constructive Total Loss. In practice, much the larger part of the losses which are total become so by abandonment ; or, at least, require an abandonment, that they may have the legal effect of a total loss.^ But the distinction between an actual total loss and a constructive total loss, defining the latter to be that which is made so by abandon- ment, is not perfectly precise nor always applicable. In a strict sense, the property is not wholly destroyed, either by fire or sub- mersion, and still less is it by capture. But it is wholly lost to the owner as the thing which it was formerly. The ship may be burnt to the water's edge, and the ruined hull still float ; or it may have gone down where no human power can either find or recover it ; or it may be captured, condemned, and sold, and ■ Emerigon states that the present positive rules respecting abandonment grew out of the express stipulations which it was the custom of the parties to make. Emerigon, oh. xvii. § 1 (Mere- dith's ed.), 666. However this may be, it is certain that provisions were very- early made for abandonment in foreign codes regulating assurance. Guidon de laMer; Reg. d' Amsterdam, art. 25 ; Cas- aregis, Disc. 3, n. 6. Although it ap- pears in the statute of 43d Elizabeth (1601), estabhshing a commission to decide questions arising among mer- chants upon policies of insurance, that marine insurances had then been com- mon time out of mind, the subject of abandonment does not appear to have assumed importance in the courts until the time of Lord Mansfield. The first reported case on this subject appears to be that of Pringle v. Hartley, 3 Atk. 195, before Lord Chancellor HardwkTce. MoUoy, in his short but lucid treatise upon insurance, scarcely alludes to the subject. MoUoy, de Jure Maratimo, Book 2, ch. 7, § XV. Weskett on Insur- ance, published 1783, contains only two cases upon it. At present there is, perhaps, no topic of insurance more important or more difiicult, or which has been discussed by a larger number of more learned adjudications. See a very learned discussion of the subject of abandonment by Lord Abinger, C. B., in Eoux v. Salvador, 3 Bing. N. C. 266. 108 THE LAW OF MARINE INSUEANCE. [CH. IV. SO gone irretrievably. Under any such circumstances it is as totally lost to the owner as if it were annihilated, and we have seen that such losses are, as they should be, called total. So, where a vessel is abandoned by her officers and crew on the ocean, t^e question in every such case is, Was it impossible to bring the vessel into port ? or, in other words, Was the act of deser- tion justified ? for, if not, there is no actual total loss under the pol- icy ; and the burden of proof would of course be on the owner to prove this fact. But, if it be prove^i the loss is not the less total because the master and crew might have remained on the wreck, or because it continued to float, if it be clear that it could not have been brought into port.^ But if the burnt hull arrives at the port of destination, or the vessel sinks where, by a certain expense, she can be recovered, or is captured under such circumstances . that a substantial hope exists of getting her again by ransom, de- cree of court, or otherwise, the loss is neither total in a strict sense nor in any just sense ; because, although the owner is dis- possessed of his property in its original condition, there remains in his hands- a valuable remnant, or a valuable hope and possibility of recovering the property. It is plain, therefore, that if he claims from his insurers as for a total loss, the principle of indemnity re- quires that he should in some way account or allow for the value remaining with him. Formerly, the way of doing this was by calling the loss, not total, but partial, and claiming exact indem- nity. But practice and long experience proved to merchants that the better way was to consider the loss total, and make it so in fact by transferring to the insurers all the remaining or resulting value in the hands of the insured. Then, the insurers paid the whole sum they were bound to pay in case of actual total loss, and indemnified themselves as far as possible from the value thus transferred to them.^ This is now the usual practice. Such a loss is commonly called ' Walker v. Protection Ins. Co., 29 ago it might not have been wiser for the Maine, 317. courts to have determined that the ^ There seems to be a difference of owners should not in any case abandon opinion as to the expediency of extend- where the property did exist, is not for ing the right of abandonment. In our consideration. About the year Mitchell V. Edie, 1 T. K. 608, 615, But- 1745,that question was determined after ler, J., said : " Whether many years much deliberation." Lord Mansfield CH. IV.] OF COHSTEUCTIVE TOTAL LOSS AND ABANDONMENT. 109 a constructive total loss, as distinguished from an absolute or act- ual total loss. And the latter term applies, although some of the property has been sold and the proceeds are in the hands of the insured, if there is no need of an abandonment. The insurer is entitled to the property thus saved, and it is usually called sal- vage.i . This word has been defined to mean " a part or remnant of the subject insured, which survives a total loss." The insur- ers are not therefore entitled to property, as. salvage, which was in Goss V. Withers, 2 Burr. 683, 697, states that " in late times the privi- lege of abandoning has been restrained for fear of letting in frauds." And Putnam, J., in Deblois v. Ocean Ins. Co., 16 Pick. 303, says : " We are among those who think that this part of the law of insurance, as it now is administered, is a clear departure from the great principle of indemnity upon which the contract of insurance should rest. Ac- cording to the original intent, surely the underwriters were to pay the damage, the actual loss. They were not to be- come ship-owners, brokers, or mer- chants. We must decide the law as we now find it. But where a construction is to be made, in the absence of binding authority, we prefer that which restrains, rather than that which enlarges, the right to make a total loss." See also the remarks of Lord EUenhorough, C. J., in Bainbridge v. Neilson, 10 East, 329, 343. On the other hand, Mr. Justice Story, in Peele v. Merchants' Ins. Co., 3 Mason, 27, 38, remarks: "It has been said that abandonments are not to be favored ; that they have been liable to great abuses, and that courts of law are not disposed to enlarge the practice. I am very much inclined to believe, that of late years this consideration has had quite as much weight as it deserved." The Supreme Court of Massachusetts, moreover, in two recent cases,' to be fully considered in a subsequent note, have carried the doctrine of abandon- ment very far. See Heebner v. Eagle Ins. Co., 10 Gray, 131 ; Kettell v. Alli- ance Ins. Co., 10 Gray, 144. ' Whatever may have been the origi- nal or etymological meaning of the words, we must admit, that, in prac- tice, those only are called construc- tive total losses which are consequent upon an abandonment. See Arnould on Ins. 990, 997. In Boux v. Salva- dor, 3 Bing. N. C. 266, the property saved was sold for nearly one fourth of the amount at which it was valued in the policy; yet Lord Ahinger, C. B., in delivering the opinion of the Excheq- uer Chamber, said : " It appears to us that this was not the case of what has been called a constructive loss, but of an absolute total loss of the goods.'' So in Hugg V. Augusta Ins. & Banking Co., 7 How. 595, 605, Nelson, J., said : " In the case of memorandum articles, the ex- ception of particular average excludes a constructive total loss; and, of course, the principle which allows an abandon- ment where the loss exceeds half the value does not apply. There must be an actual loss." But it has never been denied that there might be salvage of memorandum articles, and yet a recov- ery for a total loss. See also Murray V. Hatch, 6 Mass. 465 ; Tudor v. New England Ins. Co., 12 Cush. 54. 110 THE LAW OF MARINE INSURANCE. [CH. IV. severed from the voyage by their consent before the loss took place.^ If a vessel is sold by the insured or his agent, he is bound to ac- count to the insurers for the amount received; and, if the insurer is not satisfied that the amount is correctly stated, he can have the accounts sent to an auditor ; but if he goes to trial, it is in- cumbent on him to show that more salvage was received than is accounted for.^ The phrase " technical total loss " means much the same thing as constructive total loss. The insured may always withhold an abandonment if he chooses to do so ; nor does this discharge or bar his claim against the in- surers ; it affects only the manner of the adjustment. If the loss be actually total, as there is nothing to abandon, an abandonment can have no effect whatever. If the loss be such that an abandon- ment is necessary to make it total, then the insured may claim and adjust it as a partial loss if he wishes to do so ; ^ or he may abandon and claim for a total loss. As he never needs to abandon, unless he chooses to do it, so he may make an abandonment whenever he pleases ; but if he makes one when the insurers are not bound to ' Mutual Marine Ins. Co. v. Munro, 7 ble. But the court, for the reasons given Gray, 246. The vessel on a whaling in the text, held that it was not prop- voyage had liberty to sell her catchings, erly salvage. or to ship them home, at the risk of the ' Lewis v. Eagle Ins. Co., 10 Gray, insured. The insurance was on the out- 508. fits of the vessel, and the policy con- ' Smith v. Manufacturers' Ins. Co., 7 tained the clause : " It is understood and Met. 448, 451 ; Hamilton v. Mendes, 2 agreed, that one fourth of the catchings Burr. 1198, 1211 ; Allwood v. Henckell, shall replace the outfits consumed ; ex- Park, Ins. 239 ; Gracie v. New York cept that catchings shipped home from Ins. Co., 8 Johns. 237, 244 ; Earl v. the Cape de Verd Islands, or this side Shaw, 1 Johns. Ca. 313, 317; Roget v. thereof, shall be at the risk of the in- Thurston, 2 Johns. Ca. 248. In Wat- sured, without diminution of the value son v. Ins. Co. of N. A., 1 Binn. 47, it of outfits at the time." A part of the was held, that, where a total loss was catchings, being of less value than three proved to have taken place, but no fourths, wore sent home, and arrived in abandonment made, the jury might es- safety ; and the ship being afterwards lost, timate the value of the spes recuperandi, it was claimed that one fourth part of deduct it from the whole sum insured, the quantity sent home was in the nature and find the remainder as a partial loss. of salvage realized by the assured, and a But Kent, C. J., in Gracie v. New York proper portion thereof should be de- Ins. Co., sjipra, said he could not assent ducted from the amount 'of the loss on to this doctrine. See also Calbreath v. outfits, for which the plaintiffs were lia- Gracy, 1 Wash. C. C. 219. CH. IV.J OF CONSTKUCTIVE TOTAL LOSS AND ABANDONMENT. Ill accept it, and they do not accept it/ the abandonment has no ef- fect whatever; but the insurers may accept any abandonment made to them, and, if they choose to accept an abandonment which they are not bound to accept, by such acceptance' they make it valid ; and they must then settle the loss as a constructive or technical total loss.^ Section II. — Of an Abandonment. We will first consider the eifect of an abandonment, or of the want of one, upon the rights and obligations of all parties. It should be remarked that the parties sometimes expressly agree and stipulate that there shall be no abandonment. This would seem to be inteuded to prevent a partial from becoming a construc- tive total loss, but not to change the nature of an actual total loss.^ So insurance may be made against total loss only, and the question then arises whether the assured may abandon and recover for a constructive total loss. In considering this very difficult question, we must remember that phrases used almost indiscriminately, as " against total loss only," " free from average," " free from par- ticular average," " not liable for partial loss," and " partial loss excepted," whatever they may mean, do mean for many purposes the same thing whether the total loss intended by the policy is an actual or a constructive total loss. The cases in which one or another of these expressions comes under construction are so numerous, so various, and so conflicting, that we know not how better to deal with this subject than to present these authorities fully, which we do in our notes.* ' See Delaware Ins. Co. v. Winter, 38 after capture and before condemnation, Penn. St. 176. This is also an instruc- avoided the policy. But Buchanan, J., tive case upon many of the questions held, that an abandonment, under those which belong to constructive total loss circumstances, had no effect whatever, and abandonment. and the assured was in the same position ''See post, § 6. that he would have been in, had no aban- * In Barney v. Maryland Ins. Co., 5 donment been made. This diversity of Harris & J. 139, the policy contained a opinion did not affect the decision of the stipulation, " not to abandon, in case of case, as the whole court were of opinion capture, until condemned." Chase, C. J., that there was no claim, for eithei- a to- was inclined to consider the clause a tal or a partial loss, warranty, and that an offer to abandon, ' One of the earliest cases where a 112 THE LAW OF MARINE INSUEANCE. [CH. IV. It will be seen that a rule which we have heretofore supposed to be the well-established rule in this country, namely, that the ship was insured against total loss only is that of Pole v. Fitzgerald, Willes, 641, decided in 1752, where it was assumed that a party who insured a ship free from average might, by abandonment, recover for a constructive total loss. It was so assumed also in Cincinnati Ins. Co. v. Bakewell, 4 B. Men. 541, decided in 1844. In neither of these oases was the question discussed. In 1810, the mat- ter caime before the Supreme Court of Massachusetts, in the case of Murray v. Hatch, 6 Mass. 465. The ship, cargo, and freight were insured against " a to- tal loss only." The vessel was valued at four thousand dollars. During the voyage, she was driven ashore on the island of Bermudas, and so damaged that it would have cost fifteen hundred dollars to repair her. She was sold to pay salvage expenses, and, after this was done, a balance of about four hundred dollars remained. At the trial, parol evidence was offered, that, at the time of subscribing the policy, it was agreed that the policy should be considered as against a total loss in the natural sense of the words only, so that if any part should be saved the underwriters should not be considered liable. This evidence was rejected ; and the defend- ant then contended that the words used did not include a constructive to- tal loss; but the judge ruled that the loss as proved was a loss within the policy. The case then came up on exceptions to these rulings, an(l was argued before Setoall, J., Sedgwick, J., and Thatcher, J. On page 477 of the report, Sewall, J., said : " It is stated that the vessel was not worth repairing, and that it would have cost fifteen hundred dollars to re- pair her, which proves that the subject- matter of the insurance was not spe- cifically destroyed, and that the voyage was not entirely and inevitably de- feated. Whether the injury sustained, and the expenses of salvage, rendered the voyage of no value, and not worth pursuing, is not a question to be consid- ered, where the policy is restricted to the case of a total loss. That case is only proved by showing the destruction of the thing specifically, and in that sense totally." The learned judge also, in another part of the decision, refers to the authorities on the common memorandum clause, which he considers as determin- ing the construction of the phrase " to- tal loss only." The verdict was set aside, and a new trial granted. It may be said, that, in this case, there was no con- structive total loss ; but the case was not argued on this supposition, and was de- cided solely on the ground that a total loss, in this connection, meant an actual, and not a constructive, total loss. The fact that the vessel might have been re- paired, at an expense less than half her value, is referred to only to show that the vessel "was not specifically de- stroyed, or rendered irreparable." In a similar case in New York, Buchanan v. Ocean Ins. Co., 6 Cow. 318, 331, the same construction was given to these words, and Savage, C. J., after citing the above case of Murray v. Hatch, said : " Whether there was in this case a tech- nical total loss ; whether an abandon- ment was necessary ; or, if so, whether it was made in due season, are questions not necessary to be discussed, upon the view which I have taken." In November, 1855, this question came again before the Supreme Court of Mass- achusetts in the case of Heebner v. Eagle Ins. Co., 10 Gray, 131. Insurance was effected on the steam propeller Chesa- CH. IV.] OF CONSTRUCTIVE TOTAL LOSS AND ABANDONMENT. 113 words "total loss" meant actual and not constructive total loss, and consequently that there could be no abandonment under the peake for one year, against total loss only. The vessel was valued at forty thousand dollars. During the period of the risk she was damaged by perils of the sea, and put into port, where she was surveyed, and the repairs necessary to render her sea-worthy estimated at $22,951. In compliance with the re- port of the surveyors, the vessel was sold at auction, and brought $2,175. The case came before the court on an agreed statement of facts, by which, if the court should be of opinion that the defendant was liable for a constructive total loss, the case was to be sent to an assessor to determine whether such a loss had actually taken place. In No- vember, 1857, the court held that the phrase " total loss " meant a constructive total loss, and that the defendant was liable if such a loss had taken place. See also Greene u. Pacific Ins. Co., 9 Allen, 21 7. Some policies, it may be remarked, contain a clause that the insurers shall not be liable for any partial loss under fifty per cent. Commonwealth Ins. Co. V. Chase, 20 Pick. 142. As the loss of freight generally de- pends on the question whether there has been a loss of the cargo, we shall consider the two subjects together. In one of the earliest cases on this topic. Cocking v. Fraser, Park, Ins. 151, Lord Mansfield defines a total loss to be the " absolute destruction '' of the subject, thus clearly expluding a con- structive total loss. Lord Ellenborough, in Thompson v. Koyal Exch. Ass. Co., 16 East, 214, said: "If this can be con- verted into a total loss by a notice of abandonment, the clause excepting un- derwriters from particular average may VOL. II. 8 as well be struck out of the policy." In Skinner v. Western Mar. & F. Ins. Co., 19 La. 273, Bullard, J., said: "The doctrine in relation to memorandum articles is well settled at the present day ; as it relates to them there is no con- structive total loss The cargo in question, corn, being within the memo- randum, which exempts the insurer un- less the loss is total, that is, unless spe- cifically destroyed or lost, the only question here is, whether, under these circumstances, the corn is to be regarded as falling within the rale." Per Nelson, J., Bryan v. New York Ins. Co., 25 Wend. 617: "The terms used in the policy, 'free from average unless gen- eral,' are understood to be convertible with total loss ; and under such a war- ranty by the assured the law is perfectly well settled in the United States, that there must be either a total physical destruction of the object insured, or a total destruction of value." Per Porter, J., Aranzamendi v. Louisiana Ins. Co., 2 La. 432. The following cases also fully support the doctrine that the words " total loss," when applied to cargo or freight, mean actual and not con- structive total loss. Hugg V. Augusta Ins. Co., 7 How. 595 ; Morean v. United States Ins. Co., 1 Wheat. 219; Biays v. Chesapeake Ins. Co., 7 Craneh, 415 ; Saltus V. Ocean Ins. Co., 14 Johns. 138, 145 ; Humphreys v. Union Ins. Co., 3 Mason, 429 ; Brooke v. Louisiana State Ins. Co., 16 Mart. La. 640; Depeyster V. Sun Mut. Ins. Co., 1 7 Barb. 306 ; Wadsworth v. Pacific Ins. Co., 4 Wend. 33, 38 ; Williams v. Kennebec Mut. Ins. Co., 31 Maine, 455, 461 ; Le Roy v. Gouverneur, 1 Johns. Ca. 226 ; Ogden V. General Mut. Ins. Co., 2 Duer, 204 ; 114 THE LAW OF MARINE INSURANCE. [CH. IV. fifty-per-cent rule, has been departed from in Massachusetts, and it is there held, that, if the subject insured is not perishable in its Willard v. Millers & Manuf. Ins. Co., 24 Mo. 561 ; Navone v. Haddon, 9 C. B. 30 ; Eobinson in 1725, and that Quintin Van Weysten, a writer of great authority, in a treatise written about 1563, held that if the master of a ship had advisedly dropped anchor in rooky ground for her safety, then the breaking or losing of his anchors and cables, though it could not properly be deemed a gross average, ought to be recompensed as a good piece of service. Magens continues as follows upon the subject : " We Remember also that at London, in certain cases, where it was proved that ships,- endeavoring to keep clear of a lee shore, had new sails blown away and cables parted by anchoring in open sea, to avoid driving ashore, the losses being occasioned by striving to preserve the whole, were made good by the insurers, whose interest it always is (as well as for the common advantage) to make it the master's interest to spare nothing, in such extraordinary cases, to save the ship from stranding, by carry- ing out fresh cables when others have parted. If a, master, being himself a part owner in the ship, and fully in- sured, knows that he shall not be paid for the first cables he may carry out and lose by their breaking, he is discouraged from risking others, though with the ap- pearance of saving his ship, as he may think it more for his advantage to let her go ashore on the first cable's part- ing, because the insurers must then pay him the full insurance ; whereas, if she were saved by veering out other cables, he would lose the value of those anchors or cables that were lost or broke before. We must add that, as it is for the common good, and for the particular interest of all insurers, that ships should not go to sea without good cables, sails, &c., those cables that are not sufficiently strong for a ship to ride with in the usual load- ing-places, or any sails blown to pieces by stormy weather in the common course of a voyage, should not be paid for by the insurers, as it might be an incite- ment for masters not to go without good ones." Magens on Ins., pp. 52, 53, 54. See also Weijtsen, § 11. 238 THE LAW OF MARINE INSURANCE. [CH. V. So it must be said that, if a vessel cuts and loses her cable, this may or may not be a general-average loss, according to circum- stances. If cut only because she cannot weigh her anchor, and must pursue her voyage, it is not a general average ; but it is so if the cable were cut to avoid extreme and imminent peril of capture or wreck.i It- may be added, that it is undoubtedly the duty of the master who cuts or unshackles his cable to attach to it, if he can, buoys, or use other means to facilitate recovery. If he failed to do this without excuse, and it appeared that the cable was lost because simple aiid ordinary precautions, entirely within his reach, were neglected, we should say this could not be called such a sac- rifice from iiecessity as constituted a claim for contribution. Such cases as these, of anchors, boats, or canvas lost, bring up at once a question frequently recurring through the whole law of general average. It is whether the loss was a mere incident to navigation, and was caused by one of the common perils to which ships are always exposed, or was a voluntary sacrifice to escape an extraordinary danger. It is not always easy to answer this ques- tion ; but of the principle which must decide it, there can be no question. For it is certain that only when there is an extreme danger common to all the property, and a part of the property is destroyed, either directly and purposely, or by a danger to which it must now be exposed to save the rest, but which was never origi- nally intended, only in such a case as this can the loss be consid- ered a general-average loss.^ This may be illustrated further by ' Cables out away or anchors slipped Pull. 378. Loss by shipwreck or a to avoid being separated from convoy peril of the sea is not the subject of gen- are not the subject of general-average eral average ; but a loss incurred in or- contribution in England, though they der to save a vessel from shipwreck or , are so on the Continent. 2 Arnould, a peril of the sea is. Lyon v. Alvord^ 894; Stevens on Average, 14 (5th ed.) ; 18 Conn. 75. If the damages to the Emerigon, ch. 12, sec. 41, vol. 1, p. 605 ship arise from the ordinary occurrences (ed. 1827). It was decided by the of the voyage, and not from some ex- maritime judges of Amsterdam, in the traordinary violence or peril, to which year 1661, that if a cable is cut in a she has been exposed, the loss must be storm in order to save the ship, whereby borne by the owner of the vessel, who the anchor is lost, the cargo is not engages, by his contract with the bound to contribute, because there was freighter, that she shall be stout, stanch, . no voluntary jettison. 2 Bynkershoek, and strong, and properly equipped for Quaest Jur. Priv. 1. 4, c. 24, p. 424. the voyage ; and, whether it be ex- ^ See Covington v. Roberts, 2 Bos. & pressly stipulated or not, he is bound to CH. v.] GENERAL AVERAGE. 239 the following two cases. A ship being armed gives battle to a pur- suing enemy and beats her off ; the loss she sustains in the battle constitutes no average claim ; the ship only discharged her duty, which was to carry the goods to their destination if possible. The loss was cast upon her " by the fortune of war," and must rest where it fell.^ But where a vessel, pursued by an enemy, lowered her boat into the sea with a lantern at the mast-head and sails set, keep the vessel in this condition during the voyage, unless prevented by some extraordinary peril, for which he can, in no respect, be responsible. Koss v. Ship Active, 2 Wash. C. C. 241. ' In Taylor v. Curtis, 6 Taunt. 608, which was an action to recover contri- bution for the expenditure in ammuni- tion in resisting capture by a privateer, for the damage done to the ship in the combat, and for the expense of curing the wounded, Gibbs, C. J., said : " The losses, for which the plaintiffs seek to recover this contribution, are of three descriptions : first, the damage sustained by the hull and rigging of the vessel, and the cost of her repairs ; secondly, the expense of the cure of the wounds received by the crew in defending the vessel ; thirdly, the expenditure of pow- der and shot in the engagement The measure of resisting the privateer was for the general benefit, but it was a part of the adventure. No particular part of the property was voluntarily sacrificed for the protection of the rest. The losses fell where the fortune of war cast them, and there it seems to me they ought to rest. It therefore follows that these losses were not of the nature of general average, and that the plain- tiffs cannot recover." Upon this sub- ject Beneck^ says: "It is a question not easily to be decided, whether the damage done to a vessel by the defend- ing her against privateers or pirates be- longs to particular or to general average. .... Now if cables be cut, goods cast overboard, or the vessel run ashore, in order to escape from thg enemyj the damage is universally admitted to be general average. But eis these meas- ures are intended for the preservation of the whole, so is the defence of the vessel ; and it seems unjust that the loss arising from it should fall only upon one party, particularly upon the ship-owner, while the benefit accrues to the whole. It is certain that the damage occasioned by the enemy's shot is one proceeding from external causes, and against the will of the captain ; but it is neverthe- less the consequence of a determination to resist, and may therefore be looked upon as a damage voluntarily sustained." Beneck^ on Mar. Ins. 231 (ed. 1824). Benecke also mentions that the Ham- burg Ordinance reckons as general average all the damage done to the ves- sel, her apparel, and the cargo, by good defence against enemies, privateers, or pirates, but excludes the ammunition expended in the defence ; that the ex- pense of ammunition, on the contrary, is specially included by the Prussian Ordinance ; and that the Hamburg, Swedish, Prussian, Danish, and Span- ish laws admit to general average the charges of healing and attending the wounded in an engagement, and also allowances to widows and orphans of the killed. 240 THE LAW OP MAEINE INSURANCE. [CH. V. and thus deceived the enemy and escaped, the value of the boat was contributed for.^ So, while the common expenses of convoy are not a general-av- erage loss, it has been said that where this convoy or otlier similar protection was made necessary by some unexpected and extraor- dinary peril, the cost would be a general-average loss.^ So, if masts are blown overboard, they certainly constitute no general-average loss ; but if they float by the side, hanging to the ship, and are then cut away because they embarrass the navigation of her, it lias been said that the loss is now one of general aver- age.. We do not see a sufficient reason for this. If contributed for at all, it can only be on the value they possess when thus cut away, and we can hardly suppose a case in which this value would be anything.^ ' Emerigon, torn. 1, p. 622 (Mere- dith's ed.), 480. ^ Emerigon, torn. 2, oh. 12, sec. 41, p. 626; 2 Arnould, 913; Bynkershoek, Quaest. Priv. Jur. 1. 4, c. 25 ; Beneck^ & Stevens on Av. (Phillips's ed.) 147, 151. And it has been held that, where a vessel meets with an accident at sea, and is obliged to go into port, and anoth- er vessel accompanies her for the com- mon good, and is paid for this, it is a general-average expense. Nelson v. Belmont, 5 Duer, 310. It is stated by Mr. Stevens (Benecke & Stevens on Av. Phillips's ed. p. 67), that " some of the foreign ordinances say that, if a cable be cut or slipt to sail with convoy, the value shall be brought into a general contribution ; but this is not the prac- tice with us. See Csisar. Disc. 46, u. 9. ' Nickerson n. Tyson, 8 Mass. 467, 1 Mag. 181 ; Emerigon, ch. 12, sec. 41, vol. 1, p. 606 (ed. 1827) ; Ord. Copen- hag. a. 1, § 10; Ord. Konigsb. a. 25. In Beneck^ & Stevens on Av. (Phillips's ed. p. Ill), it is said, that though it is the practice in most countries to allow for the rigging so cut, in general aver- age, at the value which it may be supposed to have had under those cir- cumstances, yet in England no such allowance is made. For this two rea- sons are given. First, because it is said the rigging was then of no value at all. This reason is not adopted by Mr. Benecke, because he says it cannot be denied to be still of some value. He then goes on to say : " The true cause, as it appears to me, is, that under such circumstances, generally speaking, it would be impossible to work the vessel without cutting away the broken mast, and the rigging in which it is entangled, so that this act was not optional, but dictated by necessity, and consequently there was no sacrifice. But if such a, circumstance occurred in sight of a port, which the vessel might reach without the rigging being cut, and this measure be resorted to merely to facilitate the ma- noeuvring of the vessel, and to give her and the cargo a better chance of escap- ing the danger, in that case it would indeed be a sacrifice, and the rigging so cut away ought to be allowed for, at the value which it would have had if not cut away." See, further, Lee v. Grinnell, 5 Duer, 400 ; Teetzman v. Clamageran, 2 La. 197, and notes, su- pra. CH. v.] GENERAL AVERAGE. 241 Section YI. — Of Voluntary Stranding. There is one class of cases dependent on the question whether the sacrifice be voluntary, which have been frequently litigated, and in regard to which the aiithorities are much in conflict. It occurs when the ship is voluntarily stranded, or thrown upon the shore. Is this loss of the ship a general-average loss, to be con- tributed for by the interests and property saved ? If the vessel be stranded by the mere force of the winds and waves, and against the will and efforts of the master, it is evident and certain that the loss is not a general-average loss. 'But let us suppose a case where it is certain or nearly certain that the vessel will be thrown upon the shore, but it is in the captain's power to choose where she shall be stranded. This may be of very great importance. Under the lee of the vessel are only rooks which make the entire destruction of property and life almost inevitable. At some distance, but within reach of the ship, is a smooth beach, and the master succeeds in casting the vessel away upon that beach, and by so doing life is saved and cargo is saved. The ship cannot be got off at all, or only at considerable cost ; is the loss or is the cost of recovering the ship a general-average loss ? If we suppose that the ship cannot be got off and is totally lost, it may be easier, so far as the authorities go, to answer the question. Emerigon is clear that there is a right to contribu- tion only when the ship is got off.^ So it was held in Virginia in 1790,2 and in 1812 in New York.^ But in 1814 a case came before Mr. Justice Washington, where a vessel was run ashore to escape capture and was totally lost. Now if she could Iiave escaped otherwise, the loss would not have been one of general average, and, as the only choice of the vessel lay between capture and wreck, the loss would seem to come under the same prin- ' Emerigon, ch. 12, § 41, vol. 1, for the common safety, as we have seen p. 600, ed. 1827 (Meredith's ed. 475), above, provided always that the vessel states the law as folloivs : " Damages has been set afloat again ; for if the occasioned by stranding are particular stranding has been followed by a ship- averages for account of the owners, wreck, it is sauve qui pent." But it would be general average if the ' Eppes v. Tucker, 4 Call, 346. stranding had been voluntarily effected " Bradhurst v. Col. Ins. Co., 9 Jolius. 9. VOL. II. 16 242 THE LAW OF MARINE INSURANCE. [CH. V. ciple as that of stranding where a safer place was chosen. And he held that there was no claim for contribution.^ In 1839 the question came before the Supreme Court of the United States, and that court unanimously decided that whether the ship were lost or recovered made no difference in regard to the liability of the owners of the cargo to contribute.^ The opinion was given by Mr. Justice Story, and the whole subject was very elaborately considered. The reasons upon which it rests seem to us sound, and we incline to regard this as the rule of law for this country, although it has recently been held otherwise in New York.^ struck on a sunken rock, passed over it, and went ashore among other rocks. The lives of the crew were saved, and also the cargo, though in part damaged. The vessel was totally lost. This case was taken, by appeal, to the Supreme Court of the United States, and was there dismissed for want of jurisdiction. Cutler v. Rea, 7 How. 729. A suit was then commenced in the Supreme Court of Massachusetts, which was decided in favor of the de- fendants. No opinion was given in court, and the case is not reported, but we understand that it was decided on the ground that, as matter of fact, the stranding was not voluntary. Bigelow, C. J., in Merithen v. Sampson, 4 Allen, 192, refers to Rea v. Cutler, and says that it is impossible now to say on what precise ground it was decided, and that, from the fact that it was not reported, the inference is that it turned on a question of fact, and did not in- volve any new principle of law. He adds : " The position that no claim for contribution can be sustained by the owner of the vessel where she is totally lost is not supported by the more recent authorities, and is not reconcilable with sound principles." See also Gray v. Wain, 2 S. & R. 229 ; Mut. Safety Ins. Co. V. Cargo of Brig George, Olcott, ' Caze V. Reilly, 3 Wash. C. C. 298. ' Columbian Ins. Co. v. Ashby, 13 Pet. 331. ' Marshall v. Garner, 6 Barb. 394. In this case it was held that the owners of a ship involuntarily stranded cannot claim a contribution from the owners of the cargo, for the destruction of the masts and rigging, by the master, in or- der to save the ship and cargo, and the lives of the crew, as general average, where, although the cargo is saved, the ship is finally lost totally. The case of Rea V. Cutler, Sprague, 135, which was an action for contribution brought (in 1846) by the owners of the vessel against the owners of the cargo, was decided in favor of the libellant in the District and Circuit Courts for the District of Massa- chusetts. The facts of the case were substantially as follows : The bark Za- mora was at anchor in Massachusetts Bay near Plymouth, in a violent gale of wind, with a high rocky coast under her lee. The anchors would not hold, and the vessel was being forced, stern foremost, towards a projecting rocky point, where the vessel and all on board must have perished. The captain made sail, slipped the cables, and endeavored to run along shore till he could find a «afe place on which he might beach the vessel. While on the way the vi CH. V] GENERAL AVERAGE. 243 But how is it if the vessel be got off? Without stating in the text the various views given in the cases on stranding, all of which we cite in our notes, we state, as the principle which we think mxist govern all these cases, that there must be a voluntary sacrifice of some positive value. If then the ship must inevitably be cast upon the shore, and all that the master does is to select a place, a time, and a mode of stranding her, we should say that this is not that voluntary sacrifice which the law of general average requires, and therefore is not an average loss.^ All that the master did was to strand in such a way as to give him a better hope of saving the ship itself, her cargo, and the lives of those on board. Moreover, if the ship is to be contributed for, it should only be on the value which she possessed at the time, and in the condition, in which she was when the captain, abandoning all other hope, Adm. 89 ; Barnard v. Adams, 10 How. 270; Code de Commerce, art. 425; 2 Brown, Civ. & Adm. 199; Weskett, p. 132, § 4, p. 255, § 4. The point as to the liability to contri- bution of the cargo which is saved, when the ship is lost by the stranding, does not appear to have ever directly arisen in the courts of England. Abbott on Shipping, 490; Am. on Ins. 903. ' Beneek^ says, p. 219 (ed. 1824) : " If the situation of the vessel were such as to admit of no alternative, so that without running her ashore she would have been unavoidably lost, and that measure were resorted to for the pur- pose of saving the lives or liberty of the crew, no contribution can take place, because nothing in fact was sacrificed. But if the vessel and cargo were in a perilous but not a desperate situation, and the measure of running her ashore deliberately adopted as best calculated to save the ship and cargo, in that case the damage sustained, according to the fundamental rules, constitutes a claim for restitution." And in a recent case in Connecticut, Ellsworth, J., speaks as follows : " Now to me , it seems little less than a paradox, that if a captain whose vessel is doomed to destruction by stranding should consider and select, for his compulsory going ashore, the place least perilous to himself and ves- sel, and least destructive to what might happen to escape the general destruc- tion, such preference is the incurring a voluntary sacrifice which entitles him to call for contribution. ' Save himself who can,' is a maxim much more appli- cable to such a case. When a captain finds that his vessel must go on shore, and he exerts himself to go on in a safer place rather than a more dangerous one, he no more makes a voluntary sac- rifice than when, in navigating his ves- sel, he chooses a safe channel rather than a hazardous one, or changes his course to avoid a rock or shoal. He does his plain duty to the general inter- est, to mitigate an unavoidable calamity, but not at all in any sense to make a loss by selecting a part to be sacrificed in order to insure safety to the rest. Slater v. Hayward Rubber Co., 26 Conn. 139. 244 THE LAW OF MARINE INSURANCE. [CH. V. endeavored to choose his place ; and this value would seem to be, in the case supposed, nothing. But if the master had a substantial and valuable chance of saving his ship, and threw this chance away voluntarily, that he might make sure of saving the cargo, then the cargo should contribute to repay the loss, although the chance thus thrown away was less, and even much less, than a probability. There are American cases undoubtedly which indicate a very different view of the subject ; but \^e find it difficult to reconcile them with what seem to us the unquestionable principles of the law of general average. In the earliest case ^ on this subject, ' SimsD. Gurney, 4Binn. 513. In giv- stronger is the claim for contribution.'' ing the opinion of the court in this case, Tdghman, C. J., says : " It is not neces- sary that the ship should be exposed to greater danger than she otherwise would have been, to make a case of general average. It is sufficient if a certain loss is incurred for the common benefit." But in a later case in the same State, an entirely opposite doctrine was main- tained by Gibson, C. J., who says : " It is not enough that there be a deliberate intent to do an act that may or may not lead to a loss ; there must be a deliber- ate purpose to sacrifice the thing at all events, or, at the very least, to put it in a situation in which the danger of eventual destruction would he increased ; and it is this deliberate purpose, combined with a view to the general welfare, which is the distinguishing feature between gen- eral and particular average. Walker V. U. S. Ins. Co., 11 S. & R. 61. Mr. Phillips, in his treatise on In- surance, vol. 2, p. 93, note, in comparing these two cases, remarks : " But C. J. Tilghman was plainly right in this prop- osition, for the most usual case of aver- age for jettison is a sacrifice where the thing sacrificed is in imminent danger of total destruction, with both ship and cargo ; and the more certain the destruc- tion would be without the sacrifice, the It is, however, precisely here that we distinguish between the two classes of voluntary stranding. If ship, cargo, and freight are all in imminent danger, but the danger is only imminent, and a part of the property exposed to the common danger, and having the common chance of safety, is purposely destroyed to save the rest, this is clearly a ease of general average. But where the ship must be wrecked at all events, and there is no chance whatever of her safety, how can she found a claim for contribution on the mere fact that one place of de- struction was preferred to another ? If it be said that to avoid rocks, where she must have been torn to pieces, she seeks a beach where the cargo may be saved, one answer is, that she casts away no chance of safety by seeking this place ; and another is, that she gives to herself, by going there, a possibility of ultimate safety, just as she does to the cargo. We should say that the decis- ions have generally turned upon the question whether there was only an im- minent danger, or whether the wrecking of the ship was certain and inevitable. And as it must seldom be the case while a vessel floats that her safety is impos- sible, — for who can say when or how the wind may change, or what it will do for CH. v.] GENERAL AVERAGE. 245 the master directed the course of the ship to a place other than that on which she would have been wrecked but for his action. She must have been wrecked at all events, and it did not appear that the place to which the master carried her was the vessel ? — the cases in which this vol- untary stranding gives a claim for con- tribution are now much the more nu- merous. We believe this to be the meaning of Mr. Phillips ; and think the rule well illustrated in the dissenting opinion of Mr. Justice Daniel, in Bar- nard V. Adams, cited in a subsequent note. In Col. Ins. Co. v. Ashby, 13 Pet. 331, the jury found that the stranding was voluntary, and the point in question was not discussed by the court. Yet this case is often cited as one in which the court held, on the facts, that there was a voluntary stranding. In Meech V. Robinson, 4 Whart. 360, the vessel must have gone ashore at any rate, and would inevitably have been lost, togeth- er with the crew and cargo. She was run ashore in a less dangerous place, and was totally lost, but the lives of the crew, together with a portion of the cargo, were saved. It was held that this was not a case for a general-average contribution. Walker v. U. S. Ins. Co., supra, has been supposed to confirm this case, but the distinction between them is important. In this latter case the court held, as a matter of fact, that when the captain slipped his cables, it did not appear that it was his intention to run his vessel ashore, but rather to get her out to sea, and, failing in this, he was driven on shore against his will. Meech v. Robinson may seem, how- ever, to be overruled by Barnard v. Adams, 10 How. 270. But in this last case it did not appear that the ship would have been inevitably lost. She was drifting in a gale, towards a rocky and dangerous part of the coast, on which, if she had struck, she must inev- itably have perished, together with the crew and cargo. To avoid this peril she was steered along the coast and finally run on a beach, and all the cargo saved. This was held to be a case of general-average contribution. The ves- sel was not destroyed, but she was so high on the beach that it would have cost more to get her off than she would have been worth when oflF. A somewhat similar case came before the Circuit Court for the First Circuit in 1854. Sturgess v. Carey, 2 Curtis, C. C. 59. The vessel was at anchor, but in extreme danger of dragging her anchor and going to pieces, by being driven on a rocky shore by the violence of the wind and sea. To save the cargo and the lives of the crew, she was run on a beach. Contrary to expectation, the vessel was not lost, but was subsequent- ly got off and repaired. For the ex- penses thereby incurred, the owners of the cargo were held liable to contribute. In Reynolds v. Ocean Ins. Co., 22 Pick. 191, it was decided that if a vessel at anchor is in imminent peril, and there is every probability that she will soon sink at her anchors or part her cables and drive on shore, unless her cables are cut, and they consequently are cut, and the vessel is voluntarily run on shore, as the best expedient for sav- ing life and property, the expense of getting her off is a subject of general average, and this without regard to the consideration whether the voyage is resumed, or the cargo again taken on board or not. 246 THE LAW OF MARINE INSURANCE. [CH. V. in any degree better adapted to save either the ship or the targo than that to which she would have gone of herself. This was held to be a general-average loss. But we have never been able to see the reasonableness or propriety of this decision, al- though Mr. Justice Grier, in giving an opinion of the Supreme Court, speaks of it as having received the " unqualified assent " and the " unanimous approval " of that court.^ ' Barnard v. Adams, 10 How. 270, supra. In giving the opinion of the court in this, case, Mr. J. Grier says, in approval of the instructions of the court below : " The court should, therefore, not be understood as saying, that if the jury believed the peril which was avoidT ed was ' inevitable,' or that, if the jury believed that the imminent peril was not avoided, they should find for the plaintiffs. But rather, that if they be- lieved there was an imminent peril of being driven ' on a rocky and danger- ous part of the coast,' where the vessel would have been inevitably wrecked, with loss of ship, cargo, and crew, and that this immediate peril was avoided by voluntarily stranding the vessel on a less rocky and dangerous part of the coast, whereby the cargo and crew were saved uninjured, then they should find for the plaintifis." He says again, p. 305, speaking of the proper use of the term " sacrifice " in general average : " The ofifering of sacrifices was founded on the idea of vicarious suffering. And when it is said of thejactiis that it is sacrificed for the benefit of the whole, it means no more than that it is selected to undergo the peril in place of the whole, and for the benefit of the whole. It is made (if we may use another theological phrase) the ' scapegoat ' for the remainder of the joint property exposed to common de- struction. The jactus is said to be sacrificed, not because its chance of escape was separate, but because of its selection to suffer, be it more or less, instead of the whole, whose chances of safety, as a whole, had become des- perate. The imminent destruction of the whole has been evaded as a whole, and part saved by transferring the whole peril to another part." In a dissenting opinion, Mr. Justice Daniel speaks as follows : " I am wholly unable to perceive how, in conformity with the rules and principles above cited as constituting the foundation of general average, contribution could justly be claimed, in this instance, for the loss of the ship. For there is not a scintilla of proof in this cause tending to show a design to sacrifice the ship or anything else, nor tending to prove that the course pursued was one which, under any circumstances, could possibly have been avoided. On the contrary, the testimony establishes, as far as it is pos- sible to establish any facts, that the stranding was the efiect of the vis major of an inevitable necessity, that every effort was made to avoid this necessity, and that the only act of the mind appar- ent in the case was the determination, to repeat the language of Mr. Phillips already quoted, ' merely to steer her to a less dangerous place for stranding, when she was inevitably drifting to the shore,' — a determination not less for the benefit of the ship than for that of the cargo, and one falling within the general scope of the duty and discretion of every master or seaman." CH. V.J ■ GENERAL AVERAGE. Section VII. — Of a Sale by the Master. 247 There is another case which seems to come to some extent at least within the principles of general average. It occurs when the master in a port of distress sells a part of the cargo to raise funds to enable him to pursue his voyage, and take the ship and residue of the cargo to the port of destination. Nothing is more certain than that the master is authorized to make such a sale only by the strictest necessity.^ We consider his powers in this respect, as to ship and cargo, more fully in treating of ' Freeman v. East India Co., 5 B. & Aid. 617; Myers v. Baymore, 10 Barr, 114; Stillman v. Hurd, 10 Texas, 109; Underwood v. Robertson, 4 Campb. 138. The right of the master, quasi master, to appropriate the cargo for the purpose of repairs, is at an end on the arrival of the ship at her port of destination. The cargo then becomes subject to the con- trol of the consignees, and the master must, if deficient in funds, resort to other souroesfor necessaries. Union Ins. Co. V. Scott, 1 Johns. 105. The master is not justified in selling the cargo at a foreign port, although it be impossible io prosecute the original voyage, and although a sale of the goods is the most beneficial course for the owner. Wilson v. Millar, 2 Starkie, 1. This was an action on the case brought by the shipper against the ship-owners and captain, for having improperly sold a cargo of goods intrusted to them. The ship, upon a voyage to India, was captured by an American privateer, which plundered her of half the cargo. She was saved by the exertions of the master, who prevailed upon the captors to allow the vessel to be carried to Ber- muda, under an engagement that they should not be considered as prisoners of war. Upon the arrival of the vessel at Bermuda, the sails had been destroyed, and the water let in, and the boats had been taken away, and none could be built in less than three months. The cargo consisting of perishable commod- ities, and the captain not being able to procure seamen, he considered it to be impossible to prosecute the original voy- age, and sold the remaining cargo, and transmitted the product to the owner. The case was tried before Lord Ellen- borough, who gave the following opinion : " I think you had no right to determine the voyage and make a general sale of the cargo. Nothing but extreme neces- sity will warrant the master in making a sale of any part of the cargo ; but here he took upon himself to break up the destination of the adventure, and to ex- ercise a full dominion by the sale of the whole of the goods. I do not say that even extreme necessity would have warranted the master in selling the whole. He might have raised some- thing by way of hypothecation, suffi- cient, probably, to defray the expenses of salvage; but he is absolutely a stran- ger to the dominion over the ship and gfiods, and is bound to send back to re- ceive the further directions of the own- er, although the consequence may not be so beneficial to the latter. To allow the master such an unlimited dominion as is contended for would tend to the destruction of all .commercial adven- tures." 248 THE LAW OF MAEINE INSURANCE. [CH. V. constructive total loss. Here we would only say that, however necessary it may be to raise funds, he can sell no part of the cargo for that purpose until he has exhausted all other methods. If he can raise the money on his owner's credit or his own, or by the sale of the goods of his owner, or by the sale of his owner's property, or by the bottomry of the ship, or by hypotheca- tion of tlie cargo, or by a pledge of the ship and cargo, he must use these means before he is justified in selling any part of the cargo not belonging to his owner. It should be said, how- ever, that although it might be possible to raise the necessary money by some of these other means, it could only be done at such excessive cost that even this excess might justify him in selling a part of a shipper's cargo. But it is^ certain that, when the interests of the ship and cargo absolutely require that money should be raised, he may sell such part of the cargo as may be necessary for this purpose, due care being taken to sell the same with the least possible loss.^ . Then the question would arise, whether this is to be con- ' Pope V. Nickerson, 3 Story, 491 ; been sold by the master for necessary Searle v. Scovell, 4 Johns. Ch. 218; repairs has a liep upon the ship for his Koss V. Ship Active, 2 Wash. C. C. 226. indemnity. Vahn, Com. Book l,p. 343; In the case last cited, Mr. J. Washing- Laws of Wisbuy, art. 45 ; Bulgin «. Sloop ton says: "If the owner of the ship be Rainbow, Bee, Adm. 116 ; American also owner or part owner of the cargo, Ins. Co. v. Coster, 3 Paige, 323 ; Pope the master may, in his discretion, sell a v. Nickerson, 3 Story, 465. Chancellor part of the cargo, in preference to bor- Walworth, in American Ins Co. v. Cos- rowing at an exorbitant rate of premi- ter, says that, " upon every principle um ; and in his choice of means, his of justice and equity, the owner of the judgment, fairly exercised, must govern cargo whose property is thus taken for him. If in none of these ways he can the benefit of the ship, by way of a supply his wants, he may then go be- forced loan, has a right to look to the yond the general scope of his authority security of the ship as well as to the in- as master, and may sell a part of the dividual responsibility of the ship-owner cargo, or hypothecate the whole. But, for remuneration''; and in Pope v. at all events, the necessity must be such Nickerson, Mr. Justice Story says : as to connect the act with the success of " The claim of the shippers is not re- the voyage, and not for the exclusive duced to a mere lien in rem, although I interest of the ship-owner." See also am satisfied that the shippers possess Fontaine v. Col. Ins. Co., 9 Johns. 29 ; such a lien. But it is a personal claim Hassam u. St. L. P. Ins. Co., 7 La. Ann. upon the owners pro tanto, with the 11; The Copenhagen, 1 Rob. Adm. auxiliary security of the lieu on the 289, 292. ■ ship and freight." The owner of the property which has CH. v.] GENERAL AVERAGE. 249 tributed for. The loss would seem to resemble very much a loss by jettison.^ It satisfies the three great requirements of the law of general average, for it is voluntary, necessary, and effectual. And we should have no doubt that the loss would be a general- average loss so far that the property and interests saved thereby should contribute for it.^ It is possible that the money should ' See remark of Mr. J. Story in the case of The Ship Packet, 3 Mason, 260, infra, and 3 Kent, Com. 242. ' In The Gratitudine, 3 Rob. Adm. 240, 263 (which was a case of a master hypothecating his cargo to pay for ne- cessary repairs), Lord Stowell said the books overflowed with authorities that the master might sell part of his cargo, and that a sale of part was equivalent td the hypothecation of the whole, and was a fit subject for general average. And Lord Ellenbordugh, in Dobson v. Wilson, 3 Campb. 480, 487, expressed his opinion that if a ship should be seized for the non-payment of the Sound dues, and it became necessary to sell a part of the cargo, in order to obtain her release, this might be the foundation of a claim for general average. Where the master of a Peruvian vessel, bound from Lima to London, had sold some silver, part of the homeward cargo, at Bahia, to raise funds for repairing the ship, it was held to be a subject of gen- eral average, but that a court of admi- ralty, administering the ordinary mari- time law of nations, has not jurisdiction to entertain questions of general aver- age, or power to adjudicate thereon. The Constancia, 4 Notes of Cases, 677. Mr. Justice Story, in the case of The Ship Packet, 3 Mason, 255, 260, said: " In the case of a sale of part of the cargo by the master for the necessities of the ship, the sale is in the nature of a compulsive loan for the benefit of all concerned, and to enable the ship to prosecute her voyage. It bears a con- siderable resemblance to the case of a jettison, for the owner is deprived of his property for the common good, and to him it must be immaterial whether the loss be by a sacrifice at sea or on shore." In Giles v. Eagle Ins. Co., 2 Met. 140, 144, the loss in the sale of a quantity of salt, which had been sold to pay the expenses incurred in getting off and repairing a vessel, which had been driven on shore in a gale, was compensated for in general average. In The Schooner Leonidas, Olcott, Adm. 12, 15, there is a dictum that where the master sells part of the cargo to supply the necessities of the ship, the owners would probably be entitled, in case the ship or owners could not satisfy their de- mand, to compel the other owners of the cargo to contribute according to their respective interests. In The Mary, 1 Sprague, 51, specie was shipped from Boston to Porto Cabello to purchase a return cargo. The vessel was obliged to put into Antigua, and while there the ' master, being " destitute of funds, sold part of the specie for the purpose of making repairs, and the vessel pro- ceeded to her port of destination, and thence to Boston. It was admitted that the specie should be paid for in general average, and it was held that the owners were entitled to interest on the same from the time when they would have had the benefit of it at Porto Cabello, if it had been carried forward.. See also The Hofinung, 6 Rob. Adm. 383 ; Emerigon on Mari- time Loans, ch. 4, § 9, ch. 12, § 4; Con- 250 THE LAW OF MARINE INSURANCE. [CH. V. be raised or used for the benefit of the ship only ; and in that case the residue of the cargo should not contribute.^ And if raised and used for the benefit of the cargo only, then the ship should not contribute ; and it is obvious that no such sale would come within the principles of average, if the cargo were sold because it was perishable ; or for any other case or reason whatever, except to deliver from an extraordinary peril the property called upon to contribute. In the case in which this power of the master has been most fully considered, Lord Stowell says: " The power of selling cannot extend to the whole, because it can never be for the benefit of the cargo that the whole should be sold," ^ We should have some doubts, however, whether this is always and strictly true, if, as is certain, the jettison of the whole cargo may be justified, and give a clairn for contribution on the ship ; or that the whole ship and freight may be sacrificed to save the cargo ; in which case the cargo should contribute. It is at least possible to imagine circumstances which would render it justifiable in the master to sell all that the ship contains, that he might thereby sojato del Mare, ch. 104, 105, 106 ; Ste- vens on Average, 19, 24, 28, 29 ; Weskett on Ins., 252, 256, 259, art. 16. Where goods are sold by the captain in order to obtain funds for repairing particular- average losses, or for defraying the or- dinary expenses of navigation, the loss arising from their sale must be made good by the ship-owner alone ; but where they are sold for the purpose of defraying expenses or repairing losses, which are themselves of the nature of general average, the loss arising from their sale gives a claim to general-aver- age contribution. Hassam v. St. Louis Perpetual Ins. Co., 7 La. Ann. 11. Where a part of the cargo is sold by the master at an intermediate port, to ulake permanent repairs of damage, caused by a peril passed, and not for the benefit of all parties, the loss is excluded from general average. Dyer v. Pis- cataqua F. & M.Ins. Co., 53 Maine, 118. ' Upon a policy of . insurance on goods where the ship, being disabled by the perils of the sea from pursuing her voyage, was obliged to put into port to repair, and, in order to defray the expenses of such repairs, the mas- ter, having no other means of raising money, sold part of the goods, and ap- plied the proceeds in payment of these expenses, it was held that the under- writer was not answerable for this loss, but that the owners of the goods were entitled to be reimbursed by the owner of the ship. Powell v. Gudgeon, 5 M. & S. 431. In this case, Bayley, J., said : " The owner of the ship undertakes to have the ship fit to perform her voyage ; and in case of accident it is the duty of the owner, and the master in place of the owner, to provide for its repair.'' The same principle was maintained in Sarguy v. Hobson, 4 Bing. 131. ^ The Gratitudine, 3 Rob. Adm. 240. CH. V.J GENERAL AVERAGE. 251 save the ship ; and in that case there can be no doubt that the ship should make compensation for the loss.^ Supposing a sale of the cargo in a port of distress, there would be no loss and therefore nothing to be contributed for, if it broiight as much as it would have brought had it reached safely its port of destination. For there is then no diminution of value, and nothing to be contributed for. If the loss be considered as stand- ing on the same ground with that of jettison, it might be difficult to avoid the conclusion to which Mr. Stevens comes.^ We appre- ' The following case seems to illus- trate and support this principle. The United Insurance Company were in- surers on the cargo and freight, and S. and twenty-two others were separate insurers on the ship, on a voyage from New York to Savannah, and from thence to Kingston in Jamaica. The ship was captured on her voyage, and carried into Porto Kico. Abandon- ments were made to the insurers on the cargo and freight, and to the separate underwriters on the ship, which were accepted respectively, and the sums insured paid as for a total loss. The ship was afterwards liberated, and proceeded to her port of destination, and there delivered her cargo, of which the master and T. were joint consignees. The whole of the net proceeds of the cargo were applied by them to defray the expense of the necessary repairs of the ship, and also for arming her, &c. In an action by the United Insurance Company against S., as part owner of the ship, for the net proceeds of the cargo so taken and applied for the repairs, &c., it was held, that, after the abandonment and acceptance, S. was separately answerable, and not as joint partner with the other insurers on the sTiip, for a proportion of the net pro- ceeds of the cargo, applied to the neces- sary expenses of repairing the ship, but not for arming or increasing her com- plement of men ; and the sum that he was to pay was to bear the same pro- portion to the whole sum so applied that the sum subscribed by him to the policy bears to the whole amount underwritten on the ship. United Ins. Co. v. Scott, 1 Johns. 105. ^ Stevens & Beneck^ on Av. (Phil, ed.) 71. Mr. Stevens here says : "But the question has arisen, — where there is a. profit on the sale of the goods in- stead of a loss, — who is to have the benefit of it ? This question is readily answered if we treat the case on the broad ground of considering it as a jet- tison, and by which we shall put the proprietor in the same situation as the proprietors of the other part of the cargo, viz. by paying him the estimated proceeds at the port of discharge, as if his goods had arrived. Thus, it is sub- mitted, that the parties who would have borne the loss ought to receive the profit ; and which will be done by de- ducting the proportion of the amount from the average charges, in precisely the same manner as the proportion of the loss is always added to them. For, it may be asked, on whose account, or rather on what account, does the master dispose of the goods ? The answer is, certainly not on account of the proprietor of them. He is guar- anteed against all possible loss, and therefore he can have no concern with 252 THE LAW OF MAEINE INSURANCE. [CH. V. hend, however, that it is not to be considered, as far as this ques- tion goes, as quite the same thing as a loss by jettison. If the property of the shipper is taken and sold, and the sale is justified by necessity, the master acts as a quasi agent of the shipper, his agency springing from the necessity. And we should say that the shipper is entitled to the whole of the price which his goods bring, subject, in certain cases, to the requirement of contribu- tion. If they bring less than they would have brought if they had arrived at the port of destination, we think he has a right to claim compensation from those for whose benefit he suffered this loss. Nevertheless, if they bring more, we do not think that the owners of the other interests have a right to any part of his profit. If all his goods are sold, the shipper saves nothing for which he could be called upon to contribute. But if a part only be sold, and the rest are carried forward by means of the money so raised, he is now benefited by the sale, and should contribute accord- ingly. Section VIII. — What Expenses come into General Average. Hitherto we have considered only cases in which property was actually destroyed or sold and was contributed for. It is, how- ever, a well-settled rule of the law of general average, that extraor- dinary expenditures for the common benefit are to be contrib- uted for. But the cases turning upon the question, what are such expenses, are very numerous ; and there is no part of the law of general average which has been more frequently litigated, and in regard to which the law and the practice are even now more uncertain. It is, however, quite certain that there must be, here as else- tlie event of the sale. The master in judges of the Court of King's Bench is fact, having no other means of raising contrary to this ; but it is submitted money, takes these goods indiscrimi- with great deference that it is on mis- nately from the rest of the cargo, and taken grounds : that learned person disposes of them for the general benefit supposing that the owner of the ship of all concerned, for the purpose of set- would put the profit in his pocket, and ting the ship forward on her voyage ; thus that the case might occur where and, by treating this as a jettison, justice the master of the ship (his servant) is done to all parties. We are aware might dispose of the cargo for his bene- that the opinion of one of the learned fit." CH. v.] GENERAL AVERAGE. 253 where, . a sacrifice which is voluntary, necessary, and effectual. But it would seem that not only those expenses are to be contrib- uted for which are directly consequent upon or connected with the voluntary destruction of property, but that there may be cases in which expenses by themselves constitxite a general-average loss.^ ' It was held in Padelford i>. Board- man, 4 Mass. 548, that repairs generally do not go to the account of general average. See also Boss v. Ship Active, 2 "Wash. C. C. 226; Jackson v. Clar- nock, 8 T. R. 509; Emerigon, ch. 12, § 41 (Meredith's ed. p. 481). In Brooks V. Oriental Ins. Co., 7 Pick. 259, the vessel, having received damages in a storm, was partially repaired at the Ba- lize. These repairs were considered by the court to be strictly necessary, and to be of no value to the vessel after her return home. Speaking of the general question, the court said : " As to the third question, it is contended for the defendants, that the temporary repairs should be charged to general average; and we are referred to Plumer v. Wild- man, 3 M. & S. 482, which in several particulars resembled the case at bar. The ship had been run foul of, and so much damaged as to make it necessary to return to her port to repair, to enable her to perform the voyage ; and she was afterwards completely repaired at the end of the voyage. The expenses of repairs which were made abroad, which were strictly necessary to enable the ship to perform her voyage, were placed to the account of general average. Bayley, J., doubted whether the repair of any particular damage could be placed to the account of general aver- age, inasmuch as it is a benefit done to the ship. .The court considered those repairs only under the account of gen- eral average which were absolutely necessary for the enabling of the ship to pursue her voyage ; and all beyond were set down to the account of the ship. Therefore, deducting the ben- efit, if there be any, which still results to the ship from the repair, the rest may be placed to the account of general average." In Hassam v. St. Louis Perpet. Ins. Co., 7 La. Ann. 11, the vessel was injured by a storm, and put into a port for repairs. It was agreed that the voyage could not have been completed without the repairs ; that the cargo could only have been sold at a great sacrifice, and that no means of transshipping and sending it on presented themselves ; yet the court held that the expenses thus necessarily incurred were not the subject of general average. In Sparks v. Kettredge, 9 Law Reporter, 318, Spiagite, J., said: " Often the right of the master to detain a cargo while he makes repairs is a burden upon the shipper, and is of no benefit to him, except in extraordinary cases; as where no other vessels can be procured to take it, and the cargo would perish or be of no value if left. In such a case, if the expenses of repairs exceed the benefit to the ship-owner therefrom, it is manifest that such excess should be paid by the cargo, if incurred for its benefit; but whether such payment should be made by general average or payment of the whole excess, there seems to be some diversity of opinion.'' Expenses incurred in raising a sunk- en vessel, not for the purpose of saving the boat and crew and cargo from a common danger, but for the mere pur- pose of getting up the boat, so that she might be repaired, are not general aver- 254 THE LAW OF MARINE INSURANCE. [CH. V. As, for example, cases of capture and ransom or other expenses for release, and expenses for necessary repair, would frequently belong to tliis class. In a previous part of this chapter we have spoken of a question, as frequently arising, and sometimes difiBcult, whether the loss was one of intentional sacrifice for the common benefit, or arose only from the ordinary perils of navigation. Closely analogous to this qiiestion is another, — also difficult and of frequent recur- rence, — arising from the duties and obligations of the owner and master as to the sea- worthiness and .proper navigation of the ship. Nothing can be more certain than that it is the duly of both owner and master to keep the ship always in a condition of sea- worthiness, as far as this is possible, and to provide and to do all that belongs to her proper navigation ; and for all this the owner is paid by his freight. That the discharge of this duty is for the common benefit constitutes no reason whatever why the owner should be paid therefor, in the whole or in any particular, otherwise than by his freight. It becomes then important, and is often difficult, to discriminate between expenses, on the one hand, which were incurred for the common benefit, but nevertheless be- longed to the navigation of the vessel, and are, therefore, within that duty of the ship-owner which arises from his obligation to carry the goods safely to their destination, and which are tlierefore not within the law of general average, and, on the other hand, expenses of a similar character, which were incurred because an extraordinary peril, which involved all the property in a common danger, made these expenses necessary for the benefit of all the property. Thus a vessel must often take a pilot, or it may need to be towed into a port, or money must be paid for anchors, or cables, or provisions, and the vessel mxist be kept in good repair, and dur- ing the repair it may be necessary to hire people to guard prop- erty, or to remove obstructions by ice or otherwise. These charges age. Firemen's Ins. Co. v. Fitzhugh, 4 to the general average. Orrok v. Com- B. Mon. 160. monwealth Ins. Co., 21 Pick. 456, 469. The expense of employing extra sea- See Da Costa v. Newnham, 2 T. R. 407, men in pumping, and navigating the Barker v. Phoenix Ins. Co., 8 Johns, vessel from the place where she was in- 307; The Copenhagen, 1 Rob. Adm. jured to a port of necessity, is a charge 289, 294. CH. v.] GENERAL AVERAGE. 255 and others of a similar kind are not to be contributed for when they occur in the ordinary course of navigation, but they are to be con- tributed for when they are made necessary by an extraordinary peril common to all the property. A test very commonly applied to determine this question is, whether they occur in a port of distress. It is not enough, however, to bring these expenses within general average, that the ship was obliged to deviate from her course and go into this port ; for the necessity may have arisen from the insufficiency of water or pro- visions', or of the sails or spars. This would he the fault of the ship, and the expenses must be borne by the ship only. Such charges as we have above enumerated constitute a general-average loss only when the ship was driven into this port of distress by an ex- traordinary peril. A recent case in England is quite instructive on this subject. A clipper sailing ship of 2,000 tons, with an auxiliary steam screw of 130-horse power, and carrying 550 tons of coal, sailed on a voyage from Australia to England. After eleven days she came in colli- sion with an iceberg, and suffered so much damage in her masts and upper works on one side as practically to have lost all power of sailing. She reached Rio de Janeiro under steam alone, having nearly exhausted her stock of coal. The repairs necessary to re- store her sailing powers would have cost at Rio many thousand pounds more than in England, and would have occupied several months, and the cargo would have had to be unshipped and ware- housed. The captain, therefore, had only temporary repairs done (which took three days), sufficient to enable him to complete his voyage under steam alone ; and in order to do this he had to pur- chase coal at Rio and again at Payal. The voyage having been accomplished under steam alone, the ship-owners sought to charge the cost of the coal against shippers of cargo as general average, either on the principle that the expenditure was a substitution, beneficial to all parties, for a greater expenditure, which the captain had a right to incur by repairing at Rio, and ought to be appor- tioned in the same way that the greater expenditure would have been, or as an exf;raordinary expenditure for the general advan- tages of all interests concerned. It was held, that, even assuming the repairing at Rio would have been justifiable, and any of the inci- dental expenses chargeable against the shippers as general average, 256 THE LAW OP MARINE INSURANCE. [CH. V. there was no legal principle on which expenses incurred by one course could be apportioned according to what might have been the facts if a different course had been adopted. Tlie court say further that the ship-owners, by their contract with the freighters, are bound to give the services of their crew and of their ships, and to make all disbursements necessary for this purpose. In the case of a vessel equipped with an auxiliary screw, their contract includes the use of tliat screw, and consequently the disbursements neces- sary for fuel for the steam-engine. The disaster which occurred caused the engine to be used to a miich greater extent than would generally occur in such a voyage, and so caused the disbursements for coals to be extraordinarily heavy ; but it did not render it an extraordinary disbursement. The case is said to be similar • to that of an ordinary sailing vessel, in which, owing to disas- ters, the voyage is extraordinarily protracted, and consequently the owner's disbursements for provisions, and for the wages of the crew, if they are paid by the month, are extraordinarily heavy. It is not similar to that of the master hiring extra hands to pump, when his crew are unable to keep the vessel afloat, or any other expen- diture which is not only extraordinary in its amount, but is in- curred to procure some service extraordinary in its nature. There was, tlierefore, no right to charge this item to general average.^ Among the expenses for which contribution is sought is that of paying and maintaining tlie crew while the ship is seeking the port where repairs may be made or supplies procured, and while the ship is necessarily in that port. The French authorities indi- cate that, in their country, the question whether the cost of wages and provisions is a general-average loss cannot be considered as settled.^ But if these expenses are incurred when the necessity for going into port was created by a loss which was itself a general- average loss, it seems to be conceded that the resulting expenses also come into average. ' Wilson 1;. Bank of Victoria, Q. B., the subject, is of the opinion that these Hilary, 1867, 2 Eng. L. Rep. 203. expenses are not to be contributed for. '^ Emerlgon, ch. 12, s. 41, § 5 (Mere- Lemonnier, Ass. Maritime, vol. 2, p. dith's ed.) 480, and Pardessus, art. 741, 107, 113, Paris, 1843. In this he is vol. 3, p. 228, contend that expenses at- supported by Boulay-Paty. These tending the delay, such as wages and authorities, however, admit that, if the provisions, are subjects of general-aver- , going into port was caused by a general- age contribution. On the other hand, average loss, the expenses there in- Lemonnier, who has critically examined curred are to be contributed for. CH. v.] GENERAL AVERAGE. 257 But it is a question whether this is tlie case when the original loss is not one of general average. For example, if a storm blows away the mast,' it is certain that this loss is not one of general average, but it may make it necessary for the vessel to bear away and seek a port of repair ; and this is done for the safety of ship and cargo. And it is then a question whether the wages and provisions are to be contributed for. In England the law seems to be not en- tirely settled,! but the latest authority, which, however, is only a dictum, would lead to the conclusion that in such a case the wages and provisions and other expenses of the detention do not con- stitute a general average loss, as the repairs themselves certainly would not.^ In this country, by the decided weight of authority^ although not without some exceptions, these expenses would come under the law of general average from the time the vessel bore away for her port of repair, provided only that it was necessary, for the safety of ship and cargo alike, that the repairs should be made, whether the injury which created the necessity was or was not it- self within the law of general average.^ This may be regarded, we think, as the settled doctrine and prac- tice in this country. "We shall give the authorities on this ques- ' Lateward v. Curling, G. H. Sittings and provisions of the crew, and other after Trin. 1776, Park on Ins. (8th ed.) expenses during the detention, are to 288 ; Fletcher v. Poole, Sittings after be contributed for in general average, East. 1769, Ibid. 115; Eden v. Poole, but otherwise not. Sittings after Hil. Ibid. 117; Robertson ' Walden v. Leroy, 2 Caines, 263^ V. Ewer, Ibid. 117 ; S. C, 1 T. K. 127 ; Thornton v. U. S. Ins. Co., 3 Fairf. loO ; Da Costa v. Newnham, 2 T. E. 407 ; Henshaw v. Mar. Ins. Co., 2 Caines, Plummer v. Wildman, 3 M. & S. 482 ; 274 ; Padelford v. Boardman, 4 Mass. Power V. Whitmore, 4 M. & S. 141 ; De 548 ; Barker v. Phoenix Ins. Co., S Vaux V. Salvador, 4 A. & E. 420 ; Johns. 307, 318 ; Potter v. Ocean Ins. Sharp u. Gladstone, 7 East, 24 ; Beawes, Co., 3 Sumner, 27; Shelton v. Brig Lex Merc. 171. See post, p. 259, n. 1, Mary, U. S. Dist. Ct. Mass. 5 Law Re- where the question as to wages in case porter, 75 ; S. C, 1 Sprague, 1 7 ; Hause v. of capture is discussed. See also Dal- N. O. Mar. & F. Ins. Co., 10 La. 1 ; Clark glish V. Davidson, 5 Dowl. & R. 6. v. U. S. F. & M. Ins. Co. 7 Mass. 365 ; " Hallett V. Wigram, 9 C. B. 580. Peters v. Warren Ins. Co., 3 Sumner, The dictum in this case is to the effect 400 ; Ross v. Ship Active, 2 Wash. C. that, if the injury which led the vessel C. 226 ; Bixby v. Franklin Ins. Co., 8 to seek a port of refuge was itself a sub- Pick. 86, more fully reported in 3 Sura- ject for general average, then the wages ner, 46, note. VOL. II. 17 258 THE LAW OF MARINE INSURANCE. [CH. V. tion more fully when treating of the adjustment of general aver- age. In one case in Massachusetts where a ship went ashore in a storm, and was got off and repaired, it was held that the wages and provisions during the time of repair did not constitute a general- average loss.^ This case would seem to be opposed to the prevail- ing rule in Massachusetts. The principal reason given seems to be, that, as the crew had not been discharged, their wages and pro- visions were furnished to them by the ship-owner under his gen- eral duty. A better reason might have been that the vessel was repaired in the port in which or near which she had been stranded, and there was therefore no voluntary putting away for a port of repair.^ The case, however, certainly seems to differ from the current of Massachusetts authority, and if it is to be considered that the expense of repair and service is excluded from general average because the service is rendered and the repairs are made in whole or in part by the crew of the vessel, we cannot think that this conclusion accords with the prevailing rule of this country. The dif&culty no doubt is that of distinguishing between cases in which the master does only his duty in repairing the 'vessel, and the crew do only their duty in helping him, and those in ' Giles V. Eagle Ins. Co., 2 Met. 140. tinction may appear somewhat hyper- ^ The case therefore comes within critical, yet it seems to us to be the only the exception pointed out by Mr. Justice one by which the authorities can be Sewall in Padelford v. Boardman, 4 reconciled ; and, moreover, it is fully Mass. 548, 552. See also Spafford v. justified by the language of the court Dodge, 14 Mass. 66, 74. The answer in Greely v. Tremont Ins. Co., 9 Cush. to this will probably be, that, since the 415, 421. In Gazzam v. Cinn. Ins. Co., court allowed the wages of the other 6 Ohio, 71, it was held that where a persons hired to get the vessel off, this vessel, insured on a time policy, was showed that the expense was considered stranded on a rock, the wages of the as a general-average one. This is owing crew during the detention were not the to a confused understanding of the subject of a general-average contribu- phrase " general average." Such an ex- tion, the crew being retained under pense was not, strictly speaking, a gen- their original agreement. But where eral-average expense, there being no a vessel was purposely run ashore, in voluntary sacrifice ; but, the expense order to save the cargo, it was held having been incurred in consequence of that the wages of the crew while em- a direct peril of the sea, a liability was ployed in laboring for the joint bene- thereby imposed upon the interests bene- fit of the adventure were a proper fited, somewhat similar in its nature to charge in general average. Barnard a general average. Although this dis- v. Adams, 10 How. 270. CH. V.J GENERAL AVERAGE. 259 which the crew are called upon by extraordinary circiimstances to do extraordinary work. If a vessel be captured, the expenses incurred in efforts to recover the property, ■ together with those necessarily caused by the delay, constitute a general-average loss.^ If the crew are ' Upon the point whether expenses not (as in the cases of embargo and incurred during a detention by capture are the subject of general-average con- tribution, the authorities are in conflict. Magens says, p. 67, that wages have been allowed to be general average, as well in London as elsewhere, when the continued employment of the seamen is with the sole view of being enabled to prosecute the voyage immediately on the ship being cleared. Marshall, p. 464, and Park, 287, citing Beawes, 150, concur in this view. Benecke, on the contrary, holds that these expenses are by the nature of the subject particular average, as none of the particulars req- uisite to constitute a general average exist, the detention not being the free determination of the master and crew, and it not being considered as a meas- ure adopted for the benefit of the whole that the crew are retained in service, since the captain owes the services of the seamen to the shippers during the whole of the voyage, however protracted by accidental causes. Benecke on In- surance, 234. In Kingston v. Girard, 4 Dall, 274, the court says : " Whether the extraor- dinary expense incurred for seamen's wages, provisions, &o., during the deten- tion of the vessel, upon a capture as prize, is a subject of general average, forms an important question It is, upon the whole, a safe and the best rule to consider whether the expense is incurred for the general benefit of all the parties interested in ship, cargo, and fi-eight. If it is, then all the parties should contribute to defray it. If it is quarantine, where the delay and ex- pense are submitted to merely that the vessel may earn her freight), then the party who alone enjoys the benefit should alone sustain the loss." Where a vessel, chartered for a voyage at a certain hire by the month, was captured as prize, but afterwards re- stored, it was held that the costs and charges paid by the hirer in procuring the restoration of the vessel and cargo should be allowed as a general average on vessel, cargo, and freight, according to the value of each at the place of de- tention, but that the wages and provis- ions of the crew during the detention should be excluded. Spafibrd v. Dodge, 14 Mass. 66. As to wages and provis- ions during capture, Mr. Justice JacJcson, in Spafford v. Dodge, states the law as follows : " As to the wages and provis- ions of the crew during the detention, we are unable, notwithstanding the very respectable authorities cited in support of this claim, to see any ground on which we can allow it, consistently with the established principles on this sub- ject and the course of decisions in this State. The only case in which this charge has been allowed in an account of a general average in our courts was where it was necessary to go into port to repair damages sustained during the voyage from the perils of the sea ; and the master, for that reason, voluntarily sought a port to refit. Here, it is to be observed, the delay was voluntarily incurred by the master ; the mind and agency of man were employed in produ- 260 THE LAW OF MARINE INSURANCE. [CH. V. detained during a delay caused by such a necessity, that the mas- ter may have his crew ready for prosecuting the voyage if his ship cing it ; and this circumstance is deemed essential in every case of general aver- age, in contradistinction to such unar voidable detentions and losses as arise from accident beyond the control of the master. We see no ground of distinc- tion , in this respect, between a tempo- rary detention occasioned by a hostile seizure, and one which is occasioned by an embargo, or by a tempest, or other common peril of the sea The ship-owner might as well claim a contri- bution for the wear and tear of his ship during the detention, or the owner of the cargo for the interest of his money, for the deterioration of his merchandise, or for the loss of a market, by the delay, as the owner of the freight for the ex- traordinary wages and provisions ex- pended on such an occasion." The point has, however, been generally decided otherwise. See Leavenworth v. Delafleld, 1 Caines, 573; Hurtin u. Phce- nix Ins. Co., 1 Wash. C. C. 400. In Pen- ny V. N. Y. Ins. Co., 3 Caines, 155, Liv- ingston, J., who gave the opinion in Leavenworth v. Delafield, draws a dis- tinction between an embargo and a cap- ture. He says that a capture dissolves the contract, while an embargo does not, and that, therefore, in the latter case the seamen are under obligations to re- main by the vessel, while in the former they are at liberty to depart, and if they remain, this is a voluntary act on their part, and their wages and provisions, therefore, are a subject of general-aver- age contribution. Ricard, in his work on the commerce of Amsterdam, cited in Penny v. N. Y. Ins. Co., assigns nearly the same reason for this distinc- tion, as follows : " The wages of a ship, detained by an order of state, shall not be brought into general average as in case of capture ; because in the latter case the crew remain to take care of the vessel whilst she is reclaiming, and these charges are occasioned with the sole view of preserving the ship and cargo for the proprietors; but there is no room for such pretence in the case of an embargo ; as the sovereign who lays it neither claims the ship or cargo, but only for political reasons prevents their immediate departure. ■ Therefore, it can- not be said that the ship's company re- mained on board to prevent an entire loss." This distinction is shown to be inoon^ect in Spaffbrd v. Dodge, and it is there held, that the contract is no more dissolved in the one case than in the other, and in support of this proposition the court cites Brooks v. Dorr, 2 Mass. 39 ; the opinion of Lord Kenyan in Pratt v. Cuff, cited in 4 East, 43 ; of Lord Eldon in Beystrom v. Mills, 3 Esp. N. P. Cases, 36, and other au- thorities. In the case of The Nathaniel Hooper, 3 Sumner, 542, 557, since ad- judicated, Mr. Justice Story expresses an opinion in accordance with that in Spafford v. Dodge. The law laid down in Massachusetts seems, therefore, to be more consistent and better founded on principle than the New York doctrine. It has, however, been suggested by an eminent writer on this subject (see Wal- den V. Le Koy, 2 Am. Leading Cases, 1st ed. 404, 424, where the question is fully and learnedly discussed), that the inquiry is not whether a capture, under ordinary circumstances, terminates a contract of affreightment, but it is said, that " general average has its origin in the intervention of a vis major, intro- ducing a new set of relations into the CH. v.] GENERAL AVERAGE. 261 be released, this would raise a somewhat different question. Still we should be inclined to say that their wages and provisions contract for the time being, apart from the effect which it may have in abro- gating it altogether ; and that, whenever this is the case, a sacrifice, voluntarily made for the benefit of all, will render all liable for contribution, whether the party making it were or were not bound to pursue that course, in pursuance of the general duties of his position, or un- der the express or implied provisions of any previous contract." In support of this view, the illustration is given of a master being bound to cut away the masts or slip the cables of his vessel, if such a course were necessary to prevent the ship and cargo from being stranded or otherwise injured by any great dis- aster, " and yet," it is said, that " it has never been supposed that because his action, in this respect, was done in dis- charge of the obligation imposed by his position, the owners of the cargo were entitled to deny the character of gen- eral average to the loss thus occasioned, or to say, that, if what had been done were necessary for the safety of the cargo, it was done in pursuance of the prior obligations of the master and owner ; and, if it were not, that no con- tribution could be claimed for a sacri- fice which had not been beneficial." Where a ship was captured for a sup- posed breach of blockade, libelled, and condemned, and the owner appealed from the sentence, and the same was reversed, it was held that the expenses incurred by him on the two trials in the courts of admiralty constituted a gen- eral average. Dorr v. Union Ins. Co., 8 Mass. 494. The wages of the master and crew during a forcible detention with a hos- tile purpose, though not a capture, give a claim to general average. Sharp v. Gladstone, 7 East, 24. In this case Lord Ellenhorough re- marked, that "it was for the interest of all that the ship's crew should be kept in a state to navigate her home with the cargo ; and, if for the benefit of all, was it not fair that the expense should be divided proportionably ? " In France the extra wages of a crew, when a vessel puts into port and re- mains there to avoid an enemy, are a gross average. 1 Emerigon, 556. In cases of capture, the additional freight becomes gross average, and falls upon the ship and merchandise. Cleirac, Jugemens d' Oleron, art. 4, n. 4. The expenses incurred in endeavors to pro- tect and reclaim captured property prior to the time of the composition made by the captain are to be appor- tioned upon the principles of a general average. Jumel v. Mar. Ins. Co., 7 Johns. 424. In Leavenworth v. Delafield, 1 Caines, 573, where the question was whether wages and provisions, during a deten- tion after capture, formed a general average, Mr. Justice Livingston said : " When it is considered that capture is a disaster which generally happens without fault of the owner of goods or vessel, but by superior force, against which no human precaution can always provide, and that the expenses here in dispute are incurred in consequence of this vis major, or casus fortuiius, and for the common benefit of all, it is not easy to assign a reason why they should be borne by one of the parties in mis- fortune rather than another." The payment of salvage upon a re- capture, being for the benefit of all 262 THE LAW OF MARINE INSURANCE. [CH. V. should be contributed for in the same way and on the same ground as where a vessel is compelled by some extraordinary peril to seek a port of repair. Some question has been made, whether, when the master did in fact retain the crew for the purpose above stated, but might have discharged them and obtained a new crew when ready to sail, the wages and provisions were then to be contributed for. We think, however, that the question of discharge or detention is one within the master's power and discretion, and if he exercised this discretion honestly, as the best thing he could do for all concerned, the circumstance that he might have discharged the crew would not have prevented these expenses from coming under general average ; although an unquestionable waste of money, by this detention, might have the effect of throw- ing this expense on the ship alone. In a case where three months' extra wages were paid under direction of the American Consul at the Isle of Prance by reason of his mistake of the law, it was held that this expense was not a charge of general average. ^ And if they are retained by the master only because he erroneously thought that his contract with them bound him to do so, and not as a measure proper for the safety of the ship and cargo, then their wages and provisions do not come within general average. In one case mentioned by Mr. Phillips,^ where a vessel that had met with sea damage did not go to a port of repair, but received carpenters from a public ship, and delayed some days at sea to make the repairs, the insurers in Boston paid the expenses of this delay without objection ; not distinguishing the case from one where the vessel goes off her course to a port of repair. And a case is cited by Magens, where a vessel, having sought a port of repair, was frozen in there, and the expenses of the detention by the ice were a part of the general average.^ persons concerned in ship, cargo, and frozenupbyaftost'ssettinginsoonerthan freight, falls within the rule of general- exp&cted, sailors' wages and victualling average. Samson v. Ball, 4 Dall. 459. for the time she is frozen up are not to ' Dodge V. Union Mar. Ins. Co., 17 be made good by a general average, Mass. 471. but are to be borne by the ship alone ; ' 2 Phillips, Ins. 104. but that the extraordinary labor of the ' 1 Magens, 67. He says, however, that sailors in cutting the ice away from the when a ship is accidentally surprised and vessel, either to ease or to get her out, as CH. v.] GENERAL AVERAGE. 263 If the vessel be stranded not voluntarily, and expenses are incurred for getting her off, and the effort is unsuccessful, the ship alone pays for that. If the vessel* be got off, then are these expenses to be contributed for ? As it was the duty of the master to keep the vessel off the shore if he could, is it not as plainly his duty to get her orf if he can ? So, if he accidentally loses an anchor, or a sail is blown away, or a spar, or many sails and many spars,- the extent of his duty, but not its character, is changed. And if the vessel is on shore, and he can get her off and carry the goods to their destination, is it not simply his duty to do so, and is not the cost of doing it his loss ? So it may be argued, and our notes will show that there is some conflict in the au- thorities. Perhaps it may be said that the tendency of the American courts and of the American practice is to consider these expenses as a general-average loss ; while that of the English courts is to charge them to the ship alone. Here, as in some other questions, the English courts seem to construe the duty and obligation of the owner and master more strongly against them than do the coui'ts of this country. ^ it is for the common benefit, ought to held that the one hundred and fifty-five be allowed in a general average. tons were liable to contribute in general ' In Bedford Com. Ins. Co. v, Parker, average to the twenty-six hundred dol- 2 Pick. 1, a ship insured was accident- lars, and that the rest of the iron was ally stranded within a few miles of her not; that the contract with B, having port of destination. A, the owner of been made hona fide, was binding on the cargo, which consisted of iron, saved the parties to the contribution, and that part of it at his own expense. The A should not be allowed to show that insurers afterwards sent men on board, the iron might have been saved for a who endeavored without success to get less sum than his proportion ; and that the ship off, and at the same time the aid rendered by A's men to those of men employed by A saved forty tons the insurers might be set off pro tanto more of the iron- The two parties of against any claim for compensation for men acted separately, though sometimes assisting to save the forty tons, assisting each other. After this the in- If a ship and cargo are stranded, and surers contracted to pay B twenty-six at high water submerged, and aban- hundred dollars, if he would get the ship doned to the underwriters, who decline off, and A agreed that they might offer to accept the abandonment, but raise B six hundred dollars for saving the the ship, take her to her port of destina- iron, provided the ship should not be tion, being the most convenient port saved. B got the ship off, and brought for repairs, and deliver her cargo to the her to the wharf with one hundred and consignees, the cost of raising the ship fifty-five tons of iron on board. It was and bringing her in is not a general- 264 THE LAW OF MAEINE INSURANCE. [CH. V. The cost of the repairs themselves always rests on the ship only, unless they were of a temporary nature, and were made for the sake of the cargo,- and were of no further use or benefit to the ship itself, leaving it as necessary as before to. make thorough repair afterwards.^ average charge, and is to be computed in estimating a constructive total loss. Ellicott V. Alliance Inj. Co., 14 Gray, 318 ; Sewall v. U. S. Ins. Co.,' U Pick. 90. average, but to particular average on the ship alone. The. court, however, in this case says : " All expenses incurred from the misadventure, till all the Where a vessel was stranded, and cargo has been discharged, confessedly constitute a general average We do not say there may not be a case where, after the fortuitous stranding of the ship and the cargo, unloaded, the expenses voluntarily incurred by the owners of the ship to get her off, and enable her to complete the voyage whereby the cargo, which must other- wise have perished, is carried to its destination, may be general average ; as the stranding of a ship with a perish- able, cargo on a desert island in a dis- tant region of the globe.'' InMcAndrews v. Thatcher, 3 Wallace, 347, 367, infra, p. 266, n. 1, the court said, upon the point under considera- tion : " The settled rule is, that when a vessel is accidentally stranded in the course of her voyage, and by labor and expense she is set afloat, and completes her voyage with the cargo on board, the expense incurred for that object, as it produced benefit to all, so it shall be a charge upon all, according to the rates apportioning general average." See also Dilworth v. McKelvy, 30 Mo. 149, supra, p. 205, n. 1. See Wilson u.[Bank of Victoria, supra, Q. B. Hilary, 1867, 2 Eng. Law Eep. 203. ' 3 Kent, Com. (5th ed.) 235, 236 Padelford v. Boardman, 4 Mass. 548 Ross V. Ship Active, 2 Wash. C. C. 226 Jackson v. Charnock, 8 T. E. 509 Emerigon, ch. 12, § 41 (Meredith's ed. p. 481) ; Brooks v. Oriental Ins. Co., 7 lighters and men. were, by the agree- ment and consent of all parties, sent to endeavor to save the property, and the vessel was lost, except a few materials, but the cargo was saved and delivered to the consignees, it was held that the expenses of salvage, including the cost of lighters, &c., were general average, and that the insurers on the cargo were bound to pay their proportion of such average. Heyliger v. N. Y. F. Ins. Co., 11 Johns. 85. In Bevan v. Bank of U. S., 4 Whart. 301, where a vessel was stranded and ice-bound in a situation of imminent peril, and a portion of the cargo, con- sisting of specie, was carried over the ice to the shore and by land to its des- tination, and delivered to the con- signees, and, some weeks afterwards, the vessel- arrived in safety with the remainder of the cargo, which had been in whole or in part discharged into lighters, and afterwards reshipped, it was held that the consignees were liable to contribute to the charges and ex- penses incurred after the landing of the specie, as general average. But in Job V. Langton, 37 Eng. L. & Eq. 178, and 6 El. & B. 779, it was decided, on the con- trary, that the expenses of getting off a stranded ship after the cargo was trans- shipped and conveyed to its destination, and of conveying her to a port for repairs, were not chargeable to general CH. V.J GENERAL AVERAGE. 265 It is a universal rule in reference to the question, what ex- penses come under general average, that where these expenses are inciirred for the exclusive benefit of any part of the common property, that alone is liable for them.^ Andfif expenses are incurred for a common benefit, and thereafter goods which are. Pick. 259 ; Plummer v. Wildman, 3 M. & S. 482. In the ca.se last men-' tioned, Mr. Justice Bailey said : " I doubt whether the repair of any par- ticular damage could be placed to the account of general average, inasmuch as it is a benefit done to the ship, and if the captain could make it a general average by putting into port to repair, it would always be his interest to en- deavor to do so. If, however, the re- pairs were merely such as were neces- sary to enable the ship to prosecute her voyage home, and were afterwards of no benefit to the ship, such repairs, I think, would properly come under a general average. Therefore, deduct- ing the benefit, if there be any, which still results to the ship from this repair, the rest may be placed to the account of general average.'' In a recent case, that of Dyer v. Pis- cataqua F. & M. Ins. Co., 53 Me. 118, 122, the court speaks as follows: "To make property a subject of general av- erage, it must have been sacrificed to avoid an impending peril, and for the benefit of all concerned. In this case it was sold to repair damage caused by a peril passed, and not for the benefit of all parties, but of one only. As we have already seen, it was the duty of the ship-owner to make these repairs, and, what is quite as important in its bearing upon the question under con- sideration, the repairs made were per- manent, such as were needful to the vessel, and of which the owner finally had the sole benefit. If the repairs had, from the necessities of the case, been merely temporary in their nature, made for the sole purpose of enabling the ves- sel to proceed to a place of safety, or where repairs could be made to better advantage, or if the money had been raised to pay the expenses caused by detention on account of a peril insured against, such as wages and provisions of seamen, loading and unloading of the cargo, or any other things from which the owners of the vessel received no particular advantage, but which were alike beneficial to all, and contracted to avoid threatening danger, such repairs and expenses, and the cargo necessarily sold to pay for such, would undoubtedly be the subject of general average. This distinction properly applied, it is be- lieved, will reconcile all the authorities upon this question, although they are apparently somewhat contradictory." ' Vandenheuvel v. United Ins. Co., 1 Johns. 406 ; Jumel v. Marine Ins. Co., 7 Johns. 412 ; Peters v. Warren Ins. Co., 1 Story, 463, 469. In illustration .of this principle, Mr. Justice Story says, in Pe- ters V. Warren Ins. Co. : " If there should be a capture of a neutral ship, solely on account of the cargo, which is owned by different persons, who are shippers, if no proceedings are had against the ship, but are against the cargo only, the ex- penses occasioned thereby will be appor- tioned upon the owners of the cargo, and are bilt a partial loss thereof, and not a general average ; for such expenses are not for the benefit of the ship or freight, which, therefore, do not contrib- ute thereto." 266 THE LAW OF MARINE INSURANCE. [CH. V. liable to contribution are landed, and delivered to the shipper or consignee, these goods are not liable for contribution for further expenses subsequently caused. We think this the obvious result of the principle* of general 'average, although there is an Amer- ican case which seems to hold an opposite doctrine.^ ' Bevan v. Bank of U. S. supra, p. 263, n. 1. This case seems to stand alone, the current of authorities sup- porting the principle stated in the text. The earliest case in which the point was involved was that of Shep- pard V. Wright, Shower's Parliamentary Cases, 18, which was an appeal from a decree of dismission of a bill in the Court of Chancery. The ship of the appellants sailed from Messina for Lon- don, laden with silk and oil, and on the voyage was chased into Malaga by an armed vessel. The latter, after- being in sight three or four days, stood in for the port, as if designing to make an at- tack on the fort, whereupon the master advised the factor of the ship-owners of the danger, who sent him lighters, to save what he could of the cargo. Be- cause the silk was of the greatest value, it was put on board the lighter first, with a small portion of the oil, and car- ried ashore. At night the French ves- sel left the port, whereupon no more was landed. About six days afterwards, the French fleet appeared again before ■ Malaga, and, notwithstanding the efforts of the seamen, took the ship and car- ried her away. The silk was afterwards put on board another ship and delivered to the respondents at London, for which they paid the freight, &c. The appel- lants, being the owners of the ship and oil, brought their bill against dhe re- spondents, who were the owners of the silk, to compel contribution. But the Court of Chancery dismissed the bill, and the decree was affirmed upon ap- peal by the House qf Lords. The ground of the decree was, that the ap- pellants' loss did not save the silk. The whole adventure was saved from the first peril, and the silk was not exposed to the second, by which the ship and the oils were lost. The court in Be- van V. Bank of the U. 8., commenting upon this case, remarks : " The decree may be correct, because it is perfectly clear that the safety or the preservation of the silks was not owing to the loss of the ship and the oil, or of either." It is difficult to see why the same reason would not defeat the claim for contribu- tion in the case then before the court ; for it is clear that the preservation of the specie was not owing to the ex- penses incurred after it had been landed. In the case of Job v. Langton, 6 El. & B. 779, S. C, 37 Bug. L. & Eq. 178, a ship, having sailed from Liverpool with a cargo on board, accidentally went ashore on the Irish coast. In order to get her off it was necessary to discharge the whole of the cargo, which was ac- cordingly taken out and placed in store in Dublin. The ship was then got off by digging a channel for her, and em- ploying a steam tug, and was towed to Livei'pool to be repaired. The cargo was shipped in another vessel, and for- warded to its destination ; but, for the purposes of the case, was to be consid- ered as having been carried on by the original ship after she had been re- paired. It was held, that the expenses after the cargo was in safety, in get- ting off the ship and towing her to Liv- erpool for repair, were not chargeable to general average, but to the ship CH. v.] GENEEAL AVEEA6E. 267 In a case in Massachusetts, where the. expense of floating the vessel after the cargo had been landed was charged to general alone. Lord Campbell, C. J., said : " We do not see how these expenses are to be distinguished from the ex- penses of repairing the ship when she had been brought to Liverpool, which, it is admitted, must fall exclusively on the owner of the ship or the under- writer on the ship, as particular aver- age. If the owner of the ship was to earn the stipulated freight by carrying the cargo to Newfoundland, it was his duty to repair her and to carry her to a place where she might be repaired. Mr. Blackburn's position, that, the end in view of every maritime adven- ture being the arrival of the ship with her cargo at her destination, extraor- dinary acts done to effectuate this give rise to general average, would justify him in contending that these ex- penses do not constitute particular aver- age; but, unfortunately for him, the expenses incurred in repairing the ship at Liverpool, according to this reason- ing, would equally be general average ; for the repairing of the ship was an ex- traordinary act which was necessary for the arrival of the ship with her cargo at Newfoundland, and was as much for the joint benefit of ship and cargo as bringing her to Liverpool from Malahide Bay. Under the circum- stances stated, after the cargo had been safely discharged and warehoused, it does not even appear that it was for the advantage of the owner of the cargo that the Snowdon should be got off the strand and repaired. Of course we do not, contrary to the intention of the parties, attach any importance to the fact that the cargo was forwarded in another vessel; and we shall give our decision as if the Snowdon, after being repaired, had carried the cargo to its ultimate destination. But, in the ab- sence of any statement to the contrary, we might infer (as the fact turned out to be) that there would be no difficulty in forwarding the cargo by another vessel In tbe present case the owner of the ship, after the cargo was discharged, appears to us to have done nothing except in the dis- charge of his ordinary duty as owner, and for the exclusive benefit of the ship. Notwithstanding some expres- sions of Lord Ellenhorougk in Plum- mer v. Wildmau, 3 M. & S. 482, 486, we consider it quite settled that, by the law of this country, the expenses of repairing the ship, or, after the cargo is safe, of bringing her to a place to be repaired, cannot, under such circum- stances, be made the subject of general average." The claim for general aver- age would seem to have been stronger in this than in the case of Bevan v. Bank of U. S., because here the cargo was considered as having been carried on by the ship after she had been re- paired ; the cargo and ship had not been separated, as in the latter case, before the expenses were incurred ; therefore it was for the interest of the cargo that these expenses should be incurred, which cannot be said of the latter case. In Moran v. Jones, 7 El. & B. 532, a ship was chartered to proceed from Liverpool to a for- eign port. She took on board an outward cargo and sailed. She was driven on a bank, by a storm, near Liverpool ; and the cargo was rescued from her, and carried to Liverpool, and there warehoused, the ship still remain- ing ashore in a situation of peril. Some days afterwards the ship was got off and taken to Liverpool, where she was 268 THE LAW OF MARINE INSURANCE. [CH. V. average, the decision may be accounted for, perhaps, by the fact that the circumstances of the case did not make it important repaired, and again took the cargo on board, and proceeded on .her voyage. The question for the court was, whether the expenses incurred, after the goods were in Liverpool, in getting the ship off, without which 'she could not have proceeded on her voyage or earned the chartered freight, were general average to which ship, freight, and cargo were to contribute ; or were chargeable to ship alone ; or were chargeable on any other principle. The court drew the inference of fact, that the whole saving of the cargo and ship was one continued transaction ; and, on that hypothesis, held that the expenses were general average to- which ship, freight, and cargo must contribute. The same re- marks apply to this case as to that of Job V. Laugton. The expenses were requisite to the continuance of the voy- age ; they were incurred before the cargo had reached its destination and become permanently separated from the ship ; it was therefore for the interest of the cargo that they should be in- curred. In Nelson v. Belmont, 5 Duer, 310, one of the questions raised was whether the specie which was trans- ferred to the Danish bfig was liable to contribution for the expenses and loss subsequently occurring. This question was there decided in the affirmative. Upon this point an appeal was taken to the Court of Appeals. The trial there is reported in 21 N. Y. 36. The de- cision of the court below was affirmed, but the court said : " My conclusion is, notwithstanding the case of Bevan v. The United States Bank', that if the owner of any portion of the cargo, even after a peril has occurred, and after a series of measures to avert it have been commenced, can succeed in so separat- ing his own property from the rest that it is no longer in any sense at risk, he cannot be held liable to contribute to the expenses subsequently incurred. But, in order rightly to apply this rule, it is necessary to ascertain the full scope of the term ' at risk.' Physical destrtiction, or direct physical injury to the ship or cargo itself, is not the only risk to which property so situated is exposed. Its value depends, or at least is supposed to depend, in some degree, upon the successful prosecution of the voyage. Whatever threatens the voy- age, therefore, is a peril to the entire property. Until that is broken up, un- less the property claimed to be exempt is not only separated from the rest, and put in a place of present safety, but entirely disconnected with the enterprise, it must be regarded as still at risk and liable to contribute. If the voyage is not abandoned, and the property, although separated from the rest and removed from the ship, is still under the control of the master, and liable to be taken again on board for the purpose of being carried to its destined port, the relations of the several owners are in no respect changed. The common interest remains ; and whatever is done for the protection of that common interest must be done at the common expense If the cap- tain of the Galena had put the specie on board the brig, not in any event to be returned to him, but to be taken by the brig to its own port of destination, and the latter had then been suffered to pursue its course, the specie woul/i clearly not have been subject to con- tribution for any subsequent expendi- tures to save the Galena. And not- withstanding the brig was employed to attend the Galena to Charleston, if CH. v.] GENERAL AVERAGE. 269 that the several interests should be treated distinctly and sepa- rately.-^ it had been distinctly understood be- tween the two commanders that the specie was committed entirely to the custody of the Danish captain, and was in no event to be restored to the care of the captain of the Galena, it would then also have been exempt. But the facts do not warrant this assumption. The case states that ' the specie was put on board the brig because it was safer there, as, in case the fire broke out, it might be too late to transfer it from the ship.' The brig was to ac- company the Galena to Charlestown, and there is nothing from which it can be inferred that it was the intention of the captain of the latter to relinquish his control of the specie.- The fact that he reclaimed and took it from the brig as soon as he arrived in Charleston tends strongly to the opposite inference. It never ceased, therefore, up to that time, to constitute a part of the cargo of the Galena ; and if the fire had been previously extinguished, and the voyage ' Giles V. Eagle Ins. Co., 2 Met. 140. This was an action on a policy of insur- ance by which the plaintiffs were in- sured on their ship and its appurtenances to be employed in the coasting trade, and back and forth on one or more fishing voyages, the insurers not to be liable for partial loss on any articles, or on vessel or freight, under five per cent, except- ing, in all cases, general average. The vessel went ashore in a storm, and the fish and barrels, and everything on board, were got on shore as soon as pos- sible, and a survey was called upon the following morning. The crew were not dismissed, but boarded on shore and board was paid for them, after the fish and barrels were landed. By the labor resumed, it would of course have been again taken on board and carried for- ward by her." In Bedford Com. Ins. Co. V. Parker, 2 Pick. 1, supra, p. 263, n. 1, Parker, C. J., said : " The owners of the cargo had a right to save as much of it as they could, and ought not to be held to pay, on account of what was saved, any part of the expenses which subsequently occurred." The court in Nelson v. Belmont quotes this passage, and remarks : " This decision, which has been uniformly approved, appears to me to be in strict accordance with the principles upon which the doctrine of general average rests." In a very recent case, that of Mc- Andrews v. Thatcher, 3 Wallace, 347, this question came before the Supreme Court of the United States and was set- tled in accordance with the authorities above cited. The facts were as follows : A ship was stranded near her port of destination, and the underwriters upon her cargo sent an agent to assist the of the master and crew, and the labor of others who were hired for the pur- pose, the vessel was got off and fitted to sail, and she returned to her home port. Part of the outfits were sold by the master, at the place where she went ashore, to raise money to pay for getting her off, &c., he having no other means for raising money for that purpose. It was held that the labor and board of the master and crew, while getting the vessel off, were not a general average, and that the insurers were not liable therefor, but that they were liable for the labor, &c., of the persons hired to assist the master and crew, and for the loss on the sale of the outfits, — these being a general average. 270 THE LAW OF MARINE INSURANCE. [CH. V. A ship may be detained for other causes than the necessity of repair ; and it may sometimes be dif&cult to determine whether master in getting her off. The master and agent made all proper efforts to do this, for two days, when, not succeeding, and the water increasing in the hold, they began to discharge the cargo in lighters, still making efforts to save the ship. The discharge of the cargo occu- pied four days ; by which time the whole of it was taken out — with the exception of a small portion in the lower hold which was overlooked — and taken to the ship's agents, who afterwards delivered it to its consignees, they giving the usual average bond. By the time that the cargo was thus all got off, the vessel, not assisted by being lightened, was settling in the sand, with the tide ebbing and flowing through her as she lay. The agent, considering her case hopeless, and the consignees of the ship having re- fused to authorize him to incur any fur- ther expense, now went away. On the next morning, and while the master was yet aboard, the underwriters on the vessel sent their agent, who got to work to float the vessel. Soon after the new agent came, the crew refused to do duty. The agent got new hands, and the crew went away. They were soon followed by the master, he leaving the vessel af- ter the new agent had been in charge of her for four days. After six weeks' labor, and an expenditure of money somewhat exceeding her value when saved, the new agent succeeded in float- ing and rescuing the ship. The rem- nants of the cargo, in a damaged state, were delivered to its consignees. This action was brought by the owners of the ship against the consignees of the cargo for contribution for the expenses incurred after the master went away ; but it was held that there was no ground for con- tribution, as it was considered that no community of interest remained be- tween the ship and cargo after the mas- ter left the ship. We make the follow- ing extracts from the opinion of the court : " It is an undoubted rule that goods, or any interest, are not liable to contribute for any general average or expenses incurred subsequently to their ceasing to be at risk ; because all that was not actually at risk at the time the sacrifice was made or the expense in- curred was not saved thereby, and no interest is compelled to contribute to the loss or expense which was not bene- fited by the sacrifice Where the whole adventure is saved by the master, as the agent of all concerned, the con- signments of the cargo first unladed and stored in safety are not relieved from contributing towards the expenses of saving the residue, nor is the cargo, in that state of the case, relieved from contributing to the expenses of saving the ship, provided the ship and cargo were exposed to a common peril, and the whole adventure was saved by the master in his capacity as agent of all the interests, and by one continuous series of measures Such are the undis- puted facts of the case, and, under the circumstances, it is not possible to hold that the ship, as subsequently got off, was, as matter of fact, saved by a con- tinuation of the same series of measures as those by which the cargo was saved. Complete separation had taken place between the cargo and the ship, and the ship was no longer bound to the cargo nor the cargo to the ship. Undoubt- edly the doetrine of general-average contribution is deeply founded in the principles of equity and natural justice, CH. V.J GENERAL AVEKAGE. 271 they come under the law of general average. A useful test is frequently found in the question, whether the delay or detention was voluntary, for, if not, there can be no average. It may be said that if a master is compelled by disaster to seek a port of repair, he has no choice ; this, however, is not true, for, if he chose, he might always attempt to go on his course with such means as he had. But if the ship is detained on her voyage by an em- bargo, there is no element of a voluntary sacrifice, and the weight of American authority, although it is not uniform, is against any claim for contribution for wages and provisions or other expenses caused by such detention.^ So if she was necessarily delayed by quarantine,^ or while waiting for convoy.^ but it is not believed that any decided case can be found where the liability to such contribution has been pushed to such an extent as that assumed by the plaintiffs." See further The Ann D. Richardson, Abbott, Adm. 499 ; Sparks V. Kittredge, U. S. Dist. Ct., Mass. 9 Law Rep. 318. ' Penny v. N. Y. Ins. Co., 3 Caines, ^ Stevens & Beneck^ on Av. (Phillips's ed.) 165; Emerigon, torn. 1, p. 633; Kingston!). Girard, 4 Dall. 274. Upon this point Magens speaks as follows : " When in the Hamburg Ordinance, No. 983, it is said that charges occurring by any extraordinary quarantine, or unavoida- ble accidents, shall be brought into a general average, it must only be under- stood of such extraordinary charges as accrued from a voluntary endeavor for the better security both of ship and cargo, but not, as in the same ordinance. No. 901, is justly distinguished, for sail- ors' victuals and wages when they are under a necessity of performing quar- antine with the ship, in which case the master would have been obliged to maintain and pay them, though his vessel had arrived only in 'ballast." 1 Mag. 67. " Stevens & Benecke on Av. (Phil- 155 ; Harrod v. Lewis, 3 Mart. La. 311 ; Jones V. Ins. Co. of N. A., 4 Dall. 246. The decision in the last-named case has, however, been overruled. See Ins. Co. of N. A. V. Jones, 2 Binn. 547. Ma- gens says that, in a war between Eng- land and Spain, a fleet of merchant ships from Carthagena and La Vera Cruz were detained by order of the lips's ed.) 149 ; Bynkershoek, Questiones Juris Privati, lib. 4, c. 25. Referring to one of the cases mentioned by Bynker- shoek, where the claim for contribution toward these expenses was allowed, Lord Tenterden says : " In this case it is to be observed, that the master put into port to avoid an extraordinary and impend- ing peril, and not merely as a matter of general caution to avoid the ordinary dangers always accompanying a state of warfare. And the expense thus in- curred appears perfectly analogous to the cases of jettison, and to fall within the principle of the Rhodian Law. For in this case, as the learned author ob- serves, it is clear, that there was a pres- ent and impending peril, and it is clear, also, that the voyage was delayed, not by an accident, but by design, in order to avoid the peril." Abbott on Ship- ping (6th Am. ed.) p. 605. 272 THE LAW OF MARINE INSURANCE. [CH. V. As a general rule, it may be said that no expenses of delay or detention, if the detention takes place before the voyage begins, give any claims for contribution ; for this only suspends the voyage. The master is bound to have his ship in readiness. It is the duty of the owner to have his ship ready for the voyage, at the proper time, and anything which is a mere hindrance or detention of her sailing is his loss only, even if it be not his fault. It is, however, always possible that before the voyage begins, or during the detention by embargo, or quarantine, some expenses are properly incurred for the common benefit. They might come under the law of average, and certainly would do so if they were made necessary by some extraordinary ex- igency, and no necessity or advantage belonging to any one interest alone would have caused the expenses. So we have Spanish court above a year at Havana, and that, notwithstanding the expense of maintaining, a ship's crew there ran very high, yet the owners of the ships in Spain had no recourse against any of their insurers nor against the proprie- tors of the cargo; for they considered it as an accidental occurrence, or mere chance, therewith the insurers had nothing to do. He adds : " Vernier, in examining the question whether such a detention by a foreign power ought to be brought into a general average or not, very properly replies by proposing another query, ' Why should victualling and men's wages be deemed a general average, rather than interest of money, and the damage caused to goods by such a delay ? '" 1 Mag. 68. Upon the point whether wages and provisions are a sub- ject of general average, there is no dis- tinction between the case of an em- bargo and a hostile seizure. Spafford V. Dodge, 14 Mass. 66. These ex- penses during an embargo do not go into a general average, nor are they covered by a policy upon the ship. M'Bride v. Mar. Ins. Co., 7 Johns. 431 ; Robertson v. Ewer, 1 T. R. 127; Mar- tin V. Salem Ins. Co., 2 Mass. 429. In Da Costa v. Newnham, 2 T. R. 407, which was a case of a ship going into port for repairs, and the question being raised whether the wages and provisions of the crew should be compensated for in general average, Mr. Justice Buller said : " As to the wages and provisions, this is not like the case where a ship is detained by an embargo, where the court have said that the expense shall fall on the owner only, and the freight must bear it." See also Pothier, Traite des Chartes-Parties,No. 85; Ricard, Nd- gooe d' Amsterdam, p. 279. Lord Ten- terden, upon this subject, says : " And this case does not seem to fall within the principle of the Rhodian law, be- cause here the delay does not proceed from the act of the master or persons belonging to the ship ; nor is it for the general benefit." Abbott on Shipping (5th Am. ed.) 603. Another reason is that, in such case, neither ship nor cargo is in actual jeopardy ; for as Beawes expresses it, " the embargoing sovereign would not have either ship or cargo, but only hinders their departure." 2 Ar- nould on Ins. 913. CH. v.] GENERAL AVERAGE. 273 said that wages and provisions and other expenses, to obtain the release of a captured vessel, are averaged, if the vessel and cargo be released.^ This is the general rule founded upon that prin- ciple of the law of average which requires that the sacrifice should be successful. But it is here also possible that expenses may be incurred for the common benefit in such a way that they should be paid for by the whole property, although there is no ultimate release. Where funds are so raised for the common benefit as to become a general-average loss, the interests assisted must contribute, not only for the amount raised, but for incidental expenses necessarily incurred in raising the funds, as commissions, premiums, extra interest, brokerage, and the like.^ And so, if they are raised by a respondentia, or by hypothecation of the goods, instead of by the sale of them, the maritime interest must be paid.^ If the goods thus hypothecated are lost, as the owner of the goods loses nothing by the bond, that being discharged by the loss of goods, he has of course no claim for contribution. If the mp,ster hypothecates the cargo alone for necessaries of the ' Jumel V. Mar. Ins. Co., 7 Johns. 424; Kingston u. Girard, 4 Dall. 274; Leavenworth v. Dela6eld, 1 Caines, 573 ; Sharp v. Gladstone, 7 East, 24. See supra, p. 259, n. 1. ^ So stated by all text-writers ; as 2 Phillips, sec. 1326; 2 Arnould, 917; Benecke & Stevens on Av. (Phil, ed.) 172. Interest upon the amount of a contribution for general average runs from the time the money was advanced upon which the average arose. Sims V. Willing, 8 S. & E. 103. Benecke says : " The several charges, necessarily incurred in consequence of a measure taken for the benefit of the whole, must also, without contradiction, be admitted as general average. The most material of these are the expenses occasioned in raising the necessary funds in a port into which a vessel has been driven in distress So much of the charge of procuring funds as corre- VOL. II. 18 sponds with the sum actually employed for the purposes of the general average, and no more, can be admitted ; and it is a gross abuse when, as is sometimes done, the whole of the charges for obr taining funds, such as marine interest, &c., are passed to the general-average account, although a part of those funds have been employed for a particular average on the vessel, or for the resti- tution of other partial damages. This applies also to commissions of agents, attorneys, surveyors' fees, brokerage, postage, and other similar charges." Benecke, Prin. Indem. 243. Where expenses have been incurred, the insur- ers are not liable for marine interest, but only for the ordinary legal interest on the sums advanced. Jumel v. Mar. Ins. Co., 7 Johns. 412, 425. = Stevens on Av. 27 (5th ed.) ; Ben- ecke, 283. 274 THE LAW OF MARINE INSURANCE. [CH. V. ship and cargo jointly, and the ship is lost, the ship-owner, who loses nothing but what he would have lost if no hypothecation had taken place, can have no claim upon the owners of the cargo for contribution. But how is it if the goods are saved and applied to the payment of the bond ? It is of course admitted that if the master of a vessel, being obliged to put into a port of distress, has no money to pay for the repairs, and can raise none on the per- sonal credit of the owner of the vessel, he may hypothecate the ship and cargo for that purpose. Tlie question then arises in what case can the owner of the goods hypothecated call on the other shippers for a general-average contribution. If another ship can be found to take the goods on, although the master has the right to detain them till his own ship is repaired, still, in such a case, the detention would clearly not be for the benefit of the goods, and it would seem that the other shippers should not contribute ; but when no other vessel can be obtained, and the ship can not pro- ceed and complete the voyage without repairs, and there are no means of making them except by a hypothecation of the cargo, and this is done, we are strongly inclined to the opinion that the expense which is thus incurred should be made good by a gen- eral-average contribution. 1 The master, if, by reason of wreck or other cause, he is unable to carry the goods to their destination in his own ship, always may, and by the weight of American authority must, if he can, transship the goods or send them to their destination in another bottom.^ ' This is clearly the opinion of Lord stancia, 4 Notes of Cases, 677; The Stowell, in the celebrated case of The Ship Packet, 3 Mason, 255. Gratitudine, 3 Rob. Adm. 240, 264, in - All the authorities agree that the ■which, after stating that aU must finally master has the power to send the goods contribute in the case of an actual sale on in any other ship, if his own be lost, of a part of a cargo, he adverts to the but it has been doubted whether it is case of a hypothecation of the whole, his duty so to do. The question turns which he considers equivalent to a sale upon the nature of the contract made of a part, and says : " All contribute in by the parties. It is admitted that the this, as a portion of the whole value of master is bound to take the goods on, if • the cargo is abraded for the general he can, in his own ship; but it has been benefit, probably with less inconvenience argued that this is all, and that, if his to the parties than if any one person's own ship is destroyed by the vis major, whole adventure of goods had been the contr3w;t is thereby put an end to. sacrificed by a disadvantageous sale in The Khodian Law (Dig. 14.2, 10.1), the the first instance." See also The Con- Laws of Oleron, art. 47 and the Laws of CH. v.] GENERAL AVERAGE. 275 The expense incurred by doing this is not a general- average loss, but falls on the cargo or on the ship, according to the circum- stances of the case.^ There are cases in which claims for compensation arise which should be settled by the same computation as a general-average loss ; but we should not give this name to them. Such might be the case where a claim arose for compensation for the destruction of property which was not at risk nor owned by any one who had an interest in ship, cargo, or freight, or even if the property was not in any sense maritime. If, for example, it should be neces- sary for the purpose of saving from fire a ship with her cargo, which lies immovable at a wharf, to destroy property, whether an- other ship, or a building, or anything else, and this is done by any one of the owners of the endangered ship or cargo, or by any per- son for him, it must be paid for by the party who does it ; and then this payment might give I'ise to a claim for compensation in some form, against all the interests saved by it. Wisbuy, art. 16, gave the master power to transship in such a case. Faber (Com. ad Pand.) and Vinnius (nota ad Com. Peckii, ad Kem Nauticam, 294, 295) were of opinion that the master was not bound to transship. The Or- dinance of the Marine, on the other hand, held it to be the duty of the master to send the goods on if he could. Tit. du Fret. art. 11, Valin (tit. du Fret. art. 11), and Pothier (Charte Partie, n. 68) hold that the master is not obliged, and that he loses only his freight for the entire voyage by his omission, to procure another vessel. Emerigon maintains the opposite, in support of the old code. Tom. 1, 428, 429. By this new code the master is obliged, if the vessel becomes disabled, to repair her, and during the time of such repair the shipper is bound to wait or pay the full freight ; and if the ves- sel cannot be repaired, he must hire another ; but if he cannot, pro rata freight is due. Code de Commerce, art. 296. The subject is also elaborately discussed by Boulay-Paty, Cours de Droit Commercial, Maritime, tom. 2, 398-405; and the views taken by Emerigon are adopted by him. Par- dessus also is of the opinion that it is the duty of the master in such a case to procure another vessel. • Cours de Droit Com. tom. 3, note 644. In England the point has not yet been decided. See Slipton v. Thornton, 9 A. & E. 314; Rosetto v. Gurney, 11 C. B. 176, 188, 7 Eng. L. & Eq. 461. In this country the rule seems to be well settled in accordance with the doctrine of the text. Saltus v. Ocean Ins. Co., 12 Johns. 107 ; Schieffelin v. N. Y. Ins. Co., 9 Johns. 21 ; Searle v. Scovell, 4 Johns. Ch. 218, 222; Treadwell v. Union Ins. Co., 6 Cow. 270 ; Bryant v. Commonwealth Ins. Co., 6 Pick. 130; Hugg V. Augusta Ins. & Banking Co., 7 How. 595, 609; Adams v. Haught, 14 Treas. 243. ' Heyliger %i. N. Y. Firemen's Ins. Co., 11 Johns. 85. See also Lyon v. Al- vord, 18 Conn. 66. 276 THE LAW OF MARINE INSURANCE. [CH. V. We may reverse the case, and suppose an injury inflicted upon the common property by one either in wrong or for good reason, but such as gives to all who suiFer a claim for indemnity. If this claim be enforced, the expense of doing so would be so far like that of general average, that none should be entitled to their share of the benefit who did not advance or repay their share of the cost. But the right to contribution, strictly so called, does not extend beyond those who voluntarily embark in a common adventure ; and if A's vessel is about to come into collision with B's, which is at anchor, and B cuts his cable, and thus avoids it, .he has no claim for contribution under the law of general average against A for the loss of the cable and anchor. Section IX. — The Sacrifice must be Successful. The third essential of a general-average loss, namely, that the sacrifice should be successful, rests upon a reason which is perfectly obvious. The foundation of the law of general average is, that, if A's property is saved by the sacrifice of B's property, the sacrifice having been made and intended, A should compensate B therefor. And if A's property is not saved, he is in no way benefited by the sacrifice, and is therefore under no obligation to make compensation for it.^ The general rule itself has never been questioned, but some subordinate questions iinder it have been raised. If, for example, the vessel is saved by the jettison, but is afterwards lost, is contribution now due ? It is said that it is due, unless the peril which caused the sacrifice was the same peril which afterwards destroyed the property that had been temporarily saved.^ > Scudder v. Bradford, 14 Pick. 13 Bradhurst v. Col. Ins. Co., 9 Johns. 9 Gray u. Wain, 2 S. & R. 229, 255 Sims V. Gurney, 4 Binn. 513, 524 Williams v. Suffolk Ins. Co., 3 Sumner, of the ship and cargo, were cut away. A spar which was on fire, in falling, pierced the decks, and set on fire both ship and cargo in the hold and between decks. The ship was scuttled, and 510; Kossiteri;. Chester, 1 Doug. (Mich.) sunk ten feet, when she struck bottom. 154; Whitteridge D. Norris, 6 Mass. 125. Every available means was used to '' Lee V. Grinnell, 5 Duer, 400. In extinguish the fire, but without success ; this case the sails, masts, and spars of a and she continued to burn for two ship being on fire, and their destruction days, when the fire, having reached the certain, the masts, for the preservation water's edge, was put out. The ship CH. v.] GENERAL AVERAGE. 277 It has been held to be a consequence of this rule, that, wher6 repairs have been made which were necessary for* the safety of the was found to be so badly injured as to be unworthy of repairs, and was there- fore condemned. The judges, though differing upon the question whether the cutting away of the masts, &c., was a voluntary sacrifice entitling the owners to contribution, agreed in holding that, as the effect of the cutting away was not to preserve any of the property at risk, for any period of time, from the peril in which it was involved, the loss of the masts was not a subject of gen- eral average. Judge Duer remarked (p. 411) that it was unnecessary to de- cide whether the cutting away of the masts and spars was a voluntary sacri- fice of property having value ; since, if a sacrifice, as it had contributed in no degree to the preservation of vessel and cargo, it was not a subject for compen- sation by those who had derived no benefit from the act ; and Judge Hoff- man said (pp. 421, 422) : " I consider the true rule to be, that the achievement of the object designed, even for a very short period of time, will be sufficient to justify contribution, notwithstanding a subsequent loss, provided the ultimate loss results firom a new peril Thus the question is. Was the peril which rendered the sacrifice useless a continuation of the same peril which led to it, or was it a new disaster? The fire, which induced the act of de- struction, was transferred, with the blazing spar, from above to the hold below, and there continued and spread itself. It seems difficult to say that this was different fi-om the continuation of the same tempest, which, by rendering the sacrifice fruitless, displaces a claim to contribution ; and it follows that no claim exists in the present case for that damage which, though caused by a voluntary act, did not in reality avert or diminish the peril." Where the master of a vessel which was dragging her anchors towards the shore cut away the masts to prevent her drifting, and thereupon she brought up, but after about an hour drifted again and was wrecked, it was held that the cargo which was saved was not liable in general average, inasmuch as the sacri- fice of the masts did not rescue it from the particular peril then impending. Scudder v. Bradford, 14 Pick. 13. In giving the opinion of the court, Putnam, J., said : " The property saved from the danger which was immediately threatening shall be held to contribute, notwithstanding it may be 'lost by sub- sequent perils in the course of the voy- age The only hope was that, by the cutting away the masts, the anchors might bring up the ship, and prevent her drifting towards the shore. If that measure had succeeded, this would have been a case for a contribu- tion ; but it did not succeed. In about one hour aftei' the masts were cut away the ship drifted, and dragged her anchors, until she reached and was wrecked upon the rocky shore. It can- not be affirmed that the property which was saved from the wreck was saved by the means of the cutting away of the masts. The forlorn hope failed. There was no more benefit derived from cut- ting away the masts before she reached the shore than from the slipping of the cables afterwards. It cannot be said that the property was safe or saved during the short space of time that she was brought up. The sea continued to set and roll with violence towards the 278 THE LAW OF MARINE INSURANCE. [gh. V. Whole property, the expenses of these repairs, and those arising from delay or deviation for the repair and the wages and provis- shore, until the anchors were dragged as before. It was one continued peril, which was not avoided by the voluntary destruction of the masts. If the an- chors had brought up the ship after the masts had been cut away, and had held her until the then impending peril had ceased, and the ship had proceeded upon her voyage, and been lost after- wards from other perils, the contribu- tion would be due. For this general average is to be paid once or oftener, although the ship should be finally lost on the same voyage by subsequent and distinct perils. To apply this rule : suppose the claim should have been made within the hour that the anchors held the ship after the masts were cut away. Th6 answer would be obvious. Wait, and see if the ship will ride out this perilous swell of the sea ; if she does, then call for your average. If she does not, this well-intended damage to the ship must go for nothing, as no benefit or safety will be derived from it. The answer is certainly as good now as it would have been then. The sacrifice was of no avail, and cannot be the legal foundation of a claim for contribution. What was saved was saved tanquam ex incendio.'' In Lewis v. Williams, 1 Hall, 430, a vessel was stranded near her port of destination, and, for the purpose of relieving her, the cargo was put into lighters and forwarded. The vessel and cargo were thereby relieved from the peril they were in by the stranding, and the cargo reached its destination ; but the brig was eventu- ally lost by a new peril. During the passage in the lighters, a portion of the defendant's goods were damaged, for which he recovered contribution. The plaintiff, having been obliged to con- tribute to this loss before he could get possession of his goods, now sought to recover the amount so paid, on the ground that he was not liable to con- tribution because the ship afterwards perished before the voyage was ended. But it was held, that as the vessel, freight, and cargo aU derived security •from the exposure of the defendant's goods in the lighters, the purpose for which such exposure was made was fully answered ; and that, as the defend- ant's loss was the direct consequence of such exposure, all the parties benefited should contribute to indemnify him. The court said : " It is conceded to be a general rule that contribution is not due for a jettison, or for damage from the exposure of part of the cargo, unless the ship and remaining cargo have been rescued from the peril to which they were exposed ; but it is a mistake to suppose that the ship must pursue her voyage, or arrive at some port in safety, to entitle the party whose goods have been sacrificed to contribution for the loss. If indeed the ship, after the jet- tison, perishes in the same storm, the rule applies, and there shall be no con- tribution for the goods that may be saved to the owners of those that were thrown overboard ; because the object of the sacrifice, which was the safety of the ship from the storm, was not at- tained. But if the ship escape the peril which the jettison was intended to eschew, and is afterwards lost by an- other accident or disaster, the efiects ' saved from the last disaster shall con- tribute to the loss or damage incurred 0, in averting the first peril, because that sacrifice once saved them from danger." CH. v.] GENERAL AVERAGE. 279 ions expended, would constitute a general-average loss only where these repairs enable the ship to resume her voyage.^ They must not only be needed to enable the ship to go forward and carry the cargo to its original destination, but they must be_ effectual for this purpose. It is not enough that these expenses were intended for the common good, but they must also result in the common benefit. This rule has been applied in one important case, where the vessel was captured, and the voyage broken up and abandoned, but the ship returned home ; and it was held that no expenditure occurring after the capture could be averaged, because none of it was successful.^ If, however, any portion of the cargo is rescued with the ship, the rescue, being successful as to this part, the cargo saved would be bound to contribute towards that part of the expense which was incurred for its benefit in common with that of the ship and freight. A distinction has been taken between a case in which expenses have been incurred for the safety of the property by a party justified in acting as agent for the owner of the property, and a case which comes more properly under the law of general average. It may not be always easy to draw the line between these cases, but the difficulty is not in the principle itself, but in its application. If we suppose, for example, that the vessel is captured and taken into port, if the master merely as master expends money to obtain the release of the ship and cargo, and is successful, and the ship and cargo being released return home, this expense is a general-average loss ; ^ not so, however, if he is If the ship survives the danger which where the expenses were incurred with the jettison was made to avert, and is a view to decide in regard to the re- totally lost even the next day, the goods sumption of the voyage, they might saved shall contribute to the loss of the perhaps be a subject of contribution ; part thrown overboard, notwithstanding and so, where the vessel had been the entire destruction of the voyage, scuttled to save the cargo from destruc- Caze V. Eeilly, 3 Wash. C. C. 298, 305. tion by fire, if the cargo had been after- ' Williams v. Suffolk Ins. Co., 3 Sum- wards taken out in order that the water ner, 510, 513, 514 ; Myers v. The liar- might be pumped out. riet, U. S. Dist. Ct., East. Dist. Penn. ' Williams v. Suffolk Ins. Co., 3 2 Wharton's Dig. p. 48, tit. Ins. 140; Sumner, 510, 513, 514. Nelson v. Belmont, 5 Duer, 310, 325. ' Spafford v. Dodge, 14 Mass. 66, 74, It was said in the case last cited that supra, p. 259, n. 1. 280 THE LAW OF MARINE INSURANCE. [CH. V. wholly unsuccessful, the ship and cargo not being released. But if agents of the ship-owner and the shippers in that port concvir in expending money to obtain a release of the whole property, all the owners of the property captured are equally responsible .for the expense, whether the efforts for release are successful or not, and it may be that the master in such a case might have authority to act as the agent of all so interested, and might so act.i It has been repeatedly declared^ that a loss or expense, to constitute a general-average claim for contribution, must have caused the safety of the contributory property. The French code of commerce,^ adopting the rule of the Roman law,^ asserts this. So say Valin* and Beawes.^ So also it was held in Pennsylvania^ ^ Thus Mr. Stevens, in his work on General Average (Phillips's ed.) p. 74, says : " It will occur to every one in the habit of considering questions of this nature, that there is an essential differ- ence between a claim for restitution and for recompense. In the former case, e. g. in that of jettison, if at any subsequent period of the voyage the remainder of the cargo be lost, there is no claim to replace that part which was jettisoned, — and the same if the ship be lost before the articles sacrificed were replaced. But in the case of ex- penses incurred with a. view towards the general benefit, it is clear that they ought to be made good to the party, whether he be an agent employed by the master in a foreign port or the ship- owner himself. The former is a case lying strictly within the adventure ; for if a part be sacrificed, and the re- mainder be lost, the whole is lost. But in the latter case the expenses are extraneous, and were incurred under an implied obligation of indemnity on all parties, which is one of the duties each of the parties who are joined in a sea adventure takes upon himself." The well-established doctrine is, that dis- bursements for the common safety must be reimbursed in general average, whether the ship and cargo are eventu- ally saved or not. See also Spafford u. Dodge, 14 Mass. 66, 77, supra, p. 259, n. 1 ; Hassam v. St. Louis P. Ins. Co., 7 La. Ann. 11. 2 Cod. de Com. 1. 2, t. 12, a. 234; Ord. tit. Du Jet. a. 15. ' Dig. 14, 2, 4, 1. " Eorum enim mer- ces non possunt videri servandse navis causa jactse esse, quae periit." * Vol. 2, p. 205, Du Jet. a. 15, and p. 207, a..l6. ° Beawes, tit. Salvage, Average, &c. = Sims V. Gurney, 4 Binn. 513, 526. Here a ship, being in distress, for the common safety went ashore near Cape May, damages being thereby incurred for which general average was claimed. In speaking of the requisites of such a claim, Tilghman, C. J., said : " It is suf- ficient if a certain loss is incurred for the common benefit. It seems at first view not very reasonable, that contri- bution should be asked for damage oc- casioned by an act which in fact was for the benefit of the ship. But the law is certainly so, provided the act which occasioned the damage was conducive CH. v.] GENERAL AVERAGE. 281 and in Massachusetts,^ and indeed similar language is frequently used. And yet the rule seems to require some qualification. If we suppose the ship on shore under the circumstances which require a jettison, and this jettison is accordingly made, and then by some extraordinary rise of the tide, or favorable action of the wind, the ship is got off in safety, and it is plain that the ship and cargo would have been saved as well without the jettison, this rule would determine that the jettison should not be contributed for. "We must agree with Marshall, " this is quite unreasonfible and unjust." 2 In a case decided by Mr. Justice Washington, he asserts, as it seems to us with great reason, that " the principle fairly to be extracted from the maritime law is, that the part saved shall contribute, provided the object for which the sacrifice was made was attained." ^ to the common safety But did the standing towards Cape May con- duce to the common benefit ? It is ex- tremely difficult to say whether it did or not. One thing, however, is certain, that, as the matter turned out, the crew and cargo were entirely saved. Whether that would have been the case, had any other course been pursued, it is impos- sible to decide with absolute certainty. It was a question, however, very prop- erly submitted to the jury, and they have found in the affirmative. Xaking it, then, that the ship was run upon the ridge with a view to the common good, and that it was conducive to the com- mon good, it follows that not only, the damage sustained on the ridge, but also at Cape May, must be the subject of general average, because the damage at Cape May was the necessary result of running on the ridge." ' Scudder u. Bradford, 14 Pick. 13, supra, p. 276, n. 2. In stating what was essential to sustain a claim for contribution, the court said : " It must be proved that the sacrifice was ne- cessary and voluntary ; it must be in- tended for the safety of all concerned. and it must appear that thereby the property which is to contribute was rescued from the imminent peril then impending." ^ Marshall on Insurance (London ed. 1802), p. 462. ^ Caze V. Reilly, 3 Wash. C. C. 298, 302. In this case, a schooner, on a voyage from France to Philadelphia, being chased by a British frigate, and her capture being deemed inevitable by the captain, was, with the advice of the officers and crew, run on shore at Long Branch, N. J. Before the enemy could board her, a large part of the cargo was saved, after which she was burnt. The master claimed to retain the goods saved, as subject to freight, general av- erage, and expenses, and the claim was allowed. The court, after stating the principle quoted in the text, continues : " This principle is not inconsistent with the rule contended for, by the plaintiffs' counsel, that if a jettison be made, and the ship saved, there shall be contribu- tion ; but if the ship be lost, there shall be none. That rule is correct in all its parts, when applied to a mere case of jettison. But the principle of it is 282 THE LAW OF MARINE INSURANCE. [CH. V. It would seem that this was a material qualification of the rule requiring the object for which the sacrifice is made to be attained ly means of that sacrifice. We think the general use of language to the contrary has arisen from the fact, that in a vast majority of the cases in which property is sacrificed to save the rest, and the rest is saved, it is saved by means of the sacrifice. Section X. — The Sacrifice must he Necessary. Where the sacrifice of property is not called for as a means of escape from impending peril, it is mere waste and wrong-doing, and of course can give no claim for contribution.^ Formerly, equally applicable to a loss voluntarily incurred by the ship, for the common safety, if safety be thereby attained. .... The reason assigned in the Rho- dian Law, why contribution should be made, in case of a jettison of goods, is so entirely applicable to that of loss, or injury incurred by the vessel, under the same circumstances, that it becomes those who would distinguish them to point] out the difference. That reason is, that all should contribute to a loss, occasioned by the jettison, for the sake of lightening the vessel, because it was done for the benefit of all. If so, and the ship expose herself to loss, for the sake of obtaining safety for all, and, in consequence of such voluntary exposure, she is lost, why should not all contrib- ute to repair the loss ? " ' The Gratitudine, 3 Rob. Adm. 240, 258. Mr. Justice Curtis, in Lawrence V. Minturn, 17 How. 100, 110, speaking of the necessity which would authorize the master to make a jettison, said : " If he was a competent master ; if an emer- gency actually existed calling for a de- cision, whether to make a jettison of a part of the cargo ; if he appears to have arrived at his decision with due delib- eration, by a fair exercise of his skill and discretion, with no unreasonable timidity, and with an honest intent to do his duty, — the jettison is lawful. It will be deemed to have been necessary for the common safety, because the per- son to whom the law has intrusted au- thority to decide upon and make it has duly exercised that authority.'' On the other hand, there is a dictum by Coul- ter, J., in Myers v. Baymore, 10 Barr, 114, 118, to the effect that if the goods are thrown overboard unnecessarily by the master, although he acts with the most honest intention of saving the ves- sel, there is no claim for general average. Although this is the law relative to the power of the master to sell the vessel, we should doubt its applicability to the case of a jettison. In Lawrence v. Min- turn, the vessel had met with a gale and was severely strained by the weight of the deck load. After the gale abated, and when the sea was calm, and the vessel in no immediate danger, the master, officers, and crew made a pro- test, setting forth the above facts, and asserting that the deck load was unsafe, and that it should be thrown over as soon as possible. This was accordingly done. It appeared that the goods were of such a nature that they could not be CH. v.] GENERAL AVERAGE. 283 to guard against this waste, the master was obliged to consult his officers and crew in a formal manner, and only by their consent was he justified in making a jettison of the cargo. ^ But the rule has passed away, and the practice is almost if not quite unknown.^ One reason may have been that in those ages the thrown overboard without the greatest risk, when there was any considerable sea. It was held, that the jettison was justifiable. The court said : " Precau- tion against dangers which are certain to occur is surely proper. That they must experience gales and heavy seas at that season, in that voyage, was so nearly certain, that it was not unrea- sonable to act on the assumption that they would occur, and prepare the ship to encounter them while in a smooth sea, when alone they could do so." In Bentley v. Bustard, 16 B. Mon. 643, it was held, that if a boat runs on a known obstruction, or upon the shore, without being driven on by the violence of the wind or the force of the current, and the running on could have been prevented by proper care and skill, a jettison will not be justified, although, the boat be- ing on, it is the only way of getting her off; but the owners of the boat are lia- ble for the value of the goods thus thrown overboard. ' See authorities cited in Emerigon, ch. 12, § 40 (Meredith's ed. pp. 469, 470), and in The Nimrod, Ware, 9. In the case of The Nimrod, Ware, J., says : " Undoubtedly the master, before proceeding to throw overboard any part of his cargo, is bound in common pru- dence, if the case is such as will admit of deliberation, to consult with the most skilful and experienced men of the ship's company, and to allow to their advice all the consideration it merits. But the law gives him, the authority and im- poses on him the obligation for the gov- ernment of the ship. It presumes that his judgment is superior to that of oth- ers of the ship's company, and when he consults them, their opinions are, in the language of Emerigon, rather to be weighed than counted. The advice of _ his crew alone would not, I apprehend, excuse him for a sacrifice which was clearly uncalled for by the danger ; nor would it, if he acted against it, render him responsible for a sacrifice which was manifestly required for the com- mon safety." ■ Ch. Kent says : " Consultation is not indispensable previous to the sacrifice. A'case of imminent danger will not per- mit it. But it must appear that the act occasioning the loss was the efiect of judgment and will ; and there may be a choice of perils when there is no possi- bility of safety." 3 Kent, Com. 233. The rule of consulting the crew upon the expediency of making a sacrifice is rather founded in prudence, in order to avoid dispute, than in necessity ; it may often happen that the danger is too ur- gent to admit of any such deliberation. Birkley v. Presgrave, 1 East, 220, 228. Says Chief Justice Tilghman : " It has been said that there must be a previous consultation, but this may be doubted. Consultation, indeed, is demonstrative proof that the act was voluntary. But I should think that if it sufficiently appears that the act occasioning the loss was the effect of judgment, it is suf- ficient. For in time of imminent dan- ger immediate action may be necessary, and consultation may be destruction." Sims V. Gurney, 4 Binn. 513, 524. See also Col. Ins. Co. v. Ashby, 13 Pet. 331 284 THE LAW OF MARINE INSURANCE. [CH. V. seamen were more nearly on an equal footing in character and interest than they now are. Through the whole law of shipping there runs in these days an acknowledgment that the master of a ship must possess peremptory authority. The statutes of the United States protect the safety of the crew against the peril of unseaworthiness by providing that, on the complaint of the mate and the majority of seamen, the condition of the vessel may be ascertained by a regular survey.^ Nowhere else do they provide for, or suggest, a joint action of the crew and the officers of the ship, and this seldom occurs in fact in any case ; and it has been distinctly adjudged, by a court of high authority in matters of shipping, that it is the duty of the master alone to determine when it is necessary to sacrifice a portion of the cargo for the safety of the residue.^ It has been said that, where a consultation was had with the crew, the only effect of this as matter of evidence was, that the jettison was made deliberately, but not that it was necessary.^ Cases turning upon the question of necessity are rare, for 343 ; Nimick v. Holmes, 25 Penn. St. act the consul or commercial agent at 366, 372. the foreign port is directed, on com- ' Act of July 20, 1790, ch. 56, § 3, 1 plaint being made in writing by any U. S. Stats, at Large, 132; Act of July officer and a majority of the crew, to 20, 1840, ch. 48, §§ 12, 13, 14, 5 U. S. appoint two persons to inspect the ves- Stats. at Large, 396. The former of sel, &c. By the act of 1850, ch. 27 these acts provides that if the mate or § 6, 9 U. S. Stats, at Large, 441, the first officer under the captain, and a act of 1840 is so far amended as to re- majority of the crew of any vessel quire the complaint to be signed by the bound on a voyage to a foreign port, first or the second and third officers and shall, before the vessel has left the land, a majority of the crew. If the crew, require the sea-worthiness of the vessel instead of availing themselves of their to be inquired into, the master shall statute remedy, suffer the owner to re- stop at the nearest port for the purpose pair the vessel of his own accord, and of having such inquiry made. On the he employs an agent who pronounces construction of this act, Ware, J., re- her sea-worthy, they cannot refuse marked in the case of The William Har- to proceed on the ground that the re- ris. Ware, 367, 373, that the reason of pairs are insufficient, if they are not the law applied as strongly to the case so in fact. Porter v. Andrews, 9 Johns, of a vessel departing from a foreign 350. port on her return, as leaving her home '' The Nimrod, Ware, 9, 15. port on a foreign voyage. This is now " Bentley w. Bustard, 16 B. Mon. 643, settled by the statute of 1840. By this 695. CH. v.] GENERAL AVERAGE. 285 there is usually a strong disposition on the part of the master to preserve the property under his charge. Some question has arisen on the degree of the necessity which would authorize a master to make a jettison. It came before the Supreme Court of the United States, and the decision given by Mr. Justice Curtis states the rule with a precision and accuracy which would seem to leave no doubt.^ The master must have a large discretion in the matter ; and if it were clear that he intended to do his duty, this fact would go far in justifying his actions. At the same time it must be remembered, that where a jettison is justified by the circumstances under which it takes place, and these circumstances were caused by the fault of the master, or his want of care or skill, the jettison would give no claim for contribution ; but the owners of the ship would be liable to the owners of the goods jettisoned for the damages caused by the wrong-doing of their master.^ So too it has been held, that if the unseaworthiness of the vessel at the time of sailing- caused, or materially contributed to cause, a necessity for the jettison, the loss is not a general- average loss.^ The ship undertakes to carry and deliver the goods safely, with only the exception of the perils of the sea. Unseaworthiness is not a peril of the sea, and for the damage caused by it the ship is responsible to the shipper.* ' Lawrence v. Mintum, 17 How. 100, Brig William Henry, 4 La. 223 ; Em- 110, supra, p. 282, n. 1. ory v. Hersey, 4 Greenl. 407, ^ For instance, if the master carries In Putnam v. Wood, 3 Mass. 485, goods on deck, without the consent of Parker, J., says: "It is the duty of the the shipper, and it becomes necessary, owner of a ship, when he charters her from stress of weather or the dangers of or puts her up for freight, to see that the seas, to sacrifice the deck load for she is in a suitable condition to trans- the common safety, this does not pre- port her cargo in safety ; and he is to sent a case for contribution, but the keep her in that condition, unless pre- master is personally responsible for the vented by perils of the sea or unavoid- loss, and, through him, the ship, it hav- able accident. If the goods are lost ing been occasioned by his own fault, by reason of any defect in the vessel. The Paragon, Ware, 326, 335. whether latent or visible, known or un- ^ Dupont de Nemours v. Vance, 19 known, the owner is answerable to the How. 162, 166. See also Lawrence v. freighter, upon the principle that he Mintum, 17 How. 100, 110; Chamber- - tacitly contracts that his vessel shall be lain V. Reed, 13 Me. 357. fit for the use for which he thus employs * Eeed v. Dick, 8 Watts, 479; El- her." liott V. Bossell, 10 Johns. 1 ; Whitall v. If a vessel founders, the carrier must 286 THE LAW OF MARINE INSURANCE. [CH. V. The sacrifice must be necessary, and the necessity must be a pecuniary necessity ; for property can be called on to contribute only for that loss which was intentionally incurred for the purpose of saving that property. A very peculiar case of much interest has been recently decided in Massachusetts, which strongly con- firms the doctrine, that a sacrifice of property is not a subject of general average, and cannot found a claim for contribution, unless it is made for the purpose of saving the vessel, cargo, and freight from a peril impending over them. Stronger moral grounds for the sacrifice, we may say a stronger moral necessity, cannot exist than in this case ; but it was deemed wholly unsuffi- cient. The bark Predonia encountered on the high seas an emigrant ship, full of passengers, and almost in the act of foun- dering. The bark had a full cargo of fruit. The passengers whom it could rescue were about three hundred in number. It could not take them on board and bring them into port, with safety to them or to the bark and its crew, without making some room for them in the hold of the bark, by throwing over a part of the cargo. This was done ; and in the action of Charles W. Dabney v. The New England M. Ins. Co., the question was raised, Was he entitled to contribution for his cargo thrown over ? The Superior Court decided for the plaintiff. Exceptions were taken and carried to the Supreme^ Court, when judgment was ordered for the defendants. The case is not yet reported, nor a full opinion given ; but the rescript is as follows : " The facts show that the immediate motive and cause of the jettison were not to preserve or restore the navigability of the vessel insured, but to make room for and receive on board the passengers and crew of another vessel, which was in imminent danger of foundering at sea with all on board. The jettison cannot therefore be deemed to have been a sacrifice of a part of the cargo for the purpose of obtaining safety from a peril impending over the vessel insured, prove that she was sea-worthy, before ocean. But if the facts of the loss are he can bring himself within the excuse such that it may fairly be attributed of its being the act of God ; but she to inevitable accident, and the owner of need only be sea-worthy for the trade the goods means to allege that the ves- in which she is employed. That which sel was not sea-worthy at her departure, would constitute sea-worthiness for a the burden of proof is upon him, and short voyage upon the lakes may not not on the carrier. Bell v. Reed, 4 be sea-worthiness for a voyage upon the Binn. 127. CH. v.] GENERAL AVERAGE. 287 and the cargo and freight. There was not a general-average loss entitling the owner of cargo to contribution." Section XI. — Where the Property Saerificed would have been inevitably lost. A PEiNl;iPLE has been presented on this subject by a text-writer of higli authority, which, however, has but little support from the decided cases. Beuecb^ says : " If the master's situation were such that, but for a voluntary destruction of a part of the vessel, or her furniture, the whole would certainly and unavoidably have been lost, he could not claim a restitution, because a thing cannot be said to have been sacrificed which had already ceased to be of any value." ^ We cannot think that this opinion of Beneck^ rests upon any good reason ; and if applied in the terms in which he expresses it, it would exclude nearly all the cases which are regarded both in law and in practice as general-average losses. Indeed, those cases may be generally described as cases in which ship and cargo are exposed to a common peril by which the whole would be certainly and unavoidably lost, unless a part be sacrificed to save the rest ; and, the sacrifice being made, the residue or a part of it is saved. One of his reasons seems to he, that, if the thing sacrificed be contributed for, this contribution must be measured by its value at the time the sacrifice was made, and where it would be inevitably lost by the peril if not voluntarily lost, its value must therefore be at that time nothing. But this view rests upon an obvious fallacy. All parts of the property will be inevitably lost unless some part is sacrificed. By this sacrifice the residue may be saved. And as each part has the chance of being saved by the sacrifice of some other part, each part then has a value; and if the sacrifice be made, whatever is saved contributes, and its contributory value is its value when saved. It may be true that, if the thing which is purposely destroyed could not itself by any means whatever be saved, then it may be said that there is no voluntary sacrifice at all, for only that destruction was hastened which could not have been prevented. Such a principle may account for the case where a vessel laden ' Stevens & Beneckd on Average (Phil, ed.) 110. 288 THE LAW OF MARINE INSURANCE. [CH. V. with lime was hauled out into the stream, and there scuttled, because the lime was on fire.^ When the water poured into the vessel, the lime was destroyed' at once. The ship was saved, but did not contribute for the loss of the lime, because the lime could not possibly have been preserved, and the ship was saved by only hastening its destruction. This rule cannot, however, apply to cases in whiclf a vessel must be somehow lightened, and only those goods which lie directly under the hatches can be thrown over, because at the time they only can be reached. It might be said that these goods could not possibly be saved ui any way ; and if not jet- tisoned, they, with the ship and the rest of the cargo, would have been lost. Nevertheless, this would certainly be a general-average loss. ' Crockett v. Dodge, 3 Fairf. 190. This case proceeds entirely on the ground that the lime, at the time the vessel was scuttled, was worthless, and therefore does not differ from the prin- ciple, before laid down, that goods are to be contributed for only at the value they had at the time of the sacrifice. Nickerson v. Tyson, 8 Mass. 467, supra, p. 216, n. 1. See, however, the remarks of Mr. Justice Story, in Col. Ins. Co. v. Ashby, 13 Pet. 331, 340. In Marshall V. Garner, 6 Barb. 394, a claim was made for contribution for masts, which had been cut away. At the time they were sacrificed, the ship was on a beach in four feet of water, while she drew fifteen. She was on her broadside, where she lay on her bilge. If the masts had not been cut away, the ship and cargo would have been lost, and all on board would have perished. As soon as the masts were cut away, the vessel righted, and the cargo was saved. It was held, that there could be no contribution, because, at the time the masts were cut, their destruction, from already existing causes, was only anticipated, and that nothing, therefore, was sacrificed. This question was dis- cussed at great length in the recent case of Lee u. Grinnell, 5 Duer, 400, supra, p. 212, n. 4. The rigging and upper spars of the vessel, which was lying at a wharf, were on fire. The firemen re- fused to work on board or near the ship for fear of the blocks, and other articles, which were on fire aloft, falling on them. For the purpose of saving the ship and cargo, the masts were cut away. Assuming that the purpose was accom- plished, the court were divided on the question whether the masts were to be contributed for, Mr. Justice Duer hold- ing that they were not, Mr. Justice Hoffman being of a contrary opinion, and Mr. Justice Campbell declining to express his views upon the subject. But where a cargo is on fire from an accidental cause, and the vessel is scut- tled, or water is poured down to extin- guish the fire, and goods are thereby injured which the fire had not reached, they are to be contributed for. Nelson V. Belmont, 5 Duer, 310, 323; Lee v. Grinnell, 5 Duer, 400. See also Slater V. Hay ward, 26 Conn. 128, supra, p. 212, n. 1. CH. v.] GENERAL AVERAGE. • 289 Section XII. — The Claim on the Insurers. There remains to be considered one important question, which has been much agitated. Insurers pay to the insured what they, as owners of the property insured, pay by way of contribution for the safety of tlieir goods. So, if the goods insured are lost in such a way that the insured who owned them is entitled to a contribution, the benefit of this contribution belongs in some manner to the insurers. Then the question arises whether the insured may claim his whole loss, transferring to the insurers his claim for contribution, or whether he must first recover his contribution, and, deducting that from the loss, call on his insurers only for the balance. These two ways might in some cases be the same in their result, the only difference being as to the party who should claim contribution. In practice, however, the difference be- tween them is often extremely important. The real question is. At whose risk is this claim for contribution ? If tli« insured may recover his whole loss from the insurer, leav- ing the insurer to recover the contribution due if he can and as he can, the risk is plainly on the insurer. Suppose the con- tributory party is insolvent, and the goods have been surrendered without the contribution being paid or secured ; the insurer paying for this loss will certainly have not only the claim of the insured for contribution, but any remedies which he pos- sessed, either to enforce the claim or be indemnified for it ; as by an action against the ship-owner for the wrong-doing of the master in not securing the claim. All this would, however, be at the risk of the insurer. If, however, the insured is bound to collect the claim in the first place, and demand of the insurer only the balance, the risk will rest on the insured. It might be said, however, in that case, that as he has lost the property insured, the direct amount of the lose is the primary measure of the liabilty of the insurer ; and that the insured is bound to deduct from this not what he would have a right to get by way of contribution if he could, but what he actually succeeds in recovering. This view would still throw the risk of the loss of the claim to contribution upon the insurer. The decided VOL. 11. 19 290 THE LA\V OF MARINE INSURANCE. [CH. V. weight of authority favors this; in other words, it tends to es- tablish the rule, that the insured may claim of the insurers the whole amount of his loss, transferring to them his claim for contribution.^ ' In Maggrath v. Church, 1 Caines, 196, 215, which was an action upon a pohcy of insurance on the cargo, a part .of which, consisting of corn, had been damaged by a peril of the sea, one of the questions submitted to the court was, whether the totality of the contri- bution due to the plaintiffs for the loss of their corn was recoverable in the first instance from the insurer. In answering this question, Kent, J., said : " We are of opinion that it is because the loss arises wholly from a peril within the policy, and the plaintiff has a right to look for his indemnity from the person who has engaged to in- demnify him from the peril. This argument appears conclusive. This will not lead to a multiplicity of suits any more than a different rule ; for, if the plaintiffs could recover only a corir tributary share from the defendant, they would be compelled to resort to the owner of the ship for the residue ; and this suit over may as well be brought by the insurer as the plaintiffs, for one great object of insurance is promptly to reinvest the assured with his capital lost by the perils of the sea, and thereby enable him to continue his commercial enterprises." In Faulkner v. Augusta Ins. Co., 2 McMuUan, 158, this question was the only one at issue, and under- went a thorough discussion. The court said : " This case presents but one ques- tion of law, — Were the insured obliged to wait for the adjustment of the aver- ao-e loss, or to demand the contribution of the other shippers, or in any way to pursue the contributors, before demand- in" the total loss of their own shipment against the insurers ? No doubt is entertained that such loss is embraced by the policy. The question is upon the condition and time of demanding it. And as little question is made that either the insured or insurers may re- cover of the other shippers their re- spective contributions, according to the adjustment made and average bonds taken in this case. But each of the present parties would avoid that alter- native, and put it upon the opposite side. Which has the legal right to choose ? . . . . Until abandonment, in all cases, the goods saved remain the property of the insured, and he is of course bound in justice to do what he can to diminish the ultimate loss ,of the underwriters, — the true and unavoida- ble loss being all he is entitled to. But when the loss has occurred within the policy, it becomes the loss of the under- writers, and the right to recover vests in the insured. Both the right and liability are in virtue of the policy, which is a contract of indemnity ; and they both follow at the moment of the loss. Can, then, this right or liability be suspended by the obligation to do what may be done for the insurers in a matter which may be done as well by themselves ? The average bond is taken in order to divide the loss. To decide whose is the loss decides which party is obliged to pursue the con- tributors for his own interest and neces- sity. It is true that the insured may do so ; but it does not follow that he has his immediate right to indemnity frotti the insurers suspended unless he does so. Like all men who have two CH. v.] GENERAL AVERAGE. 291 This rule has been held applicable, even if it would give to the insured the power of making his loss partial or total, at his remedies, he may take either, at his own discretion, or even pursue both, until indemnified by one or the other. .... Looking at the strict, legal right of the insured, and to the unquestion- able liability of the insurers upon the policy, as a contract of indemnification to the former, the court does not per- ceive how the insured can be suspended in their right of action by the mere qualified obligation first to demand con- tribution of the other shippers. This is often done from self-interest, or justice to the insurers. But in many instances the obligation to do so might be incon- venient, perplex with suits, and impede the very object aimed at by the policy of insurance, — immediate reimburse- ment of the insured, in the value of the goods lost, in order that the voyage might not be retarded or its fruits lost, which would be contrary to the general ends of insurance, to extend commerce and advance its success. And these are to be answered by the immediate reimbursement promised by the insurers. I would think, therefore, that the ad- justment of average loss among the dif- ferent shippers, and the average bond, are to be considered as a counter- indemnity to the insurers, after paying the whole loss ; and that this view of their ofiice gives the foundation of the true rule, that the insured are not obliged to demand payment of the con- tributors before suing the insurers." See also, to the same efiect, Watson v. Mar. Ins. Co., 7 Johns. 57, 62; Amory .II. Jones, 6 Mass. 318; Hanse u. N. O. M. & F. Ins. Co., 10 La. 1 ; Forbes v. Manufacturers' Ins. Co., 1 Gray, 371, 374 ; Lord o. Neptune Ins. Co., 10 Gray, 109, 126, and dicta by Mr. J. Story, in Potter v. Providence Wash. Ins. Co., 4 Mason, 298, and by SImw, C. J., in Greely v. Tremont Ins. Co., 9 Cush. 415, 419. But, on the contrary, see Lapsley v. U. S. Ins. Co., 4 Binn. 502. Here there was an insurance on goods at and from London to New York. In the course of the voyage, the ship being in distress, part of the plaintiffs' goods, to the amount of more than one half, were thrown overboard, for the pres- ervation of the remainder of the cargo and of the lives of the crew. Of the residue of the plaintiffs' goods, part was found to be in a good gondition on the arrival of the ship at New York, and part damaged, but not to the amount of five per cent, in which case, by the terms of the policy, the underwriters were not to be liable. On the adjustment of the general average, the loss was about thirty- six and a half per cent. The plaintiffs abandoned, and claimed for a total loss ; and the question was, whether they were entitled to recover for a total loss. It was contended, in behalf of the plain- tiffs, that, as the loss happened by one of the perils insured against, they had a right to look immediately to the defend- ants ; who, after having paid the whole loss, might place themselves in their situation, and recover the contribution to which they were entitled. Upon this argument Tilghman, C. J., made the following comments : " I am not satisfied with this course of proceeding, which seems rather to invert the natural order of things. The defendants are un- doubtedly answerable for the loss occa- sioned by the jettison, and it is equally clear that the plaintiffs have a right to receive contribution from the other persons whose property was saved. 292 THE LAW OF MARINE INSURANCE. [CH. V. pleasure. By an American rule, as we see more fully elsewhere, a loss of more than one half may be made a constructive total loss by abandonment.! Now if an insured loses by jettison of If the value of the plaintiffs' goods is one hundred dollars, and they receive seventy dollars by way of contribution, the loss is only thirty dollars. It seems reasonable that he who is entitled to receive the contribution should in the first instance apply for it. If it should be lost without any fault of his, the underwriter is answerable. It does not appear that the plaintiffs ever applied to the persons bound to contribute, or that there was the least difficulty in procuring payment from them. One cannot help asking, then, why the plaintiffs should so pertinaciously insist on resorting to the defendants in the first instance. If indemnification for their loss is the object, what is the difference whether they receive it from the defendants or other persons ? I can find no satisfactory answer to this ques- tion, but by supposing that bare in- demnification will not satisfy the plain- tiffs. Their object must be to make gain by abandoning to the defendants, and thus producing a constructive total loss, whereby the defendants will be involved in the state of the market at New York. I am not disposed to assist them in this attempt, unless it can be clearly shown that they have the law in their favor It is unnecessary to decide what steps are to be taken by the assured to recover the contributign before the underwriters shall be liable for the whole loss, or whether, on refusal to pay the contribution, the demand against the underwriters is to be sus- pended until the end of the suits brought for the recovery of it. It is sufficient, for the present, to say, that there should be a demand made from the persons bound to contribute, and some reason- able endeavor to procure payment, and that the insured has not a right in the first instance to make an election whereby a loss partial in its nature is by construction rendered total." See also dissenting opinion of Wardlaw, J., in Faulkner v. Augusta Ins. Co., 2 McMuUan, 161. The rule that the insured may recover, in the first instance, of the insurers on the vessel the whole general average,- does not apply to the case where the ship, freight, and cargo belong to the same person, and the freight and cargo are not insured, since they would, by the very act of recovery, and immedi- ately upon receipt of the money, become answerable over to the defendants for that proportion of the average which ought to be borne by the cargo and freight. Jumel v. Mar. Ins. Co., 7 Johns. 412, 425. No indemnity can be given to the plaintiff in an action on a policy of insurance on a steamer, for a general- average loss, without evidence of the value of the cargo and freight. Billow V. West. M. & F. Ins. Co., 1 La. Ann. 57. ' Dupuy V. United Ins. Co., 3 Johns. Ca. 182; Depeyster v. Col. Ins. Co., 2 Caines, 85 ; Wood v. Lincoln & Kennebec Ins. Co., 6 Mass. 479 ; Dickey V. N. Y. Ins. Co., 4 Cow. 222, S. C. 3 Wend. 658 ; Saurez v. Sun Mut. Ins. Co., 2 Sandf. 482; Allen v. Com. Ins. Co., 1 Gray, 154. When a moiety of any portion, spe- cifically underwritten, has been lost, its owner may abandon, however small its proportion may be to the whole lading. Vandenheuvel v. United Ins. Co., 1 Johns. 406, 411. CH. v.] GENERAL AVERAGE. 293 his goods sixty per cent, and is entitled to receive half of this by way of contribution in general average, and the circumstances are such that he can receive this if he will, the rule above men- tioned would give him the right to choose between recovering his contribution and claiming a partial loss of thirty per cent, and transferring this claim to the insurers, and, abandoning his salvage of forty per cent, demanding of them as for a total loss. It would be his interest to pursue the first course if the forty per cent of his goods which arrived safely found a high market and made a great profit. It would be for his advantage to take the other course if the goods arrived at a bad market and made little or no profit. The rule, therefore, would in fact subject the insurers ■ to the risk of a market, in so far as it would make them liable for a total loss if the market were bad, and throw on him the loss of profit on the salvaged goods ; while, if the market were a good one, the insurers would pay for a partial loss, and the insured take all the profits. Some objection has been made to this rule from its apparent inequality in such a case. The cases cited in our note, however, show that this rule may perhaps be considered as now an established part of the law of marine in- surance, with all the consequences that may result from it.-' ' As to the right of the insured, in he may abandon, or, if it be converted cases of constructive total loss, to claim into a partial loss, he must recover ac- and adjust it as a partial loss, or abandon cordingly. This is favorable to the and claim for a total loss, at his option, interests of trade, and is consistent with see Smith v. Manufacturers' Ins. Co., 7 the contract and the rights of the par- Met. 448, 451 ; Hamilton v. Mendes, ties. While the insured acts with good 2 Burr. 1198, 1211; Gracie v. N. Y. faith in endeavoring to recover the prop- Ins. Co., 8 Johns. 237, 244. In Earl v. erty, no injury can arise to the insurer. Shaw, 1 Johns. Ca. 313, 317, Lewis, J., If he is guilty of fraud or culpable neg- said : " The right to abandon is for the lect, his conduct ought not to affect benefit of the insured, and he has an the insurer, and the loss in consequence election to exercise his right or not. is his own. There is no fixed time at If he pursues the enterprise, and does which the abandonment is to be made." not abandon, he may recover for a total See also Eoget v. Thurston, 2 Johns, or partial loss, according to the final Ca. 248 ; Allwood v. Henckell, Park, event. If the loss should continue total, Ins. 239. 294 THE LAW OP MARINE INSURANCE. [CH. VI. CHAPTER VI. ADJUSTMENT OF GENERAL AVERAGE. The process of determining what amount shall be paid by way of contribution, of assessing this 4ipon the interests which are required to contribute, and of apportioning it among the interests which receive contribution, is called the adjustment of average losses. The principles involved in this subject are, to a large extent, equally involved in the previously considered topic of general average. But the subject of the adjustment of losses may use- fully be considered by itself. We say, of losses ; for it is very seldom that a ship reaches a port, under circumstances which call for an adjustment of average, without the question arising, as to some of the losses, whether they are general-average losses, to be di- vided accordingly, or partial losses, to be cast upon one owner alone. This subject of adjustment may be considered under the follow- ing heads : What losses are adjusted as general-average losses. What things contribute. How the value of the receiving interests and of the contributory interests is estimated. When and where and by whom the adjustment should be made. The force and effect of the adjustment. Section I. — What Losses are adjusted as G-eneral-Average Losses. Op the maritime interests, ship, cargo, freight, and profits, we have seen that any one may be sacrificed to save the rest, and any one may be saved by the sacrifice of some other. Any one of them may therefore be entitled to receive contribution, or may be called upon to make contribution. There are some principles of general-average contribution which may be applied to every kind of loss. One of them requires that all of those who are interested in the property, to save which other prop- erty was sacrificed, shall suffer by the loss, respectively, only in proportion to the extent of their several interests. CH. VI.J ADJUSTMENT OF GENERAL AVERAGE. 295 The property which was sacrificed for the general benefit is, when the adjustment is made, considered as if it still constituted a part of the whole property upon which the contribution is assessed, and its value is fixed in accordance with the value of the property saved.^ We have seen, that, if it were not so, the owner of the property sacrificed would receive its whole value, and would not then be in the same condition in which he would have been had his property been saved by the sacrifice of the property of some other party. And it is the fundamental law of general average, that all interested should suffer equally. Hence, where a sacrifice of property has been made to save the rest and nothing is saved, there is nothing to contribute, and nothing to be contributed for.^ It is important here to distinguish between sacrifices which are properly, as well as formally, general-average losses, and, on the other hand, expenses incurred for a common benefit, and reimbursed by an apportionment after the maimer of general average. We say this distinction is important, although in some cases it may be difficult to apply it. But the rule or principle must certainly be this : wherever the loss is properly one of general average, nothing contributes for it that is not saved ; but expenses may be incurred, on justifiable grounds, in such a way as to create a personal debt from all those for whose benefit they were incurred. This debt must be paid with no refer- ence to the result of these expenses, and, in apportioning it among the various parties for whom it is incurred, the principles of general average will usually be applicable.^ Among the cases which have arisen in which this distinction becomes important, and at the same time very difiicult, is that which occurs when goods are sold by the master in a foreign port to raise necessary funds ; and the question is, whether these expenses are to be treated as sacrifices constituting general-average loss. Where these expenses accomplish their purpose, — as, for example, if money be raised for repairs, and the vessel, being ' 3 Kent, Com. 242 ; Beneck^, Pr. of = Benecke, Pr. of Indem. 251 ; Spaf- Indem. 286. ford v. Dodge, 14 Mass. 66 ; 2 Arnould, ' 2 Arnould, Ins. 926 ; Emerigon, ch. Ins. 921 ; 2 Phillips, Ins. § 1319. 12, §41, vol. l,p. 601 (ed. 1827); Be- necke, Pr. of Indem. 289. 296 THE LAW OF MARINE INSURANCE. [CH. VI. repaired, goes on her way carrying her cargo to its destination, or where money is raised by way of ransom to procure the re- covery of a captured ship, and the ship is delivered up and completes her voyage, — these expenses are always regarded and adjusted as general average.^ But suppose these expenses to be entirely ineffectiial, and the whote adventure perishes ; the question then arises. Are they to be repaid ? Neither in England nor in this country can the law on this subject be regarded as settled. On the Continent of Europe it would seem to be at least the prevailing rule that the. ship-owner shall reimburse the owner of the goods sold, whether any part of the adventure be finally saved or not.^ And the reason for this is, that it is the duty of the master and owners of the ship under such circumstances so to raise and expend their funds, and that, when they so used the goods of the shipper as to enable them to discharge this duty, they contracted an individual debt in favor of the shipper ; ^ and there is one English case in which this rule seems to be adopted.* ' Plummer v. Wildman, 3 M. & S. 482 ; Brooks v. Oriental Ins. Co., 7 Pick. 259 ; Spafford v. Dodge, 14 Mass. 66; Douglas v. Moody, 9 Ma;ss. 548; 1 Magens, 64 ; Welles v. Gray, 10 Mass. 42. ^ 2 Arnould, 924 ; Pothier, Contrats Maritimes, Nos. 43, 72 ; Code de Com- merce, art. 298 ; Laws of Wisbuy, art. 68. Although this last-named article is cited by Emerigon and by Valin, its genuineness is doubted by Beneck^, who says that this regulation is not found in all the editions of those laws, and that the fortieth article, on the con- trary, provides that the master who, in cases of necessity, sells goods abroad, shall pay for the same upon his arrival at the place of discharge, at the market price, and receive his freight in full. Benecke, Pr. of Indem. 266. ' " II a paru equitable de penser, que le capitaine et les propridtaires du navire, qui etaient charges de pourvoir k ses besoins, avaient contracts une dette individuelle, en appliquant ces marchandises k I'accomplissement de leur devoir personnel." Boulay-Paty, Cours de Droit Com. Mar. tit. 8, § 9, vol. 2, p. 420 (ed. 1821). * Powell V. Gudgeon, 5 M. & S. 431. In this case a ship, being disabled by the perils of the sea from pursuing her voyage, was obliged to put into port to repair ; and, in order to defray the ex- penses of such repairs, the master, having no other means of raising money, sold part of the goods, and ap- plied the proceeds in payment of these expenses. The action was brought by the owner of the goods sold upon a policy of insurance upon the same ; and it was held that the underwriter was not answerable for the loss, it not being occasioned by a peril of the sea. Mr. Justice Bailey, after expressing his concurrence with the opinion of Lord Ellenborough, C. J.,, said : " It does not CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 297 On the other hand, it is held by some authorities, that goods sold abroad for a common necessity should be regarded as sacri- ficed for the common benefit, or, in other words, should be treated as if jettisoned ; for it is the same thing to the merchant whether the goods be sold, taken, or thrown into the sea.^ And then again, as goods if jettisoned are considered as still continuing on board, • and the goods sold are to be treated as if jettisoned, they also must be considered as still continuing on board ; ^ and therefore, if the whole adventure subsequently perishes, these goods perish with the rest, and no contribution is due for them. Emerigon, Stevens, Beneck^, and Kent may be cited as holding these views.^ Mr. Arnoiild considers that these conflicting authorities do not differ so widely as they appear to, and that they may be recon- ciled to each other, by considering that the rule that the ship- owner is liable for goods so sold, although his ship be not saved by them, is applied only to the cost of the necessary repairs appear to me that this was a loss by a peril of the sea, or such as entitles the assured to recover, under the general ■words of the policy ; but a loss for which the owners of the goods will he entitled to he reimhursed hy the owner of the ship. The owner of the ship undertakes to have the ship fit to perform her voyage; and, in case of accident, it is the duty of the owner, and the master in place of the owner, to provide for its repair. I consider it as a rule applicable to the construction of policies, that the court must look to the immediate cause of loss, in order to ascertain whether it be a loss within the policy. ■ The loss here was occasioned by the act of the cap- tain, who disposed of the goods in order to provide himself with funds for the repair of the ship. If he could have raised these funds in any other way, he would not have taken the goods. To _^hold this a loss for which the under- writer is responsible would be to make bis liability depend upon the accident of the captain's being unable to provide funds for the repair, except by means of the goods. In the case of jettison, the immediate cause of loss is a peril of the sea. When the whole is likely to be swallowed up by the sea, the law of jettison allows a part to be sacrificed to save the rest. Ineismuch, therefore, as we are bound, according to the commbn rule for the construction of policies, to look to the immediate cause of loss, and as this loss was not immediately caused by a peril of the sea, but by the inabihty of the captain to procure a fund for the repairs which he was bound to do, it seems to me that this was not a loss within the policy." ' Stevens on Ay. (5th ed.) 15. ^ Les effets jetes, vendus, ou donnes pour le salut commun, sont presumes etre encore existans dans le navire." Emerigon, tome 1, ch. 12, § 43, p. 654.- ' Emerigon, supra ; Stevens, supra ; Benecke, Pr. of Indem. 292 ; 3 Kent, Com. 242. 298 THE LAW OF MARINE INSURANCE. [CH. VI. which he was himself bound to make at his own expense ; while the authorities who consider him discharged by the loss of the ship have in their mind only those extraordinary expenses which are incurred for the common benefit, and give a claim to general- average contribution.'- We cannot think that very much is gained by this distinction ; in fact, it leaves the question substantially unanswered ; for the precise difficulty in determining such a case is to decide whether the expenses were such as the master was bound to make at his own charge, for the benefit of others, or whether they were expenses which he voluntarily inciirred for a common benefit, and on which, therefore, he may found a claim for general-average con- tribution. But, upon the whole, we can only say that the con- clusion of the authorities above referred to, who consider the ship discharged by the loss of the adventure, would be that adopted generally, to say the least, in practice, in this country. There is another question whicli stands in some relation to that we have just considered, in regard to which there is much conflict of opinion, and perhaps some uncertainty. It is this : If a sacrifice be made for the common benefit and to avert the peril that threatens all, and the ship perishes by that very peril, while the cargo or a part of it is saved from the wreck, does that which is saved contribute for that which is sacrificed ? The civil law declares that no contribution should be made in such a case, but that the merchants save all they can on their own account, as if from a fire.^ The French law follows the rule of the civil law, and provides, that, " if the jettison does not save the ship, no contribution takes place." ^ And all the French . writers upon insurance are unanimous in the same view,* and the same thing is asserted by English text-writers,^ and by > 2 Arnould, Ins. 925. 616; Boulay-Paty, Traits des Ass. ch. ' Dig. 1. 14, tit. 2, f. 7. " Cum de- 12, § 41, p. 601 ; PotWer, Cont. Mar. pressa navis aut dejecta esset, quod No. 114; Valin, tit. du Jet. et de la quisque ex ea suum servasset, sibi Contribution, art. 15, 19, vol. 2, pp. eervare respondit, tanquam ex incendio." 205, 209. Pardessus, Coll. de Lois Mar. vol. 1, ° 2 Magens, 97 ; Stevens on Av. 8 ch. 3, p. 108. (5th ed.) ; Marshall on Ins. Bk. 1, ch. 13, » Code de Commerce, art. 423; Ord. § 7, p. 463. Marshall says that if, on de la Marine, tit. du Jet. art. 15. the contrary, the ship is preserved by * Emerigon, vol. 1, ch. 12, § 41, p. the jettison,^ and continues her course, CH. VI.J ADJUSTMENT OF GENEEAL AVERAGE. 299 Chancellor Kent,i who cites in favor of this view two American cases.^ On the other hand, Beneck^^ is of a different opinion ; and Mr. Phillips* adds his authority to the conclusion of Beneck^. The question, while seemingly one of law, may be regarded as, to some extent, rather one of fact, — Was any property saved by the jettison ? The strong expression above quoted from the French Code de Commerce goes on the supposition that the jettison was made to prevent the wreck, and, if the wreck then took place, the jettison was wholly ineffectual ; and, as it did no good, it could found no claim to contribution. And it must be admitted that the most general foundation of an average claim is the prin- but is afterwards lost, the effects saved from this last misfortune, if any, shall contribute to the loss sustained by the jettison, because to that the preserva- tion was once owing. Magens speaks to the same effect, vol. 2, pp. 98, 240. Valin says, however, citing Domat, fol. 187, that where the ship perishes during the same storm on account of which the jettison was made, even though it may not be till some days afterwards, yet the goods saved do not contribute for those sacrificed. Tit. du Jet. art. 16, p. 207, vol. 2. Chancellor Kent, with Marshall, says that a temporary safety is all that is requisite to entitle the owners of the property sacrificed to contribution ; and he cites Vinnius, in Peckium ad legem Ehodiam, 246, 250, and Boulay-Paty, tome 4, 443. 3 Kent, Com. 240. See also Scudder v. Bradford, 14 Pick. 13, 14. ' 3 Kent, Com. 234. ' Crockett v. Dodge, 3 Fairfield, 190 ; Williams v. Suffolk Ins. Co., 3 Sumner, 500. ' Benecke', Pr. of Indem.. 1 79. He cites a case from Emerigon, vol. 1, p. 616, where a French vessel, in order to escape from an English privateer, threw over- board her guns, part of her apparel, and one hundred barrels of rice. She nevertheless was taken, but six days afterwards made her escape. It was decided that no contribution could take place, as the ship was not saved by the jettison. Benecke, commenting upon the case, says : " The unreasonableness of this decision is apparent, if the case is considered according to its nature, and not according to positive laws. Every party interested would, at the moment of danger, had he been present, have willingly consented to pay for the goods which must be sacrificed to give the vessel a chance to escape, even if the attempt should fail, and the vessel with her remaining cargo be saved in some other way. The attempt to save was in itself of value to all parties, con- sequently all parties ought to concur in the loss. Those goods, if not thrown overboard, would have been saved like the rest out of the enemy's hands, and their owner would have been in the same situation as the rest of the parties. Consequently he ought to be placed in the same situation by a general con- tribution, if, after an unsuccessful at- tempt to save the whole by jettison, it be afterwards saved by any other means." He cites Weijtsen, § 33, to the same effect. * 2 Phillips on Ins. 98. 300 THE LAW OF MARINE INSURANCE. [CH. VI. ciple of justice, that whoever is benefited by the voluntary sacri- fice of another's property, which sacrifice was made to benefit him, ought to compensate therefor. Consequently, if no one is benefited by the sacrifice, no one should be called upon to con- tribute for it. • But is this the only principle of justice in the case ? The Spanish law,i "Weijtsen,^ whom Mr. Arnould justly calls " an early and highly esteemed writer upon average," Mr. Beneck^,^ and Mr. Phillips* hold that the goods saved should contribute for those sacrificed, on the ground, that, if the goods jettisoned had not been so sacrificed, their owners might have saved or recovered them in the same way as the other owners have saved or recov- ered theirs. The principle involved in this is one which was somewhat considered in the preceding chapter. It is, that if property be voluntarily sacrificed to avert a common peril, and the property for whose benefit the sacrifice is made is saved, although not by that sacrifice, and the property sacrificed might have been saved as well if not so sacrificed, then this sacrifice should still be com- pensated for. The obligation does not now rest upon the success of the sacri- fice, but on the motive, and on the implied contract of those whose property is saved to compensate those whose property is destroyed that theirs may be saved. If all is lost, there is no claim for compensation, because nothing in fact is sacrificed ; for that which is voluntarily destroyed would have been lost with the rest. But if the rest or a part of it is saved, and that which was voluntarily destroyed might have been saved as well, the implied promise of compensation comes in. We think there are American cases which sustain this conclusion.^ In practice ' Ord. de Bilboa, cap. 20, art. 16. captain, in order to avoid the danger, ^ Weijtsen, Traitd des Avaries, art. cuts the cables and hoists sail for the pur- 33. pose of getting out to sea, or, if that be ' Benecke, Pr. of Indem. 178-181. impracticable, of going ashore elsewhere, ' 2 Phil, on Ins. § 1318. but the vessel nevertheless goes ashore ' In Walker v. The United States and founders, the cargo saved should Ins. Co., 11 S. & E. 61, it was decided contribute for the loss of the cables and . that if a vessel lying at anchor be in anchors, as well as for any other sacrifice danger of being driven ashore in a of the rigging or hull, which can be dangerous place by a storm, and the shown to have been made for the com- CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 301 we believe it would be helped by the presumption which seems to be nearly always- made, — that when property is sacrificed to save.otlier property, and that other property is saved, the sacri- fice contributed to tlie safety, and must therefore be contributed for. Section II. — When the Loss of the Ship is to be adjusted as a General-Average Loss. It is very seldom that the whole ship is to be contributed for as sacrificed for a common benefit, and therefore a general-average loss. It occurs only in a case of voluntary stranding, and this subject has been already fully considered. But a partial injury to the ship voluntarily caused for the common benefit frequently occurs, and then it is to be contributed for.^ In applying this rule, we must remember that here, as else- where in the maritime law, the word "ship" includes whatever is on board the ship for the objects of the voyage and adventure in which she is engaged, and belongs to the owners, and is either a part of the ship, or one of her appurtenantes, that is, distinctly connected with the ship and the proper use of her. Tire question mon benefit. Here the purpose of the clear that it constitutes a case of gen- sacrifice was not accomplished, — the eral average, to be borne by the ship, ship was not prevented from going freight, and cargo, ultimately saved." ashore ; and yet contribution for the The Nathaniel Hooper, 3 Sumner, 542. loss was allowed, the court holding that Here the object of the jettison was to it was the deliberate purpose to sacrifice lighten the ship that it might be got off, the thing at all events, combined with a — an object which the sacrifice clearly view to the general welfare, which was failed to accomplish; and yet it was the distinguishing feature between gen- held that the property ultimately saved, eral and particular average, thus show- though saved by other means, should ing that the claim to contribution de- contribute to this unavailing loss, the in- pended upon the motive rather than tention of the loss being the common upon the success of the sacrifice. Where benefit of that property. But see, to a ship was accidentally stranded, and, the contrary, Scudder v. Bradford, 14 after an unsuccessful jettison of a large Pick. 13. quantity of sugar for the purpose of get- ' Beneckd, Pr. of Indem. 230; Brad- ting her off, was abandoned by the mas- hurst v. Col. Ins. Co., 9 Johns. 9 ; Gray ter and crew, and the ship afterwards v. Wain, 2 S. & R. 229 ; Caze v. Keilly, floated and was picked up and brought 3 Wash; C. C. 298 ; Walker v. U. S. into port, Mr. Justice Story said: "In Ins. Co., 11 S. & R. 61 ; Emerigon, vol. respect to the jettison of the cargo, it is 1, ch. 12, § 41, p. 620. 302 THE LAW OF MARINE INSURANCE. [CH. VI. whether a thing sacrificed is a part of the ship is of less impor- tance in respect to the law of general average, because, if anything belonging to the owners is sacrificed for the common benefit, it must be contributed for. Masts, spars, guns, anchors, cables, ship's stores, when pur- posely lost for the common benefit, are adjusted on the same footing with jettisoned goods. A difficulty in this case some- times arises, when it is necessary to distinguish between a volun- tary sacrifice and a loss by the merp perils of navigation, or even by wear and tear ; as, for example, if cables are cut away or anchors are slipped to avoid being separated from convoy, this is a general-average loss on the Continent of Europe,^ but not in England.^ This question has not arisen in this country. Here as elsewhere property lost is adjusted as general average, when it is not intentionally destroyed or "lost, but is voluntarily exposed to an extreme peril which causes its destruction.^ If sails are set in a violent tempest to draw the vessel away from a lee sliore, or to escape capture when they would not be exposed to such a wind under ordinary circumstances, and are blown away by the tempest, it may not be certain whether this should be adjusted as a general-average loss.* It must depend ' Emerigon, vol. 1, ch. 12, §41, p. the weather had been better, or the ship 621 ; Casaregis, Disc. 46, n. 9, et seq. stronger, nothing might have happened. '' Stevens on Average, 14 (5th ed.) ; See also a dictum by Gihhs, C. J., in Tay- Park on Ins. (8th ed.) 284. lor v. Curtis, 4 Campb. 338. Where ' Sturgess u. Gary, 2 Curt. C. C. 68 ; similar damages were incurred by a Barnard u. Adams, 10 How. 304. ship's being obliged to carry a press of * Where a ship was captured by a sail to avoid the dangers of a lee shore, privjiteer, but on account of a heavy the same decision was made, the court gale and the sea running high the pri- remarking, after commenting upon the vateer could not take possession of her, Continental law upon the subject, that and, in order to escape, the ship carried " with us, all casual and inevitable dam- an unusual press of sail, in consequence age and loss, as distinguished from that of which she was much strained, opened which is purposely incurred, is a subject most of her seams, and carried away the of particular, not general average, head of her mainmast, but finally sue- Shiflf v. La. State Ins. Co., 6 Mart, ceeded in getting away, it was held that (La.) N. S. 629. See also Power v. these damages were only a common sea Whitmore, 4 M. & S. 141. But upon risk, and were not a subject for general the Continent of Europe the law seems average. Covington v. Roberts, 2 Bos. to be established that such an injury & Pull. N. R. 378. The court said: would give the ship-owner a claim for " This is only a common sea risk. If contribution. Valin, Ord. de la Mar. CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 303 upon the circumstances of the case. It is quite a different ques- tion from that which occurs when cables are cut, or anchors abandoned, for the purpose of putting to sea to escape from a lee shore in a storm. Here it seems to be agreed that this is a general-average loss.^ But cables are not intended to be cut, nor anchors abandoned ; whereas it is intended that sails should be exposed to the wind. Still we beleive that, in practice, their loss would be adjusted as a general-average loss, if they were lost because exposed to an extraordinary peril and from an extraordinary necessity. So we should say that the loss of an anchor, by the chafing of the cable or the impossibility of weighing the anchor, should be so adjusted when the anchor was dropped in an unusual place to escape some extreme peril.^ Mr* Arnould admits that in practice this is frequently adjusted as a general-average loss, but adds that, " on principle, as the damage thus incurred was not intended or anticipated as the result of the act, as it was directly caused, not by the agency and will of man, but by the force of the elements, it ought not to be considered a general- average loss." ^ But it is well settled, as we have already seen, that if goods are put into boats to lighten a wrecked vessel, and are lost by the violence of the winds and waves, on their way to the shore, this is a general-average loss, although it was not intended or anticipated as a result of the act, and was directly caused, not by the agency and will of man, but by the force of the elements.* Tit. du Jet. art. 1, p. 189 ; Boulay-Paty, vessel's crowding sail, is nowhere al- Coms. de Droit Com. Mar. tit. 1 2, § 2, lowed in general average ; nor could p. 446 ; Prussian Ord. § 1824 ; Emer- any good reason be assigned for making igon, ch. 12, § 41, p. 622. Emeri- such allowance. Benecke, Pr. of In- gon says, " Le domraage arrive aux dem. 190. voiles forcees pour le salut commun, ' Greely v. Tremont Ins. Co., 9 etoient avaries grosses; car, forcer les Cush. 419; Hennen v. Monro, 16 Mart, mats, ou les voiles, c' est la meme chose." (La.) 449 ; Magens, case 27, pp. 323, Benecke says, however, Pr. of Indem. 330 ; 2 Valin, Ord. de la. Mar. tit. des p. 190, that he has seen several French Avaries, art. 6, p. 165 : 1 Emerigon, 621 statements of general average of a later Bradhurst v. Col. Ins. Co., 9 Johns. 9. date than the Code de Commerce, in ^ Benecke, p. 191 ; Weskett, tit. Gen, which the damage sustained by crowd- Av. n. 3; Weijtsen, § 11 ; Magens, 53 ing sail was not admitted as a subject ' 2 Arnould on Ins. .894. for contribution. The damage which ' Lewis u. Williams, 1 Hall, 430, 437 the goods sustain, in consequence of a Code de Com. 1. 2, tit. 11, n. 238 ; 2 304 THE LAW OF MARINE INSURANCE. [CH. VI. It is hardly necessary to say, that where spars or sails are ■carried overboard by the wind, or cables cut, or anchors lost, in the common course of navigation, it is adjusted as a partial loss, and not as one of general average.^ Mr. Arnould states this, and adds that if these losses occur " in order to prevent her drift- ing on a lee shore, or to avoid capture, it is general average, the reason being that in the last case there is, and in the first there is not, an immediately impending danger to justify the sacri- fice." ^ But the presence of the dginger is not enough, we think, to found the distinction ; there must be not only an immediately impending danger, but a danger sufliciently extraordinary to take the case out of the common course and perils of navigation. It is quite well settled that if any part of the ship or her appurtenances be applied for the common benefit, from necessity, to some temporary purpose, entirely different from its ordinary use, this application being such as prevents the thing so used from be- ing restored to its ordinary use, or injures it materially, this is a general-average loss.^ It is on this principle that it has been Valin, Ord. de la Mar. tit. 8, art. 19, p. 209; 1 EraerigoQ, 613; Stevens on Av. p. 15 ; BeneoW, 209 ; Abbott on Ship- ping, 477. Upon the same principle, goods taken out of a ship and placed upon the beach, to lighten her when stranded, if damaged, are a subject for general average. Hennen v. Monro, 4 Mart. N. S. 449. ' Dig. 14, 2, 2 ; Moses v. Sun Mut. Ins. Co., 1 Duer, 159, 170. When sails are let go for the purpose of righting the ■vessel, when on her beam ends, they are subjects of general average. So at least says Benecke, 185. But it would not be easy to distinguish this from the ordinary duties and perils of navigation. ^ 2 Arnould on Ins. 895. ' .Birkley v. Presgrave, 1 East, 220. In this case, the ship Argo, as she was entering Sunderland Harbor, was by a sudden squall prevented from proceed- ing farther, and the small bower anchor was dropped in order to bring her up. In order that the anchor might hold, and for the preservation of the ship and car- go, more cable was borne away, and the ship was permitted to drift alongside the pier, to which she was made fast with hawser ends and towing lines, such as were usually employed for that pur- pose. The master cut the cable from the best bower anchor that was then upon the ship's bow, fearing that another ship would be adrift and come down up- on the Argo, and that in that case there would not be time enough to undo the cable ; and with this he fastened the ship to the pier. While they were so fastening her, the hawser and towing lines, from the force of the storm and by another ship's driving against the Argo, broke; and if there had been another minute's delay in cutting the cable, the ship would have gone adrift and sunk upon- the bar at the entrance of the harbor ; and this she avoided by the cutting and using of the cable in the CH. VI.] ADJUSTMENT OF GENERAL AVERAGE^ 305 decided in England that the damage done to a ship by fighting, the ship being armed for that purpose, was not to be adjusted as a general-average loss.^ Mr. Arnould, in speaking of this case, manner aforesaid. In an action brought by the ship-owners for contribution, they admitted that the loss of the hawser ends and towing lines did not fall with- in the meaning of general average, be- ing only applied to the ordinary pur- poses for which they were provided ; but they claimed that the cable, be- ing appropriated to a different use from that for which it was originally intended, and for the preservation of ship and cargo, constituted a charge of general average ; and the court so held, Lord Kenyan, C. J., saying that, " with re- spect to the other question, all ordinary losses and damage sustained by the ship happening immediately from the storm or perils of the sea must be borne by the ship-owners ; but all those articles which were made use of by the master and crew upon the particular emer- gency, and out of the usual course, for the benefit of the whole concern, and the other expenses incurred, must be paid proportion ably by the defendant as general average." A similar decis- ion was made in Marsham v. Dutrey, Select Cases of Evidence, 58. 1 Taylor u. Curtis, 4 Campb. 337; 6 Taunt. 608. The plaintiffs were owners of the ship Hibernia, in which the defend- ants shipped goods to be carried from London to St. Thomas, in the West Indies. In the course of the voyage the ship was attacked by an American privateer. The Hibernia resisted, and a severe engagement ensued. The privateer was beaten off, and the Hibernia delivered her cargo safely to the consignees. She sustained great damage, during the engagement, in her hull and rigging, which were repaired VOL. II. 20 at a considerable expense to the owners* They also incurred a further expense in providing medical assistance for several of the crew who were wounded in the action. Large quantities of gun- powder and shot were likewise ex- pended upon the occasion, which had formed part of the stores and outfit of the ship. In the trial at msi prius, Gibbs, C. J., said : " I cannot feel that this is a loss entitling the plaintiffs to claim a contribution as for general aver- age. The defence may be ungracious ; but according to the rules which pre- vail in this country I think the loss must fall entirely upon the ship. I cannot distinguish this from the case of a ship carrying a press of sail to escape from an enemy. That is done voluntarily for the preservation of all ; but it has been held that a loss arising from a hazard so incurred is not the subject of general average. I likewise remembfer a case where a ship ran away from a privateer, and was shot through, and it was held that the owner could not claim a general average from the dam- age so sustained. The practice of under- writers sometimes to contribute to a loss such as this cannot weigh much, as it may be accounted for from the honor and liberality of those who contribute, and from the sense they must feel of their own interest. If there is no re- ward allowed for a, gallant resistance, such resistances will not be made, and the whole value of the property must be paid, instead of a gratuity for saving it." This decision was confirmed upon appeal by the Court of Common Pleas. The court there said : " The measure 306 THE LAW OF MARINE INSURANCE. [CH. VI. thinks that the rule should be confined to a ship of war ; and fight- ing ought not, in his judgment, to be regarded as falling within the scope of those ordinary duties of navigation to which the owner IS bound by his contract with the freighter.'^ To this we should reply, that the ship was armed for this very purpose, and that the shipper put his goods on board of her knowing that, and perhaps because he knew that she was armed and able to defend herself, and would do so wherever possible. Mr. Stevens agrees on the whole with the conclusion of the cojirt, but states that many well- informed underwriters think that it should be a general-average loss.2 We cannot but think that the court were unquestionably right. We agree with what Chief Justice Gibbs said in trying the case at Nisi Prius. " I cannot distinguish this from the case of a ship carrying a press of sail to escape from an enemy." It was the duty of the ship to make the utmost use of its sails to escape in that way if it could, but if it could not escape by their help, then to use its guns. Where the ship is intentionally cut or damaged that fire may be reached and extinguished, it is obvious that it should be ad- justed as a general-average loss.^ Section III. — When the Cargo should be contributed for. By far the most common instance of this is jettison of the goods ; but, as we have already seen, goods sold in a Ibreign port under a necessity which justifies their sale and to raise funds for the common benefit should be adjusted, by the weight of authority and by what we believe to be prevailing practice, as a jettison of the goods.* of resisting the privateer was for the ^ See Nelson v. Belmont, 5 Duer, general benefit, but it was a part of the 310, infra, p. 308, n. 1. Beneck^, Pr. of adventure. No particular part of the Indem. 243 ; contra, Emerigon, eh. 12, property was voluntarily sacrificed for § 17, p. 436. the protection of the rest. The losses ' The Ship Packet, 3 Mason, 255, fell where the fortune of war cast them ; 260; 3 Kent, Com. 242; The Gratitur and there, it seems to me, they ought dine, 3 Rob. Adm. 263; Dobsonw. Wil- to rest." 6 Taunt. 623. son, 3 Campb. 480, 487 ; Giles v. Eagle 1 2 Amould on Ins. 897. Ins. Co., 2 Met. 140, 144 ; The Mary, ^ Stevens on Average (5th ed.) 36. 1 Sprague, 51. CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 307 If goods are injured for the common benefit, as by water used if the ship be on fire to extinguish it ; ^ or if a hole be cut in the deck to get at the burning ship, and before it can be secured the waves break in and damage the cargo ; ^ such an in- jury would be adjusted as an average loss. It might be a difierent question if the goods themselves were on fire, and water poured in to extinguish it, and the cargo was saved but in a wet and damaged condition ; should the ship now contribute ? The peril was a common one, for the cargo could not be permitted to burn without imperilling the ship. But the goods were in the first and immediate peril, and it was primarily to save them that they were wet. It would be an analogous question if the ship alone were on fire. We may suppose lightning had set fire to its top-mast and the mast was cut away, and with its sails and rigging lost ; would the cargo now be required to contribute ? ' In Nimick v. Holmes, 25 Penn. St. 366, while the steamboat of the plain- tiffs was lying at the wharf in Cincin- nati, taking in its cargo, it was discovered to be on fire in the hold. It was at first attempted to extinguish the flames by injecting steam into the hold and pouring in water ; but this proving un- availing, and the officers believing there was no other means of saving the boat and cargo, determined, after consulta- tion, to scuttle her. They accordingly ran the boat out into the river about two miles from tfne wharf, and there sunk her. A portion of the deck was torn up, and water introduced from above, and by these means the fire was subdued. Subsequently the boat was raised and taken back, with the rem- nant of the cargo, to Cincinnati, where the cargo was sold. The cargo was in- jured to about seventy-five per cent of its value, and the boat and cargo to- gether to about twenty-five per cent of their entire value. It was held that this damage was a subject for general average. The court said: " Guided by the light of the rule and its instances, we feel constrained to say that when a vessel or its cargo takes fire without the fault of the crew, the damage done by the application of water or steam in extinguishing the fire, and by tearing up part of the vessel in order to get at it, is general average. The danger is a common one, and the cost of the remedy must be common. It makes no difference how the water is applied, — by the aid of fire-engines on the land, or in the form of steam, or by scuttling the vessel. AU these modes were tried in this case before the success was com- plete. They are all to be treated to- gether, because they all referred to the same peril. They were the means em- ployed for the purpose of averting the danger in which they were placed. It was a sacrifice for the common safety, for it was intentionally injuring or de- stroying all that part of the cargo that could be thus affected by water, in order to save the rest. The result was suc- cessful, if a single article was saved by the means employed." ^ See Nelson v. Belmont, 5 Duer, 310, infra. 308 THE LAW OF MARINE INSURANCE. [CH. VI. Or a still nicer question might arise if the cargo were on fire and it was owned by many shippers, and that part of it which was damaged by water was owned by other shippers than those who owned the goods actually on fire ; and the goods of yet other shippers were saved unharmed. Is all the damage by water a general-average loss, and if so, who shall contribute to it ? Shall it be the owners of the uninjured cargo, or the ship-owners also, or all who are interested in ship, cargo, or freight ? ^ It may be difficult to draw the line, but we 'think there is some ground for a distinction between these cases and such a case as where the ship is cut to extinguish fire, and the cargo being saved con- tributes to the ship; and where a hole being cut to get at the fire, the waves get through it and damage the cargo, and the ship contributes therefore. That the cargo may have a claim for contribution for con- sequential damage must be certain, and a good case to illustrate this rule may be that to which we have already previously adverted, ' In Nelson v. Belmont, 5 Duer, 310, a vessel, bound from NewOrleans to Havre, was struck by lightning, and set on fire. It struck the mizzen top-gallant mast, passed down the mizzen - mast into the cabin and into the between-decks. Holes were cut in the upper deck, around the mizzen-mast, and water poured down into the between-decks, where the cargo was. This being in- eflfectual, the holes were stopped up to stifle the flames. The next day it was found necessary to put into a port of distress, and a Danish brig was engaged to accompany her. The passengers and eight kegs of specie, which con- stituted a part of the cargo, were removed to the brig. The two vessels arrived at Charleston, when the fire- engines of the city were employed. The vessel was filled with water, and after that she was pumped out, and the cargo discharged. The cap- tain made some slight repairs to the vessel at Charleston, and then brought her to New York, where repairs to a large amount were made. Upon the trial it was held that the damage to the vessel occasioned by cutting the holes in the deck, when at sea, to pour down the water, that is, the mere expense of repairing the deck where these holes were cut, was to be allowed as a proper item for contribution ; that the damage caused to the vessel by the swelling of the cargo was also proper ; that only that part of the cargo should be contrib- uted for which could be shown to have been damaged exclusively by the water ; that the freight was neither to be con- tributed for nor to contribute ; that the cargo was to contribute in the usual manner, including the amount allowed in general average ; and that the specie on board the vessel, and which was transferred to the Danish brig, was liable to contribute, in common with any other portion of the cargo, to what- ever might be 'a proper subject of gen- eral average. CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 309 where a mast was cut away and a hole thereby opened in the deck through which water penetrated to the cargo.-^ Section IV. — When a Loss of Freight is to be adjusted as a Greneral-Average Loss. The ship earns its freight only by carrying its cargo to its destination. It is obvious, therefore, that, if goods be jettisoned, it is not only the owner of the goods who loses thereby, but the owner of the ship loses the " freight which he would have earned by carrying those goods. There would seem to be, therefore, no reason whatever why he should not have a claim for contribu- tion for the freight thus lost. This is in practice adjusted as an average loss, and the authorities sustain this view.^ ' In Maggrath v. Church, I Caines, 196, the vessel, loaded with corn, en- countered severe weather, and a mast was cut awaj for the general preserva- tion. In cutting it away it was splin- tered, and in consequence thereof water entered the hold and damaged the corn. Kent, J. said : " The corn being dam- aged by the cutting away of the mast is to be considered, equally with the mast, a sacrifice for the common benefit, — a price of safety to the rest; and it is founded on the clearest equity, that all the property and interest saved ought to contribute their due proportion to this sacrifice.'' In Lee v. Grinuell, 5 Duer, 400, 423, Hoffman, J., said: " The essential constituents of a case of con- tribution are, that the intelligence, the will, and the act of man have intended and produced the sacrifice of the thing for which compensation is sought, and have worked in whole or in part the preservation of the property from which it is claimed. The subjects destroyed must have been, in the contemplation of the party, as things to be destroyed. This rule admits, indeed, of a few guard- ed exceptions, but none which may not be considered, in the ordinary course of events, as comprehended within the in- tention. The cutting away of masts is probably as often accompanied with damage to boats and railings as other- wise, and this may well be assumed to have been an expected consequence. The leak, as in the case of Maggrath v. Church, may reasonably be anticipated as a probable result of the splintering of masts when cut away." See also Saltus v. Ocean Ins. Co., 14 Johns. 138 ; Shelton V. Brig Mary, 1 Sprague, 1 7 ; Bond u. Su- perb, 1 Wall, Jr., 355, supra, p. 232, n. 1. ' Where a ship, bound from Havana to St. Petersburg, with a cargo of su- gars, struck on the south shoal of Nan- tucket, and was there, after a jettison of part of her cargo, abandoned by the meister and crew, and the ship after- wards floated off the shoal, and was met and brought into port by salvors, and there libelled for salvage, it was held that the full freight of the sugars, of which there was a jettison, for the voyage, was to be allowed as part of the general average to be borne by the ship and cargo, and the freight (pro rata') saved. The Ship Nathaniel Hooper, 3 SIO THE LAW OF MARINE INSURANCE. [CH. VI. In adjusting an average loss on freight, the value taken when the freight is entitled to contribution is the gross freight at the port of contribution. If the freight is called on to contribute, only the net freight on the saved and carried contributes. This is usually ascertained by some rule established by usage, and this rule differs much in different places. As far as we can learn, this deduction is one half in New York, Virginia, Alabama, Georgia, Texas, and California ; so it is in Havre. One third is deducted in Massachusetts, Maane, Pennsylvania, Maryland, and Louisiana. In England, from the gross freight, including primages, wages and port charges are deducted, and the re- mainder contributes. 1 Sumner, 642. In deciding the above case, Mr. Justice Story said : " In respect to the jettison of the cargo, it is clear that it constitutes a case of general average, to be borne by the ship, freight, and cargo, ultimately saved ; and of course in that contribution the entire freight of the cargo thrown overboard is to be added to the loss as a part of the sacri- fice, and is to be allowed to the ship- owners. This is the settled course in the adjustment of general average." It is a general rule that a claim for freight follows the fate of a claim for the vessel. If a vessel is lost under cir- cumstances which make her loss a case of general average, the freight which is lost is an additional sacrifice of the owner. It has been earned in part, and would have been earned in full, but for the voluntary act which entailed the loss of the vessel, and, of course, prevented the earning of the freight from the ship- pers. Nelson v. Belmont, 5 Duer, 310, 322. In Col. Ins. Co. v. Ashby, 13 Pet. 331, 344, the court says: "The only other remaining point is, whether freight ought to have been brought into the ac- count, either as a part of the loss or of the contributory value. The auditor's report, which was adopted by the court, allowed the freight as a part of the loss and also of the contributory value. It is perfectly clear that, if a part of the loss, the freight ought also to contribute. And it seems to us, that, as by the loss of the ship the freight was totally lost for the voyage, it was properly included in the loss, and as a sacrifice by the ship- owner for the common benefit." If the voyage is broken up in any other way than in consequence of a vol- untary sacrifice, the freight lost is not to be contributed for. Lee v. Grinnell, 5 Duer, 400, 431 ; Nelson v. Belmont, 5 Duer, 310, 323 ; Tudor v. Maoomber, 14 Pick. 34. When freight is entitled to contribution, the value is the gross freight lost by the sacrifice. Mutual Safety Ins. Co. v. Cargo of Ship George, Olcott, Adm. 157. See also Gray u. Wain, 2 S. & R. 229; Magens, 272, 277, case 24; The Ann D. Richardson, Abbott, Adm. 499. ' Dixon on Mar. Ins. & Average, 149 CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 311 Section V. — When a Loss of Profits is so adjusted. A LOSS on profits is never adjusted as a general-average loss, on the ground that they were expected and would have been earned had not the goods been lost. It may be said at least that they are never contributed for under the name of profits ; but if goods are valued and a loss of them is adjusted at this valuation, the profits might be actually contributed for, if, as is very common, they entered into the valuation.^ Section VI. — What Expenses are adjusted as a G-eneral-Average Loss. We have already seen that expenditures for a common benefit are frequently charged on the interests receiving the benefit, and then they are adjusted as a general-average loss. By the law-merchant among all civilized nations, the, master of a vessel has certain definite powers and duties, which relate mainly to the navigation of the vessel, the control of all on board, and the care of the ship and all the property it contains. These powers and duties belong to his office, and are much the same everywhere. Besides these, however, he has sometimes other pow- ers and duties springing from necessity. We have had occasion to consider these powers from necessity in connection with other topics, and also to some extent in a previous part of this chapter. Where expenses are incurred by the exercise, on the part of the master, of one of these powers, two things are to be remembered : first, that it certainly is not among the general powers and duties of his office to sell the ship or the cargo, or to borrow money on the pledge of ship or cargo, or in any other way on the respon- sibility of the ship-owner or shipper; but, secondly, that he may be justified in doing any or all these things by a sufficient necessity. By such necessity he is made the agent of the ship- owner or shipper, and binds them by his acts in the same way as if he had for these acts their express authority.^ Thus, in the ' The Nathaniel Hooper, 3 Sumner, 29. This was an action on a policy of 542. insurance on the cargo of a ship from * Fontaine v. Col. Ins. Co., 9 Johns. Guadaloupe to New York. The vessel 312 THE LAW OF MARINE INSURANCE. [CH. VI. chapter on total loss, we see that he may sell the vessel;^ but such a sale, although it may make a constructive total loss, will was captured by a British cruiser and carried into Antigua, and libelled in the Adtairalty Court there. The master put in a claim, and the goods were detained for further proof, but were delivered to the master on his giving security for their appraised value and paying the costs. The master procured Hall and Kose, merchants at Antigua, to become security, and also to pay the costs and other expenses for the ship and cargo ; and for their indemnity he drew bills of exchange on his owner in New York, and pledged the ship and goods to Hall and Rose, to secure the amount, which included a commission of five per cent, charged by them on the sums advanced, and a premium of insurance which they paid to insure the ship and cargo so pledged, from Antigua to New York. The cargo was delivered to the agent of Hall and Rose in New York, and the insured, to obtain possession of his prop- erty, paid his proportion of the charges and expenses, including the commissions and premium of insurance, and brought this action to recover the amount so paid from their insurers. It was held that, the master having acted with good faith, and the charges being reasonable and necessary, the insured were entitled to recover this amount. The court said : " The plaintiff's cargo was mortgaged to Hall and Rose, in consideration of their becoming security to answer for its value, and there is no reason to doubt of the power of the master to mortgage it. The principles of the maritime law clothe him with the power of agent of the cargo, when cases of extremity occur. He may sell a part, or he may hypothe- cate the whole cargo, even for the ne- cessary repairs of the ship, when that act is required to enable him to con- tinue the voyage. Though, ordinarily, he is the mere carrier of the cargo, yet in a case of difficulty and peril, he be- comes ex necessitate a trustee of it, with a large and liberal discretion, and this character is then given to him from pub- lic policy, for without this power the cargo might be left to perish. If the master has this power over the cargo for repairs to the ship, it exists, in at least equal force, when the interest of the cargo is directly in question ; and this case contains intrinsic evidence that the terms on which the assistance of Hall and Rose was procured were as favorable as any that could have been obtained. The plaintiffs had no agent or consignee at Antigua, for none ap- pears, or is to be presumed. It was an island to which the ship was carried by the captors. To whom was the captain to apply for aid ? If Hall and Rose had exacted exorbitant compensation or se- curity, the presumption would have been different, and it might have been incumbent on the plaintiff to have shown that other applications for se- curity had been made, and failed. The indemnity required by Hall and Rose, of a mortgage of the cargo released, was reasonable for them to ask, and within the power of the captain to give ; and, having taken it, the insurance was ne- cessary to render the security perfect, and the premium for the insurance was no more than a necessary charge at- tending the taking of the security." ' See The Catharine, 1 Eng. L. & Eq. 679, 681 ; Am. Ins. Co. v. Ogden, 15 Wend. 532 ; Somes v. Sugrue, 4 C. & P. 276 ; Robinson v. Com. Ins. Co., 3 Sumner, 220. CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 313 not be adjusted as a general-average loss. So, too, he may sell the goods, if perishable,^ or for other sufficient reason ; and this may "constitute an analogous loss of the goods, which would not, however, be adjusted as a general-average loss, any more than a loss by sale of the ship. We have already inferred, from the adjudication on this subject in respect to general average, that here, as so often elsewhere, it is necessary to distinguish between expenses for which the ship alone is bound, because they belonged to the duty of navigation, and those which, being in- curred to relieve all the property from a common danger, which lies outside of the ordinary perils of navigation, give a right to general contribution, and are to be adjusted as a general- average loss. But he may borrow money on the ship, or on the cargo, or may raise it by sale of the cargo or of a part, under such circum- stances and for such purposes as may' create a general-average claim.^ Through all these cases, whether they belong to partic- ular average or to general average, there runs one question, — was the borrowing, or the sale, justified by necessity. If so, the adjuster will cast the loss upon those interests to benefit which the money was raised. If not so justified, then he will cast it upon the party only who was in the wrong, whether he did it personally or by one for whom he was responsible. It is difficult to determine what this necessity must be to justify this act ; and in its connection with different topics, partic- ularly total loss, and bottomry and respondentia, we have fully considered this question. Here, in its bearing on the duty of the adjuster, we will only say, that it is quite certain that, by the law-merchant, different degrees of necessity authorize and justify different classes of acts ; thus it may be said that the master may make repairs and bind his owner for them, on the simple ground that such repairs were on the whole expedient or desirable ; and yet even here it is plain that he would not ' Jordan v. Warren Ins. Co., 1 Story, W. 320 ; Smith v. Martin, 6 Binn. 342; The Gratitudine, 3 Rob. Adm. 262. 240, 259 ; Hugg v. Augusta Ins. and ' The Gratitudine, 3 Rob. Adm. 240, Banking Co., 7 How. 595,609; Vaughan 263; Giles v. Eagle Ins. Co., 2 Met. V. Western M. & F. Ins. Co., 19 La. 140, 144 ; The Mary, 1 Sprague, 51 ; 54; Vlierboom v. Chapman, 13 M. & The Constancia, 4 Notes of Cases, 677. 314 THE LAW OP MARINE INSURANCE. [CH. VI. be justified in making very large and expensive repairs, except by an expediency which should amount almost, if not quite, to a necessity.^ When he comes to borrowing money on bottomry of the ship, or by respondentia of the cargo, there must now be a stronger and an unquestionable necessity.^ But if he under- • In the case of The Ship Fortitude, 3 Sumner, 228, 237, which was a suit in rem, founded on a bottomry bond given by the master of the ship for moneys taken up for the repairs of the ship, the main question raised by the pleadings was upon the necessity of the repairs, the respondents contending that they were unnecessarily, if not fraudulently, made. In deciding this question, Mr. Justice Story remarked : " In relation to what are necessary repairs in the sense of the law, for which the master may lawfully bind the owner of the ship, I have not been able, after a pretty thorough search into the authori- ties and text-writers, ancient and modern, to find it anywhere laid down in direct or peremptory terms, that they are such repair?, and such repairs only, as are absolutely indispensable for the safety of the ship or the voyage, or that there must be an extreme necessity, an invincible distress, or a positive urgent incapacity, to justify the master in mak- ing the repairs. The general formulary of expression found to be laid down is simply that the repairs are to be neces- sary, without in any manner pointing out what repairs are, in the sense of the law, deemed necessary, or what consti- tutes the true definition of necessity. But a thorough examination of the common text-writers, ancient as well as modern, will, as I think, satisfactorily show that they have all understood the language in a very mitigated sense ; and that necessary repairs mean such as are reasonably fit and proper for the ship under the circumstances, and not merely such as are absolutely indis- pensable for the safety of the ship or the accomplishment of the voyage." ' The authority of the master is limited to objects connected with the voyage, and, if he transcends the pre- scribed limits, his acts become in legal contemplation mere nullities. Hence, to make a bottomry bond executed by the master a valid hypothecation of the ship, it must be shown by the creditor that the master acted within the scope of his authority ; or, in other words, it must be shown that the advances were made for repairs and supplies necessary for eflfectuating the objects of the voy- age or the safety and security of the ship ; and no presumption should arise that such repairs and supplies could be procured upon any reasonable terms with the credit of the owner, indepen- dent of such hypothecation. The Au- rora, 1 Wheat. 102. " To justify the giving of a bottomry bond, it is not only essential that there should be a necessity for the repairs, but that there should also be a necessity of resorting to a bottomry bond in order to procure the proper funds to defray the expenditure. If the master has funds of his owner in his own possession, or if he can procure funds upon the personal credit of the owner, he is not ordinarily at liberty to resort to a bot- tomry loan. In short, it is only when this is the only or the least disadvan- tageous mode of borrowing, that the master is at liberty to resort to it as a dernier resort. The giving of a bot- tomry bond is therefore properly said CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 315 takes to sell the ship, or the cargo, or any part of it, the necessity must now be yet stronger. It must be certain and stringent. It must be a necessity which leaves to him no alternative but to proceed in this way, or let the property intrusted to his care perish or waste away, to the detriment of the owners.^ to be justifiable only in a case of great extremity, of urgent necessity, or of extreme pressure. In cases of bottomry, the expressions may be appropriate when they would be utterly inapplicable to common cases of repairs.'' Story, J., in The Ship Fortitude, 3 Sumner, 228, 234. The master may sell a part or he may hypothecate the whole cargo, even for the necessary repairs of the ship, when the act is required to enable him to continue the voyage. Fontaine v. Col. Ins. Co., 9 Johns. 29. ' The master of a vessel, as such, has no authority to sell the vessel or the cargo, unless in a case of extreme necessity, and where he acts, with the most perfect good faith for the interest of those who are concerned in the prop- erty. Gordon v. Mass. F. & M. Ins. Co., 2 Pick. 249. There must be some- thing more than expediency in the case ; the sale should be indispensably requisite. The reasons for it should be cogent. It must be a necessity which leaves no alternative, which prescribes the law for itself, and puts the party in a positive state of compulsion to act. The master acts for the owners or in- surers, because they cannot have an opportunity to act for themselves. Hall V. Franklin Ins. Co., 9 Pick. 466. In Idle V. Koyal Exch. Ass. Co., 3 Moore, 115, 145, Dallas, C. J., says: " The right to sell, as between the cap- tain and the owners, has been deemed of a very questionable nature ; although, upon the whole, extracting from the books what seems to be the weight of authority, I conceive that the right to sell must be considered to exist in cases of extreme necessity, — a right, how- ever, which in all cases must be strictly watched." As between the owner and the mas- ter, it is not sufficient that the sale be one of good faith on the part of the master, and for the benefit of all con- cerned, unless there be an urgent neces- sity. The Schooner Tilton, 5 Mason, 465 ; Head u. Bonham, 3 Bro. & Bing. 147. In cases of necessity, the master may sell in a foreign country, rather than let the property perish, but not in the country where his owner lives. Scull u. Briddle, 2 Wash. C. C. 150. " The master has an authority to sell only in cases of extrejpe necessity, not indeed of physical necessity, but of moral necessity. By moral necessity, I understand, not an overwhelming and irresistible calamity or force, but a strong and urgent, and, if one may so say, a vehement exigency, which justi- fies and requires the sale to be made, as a proper matter of duty to the owner, to prevent a greater sacrifice, or a total ruin of the property.'' Story, J., in Robinson v. Com. Ins. Co., 3 Sumner, 220, 227. See also N. E. Ins. Co. v. Brig Sarah Ann, 13 Pet. 387 ; Thorneby V. Hebson, 2 B. & A. 618 ; The Betty Cathcart, 1 Eob. 220 ; Robertson v. Clarke, 1 Bing. 445 ; Bryant v. Com. Ins. Co., 13 Pick. 543; Caldwell v. W. M. & F. Ins. Co., 19 La. 42 ; Somes v. Sugrue, 4 C. & P. 276, infra. 316 THE LAW OF MARINE INSURANCE. [CH. VI. It has been said that the necessity for these acts is sufficient to justify them, if it must be supposed that the owner if present, and a rational man, would do the same things.^ We cannot think that this is quite true ; and while we admit that there may be some difficulty in pressing the rule too far, we should say that, while the owner, if present, might reasonably choose this thing among others, the master would be justified in doing them as his agent, only when he could do only these things, and had, properly speaking, no choice. . We have considered some of these questions in other connec- tions ; and have dwelt upon them now, because, when a loss occurs through such an act of the master, while the insurers are liable for it either as particular average or as general average when such a necessity existed, in some adjudicated cases and in prac- tice, such expenses are sometimes adjusted as a general-average ' In Robinson v. Com. Ins. Co., supra, Judge Story, in defining the necessity which will justify the master in selling, says : " I know not how better to put the case of such a moral necessity than to say, that it is such an act of sale as, under like circumstances, a considerate owner, who was lininsured, would adopt for his own true interest, and that of all concerned in the voyage." Lord Mans- field, in Milles v. Fletcher, Doug. 234, said : " Whatever it was right for the captain to have done, if it had been his own ship and cargo, the underwriters must answer for the consequences of." In Somes v. Sugrue, 4 C. & P. 276, 283, the court says: "A captain has no power to sell except from necessity, considered as an impulse, acting morally to excuse his departure from the original duty cast upon him of navigating and bringing back the vessel. If he has no means of getting the repairs done in the place where the injury occurs, or if, being in a place where they might be done, he has no money in his possession, and is not able to raise any, then he is justified in selling, as the best thing that can be done. In the present case, it appears that the vessel was in a place where the repairs could be done, and where money could be obtained, al- though at an extravagant expense. Still the question is, whether the expenditure was so great that no prudent man, in the exercise of a sound and vigorous judgment, would hesitate as to the pro- priety of selling. If you think that, if the owner himself had been on the spot, uninsured, he, in the exercise of a sound discretion, would have repaired the vessel, or that, if an agent of the underwriters had been there, he, exer- cising such a discretion, would have re- paired, then this captain ought certainly .to have done so. But, if they would not have done so, then I think this cap- tain was not compellable to repair, and the sale in such case will have taken place under a justifiable necessity." But see contra, as to the power of the master to sell the cargo because a pru- dent owner, if present, would do so, Bryant v. Com. Ins. Co., 18 Pick. 543. CH. VI.] ADJUSTMENT OP GENERAL AVERAGE. 317 loss when they rest upon no other justification than that of reasonable expediency.^ If a master sells a cargo or a part of it for insufficient reasons, he sells it without authority. If the owner of the cargo be also the owner of the ship, it is his servant who has done hini this wrong, and he has no remedy unless he may have one against the master. If the shipper be not the ship-owner, then he is injured by the master, for whom the ship-owner is responsible ; and in neither case should the insurer be responsible, for he insures only against the perils of the sea, and this is not a peril of the sea.^ If the wrongful act amounts to barratry, the insurers will be responsible if they insured against barratry, but a loss by barratry would not come within the scope of general average. Text-writers generally make a distinction between those gen- eral-average claims which arise out of sacrifices and those which rest on expenditures. We are satisfied, however, that this dis- tinction is unreal, and the three essentials of all general-average claims apply equally to sacrifices and expenditures, that is to say, they must be voluntary, necessary, and effectual. It must be especially remembered, in claims founded on ex- penses, that only that part of the property for the benefit of which the expenses are incurred" is liable for it.^ If for the ship only, ' See the strong language of Lord sel, was proceeded against in the Ad- Mansfield, in Milles v. Fletcher, in the miralty Court, and a part condemned preceding note. and the residue released, and, to prevent " An insurer on goods is not liable an appeal and avoid further detention, when the goods are sold by the captain the master agreed to pay a specific of a ship to defray the expense of re- sum, as a ransom, and sold a part of the pairs rendered necessary by a tempest, cargo, being more than a moiety of the to which ship and goods had been ex- part insured, to defray the expenses and posed. The owner of the ship ought to pay the ransom, it was held that the furnish the captain with funds for re- sum paid for ransom and expenses was pair ; if he omits to do so, and the cap- not general average, having been paid tain is obliged to sell the cargo, he solely for the benefit of the cargo, and whose goods are sold may claim the not to obtain a liberation of the vessel, value of the owner ; and the owner which was not brought into controversy, may sue the insurer on ship for the ex- but must be borne as a particular aver- pense incurred in repair. Sarquy v. age upon the cargo alone. Vandenheu- Hobson, 4 Bing. 131 ; Powell v. Gud- vel v. Un. Ins. Co., 1 Johns. 406. See geon, 5 M. & S. 431. also Watson v. Mar. Ins. Co., 7 Johns. ' Where a vessel and cargo were cap- 57; Jumel v. Mar. Ins. Co., 7 Johns, tured, and the cargo, but not the ves- 412; Pet«rs u. Warren Ins. Co., 1 Story, 318 THE LAW OF MARINE INSURANCE. [CH. VI. the cargo does not contribute ; if for the cargo only, the ship does not contribute ; and if for a part of the cargo only, it must be adjusted as a loss, partial or total, of that part only. Wherever an act is done for the safety both of the ship and cargoj and therefore founding a claim for general-average loss, all the expenses directly and necessarily incident to that act, and con- nected with it, are to be adjusted as a part of the general-average claim. Thus, if the ship put into some port for repairs, under circumstances which make the expense of these repairs a general- average loss, then all the expenses in bringing the ship into port and clearing her out again, piloting,^ towage,^ charges of watch- 463, 469 ; Benecke, Pr. of Indem. 223. The principle of contribution is, that everything which is saved by common expense and labor shall pay that ex- pense in proportion to its value ; there- fore property taken from the vessel by the owners, before the expense was in- curred by which the vessel was saved, is not subject to contribution, as it cannot be said to have been saved by that ex- penditure. Bedford Com. Ins. Co. v. Parker, 2 Pick. 1, 10. In Castillain v. Thompson, 13 C. B., N. S., 105, T. & Co., the owners of flats or barges at Liver- pool, were employed by H. & Co. to carry certain copper ore to one L., the owner of crushing-mills at Birkenhead, who, in consideration of being employed to crush the ore, agreed to indemnify H. & Co. against all risk in the transit. Whilst on its way to Birkenhead, the barge with the ore on board foundered hi the river. The barge-owners gave no- tice of the loss to the shippers, and re- quested to be employed to raise the cargo ; but were answered that they had better see L., as the shippers had noth- ing to do with it. But L. referred them to M., with whom he was insured for orders, and the latter said : " You had better go on with it, and do the best you can for us." T. & Co. thereupon pro- ceeded with the work, and, after incur- ring great labor and expense, succeeded in recovering the ore. It was contended, in behalf of T. & Co., that they were entitled to claim the expenses incurred by them as general average, since the ore was on board their vessel, sunk at the bottom of the river, and the ex- penses were incurred in recovering the vessel and her cargo. But it was held that this claim could not be allowed, as it was not for expenses incurred by the master, or the owners for the benefit of all concerned, but for those incurred by virtue of a contract entered into with the insurer, the person ultimately inter- ested in recovering the ore. ' Benecke, 192 ; 2 Phillips, § 1326. ^ Wightman v. Macadam, 2 Brev. 230, 233; Beawes, 150. This charge was allowed in a London adjustment of an average in case of an American ves- sel putting into that port. 2 Phillips, § 1326, in notes. In Lyon v. Alvord, 18 Conn. 66, the vessel of the plaintiffs, on her way from Albany to Westport, with a cargo of lumber, a part of which was consigned to the defendant, was driven, by stress of weather, on a rock in Long Island Sound, and a hole was broken in her hull; in consequence of which, she filled with water, and be- came unable to proceed on her voyage, and was in danger of sinking. The CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 319 men,^ of men hired to assist in pumping the ship,^ cutting a way for the ship through ice,^ and all the expenses necessarily incurred for the repair of the ship, necessary loading or unloading,* and all other expenses of similar character, are treated in the adjust- ment as a part of the general-average claim ; ^ only, however, so far as the expenses were for the common benefit. plaintiflFs thereupon procured her to be towed into the harbor of Southport, where they obtained another vessel to take the cargo to Blackrock, where it was delivered to the defendant. There was no evidence that the defendant re- quested any of the acts, either of towing the vessel into Southport or in procur- ing the cargo to be transported to Black- rock. The action was brought by the ship-owners against the owner of the lumber for contribution. It was held that the acts done by the plaintiffs, from the time the vessel became disabled un- til she was brought into the harbor of Southport, being found necessary, were proper subjects of a general average, and the plaintiff was accordingly entitled to recover ; that if the exception had bedn properly taken, the defendant would not have been liable for the expense of taking the lumber from Southport to Blackrock ; unless this was part of the process of lightening the vessel or of fit- ting it for repairs, in order to save it and the cargo, and to complete the voyage ; in which case this expense also would be the subject of a general average ; and that as the objection of the defend- ant, on the trial, went to the whole claim of the plaintiffs and the whole evi- dence to support it, without discrimina- tion, and no distinct question as to the last-mentioned expense was made, a judgment covering the entire expense would not, for that reason, be reversed. } Stevens on Average (5th ed.) 23. ' Orrok V. Com. Ins. Co., 21 Pick. 469, 470. ' 1 Mageus, 67. * The Copenhagen, 1 Rob. Adm. 289, 294 ; Plummer v. Wildman, 3 M. & S. 482, 487 ; Barker v. Phoenix Ins. Co., 8 Johns. 307, 318 ; Da Costa v. Newn- ham, 2 T. R. 407. In Hall V. Janson, 4 El. & B. 500, 507, where a ship, being damaged by stormy weather, was forced to go out of her course to be repaired, and for this purpose the cargo was necessarily unloaded and loaded again, the court said : " The expenses necessarily in- curred in unloading and reloading the cargo for the purpose of repairing the ship, that she may be made capable of proceeding on her voyage, have been held to give a claim for general-average contribution ; for the acts which occa- sion these expenses become necessary from perils insured against ; and they are deliberately done for the joint bene- fit of those who are interested in the ship, the cargo, and the freight." * Where a survey is properly made at a foreign port, in order to ascertain the amount of damage and the propriety of making repairs, if the damage is a peril insured against, the expense is to • be contributed for. Potter v. Ocean Ins. Co., 3 Sumner, 27. Whatever charges are necessarily in- curred where a vessel is compelled to seek refuge from a tempest, in a port out of the course or short of her port of destination, for the mutual safety of the ship and cargo, the owners of each are respectively bound to contribute in proportion to their several interests. 320 THE LAW OF MABINE INSURANCE. [CH. VI. Thus, for example, if the ship could have been as -well repaired with the cargo on board, and the cargo only unloaded for its own benefit, the expense thence arising wpuld be charged to the cargo only ; ^ and if, after the cargo is removed, the ship's stores are taken out, this is of no benefit to the cargo, and is chargeable to the ship only.^ The question to which we have already referred more than once, and which, as we have seen, comes up in many cases of average and adjustment, is this : Do certain expenses which were incurred by the ship belong to her especial duty and obligation, or, lying outside of this duty, should they be considered as voluntarily incurred for the common benefit of the ship and cargo ? It is this question which causes the difierence between English and American adjudications, to which we have already referred. The English courts holding that, as the owners of a vessel are bound to keep her in repair, when she goes out of her way for the purpose of repair, the expenses thence arising are not a general-average loss, unless entirely and exclusively for saving the whole subject of insurance should, for the purpose of adjusting the loss on the The following charges appear to be of that description : attendance on the schooner coming into port ; pilotage ; harbor - master and health officer's charges; wharfage to unload and un- loading; and, perhaps, the protest. Wightman v. Macadam, 2 Brevard, 230. In a policy of insurance upon a steamer in the ordinary form, the hull and the machinery were separately valued, with a clause, " average payable on the whole, or on each as if sepa- rately insured." The steamer had dis- charged her cargo at C, and while she lay there, without any cargo on ' board, her hull was damaged by fire. To the cost of repairs to "the hull, in- cluding the sum paid for surveyors' fees, after a deduction of the usual one third, it was proposed to add an addi- tional sum expended in extinguishing the fire, so as to take the case out of the common three-per-cent memorandum. It was held by Blackburn, J., that the parties must be understood to have agreed that any expenditure incurred policy, be treated as general average. Oppenheim v. Fry, 3 B. & Smith, 873. ' In a case where a boat was aground in five feet of water at her bow and eight feet at her stern, it was held that, if she had sunk in deep water, the un- loading of the cargo might have been necessary for raising her ; in which case, or at any rate, if unloading the cargo had sufficed to raise her, and she was to be repaired, the expense of unloading might have been a case for contribution, if the cargo was also benefited thereby ; but if the cargo was unloaded for its own preservation merely, and not for the benefit of the boat, or if the boat were raised for its own benefit only, and not for the benefit of the cargo, there would be no general average for the expense of unloading in the first case, or of raising the boat in the last. Fire- men's Ins. Co. V. Fitzhugh, 4 B. Mon. 160, 167. " Stevens on Average (5th ed.) 22. CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 321 the repairs were made necessary by the voluntary loss or destruc- tion of some part of the vessel for the common benefit.^ Whereas, ^ In the early case of Lateward v. Curling, G.H. Sittings after Trin. 1776, Lord Mansfield seems to have been of opinion that the expense of extraordi- nary wages and provisions during the time a ship goes into a port to repair is not the subject of general average, unless in a case of urgent necessity. The action was brought upon a policy of insurance on a ship to recover the amount of wages and provisions ex- pended during the time the ship went from Bengal to Bombay to repair. His lordship decided against the action, but said that there might be cases where exceptions to the general rule should be allowed ; but that, in order to consider a case as excepted, it must be an expense absolutely necessary, and such as could not possibly be avoided, owing to some of the perils stated in the policy. Park on Insurance (8th ed.) 288. In Da Costa v. Newnham, 2 T. R. 407, tried twelve years later, it was decided that, where a ship was obliged to put into port for the benefit o.f the whole concern, the charges of loading and unloading the cargo, and taking care of it, and the wages and provisions of the workmen hired for the repairs, became general average. The court laid stress on the fact that the sailors were not employed as such to make the repairs, but were discharged, and then hired anew as common workmen to perform this extra labor; intimating that, had they remained on board as sailors, the expense of their extra wages and provisions would not have been allowed. Mr. Justice Buller said : " As to the wages and provisions, this is not like the case where a ship is detained VOL. II. 21 by an embargo, where the court have said that the expense shall fall on the owner only, and the freight must bear it; but this is a question of general average, the ship having been obliged to go into por.t for the general benefit of the whole concern. A passage from Beawes is mentioned in Park, 143, showing the law in foreign countries upon this subject ; that when a ship is forced by storm to enter into a port to repair the damage she has suffered, if she cannot continue her voyage without an apparent risk of being lost, in such case the wages and victuals of the crew are brought into an average from the day it was resolved to seek a port to refit the vessel to the day of her depart- ing from it, with all the charges of load- ing, unloading, anchorage, pilotage, and every other expense incurred by this ' necessity. But I do not know that this point has ever been settled in England. There is one case mentioned in the same book [Lateward v. Curling, supra], where Lord Mansfield seemed to ap- prove of this rule ; but it is not neces- sary to determine that point now, for it ' appears that the crew had been all dis- charged, and these men were only em- ployed as common ■v#]rkmen." In Fletcher v. Poole, Sittings after East. 1769, Lord Mansfield, and after- wards, in Eden v. Poole, Sitt. after Hil. 1785, and in Robertson v. Ewer, 1 T. R. 127, 132, Mr. Justice Buller held that the expense incurred for wages, provisions, &c., of the seamen during a detention to repair could not be allowed as a charge against the insurer on the ship, but must be borne by the freight. Park (8th. ed.) 116, 117. These de- cisions have been confirmed by the 322 THE LAW OF MARINE INSURANCE. [CH. VI. in American law and practice, the going out of her way for ne- cessary repair is itself a voluntary sacrifice or loss, on the part recent case of De Vaux v. Salvador, 4 A. & E. 420 ; S. C. 6 Nev. & M. 713. In Hummer v. Wildman, 3 M. & S. 482, one of the leading English cases upon this subject, a ship was run foul of by a brig, which was unavoidably driven against her by the violence of the wind and weather, by which accident her false stern and knees were broken, and the master was in consequence obliged to cut away part of the rigging of her bow- sprit, and to return to port to repair the damage sustained by the accident and cutting away, without which re- pairs the ship could not have prosecuted her voyage or safely kept at sea. The action was brought for contribution for work and labor and for money paid. It was held that the amount of the ex- penses of repairing to be placed to the account of general contribution must be strictly confined to the necessity of the case, and that the arbitrator would have to determine how much was expended upon such repairs as were absolutely .necessary to enable the ship, with her cargo, to prosecute the voyage; and that for so much, and no more, the defendant would be liable to contribute ; but that the ship-owner must bear the captain's expenses in port during the unloading, repairmg, and reloading, and that crimpage did not come under general average. Lord EUenborough, C. J., said : " If the return to port was necessary for the general safety of the whole concern, it seems that the ex- penses unavoidably incurred by such necessity may be considered as the subject of general average. It is not so much a question whether the first cause whether the effect produced was such as to incapacitate the ship, without en- dangering the whole concern, from further prosecuting the voyage, unless she returned to port and removed the impediment. As far as removing the incapacity is concerned, all are equally benefited by it, and therefore it seems reasonable that all should contribute towards the expenses of it ; but if any benefit ultra the mere removal of this incapacity should have accrued to the ship by the repairs done, inasmuch as that will redound to the particular benefit of the ship-owner only, it will not come under the head of general average ; but that will be a matter of calculation upon the adjustment." In the subsequent case of Power v. Whitmore, 4 M. & S. 141, it was de- cided that the wages and provisions of the crew, while a ship remained in port, whither she was compelled to go for the safety of ship and cargo, in order to repair a damage occasioned by a tem- pest, were not the subject of general average ; nor were the expenses of such repair ; nor the wages and provisions of the crew during her detention in port, to which she returned, and was there detained on account of adverse winds and tempest, since there was here no sacrifice of any part by the master, but only of his time and pa- tience, and the damage incurred was by the violence of the wind and weather. Lord EUenborough, in the decision, re- ferred to the preceding case of Plum- mer v. Wildman, and said, that " this was not like the case recently before the court, where the master was compelled of the damage was owing to this or that to cut away his rigging in order to pre- accident, to the violence of the elements, serve the ship, and afterwards put into or the collision of another ship, as port to repair that which he sacrificed." CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 323 of the vessel, for the common benefit.^ Our notes will show the adjudications on this subject. We should agree with the In Jackson v. Charnock, 8 T. R. 509, A- let his ship to B for a voyage, engaging to keep it in repair during the whole time, for which he was to receive freight on the return of the ship. It became necessary for the safety of the ship during the voyage to put into a port to refit. It was held that the ex- pense of repairing must be borne en- tirely by A, and that B was not liable to contribute to it in proportion to his interest in the cargo, as for a general average. But here the court treated the question as depending wholly on the construction of the contract, in which the owner engaged to bear the expense of repairs. The decision, how- ever, would doubtless have been the same in the absence of any such agree- ment, as the English law, considers the ship-owner bound to repair, whether there are express stipulations to that effect or not. The general principle of the English law deducible from these decisions ap- pears, therefore, to be, that, if a vessel is compelled to put into port to repair a damage which is itself the subject of a general average, the necessary expenses thereby incurred to enable the ship to pursue her voyage may be the subjects of a general contribution; but that, if the losses sustained by the ship are of the nature of particular average, then the expenses incurred in repairing them give no claim to a general average, but must be borne by the ship-owner alone. Chancellor Kent says : " The result of the decisions in Plummer v. Wildman and Power v. Whitmore is, that where the general safety requires a ship to go into port to refit, by reason of some peril, the wages and provisions of the crew during the detention are not the subject of general average ; but the other necessary expenses of going in- to port, and of preparing for the refit- ting the ship, by unloading, warehous- ing and reloading the cargo, are gen- eral average. The costs of the repairs, so far as they accrue to the ship alone as a benefit, and would have been ne- cessary in that port, on account of the ship alone, are not average. Yet if the expense of the repairs would not have been incurred but for the bene- fit of the cargo, and might have been deferred, with safety to the ship, to a less costly port, such extra expense is gen- eral average." 3 Kent, Com. 235, 236. In Sharp v. Gladstone, 7 East, 24, where a ship was forcibly detained in a foreign port, and the owner abandoned first the ship and then the freight to the different sets of underwriters thereon, who paid as for a total loss, after which the ship was liberated, reshipped her cargo which had been taken out, and returned home earning freight, which was received by the assured, it was held that the under- writers should contribute according to their respective interests, among other expenses, for the wages and provisions of the crew from their liberation in the for- eign port till their discharge in the home port, and also for the wages of the crew during their detention, provisions being supplied by the foreign government. In DeVaux v. Salvador, 4 A. & E. 420,where a ship was insured with the usual war- ranty as to average, it was held that the expense of the wages and provisions of the crew, during the time that she was de- tained in repairing damage done to her- self by pei'ils of the sea, were not a loss for which the underwriters were liable. > In Padelford v. Boardman, 4 Mass. 548, it was decided that when, in the 324 THE LAW OF MARINE INSURANCE. [CH. VI. remark of Mr. Arnould, that there is hardly any point, even in course of a voyage, a ship insured, being damaged by winds and storms, volun- tarily seeks a port to refit, the expenses consequent thereon, including the wages and provisions of the crew during the detention, are a general average ; but that the repairs are a distinct charge upon the vessel. In noticing the cases of Fletcher v. Poole, and Eden v. Poole, supra, Mr. Justice Sewall said: "Both these cases exclude the circumstance of a voluntary and deliberate resort to a port for the particular purpose of re- fitting, with a view to the common safety of the vessel and cargo, and to avoid the impending danger of continuing the , voyage without some necessary repairs." Again he says, p. 554 : " A liberal con- struction in this respect appears condu- cive to the interest of insurers, in the benefit they derive from every reasona- ble precaution against impending and , extraordinary risks, such as the continu- ing at sea with a vessel disabled in her sails and rigging. By rendering the concerned liable in a general contribu- tion to defray the extraordinary ex- penses of seeking a por* and of the de- tention there to refit, the hazard from opposing interests is avoided ; and a se- curity common to all the concerned is purchased, as it ought to be, at their common risk and expense. Upon the yhole, there may be some difficulty in deciding, under the circumstances of a particular case, whether a detention by any accident happening after the com- mencement of a voyage is or is not a case of general average. But when the case is established to be of that nature, and sailors' wages and provisions make a part of the expense necessarily in- curred, this seems a sufficient reason for allowing them. The text-writers, and the ordinances and decrees of several great commercial republics favor it; and there is no opposing authority, ap- plicable to the case supposed, in the de- cisions of this court, or of the courts of Great Britain, from whom our rules of maritime law are generally derived.,. But the definition of a general average, received in the courts of both countries, includes the wages and provisions of seamen, in cases like this now under con- sideration." It is to be observed, in ex- planation of the last sentences of this citation, that this case was decided be- fore those of Plummer v. Wildman, and Power M. Whitmore, the latter being tried in 1815, and the former in 1808. In an earlier case in New York, it was held that if a vessel were, from sea damage, obliged to bear away to a port of neces- sity in order to refit, the wages and pro- visions, from the moment of bearing away to the period of sailing on her original voyage, constituted a subject of general average. Walden v Leroy, 2 Caines, 262. In delivering the opin- ion of the court, Kent, C. J., said : " It is necessary that the mariners should re- main for the purpose of proceeding to the port of discharge, as soon as the in- evitable misfortune, the casus fortuitus, creating the delay is removed. The cargo might be sacrificed j,t the interme- diate port, if the crew were not to be de- tained, and the expenses of their deten- tion, being for the common benefit, ought to be apportioned as a common bur- den." But Livingston, J., in a dissenting opinion, said: "I am for confining 'a general contribution for extra wages and provisions to a case of capture, or where a vessel goes into port to avoid an ene- my, or where some other step is taken by the master, without any previous in- jury to the vessel alone, evidently for the benefit of the whole, and with the view CH. VI.3 ADJUSTMENT OF 6ENEEAL AVERAGE. 325 the perplexed doctrine of general average, in which there is such a great diversity in the laws of mercantile states.^ of escaping from an impending peril. All these cases rest on the same princi- ple. No particular accident having hap- pened to the vessel, which it is the own- er's special duty, and interest to repair, there is no reason why he should per- sonally bear a heavy loss, which, in most of the cases put, is volunlarily incurred, to prevent a general one, greater still. Hence it will result, and perhaps a safer rule cannot be followed than the one suggested by Abbott, which is, that, if the injury to be repaired be not of itself an object of gross average, neither shall any of the incidental or consequential charges become so. If a shipper be not obliged to find materials, or carpen- ters, to repair injuries from tempest or stranding, why should he be taxed to pay or victual the crew ? " Where a vessel during her voyage puts into a port of necessity, and is repaired, and afterwards proceeds on her voyage, and is totally lost, the in- sured is entitled to recover the partial loss arising from the repairs, and general average consequent thereon, in addition to the total loss. Saltus v. Com. Ins. Co., 10 Johns. 487. Where a vessel insured, having lost her boat and camboose, and had her mainsail damaged in a gale, repaired the sail at sea with duck taken from the cargo, and purchased an old boat and camboose at a port of necessity, and, upon her arrival at home, sold the sail, boat, and camboose, and procured new ones, it wa# held that the loss was par- ticular average ; but other repairs made abroad from strict necessity to enable the vessel to return, and which were of no value after her return, were held to come under general average. Brooks V. Oriental Ins. Co., 7 Pick. 259. If, after a vessel is disabled, the master can, in a reasonable time, com- municate with his owners, it is his duty to do so before making repairs; and such delay does not relieve the owner of the cargo from contribution. Sher- wood V. Kuggles, 2 Sandf S. C. 55. In Sage v. Middletown Ins. Co., 1 Conn. 239, 243, the distinction men- tioned in Da Costa v. Newnham, 2 T. R. 407, between the wages of the seamen, as such, during a detention, and the wages of extra workmen, or of the sea- men discharged and hired anew as workmen, as subjects for contribution, is affirmed, and the reason upon which it is founded given. The court says : " The allowance of the charge for the services of the master and mariners was also incorrect. Mariners' wages are sometimes allowed during detention as a general average ; but I find no case in which they have been allowed under circumstances like the present. This, however, is not a case presenting simply a charge for mariners' wages. It is an extra allowance for labor on the repairs, while they remained a part of the crew not discharged. If this were allowed against the underwriters, either the mariners would receive a double com- pensation for their services, or the owner would receive from the under- writers the price of day laborers for services paid by him at a less price by the month.'' In Dunham v. Com. Ins. Co., lljohns. 315, a ship was insured " at and from New York to Liverpool, and at and from thence back to New York." On her ' 2 Arnould on Ins. 911. 826 THE LAW OF MARINE INSURANCE. [CH. VI. Section VII. — Of the Value of the Contributory Interests. A. Of the Ship. It may be doubted whether there is now any uniforiflity of rule or practice in regard to the contributory value of the ship, outward voyage she sustained so much Dunham v. Com. Ins. Co., supra, oontro- damage by tempests, &c., that on her verts the general principle of the Amer- arrival at Liverpool she was obliged to lean law upon the subject ; for in both go into dock to be repaired, which de- cases the cargo, having been delivered tained her from the 1st of December, 1810, to the 24th of March, 1811. The cargo having been delivered, and freight earned before the Ist of December, it was held that the wages of the master and crew and provisions on board were not general average, and that the under- writers on the ship were not liable for them. The case of Wightman v. Macadam, 2 Brev. (South Carolina) 230, was somewhat similar in principle. A ves- sel had been chartered by the defend- ant for a voyage from Charleston to Havana and back. The owner cove- nanted that the ship was tight, stanch, well fitted, tackled, and provided with every requisite, and both men and provisions fitting for the voyage. On before the expenses in question were incurred, was of course in no way bene- fited by them. This fact determined the decisions in both cases ; for in Wightman v. Macadam, the expenses incurred before the discharge of the cargo, namely, for attendance on the. schooner coming into port, pilot- age, harbor-master and health officer's charges, wharfage to unload, and un- loading, &c., were allowed as subjects for contribution. And in Dunham v. Com. Ins. Co. the court says : " It is clear that the expenses for wages and provisions during the time the ship was detained at Liverpool cannot be brought into general average. They were not incurred for the benefit of cargo or freight. The cargo had arrived at its the return voyage, in consequence of port of discharge, and had been de- damage from the perils of the seas, the livered, and freight earned, before the vessel was compelled to put into Savan- expenses in question were incurred." nah to refit. The cargo was landed. So also the decision in Williams v. Suf- and delivered to the defendant, who folk Ins. Co., 3 Sumn. 270, S. C. 13 Pet. paid a, pro rata freight on the same, and 415, that the expenses of going into port sold it at Savannah. The plaintiff to refit are general average only when the made a deduction for the freight from voyage has been or might be resumed ; Savannah to Charleston. The action for if the voyage is abandoned, and the was brought for contribution, among cargo is obliged to be transshipped, of other things, for the wages and suste- course the expenses attendant upon the nance of the crew during the detention, detention are in no way conducive to The court held that the defendant was the benefit of the cargo, and there is ac- nOt liable to contribute to this expense, cordingly no reason why it should con- as it was not necessary to the safety of the tribute toward them, goods. But neither this case nor that of In the case of Union Bank of S. C. v. CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 327 on an adjustment of general average. Ancient maritime codes prescribe certain rules, which are now no longer in use. They are collected by Mr. Stevens in his essay on general average, and we give in our notes a brief statement of them, because they are still serviceable to illustrate the principles which should be applied to this question.^ Union Ins. Co., Dudley, S. C. 171, the for her full value. By the ordinance English rule was adhered to ; but there of Hamburg, Tit. 21, art. 8, she con- the policy referred to the usages of tributes according to her true value in London as the standard by which the the state in which she comes from the liabilities of the company were to be ascertained, although it was stated that the custom as to wages was the same in .the city of Charleston. The wages and expenses of the crew during repairs made at the port of de- livery are not to be contributed for, even if the insurance be on time. Perry •v. Ohio Ins. Co., 5 Ohio, 305. In addition to those already cited, the American rule is sustained in the following cases : Clark v. United M. & F. Ins. Co., 7 Mass. 365 ; Potter v. Ocean Insurance Co., 3 Sumner, 27 ; Bixby V. Franklin Ins. Co., lb. 46, in note ; Peters v. Warren Ins. Co., lb. 400 ; Henshaw v. Mar. Ins. Co., 2 Caipes, 274 ; Spafford v. Dodge, 14 Mass. 66, 74;. Barker v. Phoenix Ins. Co., 8 Johns. 307 ; Ross v. Ship Active, 2 Wash. C. C. 226 ; Thornton v. U. S. Ins. Co., 3 Fairf 150; Hause v. N. O. M. & F. Ins. Co., 10 La. 1 ; The Brig Mary, 1 Sprague, 17, S. C. 5 Law Re- porter, 75 ; Dyer v. Piscataqua F. & M. Ins. Co., 5"3 Me. 118, 122. ' By the Consolato del Mare, c. 94 ; the Code de Commerce, art. 304 and 401 ; the Ord. de la Mar. Tit. du fret., art. 7 and 20 ; des avaries, art. 3 ; du jet., art. 19; the Ordinances of Flor- ence, Amsterdam, and Leghorn ; the ship contributes for half her value. By the ordinances of Philip 11., of Konigs- burg, and of Portugal, she contributes sea, and the whole freight, deducting wages, pilotage, and other charges be- longing to simple average. The ordi- nances of Prussia, of Genoa, of Spain regarding the commerce with India, and of Copenhagen, are to the same effect, Pruss. §§ 1868-1870; Stat. Jan. 1.4, c. 16, § omnia j acta ; Recopilation de Leyes de las Indias, No. 80, 1. 9 ; Tit. 39, Ley, 10. By the Ord. de Bilboa, art. 1 and 2, the ship contributes for her full value, as estimated by com- petent persons, the freight for one half, and the whole of what is paid by the passengers, if any. By the ordinance of Sweden the ship contributes accord- ing to her value as estimated by sur- veyors upon her arrival. But if she be valued in the policy, she contributes according to that value. The Danish articles have the same provision. If no valuation is made, the ship contributes according to her value at the place of departure, or at the time when the order for insuring her was given. Be- necke, Pr. of Indem. 323, 324, 325. The laws of Wisbuy and the ordinances of Antwerp and Rotterdam provide that the owner of the ship shall contrib- ute for her whole value, or her whole freight, at the option of the proprietors of the cargo. The custom in Holland was the same. Ad. Vermer, annot. p. 118. The Laws of Oleron gave the option to the owner. The Consolato 328 THE LAW OF MARINE INSURANCE. [CH. VI. We consider that the general principle, whatever may be the method or difficulty of its application, is that stated more than fifty years ago by Mr. Justice Sewall : " In averages and contributions, the value, as between the parties interested in the adventure of property liable, is to be taken as it may be estimated at. the time The various rules adopted at dif- and, finding it impracticable to beat back to that port, although it was prac- ticable, to go to Liverpool, the master bore away to Dublin to gain information of the state of the markets, and in the course thither a loss was incurred. It was agreed by the parties that the ex- penses and damages incurred by the_ disaster, computed at the sum of $ 4,924, should be adjusted as a general average upon the ship, cargo, freight, and a deck load ; that in this adjustment the value of the property as at Dublin should 'be taken, and that the ship was there worth $ 8,000, — $2, 000 more than at the commencement of the voyage, — the cargo, $ 5,510 ; the freight, $ 1,094 ; and the deck load, $ 332 ; that there had been sustained and paid thereon a loss and contribution of 28f per cent ; and that the value of the cargo, as shipped, was $ 2,000. The action was brought upon the policy by the part owner of the ship and cargo for the amount contributed by his part thereof towards this loss. The court were to determine what sum for the loss de- manded was recoverable upon the policy, — whether the whole sum sup- posed to be assessed upon the plaintiff, and paid by him, upon his quarter part of the ship and cargo, or only the same rate of loss upon the sum insured which was paid upon the supposed valuation at Dublin. After stating the rule given in the text, and which he mentions as having been derived from usages estab- lished in England and recognized in judicial decisions there and in Massa- and place of its adjustment." ^ del Mare, cap. 96, provides that, if the master receives freight for his whole cargo, the same shall be included in the general contribution. By the ordinance of Louis XIV., No. 579, both ship and freight contribute for one half. The gross freight is only understood herfe. 1 Mag. 58. The difference in these ordinances is easily reconciled, for it proceeds from the same grounds, viz. the impossibility of employing a ship in any voyage without wear and tear, and consequently losing the value she had when she com- menced it, and the supposition that one half or one third of her freight would be expended in paying men's wages and other charges. 1 Magens, 58. Quentin van Weytsen upon this sub- ject says, Tr. des Av. p. 31 : " They ought in reason and justice to carry in common contribution the whole value of the vessel, as well as the entire freight which the master receives for the voyage." Upon this passage Mr. Stevens says : " This, which was his opinion in 1563, is now the practice in England." Stevens & Benecke on Av. (Phil, ed.) 211. ' Clark V. United M. and F. Ins. Co., 7 Mass. 365, 370. In this case a ship was insured from the United States to Cork or Liverpool, either or both, for two thousand dollars, — fifteen hundred on the vessel and five hundred on the cargo, the vessel being valued at six thousand dollars. In consequence of the fog, and contrary to the intentions of the master, the ship passed Cork, CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 329 ferent times in different nations have been intended only to ascer- tain this value. In practice, if the ship be sold, this is usually taken as fixing her contributory value. ^ chusetts, Judge SewaU continues : " The effect of this subsequent valuation, in determining the proportion of loss re- coverable by the assured in a case of general average, has not been settled, I believe, by any judicial decision ; and I have not found any rule or usage re- specting a case where the circumstance has occurred of a valuation in adjusting a general average materially varying from the value of the property as in- sured. The reason may be that the case is very unusual where goods are to be estimated at a very considerable ad- vance and profit, besides the expense of freight, in adjusting a contribution for salvage at their port of discharge ; and it may at least be conjectured that never before did a vessel become a third part more valuable in a foreign port, and after a long voyage, than she was in the port from which she sailed, and at the commencement of her voy- age ; unless by means of some addition and repairs of an extraordinary nature made in the course of the voyage Nor is a vessel, generally speaking, an article upon which a profit in a foreign market can be insured or expected; nor is it usually sent to a foreign port for sale. It is rather the instrument of ■ trade and business, like a shop or ware- house, than the immediate subject of traffic ; and the voyage and employ- ment are ordinarily estimated as a diminution of value to a vessel, and as a matter of expense to the owner, for which he expects an indemnification in the hire or freight, or in the profits accruing from the use of the vessel in the carriage of his own goods. It is perhaps upon these considerations that a variety of positive regulations have been established from time to time in foreign states, as to the degree in which a ship shall be liable to contribute in a case of general average It is the opinion of the court that the defendants are liable in the proportion which the sum underwritten by them upon the vessel bears to th& actual value of the vessel when insured ; and the valuation stated in the policy is not to be re- garded." The owners of the ship contribute ac- cording to her value at the end of the voyage, and according to the net amount of the freight and earnings. 3 Kent, Com. 242 ; Benecke, Pr. of Indem. 310, 311 ; Abbott, on Ship. 503 ; 2 Mag. 237 ; Spafford v. Dodge, 14 Mass. 66, 80 ; Gil- lett V. Ellis, 1 1 111. 579-. The ship's pro- visions are not to be added to the value, though the accident happened at a time when much of them remained on board ; because they are destined to be consumed during the voyage, and consequently belong to wear and tear. Benecke, 311 ; Brown v. Stapyleton, 4 Bing. 119. But in all those cases in which the cargo is obliged to contribute for its value at the time of the accident, without refer- ence to a subsequent diminution, the vessel ought to contribute also for that value, this being the only way of placing all parties upon an equal footing. Ibid. Where a ship after a jettison is wrecked, but a part of its materials are saved, these contribute according to their value as saved, the expense of salvage being deducted. Dodge v. Un. Mar. Ins. Co., 17 Mass. 471. ' Bell V. Smith, 2 Johns. 98 ; Lee v. Grinnell, 5 Duer, 400, 429. 330 THE LAW OF MARINE INSURANCE. [CH. VI. There is no doubt that in most cases it would determine this value with sufficient accuracy; not always, however, for it is obvious that the price might be increased or diminished by ex- traneous circumstances, which should not be considered in deter- mining the contributory value.^ If the value of the ship when she sails be ascertained, this is certainly a step towards ascertaining her value when the adjust- ment is made. But it is only a step ; for not only is she older, and must have been subjected to some wear and tear, but she may be greatly deteriorated in value. There are many rules in the law-merchant which seem to be arbitrary, but are in fact founded upon the average of cases, and therefore work well on the whole, although especially adapted to no one case. The rule one third off new for old, of which we have already spoken, is one of these. In some of our States a rule of like kind has been applied to this question ; and one fifth of the value which the ship had when she sailed is deducted to give her contributory value. ^ ' Speaking of this rule, Mr. Stevens says : " There is no general rule, how- ever, that will serve for all cases of this nature ; for, even on the above prin- ciple, if the voyage end at a foreign port, or at a place where there is no demand for shipping, or, on the con- trary, where there is a very great de- mand, the value of the ship will be decreased or increased by such adven- titious circumstances, but which ought to have no weight in an equitable ap- portionment." Stevens & Beneck^ on Av. (Phil, ed.) 213. In Gray v. Wain, 2 S. & K. 229, the court says : " The defendant contends that it is the sum the ship would have sold for at Algesiras or Gibraltar, and insists on the impropriety of valuing the goods by one rule and the ship by an- other. But the same reason does not hold for the valuation of the goods and the ship. The goods are intended to be sold at the port of destination, and, being selected for that market, may be supposed in general to fetch a good price there. Not so the ship, which in many cases delivers her cargo, and re- turns to the place where the voyage originated, her owners having had no intention to sell her at the port of de- liyery, which they may have known to be no market for ships. It would seem more just, therefore, to value the ship according to the price she would have borne at the place where the voyage commenced, deducting the expense of carrying her there." In regard to the deduction mentioned in the last clause, Mr. Phillips observes : " But this is supposing her to come home empty, which by no means is a necessary supposition- 2 Phil, on Ins. § 1383. " Leavenworth v. Delafield, 1 Caines, 573; Gray v. Wain, 2 S. & R..229. This is the rule in New York. In Gray V. Wain the court said : " I am the more inclined to be satisfied with it, as it is more equitable, more certain, and CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 331 In other States this rule is not made use of,^ and even in those States in which it is adopted it would seem not to be applied when the value can be obtained more ezactly. We incline to think that the rule laid down quite recently, in .an interesting case in the United States District Court of New York, may be regarded as giving the present rule of practice. It is substantially this : the value of the ship at the port of depart- nve is to be taken ; from this a reasonable deduction is to be made for wear and tear, and for deterioration in value, and what this deduction should be is to be determined by the best evidence which the case admits.^ We give in our notes the principal ad- judication on this subject. Where contribution is made to the ship because of damage caused to her for the benefit of the contributory interests, the damage to be contributed for is the actual cost if the repairs are made, or the estimated cost if they are not yet made ; and less liable to accidental fluctuation than the rule contended for by the defend- ant." But in The Mutual Safety Ins. Co. V. The Cargo of the Ship George, Belts, J., said : " The rule is that a reasonable allowance shall be made for ■wear and tear, and there would mani- festly be great conveniency in possess- ing a criterion which should infallibly fix that amount ; but without the sup- port of notorious usage and custom to a uniform scale of depreciation of a vessel by performing the whole or any portion of her voyage, it must be sheer con- jecture with the court to pronounce the abatement of one fifth, or one half, or any other aliquot of the value of the ship when sound a reasonable measure of its worth at the time of loss." ' It has not been adopted in Massa- chusetts. Spafford v. Dodge, 14 Mass. 66 ; Douglas v. Moody, 9 Mass. 548. " Mutual Safety Insurance Co. v. Cargo of the Ship George, Oloott, Adm. 157, S. C. 8 Law Rep. 361. The adjustment is to be made in the same manner, whether the ship, freight. and cargo belong to the same or to difierent persons. Spafford v. Dodge, 14 Mass. 66, 79 ; Jumel v. Mar. Ins. Co., 7 Johns. 412, 425. The contribution is to be adjusted according to the value of the respective articles saved, at the time and in the place when and where the expense was incurred, in like manner as if all the three parties had been present, and each had originally paid his own pro- portion. Spafford v. Dodge, 14 Mass. 66, 80 ; Douglas v. Moody, 9 Mass. 548, 554. If the contribution is claimed for goods thrown overboard, or for a mast cut away, the adjustment must neces- sarily be postponed until the termina- tion of the voyage ; because, until that event, it cannot be known whether any- thing will be saved from which to claim a contribution, and also because each party will be held to contribute accord- ing to the value of what shall come to his hands at the termination of the voy- age., Spafford v. Dodge, 14 Mass. 66, 80. 332 THE LAW OF MARINE INSURANCE. [CH. VI. in either case one third is to be deducted, under the rule of one third off new for old.^ ' B. Contributory Value of the Freight. There is of course no contribution by the freight, unless it be earned, and by only so much as is earned.^ But the earning of freight is always at a certain cost. The ship is kept in a ' 3 Kent, Com. 243 ; Abbott on Ship- ping (8th ed.) 609 ; Da Costa «. Newn- ham, 2 T. R. 407, 408, 412; Dunham V. Com. Ins. Co., 11 Johns. 315, 321; Brooks V. Oriental Ins. Co., 7 Pick. 259, 269 ; Byrnes v. National Ins. Co., 1 Cow. 265, 273 ; Reynolds v. Ocean Ins. Co., 22 Pick. 191, 196 ; Giles v. Eagle Ins. Co., 2 Met. 140, 144. This deduction of one third new for old is al- lowed, upon the supposition that the ves- sel, after being repaired, is in better cpndition than she was at the commence- ment of the voyage, in consequence of new materials having been substituted for old. And as the contract of the un- derwriters is one of indemnity merely, it is equitable that a deduction should be make from the cost of the repairs, equal to the enhanced condition of the vessel. Byrnes u. National Ins. Co., 1 Cow. 274. In England this deduction is made from the repairs of a ship, if she has met with an accident, only in her second voyage ; for if the injury is sus- tained and the repairs made in the first voyage, the vessel being new, it is not to be supposed that she is put in better condition by the repairs. Weskett on Ins. 456 ; Byrnes v. Nat. Ins. Co., 1 Cow. 27^ But this distinction has not been adopted in New York. Byrnes V. Nat. Ins. Co., supra ; Dunham v. Com. Ins. Co., 11 Johns. 315, 321. The deduction is not made unless the ship gets into the possession of the owner again, the usage being founded on the idea that the owner gets the ship the better for the repairs. Da Costa v. Newnham, 2 T.-R. 408, 412; Smith u. Bell, 2 Caines, Ca. 153, 156. The one third is not deducted from the gross amount of the expenses for re- pairs, but from the balance aft6r first deducting from that amount the value of the old materials, which are con- sidered as still belonging to the as- sured. Byrnes v. National Ins. Co., svr- pra; Brooks v. Oriental Ins. Co., 7 Pick. 259, 269. The customary deduc- tion of one third new for old is applica- ble only to the labor and materials em- ployed in the repairs, and to the new articles purchased in lieu of those which are lost or destroyed ; and it does not apply to other incidental expenses, hav- ing no connection with the repairs or new articles furnished, and from which the assured can possibly derive no en- hanced benefit or value beyond his loss, such as steamboat towage, boat hire, &c. Potter V. Ocean Ins. Co., 3 Sum- ner, 27. The rule of one third new for old, in the law of marine insurance, is applicable to the insurance of steam- boats on the Western waters. Wallace V. Ohio Ins. Co., 4 Ohio, 234, 242. » Potter V. Prov. Wash. Ins. Co., 4 Mason, 298 ; Lee v. Grinnell, 5 Duer, 400, 431 ; Maggrath v. Church, 1 Caines, 196, 215. CH. VI.J ADJUSTMENT OF GENERAL AVEKAGE. 333 condition tliat it may earn freight, and the wear and tear and natural decay of the ship while the freight is being earned, the wages and provisions of the crew, and all expenses attending navigation, are for the most part a fair charge against the con- tributory value of the freight. As a mattet of principle,, the test is this ; so much of the freight as is saved by the sacrifice contributes ; ^ but the expenses sub- ' In Williams v. London Ass. Co., 1 M. & S. 318, a ship was chartered from London to the East Indies, there to de- liver her outward cargo and return thence with a cargo for England into the Thames, and there make a true de- livery, &c ; and it was agreed that the charterers should, upon condition that the ship performed her voyage and ar- rived at London, and not otherwise, pay freight for every ton of goods that should be brought home at so much per ton. The ship, in the course of her outward voyage, incurred an average loss, but was repaii'ed and afterwards performed her voyage, and the^freight was received. It was held that the freight was liable to contribute to general average, and that the underwriter upon a policy on the ship for the outward voyage was enti- tled to deduct in respect to this contri- bution. Lord Ellenborough, C. J., said : " This is the case of an insurance on the outward voyage, on a ship chartered for a voyage out and home ; in the course of which outward voyage an average loss has happened ; and the question is, whether the freight payable under the charter-party is liable to contribute to general average. It is contended that the whole freight out and home is not liable; but the whole was affected and might have been frustrated by the loss, and was eventually preserved to the owners by the repairs done to the ship. It is true indeed that if this action had been com- menced immediately upon the loss hap- pening, it would not have been open to the defendants to say that the plaintiff was recouped in damages by a contribu- tion in respect of freight which at that time was contingent. But the case now before us is argued upon an admission that the freight has actually been re- ceived ; and therefore now the amount of the damages must be that of the origi- nal damage, minus the amount of the plaintiff's contribution ; and the diffi- culty as to the outward and homeward voyage seems to be removed by the consideration that the whole freight was saved by the repairs." A jettison of the cargo constitutes a case of general aver- age, to be borne by the ship, freight, and cargo ultimately saved. The Ship Na- thaniel Hooper, 3 Sumner, 5^2, 549. Where an average loss occurred before the vessel sailed, it was held, that as the voyage was not commenced, and the loss of freight could not be attributed to the circumstances creating the gen- eral average, the freight was neither to contribute nor be contributed for. Lee V. Grinnell, 5 Duer, 400, 431. 'Freight is liable, in some cases at least, upon a chartered ship, to contribute to salvage. The Racehorse, 3 Rob. 101 ; Cox v. May, 4 M. & S. 152, 159 ; The Dorothy Foster, 6 Rob. Adm. 90. General av- erage is in this respect analogous to the case of salvage. The principle upon which freight is to contribute in the ease of general average is, that it was one of the things in hazard at the time when 334 THE LAW OF MARINE INSURANCE. [CH. VL sequent to the sacrifice, which are necessary to the earning of the freight, are not saved, for they must be incurred at all events. If a ship makes a sacrifice, and three months afterwards reaches, with the saved cargo, its port of destination, and thereby earns a freight of ten thousand dollars, all of this is not clear gain. Only that part of it is so which is over and above the necessary cost, subsequent to the sacrifice, of earning this freight. The extreme difficulty of applying this rule in detail — that is to say, of estimating exactly what share of these expenses should go in diminution of freight — has led in this case, as in many others in the law of insurance, to which we have referred, to the adoption of a practical rule founded on the average of cases. In New York the freight contributes on one half of the gross amount earned,^ considering the other half as expended in earning this half. This, however, is a larger allowance than is usually made. The prevailing rule in this country is to apportion the that sacrifice which produced the gen- eral average was made ; and the princi- ple upon which it contributes in the case of salvage is, that but for the recapture, for which the salvage is paid, it would have been lost. Cox v. May, 4 M. & S. 152, 159. Where a ship from New York, destined to Madeira, was obliged, being disabled by perils of the sea, to put into Philadelphia, where the cargo was sold, it was held that the freight actually gained or earned in the voyage, and not what the vessel would have earned if she had gone to Madeira, should contribute to an average loss which had been incurred. Maggrath v. Church, 1 Caines, 196, 215. If the cargo arrives in safety at the port of destination, the freight is brought into the contribution ; but where the voyage is broken up near the port of departure, and the vessel has not adopted any in- termediate port, as and for the port of destination, but has returned home, and the freight has not been saved by the jettison, the contribution to the general- average loss should be between the ship and the cargo. Tudor v. Maoomber, 14 Pick. 34, 39. ' Leavenworth v. Delafield, 1 Caines, 573 ; Heyliger v. N. Y. Firem. Ins. Co., 11 Johns. 85. In Leavenworth v. Del- afield, the court observes that this rule may be deemed arbitrary, but that it will, perhaps, come as near as any other to producing a contribution in propor- tion to the real interest of each which may be in jeopardy, inasmuch as the freight will not clear to the owner more than, if as much as, one half what is con- tracted to be paid. This is also the rule in Prance, and in regard to it Pothier remarks : " As the freight is only due to the owner of a vessel, as a kind of in- demnity for her deterioration and ex- penses incurred by the voyage, it is sub- jecting him to a double burden to make him contribute for the entire value of the vessel and of the freight. Our ordi- nance, therefore, has adopted the mid- dle course of making him contribute for one half of the value of each." Pothier's Maritime Contracts, vol. 2, n. 119, p. 411. CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 335 general average of contribution on two thirds of the gross amount of freight earned.^ It is . said that in England only the wages are deducted.^ Where any rule on this point exists, we suppose it to be applicable to all cases of freight saved and earned. It was held in one case in Massachusetts that this rule did not apply to cases of capture and subsequent release,^ but this decision was not long after overruled.* If the voyage has many parts, that is, if the ship carries cargo to many ports, and earns freight at each port, the question has arisen whether, in the adjustment, the freight held to be con- tributory should be only that to the first port that the vessel reaches after the sacrifice, or the whole freight to the end of the voyage. The circumstances of such cases vary so much as to make it difficult to give a certain rule. If, however, the freight to the end of the whole voyage is certainly tliat which is saved by the sacrifice, it would be difficult to see why this whole freight should not contribute. If the vessel was chartered for the whole voyage, and, by the terms of the charter, one whole freight was payable at the end. of the whole voyage and nothing before, this would seem to strengthen the reason for saying that the whole freight should contribute.^ ' Humphreys v. Union Ins. Co., 3 turn cargo, if a loss occurs on the out- Mason, 429, 439. In Mutual Safety ward voyage, the freight for the round Ins. Co. V. Cargo of The Ship George, voyage contributes. Shelton u. Brig Olcott, Adm. 157, it was held that the Mary, 5 Law Reporter, 75; S. C. 1 freight should contribute at its gross Sprague, 17. In Williams v. London value, deducting therefrom all necessary Ass. Co., 1 M. & S. 318, of which we expenses incurred, if any, subsequent have given a statement, supra, p. 333, to the wreck. n. 1, Bayley, J., said : " Here the plain- ' Marshall on Ins. 467. It is the tiff had a vested right of freight; he same in the Consolato del Mare, and had some freight then actually due, and the ordinances of Philip II., Genoa, the whole was put in hazard, and the Konigsburg, Hamburg, and Copen- whole has been ultimately earned, hacen. See Stevens & Benecke on The difficulty raised in argument is Average, 215, 217. this, that a thing is not to contribute ' Douglas V. Moody, 9 Mass. 548. unless ultimately saved, and that it was * Spafford v. Dodge, 14 Mass. 66, 81. uncertain at the termination of the ' If there is a charter-party, and outward voyage whether the freight freight is to be paid for the round voy- would be saved; hut this freight was one age out and home, and the principal entire and indivisible sum payable for the object of the voyage is to obtain a re- use of the ship out and home ; therefore 336 THE LAW OF MARINE INSURANCE. [CH. VI. But if the ship, on its arrival at a certain port, delivers there a part of tlije saved cargo, and receives its freight for that part, and then carries -forward the reimainder of the saved cargo, and on her arrival receives freight for this remainder, it is difficult to see why the freight to the last port is not as much saved by the sacrifice as the freight to the first port ; or why, if so saved, it should not contribute. If the vessel on arriving at the first port delivers there the whole of the saved cargo,, and is paid for it, and takes there a new car- go for another port, it is a different case. Even here it might when ultimately earned, having been put in hazard and saved, it ought to contribute." Benecke, however, criti- pises the decision in this case. He say : " It is, however, with all deference, my private opinion that, in cases of this description, the freight ought to be divided, notwithstanding the stipulation in the charter-party, and such part only ought to contribute as may fairly be presumed to belong to the outward voyage. Considering, in the first place, the liability of contributing towards a general average as between the owners of the ship and those of the cargo, with- out reference to a particular stipulation exempting the cargo from contribution, it is not difficult to see that, if the freight were not to contribute at all, the ship-owner would gain the chance of earning freight at the expense of the proprietors of the cargo ; and that, on the other hand, if the whole of the freight for the voyage out and home were made to contribute, the freight would run the double risk of a general average, while that of the cargo were only single; for the risk of a general average taking place upon the voj'age out and home is double that of the same event occurring upon a single voyage. Had the vessel in the above case in- curred another general average upon her voyage home, the whole freight for the voyage out and home would, accord- ing to the same principle, have been liable to contribute to this also, whilst the outward-bound cargo only would have contributed to the first, and the homeward-bound cargo only to the second general average." Benecke, Pr. of Indem. 315; Stevens & Benecke on Average, 258. The court, in giving salvage upon freight, makes no separation as to mi- nute portions of the voyage. If a com- mencement has taken place, and the voyage is afterwards accomplished, the whole freight is included in the valua- tion of the property on which salvage is given. The Dorothy Foster, 6 Kob. Adm. 88, 91. In The Progress, 1 Edw. Adm. 210, 224, the court says: "If there had been two distinct voyages, as is sometimes the case in charter-parties, distinguishing the outward from the homeward voyage, the case would have assumed a different aspect ; but whei'e a ship goes out under a charter-party to proceed to her port of destination in ballast, and to receive her freight only upon her return, the court is not in the habit of dividing the salvage." These decisions as to salvage would apply as well to general average, as the two are, in respect to the contribution of the freight, analogous. Cox v. May, 4 M. & S. 152, 159. CH. VI.j ADJUSTMENT OF GENERAL AVERAGE. 337 be said, that, if the ship be. enabled by the sacrifice to earn this second freight, this second freight should not be a •contributory interest. We think it more reasonable, however, to say that, so far as the freight is concerned, if not in all respects, the voyage ends when the whole cargo is delivered. Of coixrse no freight earned previously to the sacrifice contributes, because it is not saved thereby. 1 Where the ship is disabled in the course of the voy- age, and the master is able to discharge his duty of sending the cargo to its destination in another ship, the freight which is saved is the excess of what is earned over the cost of transshipment.^ Section VIII. — What Goods contribute, and what is their Con- tributory Value. Much question has been made as to what property contributes to general average, as a part of the cargo. The rule laid down by Magens is, that what pays no freight pays no average.^ But we agree with Mr. Stevens, that this is an insufficient and unrea- sonable rule.* Lord Tenterden says that all articles should con- tribute, which are carried in the ship for the purpose of traffic, whether they belong " to merchants, to passengers, to the owner, or to the master."^ And Lord BUenborough also makes this purpose of traffic the test of the contributory interest.® Beneck^ ^ Spafford U.Dodge, 14 Mass. 66, 80; Siam to Amsterdam, deducting what Dunham v. Com. Ins. Co., 11 Johns, was paid to the Dutch ship. See also 315. See further, as to contribution by Searle v. Scovell, 4 Johns. Ch. 218. freight, Da Costa v. Newnham, 2 T. * 1 Magens, 62. R. 407, 415; Padelford t. Boardman, 4 ' Mr. Stevens says that this rule Mass. 548 ; Col. Ins. Co. v. Ashby, 13 should not be construed literally, for it Pet. 331, 344. would be very unjust that the master ' Dodge V. Union Mar. Ins. Co., 17 or owner, or any other person who had Mass. 470, 478. In this case a vessel, goods on board, should not contribute, on a voyage from Siam to Amsterdam, merely because he paid no freight for sprung a leak, and put into the Isle of the carriage of them ; but all the goods France in distress, where she was totally on board ought to contribute, and lost. The cargo was sent forward to the goods are the wares or cargo for Amsterdam in a Dutch ship. In an sale laden on board the ship, whether it action for general average for the ex- pays freight or not. Stevens & Beneoke penses incurred at the Isle of France, on Av. p. 206. the court decided that among the con- * Abbott on Shipping, 502. tributory interests was the freight from ' Hill v. Patten, 8 East, 373, 375. VOL. 11. 22 338 THE LAW OF MARINE INSURANCE. [CH. VI. aud Emerigon apply a different test ; they hold that whatever should be contributed for, if jettisoned, should contribute if saved ; and on this ground say that the trunks and luggage of passengers should contribute.^ All this may be defended on prin- ciple, and it seems that the Roman law included all goods on board of any kind.^ But by the general and we think uniform practice, the baggage of passengers of every kind does not con- tribute.^ In an English case, the question whether provisions for passen- gers should contribute was considered.* It was a convict ship, and the value of the stores and provisions put on board by govern- ' Benecke, Pr. of Indem. 308 ; Emer- igon, Traitd des Assurances, ch. 12, § 42, p. 645. ' Digest, 2, 2, 2. See also 2 Molloy, ch. 6, § 14. ' Magens says that he does not re- member ever to have met with any reg- ulation of a general average, where the apparel and jewels of passengers were brought into the contribution. 1 Mag. 62. See also Abbott on Shipping, 503 ; Stevens & Benecke on Av. (Phil, ed.) 206, 251 ; 2 Phil, on Ins. § 1394; Valin, Ord. de la Mar. torn. 2, 1. 3, tit. 8, art. 11. Emerigon, though maintaining the contribution for average, but only such stores as are termed merces. Merces has never been held to extend to pro- visions, but includes only the cargo put on board for the purposes of commerce ; and the practice shows that this has been the understanding of all times. Magens, Molloy, Beawes, Stevens, and other writers, all expound the word mer- ces in this way ; all in terms exclude provisions. They concur in saying, that things of light weight, but of considera- ble value, must contribute, if they be- long to the cargo, but not if they belong to the passengers. Provisions are laid principle that the trunks and luggage in for the passengers, and must be es- of passengers should contribute, says that he has never known an instance where this has been put in practice. Tom. 1, p. 645. * Brown V. Stapyleton, 4 Bing. 119. In this case the counsel argued, that, in a ship hired to carry convicts, the con- victs were themselves the cargo, aud not like passengers in ordinary cases ; that the provisions and convicts were in ef- fect the merces of the voyage, and, teemed to belong to them. Further than this, the ship is always brought into average according to her reduced value at the end of the voyage, when the pro- visions have mostly been consumed. As to the argument that the convicts must be esteemed the merces upon this voyage, and so the stores laid in for them be chargeable as parcel of the merces, it is clear that, whether cargo or not, they cannot be brought into contribution, therefore, distinguishable from the case because human life is not the subject of where the provisions are for a few pas- average. If, therefore, the convicts sengers, and of small comparative value, themselves cannot be brought into con- In giving the opinion of the court, Best, tribution, much less can the provisions, C. J., said : " It is not every object of which are merely accidental to their value which has been held liable to a passage." CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 339 ment for the convicts was very large. But it was held by all the judges of the Commoii Pleas, that they should not contribute. The reasons offered by the counsel for the plaintiff, and by the court in their decision, cover the whole ground ; the coun- sel resting his claim on the assertion that the provisions in this case were a cargo, and the court denying the claim of the plaintiffs, on the ground of the custom, which, as they say, limits the contributory liability to merchandise. ^ We believe this to be the law in England, and the practice there and here. The mere size or bulk of the goods does not enter into this question. It is always said that the precious metals and pre- cious stones, and other small articles of great value, contribute.^ ' Neither passengers nor crew are called on to contribute for their personal safety. Dig. 14, 2, 2, 2 ; Guidon, ch. 5, art. 26 ; Cleirac, p. 45 ; Emerigon, ch. 12, § 42, § 8 (Meredith's ed.) 495; Brown v. Stapyleton, 4 Bing. 119; Weston «. Train, 2 Curtis, C. C. 49, 59. Neither do the wages of mariners con- tribute. Pothier on Maritime Contracts (Cushing's ed.) p. 72, n. 126 ; Emeri- gon, ch. 12, § 42, § 7 (Meredith's ed.) 494 ; Consolato del Mare, c. 281, 293. 2 Park on Ins. (8th ed.) 296 ; Millar on Ins. 344, 345 ; Weskett on Ins. 130, 131; Dig. 14, 2, 2, 2; Nelson v. Bel- mont, 5 Duer, 310; Peters v. Milligan, before Mr. Justice Buller, Sittings at Guildhall after Mich. 1787, cited in Park on Ins. 296; 1 Magens, 62; 1 Emerigon, 639 ; Bevan v. Bank of U. S., 4 Whart. 301, infra, p. 346, n. 3. Emeri- gon, p. 639, states very succinctly the reason of the rule : " The more valuable a thing is, the more it is for the interest of the owner that the ship in which it is should not perish " ; and Magens says that it is customary in London, and most other countries, for the proprietors of whatever gold, silver, or jewels pay freight in merchant ships to contribute to a jettison for their full value ; for, the masters being obliged, by all sea laws, to throw out, in case of need, what is heaviest and of least value, and the worth of such precious commodities being known, the care of them will be in- creased in proportion to their worth, to prevent their being thrown overboard promiscuously with other things ; and hence their preservation redounds to the common benefit. Mag. 63. In Be- van V. Bank of U. S. the court says : "In case of a general average, on ac- count of part of the cargo being ejected for the purpose of saving the ship and residue of the cargo, the owners of spe- cie, diamonds, or precious stones are re- quired for having such preference al- lowed to them, in the retainer of their portion of the cargo on board, to con- tribute towards making good the loss sustained by those whose goods are ejected, according to the value of the specie, &o., and not according to their weight or bulk, which, being of but small account, would not have tended to pre- serve the vessel and remaining part of the cargo, even if they had been thrown overboard." Lord Karnes, however, in his work on the Principles of Equity, p. 116, while admitting this to be the rule, controverts its propriety, and main- tains that the contribution should be according to weight, and not value. 340 THE LAW OF MARINE INSURANCE. [CH. VI.- Mr. Arnould says of these things that they contribute, " unless carried about the person or forming part of the wearing apparel."-' It is difficult to see why the same thing should contribute if car- ried in a trunk, and not contribute if carried in the pocket.^ It is however true that, in the English case above referred to,^ merchan- dise is said to include all articles of great value not carried on the person. The same distinction would apply, we think, to bank-bills. They should not contribute, unless they are merchandise, which they seldom or never are.* "We agree»with Mr. Phillips, that they should not contribute, but not altogether for the reason that he gives,^ — that they are not so properly actual property as the evi- dence of demands, which may be supplied by other evidence if they are lost. One important exception to the rule, that only those goods con- tribute which are contributed for, occurs in the case of goods carried on deck. We have seen, by the general rule, that they are not contributed for, but they always contribute. We know but one decision to this effect ; ^ but the practice is uniform. ' 2 Arnould on Ins. 919. All prop- erty on board the vessel at the time of the jettison, and saved, unless attached to the persons of the passengers, is to be brought into contribution. Harris v. Moody, 30 N. Y. 266. ^ Magens appears to make no distinc- tion between valuables carried in the trunk or about the person of the passen- ger ; for he says that in voyages from Cadiz and Lisbon, where the carriage of gold and silver makes a great part of the ship's profit, or freight, if a person, under the cloak of going passenger, should conceal, either in his trunks or about his body, any such considerable sum of money, or jewels, as would not be suffered without paying a freight, he must, when discovered, not only satisfy the freight, but also contribute to any jettison. 1 Mag. 63. ' Brown v. Stapyleton, 4 Bing. 121. ' Weskett, tit. Contribution, u. 15, citing 2 Valin's Com. 200, classes bills with money, jewels, &c., as articles that ought to contribute. But in the case of The Emblem, Daveis, 61, it was held that bills of exchange, saved from a wreck, were not liable for salvage, from which it would follow that they would not be bound to contribute in gen- eral average. In Harris v. Moody, 30 N. Y. 266, it was held that bank- bills of individuals, so carried for them in a crate, by an express company, which company, by an eigreement with th^ owners of the steamboat, pay such owners a fixed sum annually for the carrying of a stated number of portable crates, with the contents thereof, are bound, when saved, to contribute for such a loss. ^ 2 Phil, on Ins. § 1397. ° Emerigon, ch. 12, § 42, p. 639; Code de Com. 1. 2, tit. 12, Du Jet. a. 232 ; Consolato de la Mare, art. 13, tit. du Jet. ch. 183 ; Stevens & Beneoke on Av. (Phil, ed.) 210, 248. Goods carried •CH. VI.J ADJUSTMENT OF GENERAL AVERAGE. 341 We do not consider that the question, whether public property is exempt from contribution, has been positively determined by direct adjudication. There would seem to be no good reason for this exemption.! In one American case, the court were of opin- ion that public property could claim no exemption from contribu- tion, and that the right of the master to retain the goods until the contribution was paid extended to public property.^ In the on deck, according to the custom of the trade, by steamboats navigating Long Island Sound, and stowed in the usual ■way, are liable to contribution by way of general average for a loss occasioned by a jettison of other goods necessarily thrown overboard under stress of weath- er and while subjected to the perils of the sea. 1 1 Magens, 63, 172; Us et Cou- tumes de la Mer, 20 ; Jug. d'Oleron, c. 8, n. 8. Magens says the reason is that, " in goods belonging to his Majesty, all his subjects in general are concerned ; wherefore for any particular loss of them no particular contribution is ne- cessary, because it is supplied by the general contribution of the whole com- munity." But Valin, tom. 2, p. 184, tit. Des Av. a. 11, n., thinks there is no reason for this. " United States v. Wilder, 3 Sumner, 308. This was an action of trover brought by the government to recover certain property detained by the de- fendant. The facts were the foUowiilg : The schooner Jasper, from Boston to New York, went ashore on Block Island. Much expense was incurred in saving the goods, which gave rise to a claim of general average. Among the prop- erty on board there were about one hundred bales of slop clothing belong- ing to the United States, invoiced at $7,320. The goods being brought back to Boston, the owners of the vessel made out an average bond for the freighters to sign. The store-keeper of the United States (by whom the clothing was shipped) declined to sign the bond, claiming for the United States the right to take the goods, without paying or securing their contribution to the aver- age. This right being denied by the ship-owners, they refused to deliver the clothing, and this action was brought to recover its value. The case was tried before Mr. Justice Story, from whose opinion we make the following extracts : " The sole question in the present case is, whether there exists a right of lien for the general average due on the goods (slop clothing) belonging to the United States, under the circumstances stated by the parties. There is no dis- pute that there has been a general average in this case, towards which all the goods on board, and among others the slop clothing of the United States, are to contribute. There is as little doubt that for such general average there does exist, on the part of the master and owners of the schooner Jasper, a right of lien against all the goods belonging to all the other shippers, except the United States. In other words, that the master and owners of the schooner have a right to retain all the goods of such shippers until their proper share of contribution towards the general average is either paid or satisfactorily secured to be paid Th-e question then is, whether a Uke lien exists in regard to goods belonging to 342 THE LAW OP MARINE INSURANCE. [CH. VI. English case just above referred to/ provisions put on board by the government, and belonging to them, were held not to contribute. the United States. No case has been cited in which any exception has ever been made in regard to the United States, nor has any authority been pro- duced to show that it constitutes a known prerogative of any other govern- ment or sovereignty. I have examined cases the only remedy ; as, for example, where the owner of the goods is un- known. Indeed, it may be asserted with entire confidence, that, in a great variety of cases, without such a lien, the ship-owner would be without any adequate redress, and would encounter the treatises upon the prerogatives of most perilous responsibility It is the crown of England, and I do not find there, or in any of the great abridgments of the law under the title prerogative, any such exception recog- nized or even alluded to. The argu- ment rests the objection upon the ground of public inconvenience, if it should be held that, whenever a lien exists against a private person, it is to be held that the like lien attaches against the United States. And it is said that in cases of contract for labor and services, or repairs, or supplies with the United States, no lien can be presumed to exist ; but that the only remedy is an appeal, not to law, but to said that, in caises where the United States are a party, no remedy by suit lies against them for the contribution ; and hence the conclusion is deduced that there can be no remedy in rem. Now, I confess that I should reason altogether from the same premises to the opposite conclusion. The very circum- stance that no suit would lie against the United States in its sovereign capa- city would seem to furnish the strongest ground why the remedy in rem should be held to exist. And I do not well see how otherwise it would be practi- cable at all, or, if practicable, how without extreme peril to the ship-owner the justice of the government any private ascertainment or settlement The present case is not one arising under contract, but by operation of law, and, if I may so say, in invitum. It is a case of general average where, as in a case of salvage, the right of the party arises from sacrifices made for the common benefit, or labor and ser- vices performed for the common safety. Under such circumstances the general maritime law enforces a contribution, independent of any notion of contract, upon the ground of justice and equity, according to the maxim, qui senlit com- modum, sentire debet et onus. And it gives a lien in rem for the contribution, not as the only remedy, but as in many cases the best remedy, and in some of the general average could be made at all. The United States would not be bound by any such ascertainment or settlement of the average. They might deny the correctness of the valuation and apportionment ; there would be no remedy to compel a submission to the authority of any tribunal of justice.; and whether the ship-owner should ever receive any compensation or not, and what compensation, would depend upon the good-will of Congress after what is a most lamentable defect in the existing state of things, a protracted appeal, and after many years' duration of unsuccess- ful and urgent solicitations to that body. And yet the contribution of every other Brown V. Stapyleton, 4 Bing. 119. CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 343 But the reasons given for this at much length include no refer- ence to the fact that they were public property. To this extent, therefore, this case must be considered as denying by implication any exemption on that ground. It is the general rule of all contributory maritime interests, that their contributory value is that which they have at the time and place where they are considered as finally saved.^ So far as the goods are concerned, this value is ascertainable in many ways. They may be sold at that place, and their net proceeds then de- termine their contributory value. ^ If they are not sold, there value at the time when the disburse- shipper may be, and indeed must be, materially dependent upon what is properly due and payable by the United States. In the case of mere private shipments, a court of equity (and prob- ably a court of admiralty also, by a proceeding in rem) would have ample jurisdiction to compela reluctant shipper to submit to its jurisdiction, in ascertain- ing and decreeing an apportionment of the contribution to be made by all the shippers. I cannot therefore but think that the circumstance that the United States can in no other way be com- pelled to make 9. just contribution of its share in the general average, so far from constituting a ground to displace thei lien created by the maritime law, does in fact furnish a strong reason for enforcing it Finding therefore no such exemption from the ordinary lien for general average as the govern- ment seeks to sustain' justified by any general principle or any authority, I am not bold enough to create one. The consequence is, in my opinion, that the present suit is not maintainable, and that judgment ought to be entered for the defendant." 1 2 Arnould, 932; 2 Phillips, § 1401 ; Bedford Com. Ins. Co. v. Parker, 2 Pick. 1, 11. When the general con- tribution is for disbursements, the goods ought to contribute according to their ments were made, and without refer- ence to a subsequent deterioration. Beneck^, Pr. of Indem. 298 ; Douglas V. Moody, 9 Mass. 548, 554. If the vessel arrives at the home port, or if it is wrecked, and the goods are sent on, the general rule is that they shall contribute according to their value there. Barnard v. Adams, 10 How. 270, 307. In this case the court said : " The place where average shall be stated is always dependent more or less on accidental circumstances, afiect- ing not the technical termination of the voyage, but the actual and practical closing of the adventure. We see nothing in the circumstances to take this case out of the general rule that contribution should be assessed on the value at the home port." See also Gillett V. Ellis, 11 111. 579; Gray v. Wain, 2 S. & E. 229. ' See Stevens & Benecke on Av. (Phil, ed.) 68-74, 193, 194; 2 Phil, on Ins. § 1401 ; Dodge v. Union Mar. Ins. Co., 17 Mass. 470, 478 ; Tudor v. Mac- omjjer, 14 Pick. 34. In Lee v. Grin- nell, 5 Duer, 400, 430, where the cargo was damaged while in port and sold, it was held that the amount it brought at the sale was to be taken as the fair value. In Richardson v. Nourse, 3 B. & Aid. 237, goods were sold at an 344 THE LAW OF MARINE INSURANCE. [oh. VI. may be a known niarket value, and upon this is founded their contributory vahie. In the absence of these tests, the invoice value is the foundation of the estimate, and this invoice value is generally takeiT for this purpose whenever the average is adjusted at some other port than the port of destination. ^ If this invoice price does not include commissions and premium of insurance, these should be added. ^ The two elements which enter into the estimate of the contribu- tory value of goods are, first, only the value saved contributes, and intermediate port, in order to pay for necessary repairs, at a price higher than they would have brought at the port of destination. A reference being had to settle the loss, the arbitrators (who ■were mercantile men) allowed for the actual value of the goods when sold, and not for their value at the port of desti- nation. The case came before the court on a motion to set aside the award. It was held that, as it did not clearly ap- pear that the award was contrary to any well-established principle of law, it must stand. Mr. Phillips says : " There is a diversity of opinion on this question among practical underwriters in the United States.'' Stevens & BenecW on Av. (Phil, ed.) 194. We believe that ad- justers in this country, where there is a hona fide sale of goods, take the net proceeds as determining the contrib- utory value. ' Tudor V. Macomber, 14 Pick. 34, 38. If the policy should contain a less valuation than the invoice, it should be opened, just as it would be in respect to the ship, to ascertain the true or invoice value. Ibid. An average loss opens a valued policy. Le Cras v. Hughes, 3 Doug. 81. Where goods insured by a valued policy are jettisoned for the common benefit, the underwriters are liable for the amount at. which the goods are valued in the policy, although it exceed their market value at the place of des- tination. Forbes u. Manufacturers' Ins. Co., 1 Gray, 371. In New York the value of the goods is taken to be the first cost at the port of departure and charges. Leaven- worth «. Delafield,. 1 Caines, 573. In this case Judge Livingston said : " It will be a rule less liable to objection, will suit the greatest number of cases, and not be aflfected by the fluctuations of markets or other contingencies, and certainly most easy of practice, always to value the goods at the invoice price, that is, at their first cost, without regard to their price abroad." See also Mutual Safety Ins. Co. v. Cargo of Ship George, Olcott, Adm. 157, 166. In Spaffbrd v. Dodge, 14 Mass. 66, it was held that the value of the goods at the port of lading was to be taken, un- less it should appear that the value was increased by being carried to the port where the average expense became necessary. ^ In case of an open policy the in- voice price at the loading port, includ- ing premiums of insurance and com- mission, is, for all purposes of either total or average loss, the usual standard of calculation resorted to for ascertain- ing the value of the goods. Usher v. Noble, 12 East, 639. CH. VI.J ADJUSTMENT OF GENERAL AVERAGE. 345 next, only so much of that value as was at risk at the time of the sacrifice. Hence, as we have seen in relation to freight, whatever charges, losses, or expenses occur subsequently to the sacrifice, in reference to the goods saved, before it is finally saved, diminish its value just so much. Therefore from the proceeds, if sold, freight, duties, and commissions, and all other expenses necessary to realize the value of the goods, are deducted. ^ The sending of goods to a port is always with the belief that the increase of value by carriage there will more than meet the expenses of freight and carriage. In practice it is often assumed, neither party objecting as he has the right to, that these expenses meet this increased value and no more. Then the value of the goods remains the same as their original value, which is deter- mined by the invoice, and hence the invoice price is taken as their contributory value.^ to recover, respects more particularly the hire and freight. The same sum is freight as connected with the cargo, and hire as money due to the defend- ants. If the value of the cargo is to be increased by adding to it this sum as freight saved by its arrival at the place of destination, and its increased value in the market there, there seems to be an equal reason for adding it as hire to the value of the vessel ; because the hire becomes due to the owners of the vessel in consequence of her arrival. It may be said that the hire is subject to great deductions for wages and pro- visions, and is not a net gain or acquisi- tion to the defendants. But the addition of a freight to the value of the cargo may be liable to similar objections. And it seems, upon the whole, to be most reasonable, and most consonant to the rules of contribution as observed in English decisions, to estimate the vessel and cargo at their value in the place and at the time where and when the expense was incurred, which is to be adjusted by the respective owners ac- cording to their average proportions." ' Beneck^, Pr. of Indem. 301 ; Dodge V. Union Mar. Ins. Co., 17 Mass. 470, 478. ° In Douglas V. Moody, 9 Mass. 548, a neutral hired and loaded a vessel for a voyage, in the course of which she was captured on suspicion of having enemies' property on board, and carried into port and libelled as prize ; but be- fore any proceedings in the admiralty a compromise was effected between the captors and the hirer, who was owner of the cargo ; on which, for the release of the vessel and cargo, the latter drew a bill of exchange, which the master indorsed, he having been appointed by the owners of the vessel ; and in con- sideration thereof the vessel and cargo were released, and arrived in safety. It was held that, on payment of the bill of exchange, the owners were liable therefor to the hirer, as for an average on the value of the vessel and cargo at the time and place of incurring the ex- pense. In regard to the adjustment, the court said : " The question, as it occurred at the trial in assessing the damages, supposing the plaintiff entitled 346 THE LAW OP MARINE INSURANCE. [CH. VI. We see no sufficient reason for saying, with Mr. Beneck^ ^ that freight advanced by the shipper should be included in the contrib- utory value of his goods, when the adjustment is made at the port of departure. It is only an unusual stipulation as to the time of the payment of freight, and we know not why it should affect the rights or obligations of the parties as to contribution, especially where the freight is to be recovered back, if not subsequently earned, as must usually be the case.^ In one American case there seems to be an exception to the rule that goods are not liable to contribution unless they are at risk when the sacrifice is made. The peculiar circumstances of this case may justify the decision.^ ^ Stevens and Benecke on Av. (Phil, ed.) 257. ^ In Winter v. Haldiman, 2 B. & Ad. 649, it was held that even such an ad- vance did not constitute a part of the amount of insurable interest in the ad- justment of a total loss. 2 Phil, on Ins. § 1404. ' Bevan v. Bank of the United States, 4 Whart. 301. In this case a quantity of specie, the property of the defend- ants, was shipped, together with other goods, on a voyage from New Orleans to Philadelphia. The vessel became ice-bound in Delaware Bay, and was in imminent danger of being wrecked. The specie was taken out, and con- veyed by land to Philadelphia, where it was delivered to the defendants on pay- ment of freight. Eight weeks after- wards the vessel arrived in safety with the remainder of her cargo, which had been in whole or in part discharged into lighters, and afterwards reshipped. A number of additional charges had also been incurred in the mean time for the safety of the ship and cargo. It was held that the defendants were bound to pay their proportion of these expenses. The grounds of this decision appear from the following extracts from the opinion of the court : " Suppose, for example, that a vessel, with a cargo of the same kind of goods throughout on board, belonging to twenty different owners, each owning an equal quantity, is run on shore within eight or nine miles of the port of destination, for the purpose of saving her and her cargo from an impending danger, when it becomes requisite to unlade the vessel, and to convey the cargo thence by wagons to the place of delivery, in doing of which two months are consumed, it is obvious that, according to the prin- ciple contended for on behalf of the defendants, the owner whose goods are first taken out of the vessel and con- veyed immediately to him will have comparatively but little of the whole expense to pay, whereas he who re- ceives his goods last will have perhaps more than twenty times as much to pay as the first. The charges being made general average as to the first who re- ceives his goods down to the time of their being delivered to him, the last has to pay one-twentieth part of these charges, and upon the same principle one nineteenth of the expenses attend- ing the saving and delivery of the goods to the second, and so on till his own turn comes, when he has to pay all the expenses of saving his own portion of the cargo This rule would subject those whose goods are saved CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 347 "We cannot doubt, however, that the rule itself is, very nearly at least, universal. Where a cargo vras saved in part at its own expense, and the insurers on the ship expended a large sum to get the ship off, and the ship was saved and brought to the wharf the remaining cargo, it was held that the cargo saved by its owner should contribute nothing towards the expenses of the insurers, but that the cargo brought in by the ship should contribute.^ and delivered last to the payment of a portion of the expenses incurred in saving those of the first, without requir- ing the first to pay any part of the ex- penses incurred in saving the goods of the last, but leaving them to pay the whole of it themselves The prop- erty of the defendants and that of the plaintifis formed, as it were, a common stock of a sea venture held by them in their several proportions as partners, and all were alike exposed to the same common danger from which the stock belonging to the defendants was saved, and a proportionable part of the ex- pense incurred by saving it paid by the plaintiffs ; and why shall the latter not receive from the former a proportion- able part of the expense incurred in saving their portion of the stock from the same common danger ? Natural justice seems to require that they should." Beneck^ maintains the same principle as to goods shipped into barges for the purpose of lightening and saving the vessel and the remaining cargo, but adds that, as to goods taken from the vessel for the convenience and at the peril of their owners, all connec- tion between them and the vessel and remaining cargo ceases from the moment of the unloading, and a subsequent general average falls entirely upon the vessel, the goods remaining on board, and the freight for the same. Beneck^, Pr. of Indem. 306, 307. ' Bedford Com. Ins. Co. v. Parker, 2 Pick. 1, supra, p. 263, n. 1. In giving the opinion of the court in this case, Parker, C. J., said : "We think the plaintiffs' claim for contribution on that part of the cargo which had been taken from the vessel, at the expense of the defend- ants, before the contract was made un- der which the vessel was raised and brought into harbor, as untenable as the defendants' position, that the part which remained on board should not be held to contribute It cannot be said that the iron taken from the vessel by the owners, before the contract was made under which the vessel was saved, was saved by means of the successful execution of the contract. It might with more fitness be said, that relieving the vessel from so great a proportion of the weight of her cargo was an efficient cause of her final rescue, and for this reason the expense of saving this iron should be made a subject of average ; but this was not done with a view to save the ship, but was an independent act of the owners of the iron, and must therefore bear its own expense It is said that great disorder and confu- sion, and perhaps increased danger, will be the consequence of allowing every freighter of goods, when a vessel is stranded, to hurry off their particular goods, which may be easily come at ; and that it would be throwing an undue burden upon the owners of those goods 348 THE LAW OF MARINE INSURANCE. [CH. VI. Insurers of ship, freight, or cargo are not affected by the estimated contributory value of it, in reference to their liability on the property. But if insurers are called to indemnify the insured for his contribution, they pay the same proportion of the contribution which they insure on the value of the goods.^ It may be well to remark here, that in reference to this last question, as well as 'many others which relate to the contributory interests and adjustments thereof, important distinctions are to be taken between insurance on valued policies and insurance on open policies. We prefer to consider this subject, however, in our chapter on Valued Policies. Section IX. — A. Of the Force and Effect of an Adjustment. The policies of this country usually provide that tlie sum insured is payable in a certain number of days " after the proof and adjustment of the loss." This provision would seem to make an adjustment necessary for recovery ; it is, however, quite certain that, if the insurers refuse to pay or dispute the claim, this clause becomes so far inoperative that the mere want of an adjustment will neither prevent nor delay trial, judgment, or execution. Still the usage of making an adjustment is so general, if not universal, that it may be considered practically necessary. Where, however, the claim of the insured is for a total loss, no such adjustment as would be made for a partial loss need be presented.^ which may be so situated that the own- of the hold, and therefore very difficult ers cannot rescue them. No such dlffi- to be taken out, he would have no just culty happened in this case \ on the ground of complaint against the defend- contrary, what was done by the own- ants for removing so much of the cargo ers of the cargo, facilitated the final as enabled the underwriters on the ship saving of the ship. Where a con- to raise her, and thus to save his iron, trary effect would result from such which might otherwise have been lost." an act, the legal consequence may . ' The rate of loss being ascertained, be different, for it peculiarly belongs the insurer is liable in the proportion to contracts of this nature that appar- which the sum insured bears to the act- ently slight differences of facts may ual value of the property included in have an important bearing on questions the risk described in the policy. Clark relating to them. Had another person v. United M. & F. Ins. Co., 7 Mass. 365, ■ been the owner of the iron remaining 374. on board the vessel, being in the bottom ^ Fuller v. Kennebec Mut. Ins. Co., CH. VI.] ADJUSTMENT OF GENERAL AVEEAGE. 349 Adjustments are usually made in all of our commercial ports, in a form and manner substantially the same, and in accordance with similar principles everywhere. But there is no particular form of adjustment established by law or usage. These instru- ments ai-e sometimes very brief and simple, but they are of great importance, for the law of insurance makes them in most cases binding upon the parties. In one English case,^ Lee, C. J., said that he considered an adjustment, when signed by the underwriter, as equivalent to a note of hand, and that no further proof of the loss was neces- sary. In England, the business of insurance, if we can judge by the books, seems to be transacted even more generally through insurance brokers than in this country. There, too, the practice of insurance, by different underwriters on the same policy, still continues, while it has nearly ceased in this country. There the broker makes, or causes to be made, an adjustment, and then indorses on the policy, " Adjusted the loss on this policy at £ — per cent." He then takes the policy to the different under- writers, who sign their initials to the indorsement.^ The signa- ture of the underwriter to the policy is sometimes struck out, his initials to the indorsement of adjustment binding him as to an ascertained loss ; and he would be bound, if his signature to the policy were struck out, and the adjustment written on the blank space opposite his name, and his initials affixed to it.3 The adjustment verified as above, or in any similar way, becomes a contract, and subject to the general law of contracts. If it be tainted with fraud, it has no force or effect whatever against the party defraiided ; as, for example, it is not binding if it were made upon the evidence of fictitious invoices and bills of lad- ing.* Neither is it if it were made upon a misrepresentation or a concealment of a material fact. Here the question, what 31 Me. 325, 328. The plaintiff must (1746), Beawes, Lex Meroatoria, 308; establish his right to recover, as in other Adams v. Saundars, 4 C. & P. 25 ; May cases, by evidence, and this he might do v. Christie, Holt, N. P. 67. with or without an adjustment. Ibid. '' 2 Arnould on Ins. 1201. ' Hog V. Gouldney, Beawes, Lex * Adams v. Saundars, 4 C. & P. 25. Mercatoria, 310, Park, Ins. 162, decided ' Haigh v. De la Cour, 3 Campb. in 1745. See also Hewit v. Flexney 319. l» 350 THE LAW OF MARINE INSUEANCE. [CH. VI. is material, or what is misrepresentation or concealment, is much the same as when it arises respecting the validity of the policy. Thus where the property had been captured, but a large portion saved, and the assured did not inform the adjuster that it had been saved, the court held the adjustment not binding.^ A difficulty sometimes occurs, if the question be one of conceal- ment, whether the insured had sufficient means of knowledge ; for if their ignorance were their own fault, they can found upon it no defence against the effect of, the concealment. So if the insurers had means of knowledge, they cannot make their igno- rance the ground of a defence against the adjustment. Thus it has been held, where an underwriter, before accepting the adjust- ment, has papers before him stating all material facts, he cannot afterwards set the adjustment aside on the ground that he read the papers in a cursory manner.^ It is a general principle of the law of contracts, that where a party makes a promise, under a mistake of law, he may set up this mistake in defence of an action founded on the promise.^ The ground of this rule is, that the promise is given without consideration.* This principle has been applied to adjustments.^ So if the adjustment were made under a material mistake of the facts of the case, it would have no force against either party. ^ ^ Faugier v. Hallett, 2 Johns. Ca. binding, and that, if it were, it ought to 233. have been declared on specially. Lord ' VoUer V. Griffiths, before Lord Kenyan said that he did not think it Kenyan, C. J., Selw. N. P. 985. necessary to declare on the adjustment ' Warder v. Tucker, 7 Mass. 449; specially, that it was pi-ima facie evi- Freeman v. Boynton, 7 Mass. 483 ; May dence against the defendant ; but if V. Coffin, 4 Mass. 347 ; Blesard v. Hirst, there had been any misconception of 5 Burr. 2670; Goodall v. DoUey, 1 the law or fact upon which it had been Term, 712. made, the underwriter was not abso- ' Cabot V. Haskins, 3 Pick. 83. lutely concluded by it. * Rogers v. Maylor, Sittings after " Eogers v. Maylor, supra ; Christian Trin. 1790, reported in Park on Ins. v. Coombe, 2 Esp. 489. In De Garron (8th ed.) 267. This was an action on v. Galbraith (1795), Park, Ins. 267 a policy of insurance on ship and goods. (8th ed.), the plaintiff produced the ad- Tbe policy had been adjusted by the justment and rested his case. The wit- defendant at £ 50 per cent, and it was ness who produced it testified that, soon contended that he was now bound by after the underwriters signed, doubts that adjustment. On the other hand, it arose as to the honesty of the transac- was argued that the adjustment was not tion, and they refused to pay. Lord CH. VI.J ADJUSTMENT OF GENERAL AVERAGE. 351 Here, again, the question may arise whether the mistake was the party's own fault. Thus, if we suppose a deviation had occurred which would have discharged the insurers ; they had of course a right to waive this defence, and if with full knowledge of the fact they signed the adjustment, they would be bound by this waiver. It seems to be held, however, in a case in which this question arose, that it was not enough to bind the underwriters, that facts had been disclosed to them from which deviation might have been inferred, unless their attention had been particularly drawn to them, or the facts were such as to make the inference obvious and necessary.^ Kenyan, C. J., held that, under these circumstances, the plaintiff must go into other evidence, and as he was not pre- pared to do so, he was nonsuited. In Herbert u. Champion, 1 Campb. 134, the defence was, that a letter from the captain, dated December 5th, stating that he was to sail under convoy, though received on the 6th of that month, had not been communicated to the under- writer before effecting the policy, and that this was a concealment of a material fact. To this it was answered that the defendant, on the 12th of March follow- ing, after reading the letter in question, of fraud ; but a promise to pay will not, in general, be binding, unless founded on a previous liability. What is an ad- justment ? An admission, on the suppo- sition of the truth of certain facts stated, that the insured are entitled to recover on the policy Here it is a mere admission, and there was no considera- tion for the promise it is supposed to prove." In Sheriff v. Potts, 5 Esp. 96, the adjustment was admitted, but the defendant's counsel stated that his de- fence turned upon a fact admitted by the plaintiff himself in his answer in equity, namely, that there had been a together with others from which he had ' deviation. This deviation being proved, obtained a full account of all the cir- the plaintiff was nonsuited. cumstances of the case, had adjusted the policy as for a total loss, and put his initials on the back of it ; and, secondly, that the letter was not material to be communicated. It was held that the un- derwriter, by thus signing his initials to the adjustment, was not precluded after- wards from taking advantage of circum- stances with which he had been made acquainted before signing the adjust- ment. Lord Ellenborough, C. J., said : " The cases are clearly distinguishable, where, upon a dispute, the money is paid, and where there is only a promise to pay. If the money has been paid, it cannot be recovered back without proof ' Shepherd v. Chewter, 1 Campb. 274. This was an action upon a policy of insurance on goods on board a ship at and from Liverpool to Trieste or Ven- ice, with or without letters of marque. The loss was by capture. The plaintiff gave in evidence an adjustment on the policy signed by the defendant, and proved that, previously to its being signed, an account had been posted up at Lloyd's, which the defendant must have seen, that the vessel had chased everything she saw, and had been at last captured through the cowardice of the master. The underwriter said, when he signed the adjustment, that it was not 352 THE LAW OP MARINE INSURANCE. [CH. VI. In an early American case the courts say : " It appears that, previous to the adjustment, all the facts were communicated to the underwriters. The adjustment was made by the underwriters with their eyes open. An adjustment cannot be opened, except on ground either of fraud, or mistake from facts not known." ^ Nevertheless a new trial was granted, on the ground that the vessel had sailed with an insufficient crew, and therefore it was unseaworthy. The case is obscurely reported, and it is not certain that the facts in possession of the iftsurers, when they agreed to the adjustment, included this insufficiency. We cannot doubt that the general rule is, as we have stated, in this country, and an adjustment made in good faith, and a full knowledge of all the material facts of the case, is binding upon the parties. It may be, however, doubted whether it is not other- wise in England. Lord Campbell, in a note in his reports,^ dis- cusses the question at some length, and expresses a decided opinion that an adjustment agreed to with a full knowledge of material facts, which would have afforded the insurer a defence under an action against the policy, does not preclude him from afterwards setting up this fact in defence. He goes upon the ground that an adjustment is only a promise to pay ; that this promise cannot be enforced unless it rests on a consideration ; and likely that the ship was lost by coward- manner in which the ship was captured, ice, as the master had been killed. The and was not roused to the previous de- defendant proved that the ship had viation with which he afterwards be- been in the constant habit of cruising, came acquainted, his liability would be which amounted to a deviation. It was discharged, notwithstanding the adjust- contended for the plaintiffs that the ment. His remark when he signed the only defence which could be set up was, adjustment seemed to show, that he had that some fraudulent concealment had then only considered the conduct of the been practised, but that notice that the master at the moment of the capture ; vessel had chased everything informed and the expression of the ship having him of the deviation. Lord Ellenbor- chased everything did not of necessity ou^A said that the adjustment was prima imply a deviation, since from carrying facie evidence against the defendant, a letter of marque she might be con- but that it certainly did not bind him, sidered as at liberty to chase, so that unless there was a full disclosure of the she continued in the direct line of the circumstances of the case. Therefore, voyage. if it should be thought that the defend- " Dow v. Smith, 1 Caines, 32. ant, by reading the notice at Lloyd's, ^ Shepherd v. Chewter, 1 Campb. had his attention drawn only to the 274, 276. CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 353 although the adjustment may, as between the parties, import a consideration, yet, if the insurer denies the consideration, he may, by proof of its absence, avoid his promise. In other words, lie allows to an adjustment no other effect than merely to transfer the burden of proof from the assured to the insurer. It cannot be de- nied that high authorities — Lord Ellenborough, for example — assert the same principle.^ And there are decisions which support it.^ But even in these there seems to be a reluctance to apply this principle freely. Even Lord Ellenborough says, " An under- writer must make a strong case after admitting his liability." ^ We cannot understand this. An adjustment agreed upon is either a contract which binds both parties, unless it can be set aside for fraud, or mistake of law or fact, which we take to be the law in this country ; or else it is, what Arnould supposes it to be. ' Herbert v. Champion, 1 Campb. 134, 136. This was an action on a policy upon a ship which was captured by a privateer. The defence was that a letter from the captain, stating that he was to sail under convoy, though re- ceived more than a month previous, had not been communicated to the underwriter before effecting the policy ; which letter, it was contended, would have induced the insurers to make in- quiries whether the ship had reached her destination, and would have shown her to be missing. To this it was re- plied that the defendant, after reading the letter in question, together with several others subsequently written by the captain giving a full account of all the circumstances of the case, had ad- justed the policy as for a total loss, and put his initials upon the back of it, which was considered equivalent to an order for the money. The materiality of the letter in question was also denied. Lord Ellenborough in his opinion uses the following language : " The cases are clearly distinguishable where, upon a dispute, the money is paid, and where there is only a promise to pay. If the VOL. II. 23 money has been paid, it cannot bs recovered back without proof of fraud ; but a promise to pay will not in general be binding, unless founded on a previous liability. What is an adjustment ? An admission, on the supposition of the truth of certain facts stated, that the assured are entitled to recover on the policy. Perhaps, if properlj' stamped, it might be declared on as a promissory instrument. Here it is a mere admis- sion, and there was no consideration for the promise it is supposed to prove. An underwriter must make a strong case after admitting his liability; but until he has paid the money he is at liberty to avail himself of any defence which the facts or the law of the case will furnish." ' Lord Campbell cites in support of the principle which he maintains, and which is referred to in the text, Kann V. Hughes, 7 T. R. 350, n. ; 3 Bos. & Pull. 249 (a) ; Plowd. 305, 308 ; Mamott V. Hampton, 7 T. R. 269; Bilbie v. Lumley, 2 East, 469 ; Fisher v. Lamuda, 1 Campb. 190. * Herbert v. Champion, 1 Campb. 134, 137. 354 THE LAW OF MARINE INSURANCE. [CH. VI. " as the fair result of the authorities, nothing more than a prom- ise to pay, which is only binding when founded on the considera- tion of previous liability." ^ If it be only this, when the insurer is called upon to perform his promise, he may prove that it was voluntary only, and not founded on any consideration, as freely and fully as he could do so in any other case where this question arises. And this defence if made out would be as effectual. We are not satisfied by the cases to which Mr. Arnould refers, -or any others that we have been able to find, that an agreed adjustment in England is so entirely devoid of final authority. We believe that the interests of commerce, and the purposes and principles of the law of in- surance, require that such an adjustment should be held to be conclusive against both parties, with only the exceptions above stated, of fraud or mistake. One important distinction is taken between a mistake of law and a mistake of fact, namely, that if money be paid by insurers xindei" a mistake of law they cannot on this ground recover it back ; ^ while, if the money were paid under a mistake of fact, it may be recovered back.^ On this ground it has been held in England, that where money was paid upon a policy, under a knowledge that it was discharged, but in forgetfulness of the fact, the money could be recovered back on the ground that " the knowledge of the facts which disentitles the party from recovering must mean a knowledge existing in the mind at the time of payment." * This 1 2 Arnould on Ins. 1202. * Kelly v. Solari, 9 M. & W. 54. ^ Bilbie v. Lumley, 2 East, 469 ; Here the insured on a life policy Lowry v. Bourdieu, 2 Doug. 468. In omitted to pay the quarterly premium, the former case Lord Ellenhorough and the policy thereby became of no said : " Every man must be taken to be effect, and the word " lapsed " -was cognizant of the law ; otherwise there written on the policy by one of the is no saying to what extent the excuse directors. The insured died, and two of ignorance might not be carried. It of the directors who had known of the would be urged in almost every case." fact of the policy having lapsed, together And in the latter case, where money with another director, on application paid under a mistake of law was sought being made, drew a check for the to be recovered back, it was observed amount. The mistake being discovered, by BuUer, J., that, "if the law was the insurers brought an action to re- mistaken, the rule applies that igno- cover back the amount, on the ground raniia juris non excusat." that it was paid under a mistake of ' Keyner v. Hall, 4 Taunt. 725. fact, and the two directors testified that CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 855 was a life policy ; but we know no reason why, if the principle be sound, it should not apply as well to marine policies. We have much doubt, however, as to its soundness, and Lord Abinger, at the trial, ruled otherwise. Au adjustment may be conditional in its terms ; and if it be so the party relying upon it must prove that the conditions were per- formed.i And on this point it has been held, with some contra- they had entirely forgotten at the time of paying the money that the pohcy had lapsed. Lord Abinger, C. B., at nisi prius, expressed his opinion that if the directors had had knowledge, or the means of knowledge, of the policy hav- ing lapsed, the plaintiff could not re- cover, and that their afterwards forget- ting it would make no difference. But afterwards, at the trial in the Ex- chequer, he said in regard to his previous ruling : " I certainly laid down the rule too widely to the jury, when I told them that if the directors once knew the facts they must be taken still to know them, and could not recover by saying that they had since forgotten them." He then states the qualification of the rule which is quoted in the text. Baron Parke also said : " If, indeed, the money is intentionally paid without reference to the truth or falsehood of the fact, the plaintiff meaning to waive all inquiry into it, and that the person receiving shall have the money at all events, whether the fact be true or false, the latter is certainly entitled to retain it ; but if it is paid under the impression of the truth of a fact which is untrue, it may, generally speaking, be recovered back, however careless the party paying may have been in omitting to use due diligence to inquire into the fact." ' Gammon v. Beverley, 1 J. B. Moore, 563; S. C. 8 Taunt. 119. This was an action on a policy of insurance to recover a salvage loss. The facts were as follows. The defendant, with several other underwriters, in August, 1814, subscribed a policy on hides from Buenos Ayres to London. The ship was captured, and the plaintiffs aban- doned the cargo to the underwriters, and claimed a total loss. Some time after the ship was recaptured, and all the underwriters but the defendant, on the 19th of October, 1814, adjusted a salvage loss, deducting short interest to the amount of £64 18s. 3d. per cent, which they paid. The defendant, on the 7th of February, 1815, " adjusted £33 per cent on account of his subscrip- tion to the policy, until the account of the goods insured could be made up, when a final loss was to be paid to the same amount as by the other under- writers; and if the same exceeded £33 per cent, the defendant was to pay the excess ; if short, the insured was to re- turn the difference.'' It was held that this was a conditional and not an abso- lute adjustment ; and that, as the plain- tiffs had not proved that the account of the goods insured had been made up, they were not entitled to recover, and that the defendant was not bound by the former adjustment of the other underwriters. The court said : " There can be no doubt but that, in the case of an absolute adjustment, an under- writer is liable to pay the amount of the indemnity which the assured is en- titled to receive under tlie policy, which amount is to be explained by 356 THE LAW OF MARINE INSURANCE. [CH. VI. diction to the law of evidence, that, where the adjustment is on its face absolute, the insurers may attach to it a condition by parol evidence.^ An adjustment, and a settlement under it, will leave to the in- tte adjustment. It has been objected that the plaintiffs have not adduced evidence to prove the defendant's liability to pay ; if the memorandum indorsed on the pohcy and signed by him was absolute, he would have been liable. The question then is, whether, either on the face or by the terms of this instrument, it is an absolute or conditional adjustment ; if it be condi- tional, the terms it contains are in the nature of a condition precedent, and should therefore have been complied with by the plaintiffs in order to en- title them to recover. Neither in terms nor substance can this be an absolute adjustment. If the memorandum had been ' adjusted £33 per cent on ac- count upon the defendant's subscrip- tion to the policy,' it would have amounted to an absolute adjustment ; but the subsequent terms have a pro- spective view, namely, ' until the ac- count of the goods insured can be made up.' The word ' until ' is clearly pro- spective, and ' can ' is equally so. On the face of the memorandum, therefore, the undertaking of the defendant ap- pears to be prospective, and that his subsequent liability depended on the making up of the account ; but it is not merely prospective in this respect, but goes still further ; for when the account was made up, a final loss was to be paid to the same amount as by the other underwriters; and if the same exceeded £33 per cent, the defendant was to pay the excess ; if short, the insured was to return the difference. Through- out, therefore, it was entirely pro- spective, and showed that something remained to be done ; and more partic- ularly so as all the other underwriters had adjusted and paid their losses long before. If therefore the defendant was to be bound by what the other under- writers had done, there would have been no necessity for an account to have been made up, for they had ex- cluded themselves from .having an ac- count rendered to them by the terms of their adjustment of the 19th of Oc- tober, 1814. As therefore the defend- ant's liability would only attach when the account was made up, and as the adjustment settled by the other under- writers was not conclusive on him, as it was made nearly four months be- fore he signed the memorandum in question ; and as his name only re- mained on the policy, the plaintiffs should have proved that they had made up and rendered to him an account of the proceeds. The undertaking by the defendant to pay the final loss to the same amount as the other under- writers is qualified by the former part of the adjustment, which involved a condition precedent which has not been performed by the plaintiffs." ' Russel V. Dunskey, 6 J. B. Moore, 233. In this case, by a memorandum of adjustment indorsed on the back of a policy, it was stated that a particular- average loss of £ 54 per cent had been settled between the plaintiff (an under- writer) and defendant. It was held that parol evidence was admissible to show that, by a previous arrangement, it was agreed that, if the other under- writers paid a less sum, the surplus should be repaid. CH. VI.J ADJUSTMENT OF GENERAL AVERAGE. 357 sured his claim or remedy on the policy, so far as the subject- matter on which the claim rests is not included in the adjustment. ^ It might seem that this should be applied only to such a limited adjustment as was intended to cover only a part of the claims of the insured ; and it has been held that where there was an adjust- ment and a settlement under it, and the policy was given up with no reference to a claim existing at the time against the insured in admiralty, for salvage, and this claim was afterwards decided against the insured, he could not on this ground have any further claim against the insurers.^ An action may be brought upon a written adjustment, or upon the policy, without especially setting up the adjustment.^ This last is the customary way, and an adjustment, if agreed to, may be offered in evidence in an action on the policy.* If the insured presents an adjustment, and the insurers refuse to settle upon it, and the insured brings his action, he is not bound by the adjustment he has presented, but may offer a new one more favorable to himself.^ Where the insured presents an adjustment, and offers proof in which there is some formal defect, or some deficiency which he may supply or remedy, the insurers are bound to point out tlajs error or defect to him, that he may have an opportunity to amend it. And their omission to do so will be understood as a waiver of their right to object to his claim on that account. This has been held in actions on a fire policy, and in one action on a marine policy.® ' Thus, if, the insurers being held to this outstanding claim, a different case indemnify for certain injuries, a vessel would have presented itself, is abandoned to them, and after an ' Rogers v. Maylor, Park on Ins. apparently complete repair by them is (8th ed.) 267. tendered to the insured, and accepted * Ibid. by him, such acceptance will not pre- * American Ins. Co. v. Griswold, 14 elude him from maintaining an action Wend. 399. to. recover indemnity for any subse- " Allegre v. Maryland Ins. Co., 6 H. quently discovered deficiency in her & J. 408. This was an action on a pol- repairs as a partial loss. Reynolds v. icy of insurance on the cargo of a ship Ocean Ins. Co., 22 Pick. 191. from Rio de la Plata to Havana. On ^ Batre v. Louisiana Ins. Co., 13 La. the voyage a portion of the cargo was 577. But it was admitted in this case lost by one of the perils insured against, that if the insured had notified the in- A protest was made in due form, detail- surers, at the time of the settlement, of ing the particulars of the shipment, the 358 THE LAW OF MARINE INSURANCE. [CH. VI. It seldom happens that an adjustment of general average does not include items of partial loss, because the adjustment covers the sailing, and the loss sustained. This protest, together with the usual bill of lading, was delivered to the defendants by the plaintiff, as his preliminary- proofs, before the bringing of the action. After the receipt of this, the company wrote to the plaintiff that they declined paying the insurance. In the court be- low, the plaintiff prayed the court to in- struct the jury that no proof was re- quired on this trial that he exhibited to the defendants, before instituting this suit, any preliminary proofs, or that if such proofs be necessary, the protest and bill of lading are sufficient" prelimi- nary proofs, or that the letter from the defendants was a waiver of such proof. The court refused to give this direction, and to this refusal the plaintiff excepted. Upon the point in question, the court said : " Was the letter of the defendants to the plaintiff a waiver of such prelimi- nary proofs ? is the last question aris- ing on this exception ; and the court are of opinion that it was. Good faith and fair dealing is of the very essence of all contracts of insurance, and should per- vade every proceeding under them. If then the insurer, in writing this letter, intended to reject the claim of the in- sured, merely because the invoice had not been produced, the writing of this letter was a fraud upon the assured, a deception utterly inconsistent with the spirit and meaning of the contract, — a species of conduct which this court will never impute to the underwriters while their acts are susceptible of a different interpretation. If they intended to re- fuse payment of the loss, because the invoice, a customary part of the prelimi- nary proofs, had not been laid before them , it was their duty so to have informed the insured ; and their failure to do so, and the writing of such a letter, was a waiver of all further preliminary proofs. The letter itself is a plain unequivocal notification to the plaintiff, that his claim for indemnity will not be adjusted by the defendants; and by necessary implication gives him to understand, that all further offers of preliminary proofs would be useless." Where the insured claimed for a total loss of a ves- sel, and thirty days previous to the com- mencement of the suit exhibited the pro- test of the captain to prove the loss, but not the register or other proof of interest, to the underwriters, who made no objec- tion to the proofs, but refused to pay, solely on the ground of a deviation, it was held that this was an admission of the plaintiff's interest, or, at least, a waiver of the necessity of producing proof of it. Vos «;. Robinson, 9 Johns. 192. In Francis v. Ocean Ins. Co., 6 Cow. 404, 415, where, as in Vos v. Rob- inson, the question was upon a marine policy and one of the objections made ■ by the defendants was as to the proof of interest, the court said : " The defend- ants waived whatever imperfection there may have been in the preliminary proofs of the plaintiff's interest in the subject insured, by not putting their refusal to pay upon that ground. They declared, ' that they would not settle the claim in any way,' putting their objection to pay on the merits of the case, and not on any defect in the proof of the plain- tiff's interest. If that ground had been taken, the defect might; and undoubt- edly would, have been supplied. But this point was not much insisted upon by the defendants' counsel; and is clearly capable of being supported." CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 359 whole loss. Of course the adjuster will carefully discriminate these, and apportion them upon the interest or interests to which they belong. The necessity and the custom of doing this has probably helped to make the phrase " particular average " synonymous or nearly so with " partial loss." Judgment was given for the plaintiff. This decision was made in the Supreme Court of New York. The defendants took the case on appeal to the Court of Errors. At the trial there, reported in 2 Wendell, 64, 66, the Chancellor said : " In the documents exhibited as preliminary proofs, the interest of Basil Francis was distinctly stated. The in- surers made no objection that there was not sufficient proof of interest, but put their refusal to pay on the ground that they were not liable for the loss. That was a waiver of any further preliminary proof of the interest of the assured, and brings this case directly within the de- cision of the Supreme Court in Vos v. Robinson." In ^tna Fire Ins. Co. v. Tyler, 16 Wend. 385, 401, the court said : " The certificate of the magistrate was a part of the preliminary proofs as to the nature, circumstances, and ex- tent of the loss which, by the express terms of the policy, the underwriters- had the right to insist upon before any action could be sustained for such loss ; but the production of this document, as well as any other part of the prelimi- nary proofs of loss and interest, might be waived by the company. The law is well settled in this State, that if there is a formal defect in the preliminary proofs, required by the policy or the cus- tom of the place, and which could prob- ably have been supplied, had any objec- tion been made by the underwriters to the payment of the loss on that ground, if the insurers do not call for the docu- ment or make an objection on the ground of its absence or imperfection, but put their refusal to pay distinctly on some other ground, the production of such further preliminary proof will be considered as waived." In McMasters V. West'r Mut. Ins. Co., 25 Wend. 379, 3S2, Nelson, C. J., said: "I think the judge was right, also, in submitting to the jury, whether the company were not concluded from taking exceptions to the preliminary proofs. Although re- peated communications had taken place with the officers and agents of the com- pany, and in some instances, in pursu- ance of directions from the board, after the preliminary proofs were delivered, no such ground was taken. On the contrary, the fair inference from all the proof in the case is, that other grounds were put forth and mainly relied upon to defeat the recovery. The law is well settled, that if there be a, formal defect in the preliminary proofs, which could have been supplied had an objec- tion been made by the underwriters to payment on that ground, if they do not call for a document, for instance, or make objection on the ground of its ab- sence or imperfection, but put their re- fusal upon other grounds, the produc- tion' of such further preliminary proofs will be considered £is waived." But there is no ground for the implication of a waiver of preliminary proof, where the assured could not have supplied the proof, or removed the objection to the want of it, if the objection had been made. The assured, in such case, can sustain no injury by non-disclosure. He is not lulled into false security, nor pre- judiced in the way of fraud or surprise. Edwards v. Baltimore F. Ins. Co., 3 Gill, 176. 360 THE LAW OF MARINE INSURANCE. [CH. VI. We have already seen that expenses may be incurred for the benefit of one interest only, and should then be charged to that interest ; or for the benefit of more than one, and should be charged accordingly. So they may be incurred for the benefit of all the interests, and will then be chargeable to all, and will be distributable among them all in the same manner, or in the same proportions, as if they were general-average expenses. Whether the adjuster called them iii this case general-average charges or not, would be unimportan|, so far as the owners and shippers were concerned. But it might be important for the insurers, as the policy might make them liable only for general- average charges, or might exclude that liability. It would be giving quite too much force to an adjustment to say that the name given to these charges by an adjuster could affect the rights or obligations of the insurers or insured, for these must depend upon the actual character of the charges. a. Of a Foreign Adjustment. The proper place for the making of an adjustment is the home port, or the port of final destination. ^ It is, however, obvious that there may be good reasons for making the adjustment at another port. An owner, for example, of cargo lost by jettison has at once a lien on all the contributory interests and property for his indemnity.^ If the ship now makes a port at which it delivers a part of the contributory cargo, and then goes to another port to deliver another part, and the shipper having a claim for contribution is obliged to delay adjusting this claim until the ship reaches her port of final destination, he may lose thereby all power of enforcing this claim, or recovering his indemnity. There would be no remedy for this, excepting to make at an earlier port the adjustment as to the parties whose goods were deliverable at that port. It would, however, be very difficult to make a partial adjustment of this kind, and repeat it as often ^ Stevens & Beneoke on Av. (Phil. = Strong u. N. Y. F. Ins. Co., llJolins. ed.) 268 ; Simonds u. White, 2 B. & C. 323 ; Sherwood v. Buggies, 2 Sandf. 55 ; 805, 811; S. C, 4 D. &.R. 375, 385; Chamberlain v. Reed, 13 Me. 357; U. Thornton v. U. S. Ins. Co., 3 Fairf. 150, S. v. Wilder, 3 Sumner, 308. 153. CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 361 as it is necessary, and then at the port of final destination make a final adjustment. Hence it is a perfectly well-established rule of the law-merchant, that a foreign adjustment, made at any port at which it ought for sufficient reason to be made, is binding upon all the parties to it. This indeed should be regarded as in one sense a port of destination, for it is so for the goods which are to be delivered there. The practical rule may be stated thus : the adjustment may be delayed as long as all the contributory interests continue to- gether, and should be delayed until the vessel reaches her port of final destination, if "they are to continue together so long. But if these interests are to be separated, then the adjustment should be made at the place where the separation first takes place. ^ We repeat that we consider the rule well established, that an adjustment made at such a port is binding on all the parties ; although there are cases, both in England and in this country, which deny its obligation. In our notes we exhibit the au- thorities on both sides of this question.^ ^ In Loring v. Neptune, Ins. Co., 20 Pick. 411, 413, Shaw, C. J., alludes in- cidentally to this rule as follows : " The general average in the present case was made up and adjusted at Hamburg, the port of destination, at which. the several interests liable to contribute were ne- cessarily to be separated from each other. Hamburg, therefore, was the proper place for the adjustment and payment of this general average." ^ In Power v. Whitmore, 4 M. & S. 141, an adjustment was made at Lisbon, and wages and provisions were in- cluded, which was contrary to the law of England. It was held that the con- tract was to be construed according to the laws of England, unless the parties were understood as having contracted on the footing of a different known general usage in the country where the adventure was to terminate. There being no evidence of such usage except the decree of the court, the plaintiff was nonsuited. In Lenox v. United Ins. Co., 3 Johns. Ca. 178, a cargo of pipe staves was insured. Some of them were carried in the hold, and others on deck, with the consent of the insurers. The part on deck was jettisoned, and, ac- cording to an adjustment made at Lis- bon, the cargo in the hold was charged with its proportion of the loss. It was held that the underwriters were not liable for a general-average loss; for, although it was decided differently at Lisbon, the port of destination, and the law there was stated to be otherwise, the parties to tbe contract were to be considered as having in view the law of the State in which it was made, and were to be governed by it. In Shiff v. Louisiana State Insurance Co., 6 Mart. La. N. S. 629, where a loss by carrying a press of sail to keep off a lee shore was contributed for in general average in Hamburg, it was held that the under- writers were not liable ; because, when 362 THE LAW OF MARINE INSURANCE. [CH. VI. Whatever uncertainty attends this question arises from still another rule, which is, that, wherever an adjustment be made, they agreed to become responsible to the plaintiff for general average, they understood what was known to the laws of their own country as such, — parties always being presumed to contract in relation to their own laws, unless the contrary is clearly shown ; and that they were not responsible in the instance in question, as by those laws the injury sustained was one of particular aver- age. In the following cases the rule laid down in the text, that a foreign adjust- ment is binding upon the parties, is substantiated. Walpole v. Ewer, Sitt. after Trin. 1789, reported in Park on Ins. (8th ed.) 898, was an action on a policy of insurance upon a respondentia bond on ship and goods, at and from B to C. The ship was Danish ; and an average loss had been sustained, towards which the plaintiff, as holder of a re- spondentia bond, had been called upon to contribute. For the amount of this contribution the action was brought against the English underwriters. Lord Kenyan, C. J., said : " By the law of England, a lender upon respondentia is not liable to average losses, but is entitled to receive the whole sum ad- vanced, provided ship and cargo arrive at the port of destination. The plain- tiff contends that, as by the law of Den- mark such lenders upon respondentia are liable to average, and bound to contribute according to the amount of their interest, the insurer must answer to them. The Danish consul has proved that he received a judgment of the court of Copenhagen, the decretal part of which proves the law of Denmark to be as the plaintiff has stated it. The opinions of several men of eminence in that country have been offered on each side ; but I reject them, because the solemn decision of a court of competent jurisdiction is of much greater weight than the opinions of advocates, however eminent, or even than the extra-judicial opinions of the most able judges. It seems as if, in this case, the under- writers were bound by the law of the country to which the contract relates." In Newman v. Cazalet, Sittings at Guild- hall after Hilary, Park, on Ins. 899, the policy on which the action was brought was upon a cargo of fish from New- foundland to any port of Spain, Portu- gal, or Italy. The ship met with bad weather, and put into Alicant and Leg- horn to repair. The captain, being owner, presented a petition to the com- mercial court of Pisa to adjust the gen- eral average, as he had put in for the general benefit of all concerned. The court, according to its usual course, ad- justed the loss by charging the cargo at its full valve, but the ship only at one half, and the freight at one third ; and they also charged as a part of the gen- eral average the seamen's wages and provisions while in port. The defend- ant, as underwriter, had paid into court as mucb as would cover the average, if adjusted according to the memorandum in the policy and the law and usage of England. The question was, whether, the plaintiff having been compelled to pay beyond that sum according to the calculatioa of the sentence of the court of Pisa, it was conclusive upon the de- fendant, and the plaintiff was entitled to recover his average by the same standard. Mr. Justice BuUer said : " On the general law the plaintiff would fail ; but in all matters of trade CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 363 it must be made under the principles, practice, and law which in that place regulate adjustment. Now these may be quite different usage is a sacred thing. I do not like these foreign settlements of average which make underwriters liable for more than the standard of English law. But if you are satisfied it has been the usage, upon the evidence given, it ought not to be shaken." It was proved by several brokers that, in repeated in- stances, they had adjusted averages under similar sentences in the court of Pisa, and that the underwriters, though with reluctance, had always paid them. The plaintiff had a verdict accordingly. In Strong v. Firem. Ins. Co., 11 Johns. 323, a vessel was moored in the port of Lisbon, and, a violent storm arising, it became necessary, for the preservation of the ship and cargo, to cut away most of her rigging and spars, which damages were made the subject of general average at Lisbon. The point in controversy was, whether the defendants were liable to pay the whole amount of the proportion of general average assessed on the cargo according to the adjustment at Lisbon, or only according to the rule adopted in New York. It was held that their liability was determined by the adjustment at Lisbon. The court said: "The gen- eral average once being made, and the amount of contribution between the owners of the ship, freight, and cargo ascertained, it appears, at least nothing appears to the contrary, that the underwriters have been held lia- ble for such amount Indeed, it seems to me that this view of the sub- ject would be conclusive to show that a bona Jide adjustment and payment of a general average ought to be the meas- ure of damages, as between the mer- chant and insured : otherwise, an in- surance would cease to be what it has always been contemplated, — a contract of indemnity. In this case it is dis- tinctly admitted that, as it respects the owners of the cargo and the owners of the vessel, the average was correctly stated, and rightfully paid in Lisbon. That this is a loss for which the insurers are liable is not disputed ; and there is no principle more firmly established than that they are bound to return the money which the assured has been obliged to advance in consequence of any peril within the policy, provided it be fairly and honestly paid, and does not exceed the amount of the subscription." After commenting upon the cases of Walpole V. Ewer, and Newman ;;. Caz- alet, the court continues : " I cannot doubt that at this day the underwriters in England are uniformly held respon- sible for the amount fairly paid under a foreign adjustment of an average loss." The following reference, in the same opinion, to the case of Lenox v. United Ins. Co., which had been previously de- cided in the same court, although not overruling it, shows that it was not con- sidered as a direct authority in support of the doctrine that a foreign adjustment is not binding upon the insurer : " The question there was, whether the plain- tifiT should recover a partial loss only, or the amount paid on the adjustment of a general average at Lisbon ; and it was decided that he should recover a partial loss only, on the ground that, according to our law, the staves on the deck of the vessel thrown overboard in a storm to lighten . her could not be brought into a general average. What would have been Ike effect of this adjustment, if the jettison had, according to the laws of 364 THE LAW OF MABINE INSURANCE. [CH. VI. in different ports. The principal reasons why a foreign adjust- ment is binding on its owners and shippers may be briefly stated (his country, formed a proper item in the making it up, is left undetermined." In a subsequent case in the same State, Depau V. Ocean Ins. Co., 5 Cow. 63, the court decided the question as to the effect of a foreign adjustment in the same way as in Strong v. Fireiflen's Ins. Co., — that case being cited as the au- thority by which it was guided. In accordance with these decisions was that in Loring v. Neptune Ins. Co., 20 Pick. 411. There Chief Justice Shaw uses the following language upon the point under consideration : " In general it is to be presumed that both the as- sured and the underwriter are ' ac- quainted with the nature of the business in respect to which they contract ; that they are acquainted with the customs and usages of that business, and consent to conform to them, unless there be some stipulation to the contrary. It is well known, therefore, to both parties that the assured may have to pay, in respect to losses insured against, general averages; that these averages may be adjusted abroad ; and that the assured will be bound by such adjustment, al- though in making it conformably to the law and usages of the places where made, both the sum to be contributed and the contributory interests may be estimated upon principles varying from those which prevail at the place where the contract of insurance is made. It seems to follow as a necessary conse- quence that, when the assured has in- curred a general-average loss within the perils insured against, when such loss has been adjusted at the proper place, and in a mode conformable to the law and usage of such place, and when the assured has thus become bound to pay and has paid such loss, he is entitled to recover it of the underwriter, although the contributory interests have been estimated upon a principle different from that of the place where the policy was underwritten." This question was discussed by Mr. Justice Story in Peters V. Warren Ins. Co., 1 Story, 463, and a strong opinion expressed in favor of the binding effect of a foreign adjustment, though he expressly stated that he did not wish to be understood as deciding the point. He says : " The contract of insurance is a contract of indemnity against risks and losses by the perils . insured against, not only in the home port and on the ocean, but also in for- eign ports. It naturally therefore looks to general averages which may be in- curred and enforced abroad as well as at home. If, by a peril insured against, the insured is compelled in a foreign port, by the local law, to pay a sum as general average which by the law of his own country would not be so, why may not such a loss or charge be properly deemed a general average in the sense of the policy ? What difference in principle is there between deciding that items or apportionments included in a foreign adjustment of a general average, although not belonging to a general average, or a proper apportionment by the law of our own country, are never- theless to be here paid for as a general average, and deciding that a loss, not a general average by our law, but a general average by the foreign law, and enforced there, is to be deemed and paid for here as a general average ? In each case the loss sought to be re- versed is, pro tanto, not a general aver- age according to our law ; and the CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 365 thus : if the cargo is to be separated in a foreign port, the con- tributory share of the cargo leaving the ship should be paid on principle which is to govern must be the same whether the loss be greater or less, whether it apply to the totality of the claims, or to any item thereof. Now, certainly, the weight of authority, both in England and America is that the items included and the sums apportioned and paid according to the law of a foreign country, as a general average in an adjustment thereof made there, and, a fortiori, if enforced by the public tribunals there, are, quoad the items and the rule of apportionment, conclusive upon and payable by the underwriters here as a general average, although not apportioned in the same manner, and not deemed items of general average by our law There is nothing unreasonable in construing the engage- ment of the underwriters in a policy to be that they will pay whatever the in- sured in a policy is compelled to pay as a general average, arising from the risks insured against." In Simonds v. White, 2 B. & C. 805, this question arose between a shipper and ship-owner, and it was there de- cided that a loss by general average was to be calculated between them according to the law of the port of dis- charge ; and in the subsequent case of Dalglish V. Davidson, 5 D. & K. 6, de- cided upon the authority of Simonds v. White, it was held that the owner of a British ship might avail himself of a statement of average made at the port of delivery in a foreign country, ac- cording to the law thereof, so as to charge a British freighter of goods, under a charter made in Britain, with the expenses of wages and provisions for the seamen, incurred during the necessary detention of the ship at an intermediate port, although by the law of England such expenses would not be recoverable as average. X^e following from the opinion of Chief Justice Abbott, in Simonds v. White, would seem to apply to the underwriter as well as to the shipper. He says : " The shipper of goods tacitly, if not expressly, as- sents to general average, as a known maritime usage, which may, according to the events of the voyage, be either beneficial or disadvantageous to him. And by assenting to general average he must be understood to assent also to its adjustment, and to its adjust- ment at the usual and proper place ; and to all this it seems to us to be only an obvious consequence to add, that he must be understood to consent also to its adjustment according to the usage and law of the place at which the adjustment is to be made." See also Lewis V. Williams, 1 Hall, 430, where the question was between two shippers, and where Mobile was considered, upon a question of average, to be a foreign •• port in relation to New York, and where an adjustment made at the former place was held to be binding upon shippers at the latter. In giving the reasons for the rule the court said : " The grounds upon which the foreign adjustment is held conclusive are, that it is the duty of the master to cause the adjustment to be made, and to see to the settlement of the averages ; and that the parties are compellable to sub- mit to the assessments upon them that may be coerced by suit or by the de- tention of the goods to pay the contribu- tions as settled there ; and if the adjust- ment could be opened at the home port, and a new rule of apportionment be 366 THE LAW OF MARINE INSURANCE. [CH. VI. the spot to the party entitled to contribution. The adjuster at that place must be bound by the law of that place, and cannot be held to know the law of a distant port. And the ship cannot be delayed until he has time to inquire and acertain that law. The adjustment covers all the interests at risk, and cannot be gone into afterwards at another place, and reformed throughout .(if reformed at all it must be throughout), after a part of the cargo has been left at another place and is out of the reach of the parties. And it may be added that if an owner or shipper loses by the difference in the rules of adjustment in one case, he may gain in another ; and this practical rule, like some others of the law-merchant, is founded on the average of all the cases, and on the whole does justice. But if these reasons are sufficient to make a foreign adjustment final between owners and shippers, other principles may well come in when another party comes in, and that is the insurers of ship or cargo. The contract of insurance is made between parties, one of whom, the promising party, has a permanent loca- tion. In that place he enters into the contract, there he receives his premium, and there he will make whatever payment the con- tract requires him to make. No rule of the law of place is more generally recognized, or more firmly established, than that the contract must be governed by the law of the place where it is made and is to be performed. We may suppose a ship and cargo 'owned in one country, bound to a second country, and insured in a third. Now if a peril insured against compels the ship to incur heavy and various expenses, these must be distributed upon the ship, or the cargo, or the insurer of the ship or of the cargo. The three countries of home, insurance, and destination may have three systems of law by which this distribution is regulated. applied, great and manifest injustice to allow the contributory parties who must often be done to some of the par- are uninsured to open the adjustment, ties, without any remedy for the wrong and to hold it conclusive upon those done them by the derangement whose interests are insured and upon In most cases of foreign adjustment the their underwriters. There can be no averages are from necessity settled and solid ground for the distinction ; the ad- paid by the parties who are to con- justment must be equally conclusive tribute, without reference to the ques- upon all the persons and interests actu- tion of insurance. It would be against ally brought into the settlement of the the principle and true spirit of the rule average." CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 867 Let US further suppose an adjustment of this made at a foreign port, and this may be the port of final destination. It may be certain that the owners of all these interests are bound, in refer- ence to each other, by this adjustment. But when one of them comes to his insurer, may he ndt say, I must be governed by the law of my place, as to the obligations imposed upon me by my con- tract made here ? And if, in the case s\ipposed, the insurer profits by the difference of the laws, and therefore does not assert this home principle, as it may be called, may not the insured who suffers from this difference assert it in his own behalf ? There is a great appearance of justice in this view, and our notes will show that it is sustained by authorities entitled to respect. We think, however, tliat this is bat one illustration of a mistake of which more than one instance can be shown. Courts of common law, both in England and in this country, now ac- knowledge the law-merchant as a part of the common law ; but they are accustomed to cases which are governed by the cominon law of the land and not of the sea, and to administer justice in cases of the land, by applying to them a system of law admirably adjusted to that end. And they are strongly disposed to apply the same system to all contracts. It might be well, in some cases at least, if the common-law courts, in judging maritime contracts, were more influenced by a spirit like that manifested by the Emperor Antonine in the rescript which founded for the civil law the law of general average. He says : "I am,. the lord of the world, but the law is the lord of the sea " ; and then goes on to show that in this case, by the lord of the sea, he means the law of the island of Rhodes even then ancient, which was only the system of rules and usages practised by all engaged in the com- merce of the Mediterranean. 1 The contract of insurance is eminently a maritime contract. The policy is made upon a designated voyage, or upon a fixed time, and with rights or liberties given by the law, and known to be so, or agreed upon by the parties. Whatever risks can arise, and this one among the number, may be estimated. And it can be no hardship to them to require them to be governed by the law of any place visited by the ship while under insurance, if the law of that place becomes applicable to the interest insured, ' Digest, lib. 14. tit. 2. § 9. 368 THE LAW OF MARINE INSURANCE. [CH. VI. within that voyage or in that time. The diversity of these rules is less than it was, and as we think is growing less than it is, under the tendency of the law-merchant to become one system, and to form a part of the law of nations without disturbance from local peculiarities. In a case in which this very question arose, BuUer, J., said: "On the general law the plaintiff would fail, but in all matters of trade usage is a sacred thing." ^ At the same time, we by no means assert that insurers are bound by a foreign adjustment, in &11 respects. Where there is a foreign adjustment of the contributions by the several interests for a loss which is the subject of general contribution in both countries, the several interests must be bound by the distribution of these contributions, determined by the law of the place where the adjustment is made. But if the general-average law, at the place of adjustment, includes within that average, and tlierefore gives a right of contribution for, a loss which in the home port would be a particular average, or a partial loss, we should say that the owner receiving this contribution cannot claim of the insurers the whole of his partial loss, without deducting what he has re- ceived by way of contribution ; for this makes his loss so much less. But for the residue the insurers would be bound to him. And if the insured was held in a foreign port to pay contribu- tion for a loss, against which, by the home construction of the policy, he is not insured, the insurers would not be bound by this foreign adjustment to repay to him this contribution. We do not consider what we have said as stating any exceptions to the general rule ; nor are we sure that a rule, resting so far as au- thority is concerned, on one case, but applied as we know in another, should be regarded as an exception. This rule is, that where, in a foreign adjustment of an average loss, certain con- tributory claims are denied to the party suffering the loss, which claims would be allowed to him at home, the insurers at home cannot say, that the foreign adjustment of the loss is so far con- clusive against the insured, and in their favor, that he is not en- titled to indemnity from them for any items of loss denied him by that adjustment.^ ' Newman v. Cazalet, Sittings at ^ Thornton v. TJ. S. lus. Co., 3 Fairf. Guildhall after Hilary, cited in Park on 150. This was an action of assumpsit Ins. (8th ed.) 900. on a policy of insurance, in which the CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 369 It may be said, however, that if such an adjustment is binding, when it is in favor of the assured, if the facts were reversed and it favored the underwriter, it should be binding on the insured. It might, perliaps, be answered, that the bargain between them might give this advantage to tlie insurers, and not to the insured ; and that the risk might be contemplated in making their bargain.^ plaintiff claimed to recover for losses under both general and particular aver- age. The plaintiff's ship, insured by the defendants, being on a voyage from Richmond, Maine, to Bremen, was com- pelled to put into Cuxhaven, an inter- mediate port, for the preservation of the ship, cargo, and lives of the crew. On the arrival of the ship at Bremen, the port of discharge, a general average of the loss was adjusted by the proper officers there ; but in this adjustment no notice was taken of the wages and victualling of the crew, after the ship bore away for Cuxhaven. By the American law these expenses would have been allowed as a general average. The question was, whether the Bremen adjustment was to be taken as con- clusive between the parties. It was held that it was not conclusive, but that the ship-owner might show that items of loss were omitted in the adjustment which by the laws of this country, where the contract was entered into, should have been included. The court said : " We know it is often said in the books that the foreign adjustment is con- clusive; as between the parties it un- questionably is so._ The party con- tributing can recover nothing back ; the party to whom the contribution is made can recover nothing further ; and he who has been compelled actually to contribute on the basis of the foreign adjustment can recover of his insurer the amount thus contributed, and nothing more. To this extent we admit the conclusive character of foreign adjust- VOL. II. 24 ments, but have been unable to find adjudged cases to carry us further. We have found no case where the party to whom the contribution has been made has been restricted, in his claim upon his underwriters, to the sum apportioned as his share of the loss, by the foreign adjustment, when that sum fell short of a complete indemnity, ac- cording to the law of the place where the contract of assurance was entered into. If the foreign adjustment in- cludes as general average what consti- tutes only a partial loss or particular average according to the authorities, the adjustment is not binding upon the underwriters, either because the loss was not covered by the policy, or, not coming within the term ' general aver- age,' is not to be adjusted abroad ; and we do not perceive any good reason against applying a similar rule in favor of the insured in cases where, by the foreign adjustment, losses are excluded which by the law of the place where the contract was made are. considered as falling within general average." ' As to the practical rule we have what we consider the valuable authority of Mr. Dixon, in his handbook of marine insurance and average. On page 162 he says : " I have, as adjuster of aver- ages for one of the principal insurance companies of New York, had an oppor- tunity of examining hundreds of state- ments in which the column of general average disallowed items which would be admitted by our custom; and, on the other hand, comprehended items 370 THE LAW OF MARINE INSURANCE. [CH. VI. We are content to say that, whatever rule was adopted, it should be applied equally, whether it favored one party or the other ; and this we suppose to be the practice. Mr. Phillips makes still another exception ; because a shipper may receive the goods at any port at which the ship arrives, by paying full freight, if he chooses to receive them at an inter- mediate port, because of a favorable market there, or for any other reason, he will still have the right to have the adjustment made on the principles which would be agplied at the port of destina- tion.^ We see no sufficient reason for this. He may take his goods if he chooses, but must take them subject to the law of adjustment at the place where he takes them. On this point we should agree with Mr. Stevens, who says that a particular average cannot be adjusted in the usual mode, short of the port of destination.^ Mr. Pliillips himself confines his remark to the case of particular average. If this be merely a partial loss, and there is no need of an adjustment elsewhere than at home, there may be ground for his view. But we certainly should not apply it to the case of particular average included in the general- average adjustment made abroad for sufficient reasons. It must, however, be remembered that this conclusiveness of a foreign adjustment cannot prevent a party interested from availing himself of a defence against a claim for contribution, which goes to the foundation, not merely of the adjustment, but of the whole right or necessity of any adjustment. Thus, where an adjustment was made on the protest and testimony of the master, the owner of goods on board was permitted to show that the loss arose from the want of care and skill of the master himself, and was not therefore a case for general-average adjust- ment.^ whioh would be disallowed here ; and, binding, not only as between the parties except in one or two very extreme interested in the adventure, but also as cases, I have found the average ad- between the assured and the under- justers, by making no readjustment of writers." those items at the home port, practically ' 2 Phillips on Ins. § 1467. hold that when a foreign adjustment is ' Stevens & Benecke on At. (Phil. rightly settled according to the laws ed.) 285. and usages of the foreign port, it is ' Chamberlain u. Keed, 13 Maine, 357. CH. VI.] ADJUSTMENT OF GENERAL AVEEAGE. 371 Section X. — Of the Enforcement of the Payment of Contrib- utory Shares. , The owners of the property on which the contribution is prop- erly assessed are. liable for it in an action by the party by whom it is receivable.^ The consignee naay be the owner of the goods contributing, and then will be liable as owner. He will not, however, be liable merely as consignee. He may refuse to re- ceive the goods from which the contribution is payable. But even if he receives the goods only as consignee, this raises no implied promise on his part to pay the contribution. The common provisions of the bill of lading under which he claimed and received the goods would not make him liable. If, however, a clause were added that the goods were to be delivered only on payment of contributory charges, as Lord Tenterden suggested,^ this might make him personally liable. He could certainly not claim the goods without paying contribu- tion, but we are not quite certain, that, if the goods were delivered to him without promise of payment on his part, the mere recep- tion of them would make hiin personally liable for them even under that clause. Such questions, however, can hardly come up under the prevailing practice in this respect. It is a rule of the law-merchant, which we suppose to be a universal one, that the master, as the agent of all concerned, has a lien on all the goods in the ship for their contributory shares.^ ' Lenders on bottomry and respon- gages to pay freight, and so he would dentia are liable to contribution in gen- to pay general average, if that were eral average. Chandler v. Garnier, 6 mentioned in the bill of lading. But Mart. La. N. S. 599. The owner of here general average is not so men- goods chargeable with general average tioned. It may perhaps be prudent in is personally liable for the amount of future to introduce into a bill of lading his contribution, notwithstanding he has an express stipulation that the party abandoned to the underwriters. Del. receiving the goods shall pay general Ins. Co. V. Delannie, 3 Binn. 295. average; but if we were to hold the ^ Scaif V. Tobin, 3 B. & Ad. 523. defendant liable for it in the present Lord Tenterden here says : " There instance, we should be going one step can be no doubt that if a person re- further than we are warranted in doing ceives goods in pursuance of a bill of by any decided case." lading in which it is expressed that the " Strong v. N. Y. Firem. Ins. Co., goods are to be delivered to him, he 11 Johns. 323; Sherwood v. Kflggles, 2 paying freight, he by implication en- Sandf. 55 ; Thornton v. U. S. Ins. Co., 372 The law of marine insurance. [ch. vi. He may refuse to deliver the goods until the contribution be paid, and sometime does so. But it often happens that the consignees require the goods before an adjustment is made, and consequently before they know their respective shares for contribution ; and sometimes a considerable .time is required to make a complicated adjustment. To meet such an exigency, the master takes from all the consignees a bond by which each one agrees to pay the contribution due from the goods he re- ceives, when the same shall be adjusted. This is now a common practice.^ The question may arise, however, whether this unquestionable right of the master ^ is also his duty ; that is, is he bound to retain the goods until the contributory shares are either paid or secured ? He is undoubtedly so far the agent of the party en- titled to contribution, that if the contributing party pays in good faith to the master all that is due from him, and the master fraudulently keeps the money for his own use, the contributing party is nevertheless discharged from all liability.^ But is he the agent of the contributing party only with power, and not with duty ? The civil law held him bound to collect their share from all contributing parties, and pay them to, or hold them for, the receiving parties.* The ordinance de la marine of 3 Fairf. 150 ; Chamberlain v. Keed, 13 throw overboard a part of the cargo, Me. 357; U. S. v. Wilder, 3 Sumner, whereby a general average had accrued, 308 ; Simonds v. White, 2 B. & C. 805 ; and in which the subscribers agreed to Briggs V. Merchant Traders' Ass., 13 pay their respective proportions of the Ad. & El., N. S. 167, 174 ; Hallett v. average as soon as adjusted, it was held Bousfield, 18 Ves., Jr., 187; Gillett v. that this was a personal obligation, and Ellis, 11 111. 579. The ship-owner's did not bind the shipper of the goods, remedy against the consignee is not Eckford v. Wood, 5 Ala. 136. lost by the latter's receiving the cargo " That the captain has a right to de- at the port of necessity, and forwarding maud of the consignee that he sign an it himself to its destination. Sherwood average bond before delivery of the V. Ruggles, 2 Sandf. S. C. 55. goods, see Cole v. Bartlett, 4 La. » Abbott on Shipping (8th ed.) 614. 130. Where, after a general-average loss, the " Eckford v. Wood, supra. several consignees of the goods, upon * Dig. 14, 2, 2. Se'e also Wellwood, tit. the requirement of the master, executed 21. The owners of a vessel who collect a bond reciting the accident, and ad- the contributory shares are entitled to mitting'that thereby the schooner had a commission of two and one half per been obliged to employ lighters, and to cent. Barnard v. Adams, 10 How. CH. VI.J ADJUSTMENT OF GENERAL AVERAGE. 373 Louis XIV .^ contains a similar provision ; still it must be stated that Valin, in his Commentary, which is of the highest authority, denies that this is done in practice.^ And we should infer from the language of Abbott, Lord Tenterden, that there was no such law or usage in England.^ A singular case before Lord Chancellor Eldon would imply that the master, while he has the right to retain the cargo, is not bound to do so by any obligation to the receiving party, or, at all events, any which equity would enforce.* We are not aware that this point has been distinctly determined by adjudication in England. There are cases which recognize the lien, but do not define it, or state expressly whether the master is not only possessed of a . right, but bound by a duty.^ We are, however, quite confident that both usage and law in this country make it his duty to refuse to deliver the goods to their consignees, unless their contributory shares are paid for or in some way secured. It has indeed been decided, that a shipper, losing the contribution to which he was entitled, by a neglect of the master 270, 308 ; Sturgess v. Gary, 2 Curt. C. C. 382. The language of the court, in Barnard v. Adams, would imply that the right to charge this commission rested on the custom of average bro- kers ; but in Sturgess v. Gary, Mr. Jus- tice Curtis stated that he had obtained a copy of the record in that case, and found that no evidence of any usage was offered, and that the presiding judge instructed the jury, as matter of law, that the charge was correct, which rul- ing, being excepted to, was sustained by the Supreme Gourt. He accordingly held, that a usage in the city of Boston not to allow such charge was not ad- missible to contravene the general rule of the law-merchant. ' Liv. 3, tit. 8, Du Jet. art. 21. ' Vahn, torn. 2, p. 21. See also Pothier on Maritime Contracts (Cush- ing's ed.) p. 76, n. 134. ' Abbott on Shipping (8th ed.) 613. * Hallett V. Bousfield, 18 Ves. 187. In this case a motion was made, by the owner of goods which had been jetti- soned for the safety of the vessel and car- go, for an injunction to prevent the mas- ter from delivering over the rest of the cargo to the other shippers. The mo- tion was refused by Lord Eldon, on the ground that, though the master was not bound to part with any of the cargo, until security should be given by each shipper for his proportion of the loss, yet that any owner of a part of a cargo could not compel him to do so. ^ See Scaif u. Tobin, 3 B. & Ad. 523 ; Simonds v. White, 2 B. & G. 805. In the latter case. Chief Justice AVbott remarks incidentally : " I believe, also, that all are agreed on another point, namely, that the master is not compel- lable to part with the possession of goods until the sum contributable in respect of them shall be either paid or secured to his satisfaction.'' 374 THE LAW OP MARINE INSUEANCE. [CH. VI. in the discharge of his duty, would hold the ship-owners respon- sible.^ So, it has been said that, if a master delivers the contributing goods to the consignee without receiving contribution, and then pays it himself to the party entitled to contribution, the master has an implied assumpsit against the consignee for what he has paid.2 If this be so, it would seem that the reception of the goods should make the consignee liable. But any claim of the party entitled to receive contribution against the ship-owners on this ground must be founded upon the neglect of the master. If he takes an average bond or other security with due care, or with a reasonable belief that it is sufficient, and the seciirity fails from no fault of the master, the ship-owners should not be bound. The owner of the goods is liable for his contributory share, although the consignee executes a general-average bond ; for this bond is not itself payment of the contributory share, and therefore does not discharge the owner.^ It has been held, that if one shipper of a general cargo pays all the general-average expenses incurred by a common peril, ' Gillett V. Ellis, 11 111. 579, 582. In fairly and honestly made. Where the this case, the court says : " The plain- law imposes an obligation on a party, tiff's goods having been sacrificed for and confers upon him the power of en- the common benefit of the owners of forcing it, as in this case, by a lien, it the vessel and the remaining portion equally imposes a liability for the neg- of the cargo, it is very clear that he lect of the obligation." See also Du- was entitled to contribution for them, pont de Nemours v. Vance, 19 How. It was the duty of the master to have 162, infra, p. 376, n. 1. caused a general average to be made, ^ Eckford v. Wood, 5 Ala. 136, 140. and enforced the payment of the part The court; in this case, remarked that, due from the owners of the cargo. He " conceding the master cannot sue or •was bound to adjust an average, and he be sued, according to the common law, had the right to detain the cargo until we cannot doubt that if the master, or the average was paid. It clearly re- the consignee, who is his agent, volun- sults from this obligation of the master tarily parts with goods which he is au- to settle an average, and this right to thorized to retain, and afterwards pays require payment from the consignees, the contribution for which he could that the defendants, for whom the mas- have retained them, an implied assump- ter was acting, are responsible to the sit is raised that he shall be repaid by plaintiff. The latter has the right to the owner.'' recover from them whatever he might ' Eckford v. Wood, supra. have received under a general average. CH. VI.] ADJUSTMENT OF GENERAL AVERAGE. 375 he has a right of action against the other shippers for their pro- portions.^ We infer from English authorities that, when the English East India Company charter a ship, they stipulate that there shall be no claim for contribution for general average.^ We are not aware that such a practice prevails or exists in this country. Public property is not exempt from liability for a contribution.^ It could not be reached, however, in this country by a suit against, the United States, unless perhaps it were brought before the Court of Claims. But it has been held that the ship-owner has a right of lien against goods belonging to the United States government, until he is reimbursed what that government should pay by way of contribution in general average. It is in this case that Judge Story remarks, that the general maritime law gives a lien in rem for the contribution ; and while this is not always the only remedy, but often the best and sometimes the only one as it certainly is where the own€r of the goods is not known, he adds, that without such a lien the ship-owner would be without any adequate redress, " and would encounter most perilous responsibility." It is not quite certain that he means by this a responsibility for the contribution which any persons were entitled to receive, if he delivered to the contributing shippers their goods without taking security. If he means this, it would go far to sustain the view we have expressed, that the master, as the agent of the owner, is not only entitled to retain the goods, but is bound ' Kern v. Groning, 1 Brevard, 506 ; action for money paid might be main- Dobson V. Wilson, 3 Campb. 480. In tained against each of those who were Birkley v. Presgrave, 1 East, 220, it benefited by such expenditure. But was held that a special action of as- as this would lead to a multiplicity of sumpsit might be maintained by the actions, and this species of action is owner of a ship against the owner of not applicable to the case of goods part of the cargo, to recover from him thrown overboard, the better mode, in his proportion of a general-average all cases, seems to be to apply for con- loss, incurred by cutting the cable and tribution to a court of equity, where part of the tackle of the ship, and ap- effectual relief may be obtained against plying them to a use for which they all the parties in one suit." were not originally intended, for the ' Hughes on Ins. 296 ; Stevens & general preservation of the whole con- Beneck^ on Av. (Phil, ed.) 252; Jack- cern. Park, in his work on Insurance, son v. Charnock, 8 T. R. 509. p. 298 {8th ed.) says: "In the case of ' United States u. Wilder, 3 Sumner, an expenditure of money, probably an 308, 312, supra, p. 341, n. 2. 376 THE LAW OF MARINE INSURANCE. [CH. VI. to do so, and his language would seem to be too strong to permit the belief that he had in mind only the ship-owner's danger of losing the contributory share to which he was himself entitled.^ ' In the oas'e of Dupont de Nemours V. Vance, 19 How. 162, Mr. Justice Curtis remarks a!s follows upon the sub- ject of liens, in cases of general aver- age r " When a lawful jettison of cargo is made, and the vessel and its remain- ing cargo are thereby relieved from the impending peril, and ultimately arrive in the port of destination, though the shipper has not a lien on the vessel for the value of his merchandise jettisoned, he has a lien for that part of its value which the vessel and its freight are bound to contribute towards his indem- nity for the sacrifice which has been made for the common bcMfit. And this lien on the vessel is a maritime lien, operating by the maritime law as a hypothecation of the vessel, and capable of being enforced by proceedings in rem The power and duty of the master to retain and- cause a judicial sale of the merchandise saved has also been long established. And this right to enforce a judicial sale, through what we term a lien in rem, is not confined to the merchandise, but extends to the ves- sel It would be extraordinary if the right to a lien were not reciprocal ; if it existed in favor of the vessel, when sacrifice was made of part or the whole of its value, for preservation of the cargo, and not against the vessel, when sacri- fice was made of the cargo for preser- vation of the vessel On full consideration, we are of opinion that, when cargo is lawfully jettisoned, its owner has, by the maritime law, a lien on the vessel for its contributory share of the general-average compensation ; and that the owner of the cargo may enforce payment thereof by a proper proceeding in rem against the vessel, and against the residue of the cargo, if it has not been delivered." CH. VII.J OF PARTIAL LOSS OR PARTICULAR AVERAGE. 377 CHAPTEE VII. OF PARTIAL LOSS OR PARTICULAR AVERAGE. We place both these phrases at the head of this chapter, because both are in use among merchants and in law books. The phrase " partial loss" is, however, gaining upon the other, and we think it far better. Mr. Phillips ^ considers that it is reason enough for using the term " particular average " that it has been so long used, and that its meaning is now definite. These are good reasons as far as they go. He adds, however, as a third reason, that " this mode of expression is often very convenient." We cannot, however, now recall an instance in which the phrase "partial loss" is not at least equally conivenient. Mr. Beneck^^ draws this distinction : he would apply " particular average " to cases of diminution of value, or loss by expenditure, which are to be borne by the owner of the property or by his insurers ; while he applies the phrase " partial loss " to the total destruction of a part of the property. At the same time he appears to consider that " partial loss " covers all of these losses ; while " particular average " is limited to those first described. Mr. Phillips ^ thinks that these distinctions are in conformity to the customary use of the terms, but we have much doubt whether they are generally made, or made with any precision.* The word " average," whatever was its original meaning, which is somewhat uncertain, always now, by universal use, means some amount or quantity which, in some way or at some rate, is to be divided among other things, or assessed upon them. But this is precisely that which is not true of what is meant by either " par- tial loss " or " particular average " ; for partial loss is precisely a ' 2 Phil, on Ins. 1432. extent of damage done to the merchant's " Stevens & Beneckd on Average, property is chiefly regarded ; particular ch. 9. See also Hughes on Ins. *374. average, when the mode of adjustment ' 2 Phil, on Ins. 1422. is chiefly regarded." 2 Arnould on * Mr. Arnould's distinction is : " These Ins. *954. losses are called partial losses when the 378 THE LAW OF MARINE INSURANCE. [CH. VII. loss which is not averaged at all, either generally or particularly. It is, by its definition, in all the books, a loss which is borne wholly by the owner of the property which is affected by it. It stands in correlation with total loss, for that is a loss of the whole, and partial loss a loss of a part ; but in opposition to general average.^ There may be a partial loss of either of the maritime and insurable interests, of ship, cargo, or freight, and in reference to either it may be caused by the destruction ^ of the property, or by expenses necessarily incurred fof its safety. If a vessel is towed into port for repairs, the expense of towage is a partial loss of that interest for the exclusive benefit whereof it was incurred.^ So may be the expense of navigating a ship from one port to another, for a similar purpose,* or the expense of launching a stranded ship.^ If the insurance be specifically on " the ship while being launched," all expenses incurred in preventing injury not made necessary by the fault of those employed to launch her would be a partial loss.^ So would be the expense of raising a sunken vessel.'^ So damage caused by a delay in port made neces- sary by a pestilence there. ^ But where a stranded ship was got off and brought home, the expense of a survey was not allowed.^ And it was held, that the insurers were not liable for commissions on ' Mr. Arnould, vol. 2, p. *955, admits ' Dix v. Union Ins. Co., 23 Mo. 57. thattheuseof the word "average "in the " Frichette v. State Mut. Fire &■ sense of loss is prima facie objectionable, M. Ins. Co., 3 Bosworth, 190. as tending to create confusion, but so ' As the expenses of raising a steamer firmly established as to make any sunk in the Ohio River, such as blankets change unwise. And Marshall cen- for stopping a leak, and plank used for sures the employment of the word in making pumps, and the expense of tak- this sense. 2 Marsh, on Ins. 462. In ing her to Louisville, and putting her Wadsworth v. Pacific Ins. Co., 4 Wend, in dock, and keeping her there while 33, 39, Chancellor Walworth, says: repairing, being incurred exclusively " Partial loss includes both general and on account of the boat, and not with a particular average ; and the latter term view to the common safety of boat and includes all partial losses, except gen- cargo, — all which were held to consti- eral average." But see Carter v. Phoe- tute a part of the partial loss. Fire- nix Ins. Co., 2 Wash. C. C. 51. men's Ins. Co. v. Fitzhugh, 4 B. Monroe, ' Wadsworth v. Pacific Ins. Co., 4 160-166. Wend. 33 ; Brooks v. Oriental Ins. Co., ' Williams v. Smith, 2 Caines, 1. 7 Pick. 259. ' Brooks v. Oriental Ins. Co., 7 Pick. 5 Perry v. Ohio Ins. Co., 5 Ohio, 305. 259. See also Sewall v. U. S. Ins. Co., * Lincoln v. Hope Ins. Co., 8 Gray, 11 Pick. 90, 96. 22. CH. VII.J OF PAETIAL LOSS OK PARTICULAR AVERAGE. 379 disbursements made by the owner for repairs ; ^ though generally all necessary charges upon the expenses are allowed, if the ex- penses themselves are adjusted as a partial loss. Section I. — Partial Loss of the Ship. Op the ship, it may be the destruction of, or injury to, any part of the hull, or of the sails, or rigging, or boats, or of anything so ap- purtenant to the ship that it is included in the maritime meaning of the word " ship," and is therefore included in an insurance of the ship.^ It may be added, that a ship remains the same Middletown Ins. Co., ' Sage V. Conn. 239. - 1 Magens on Ins. p. 52, § 51. For insurance purposes the word " sbip " in- cludes " all that belongs to it, as hull, sails, rigging, tackle, apparel, or furni- ture." In a policy of insurance the word " ship " prima facie includes the boat, unless it was improperly slung in the position from which it was lost. Hall V. Ocean Ins. Co., 21 Pick. 472 ; Emerigon, c. 6, § 7 (Meredith's ed.) 143. See also. Shannon v. Owen, 1 Man. & E. 392. As to fishing stores, see The Dundee, 1 Hagg. Adm. 109 ; affirmed in Gale u. Laurie, 5 B. & C. 156. In Mason v. Franklin Ins. Co., 12 Gill & J. 468, it was held that an in- surance " on a new bark now being built" covered only the vessel in pro- cess of construction, and not articles made for her, delivered in the ship-yard where she was building, and intended to be attached to her as soon as she was ready to receive them. And in New York this principle has been carried to a still greater extent. Insurance was made on a bark " on the stocks build- ing," &c. It was held that this did not cover timbers not united to the struc- ture, although they were intended and completely prepared to be used in the framework, in the proper place for that use, and valueless for any other vessel. Hood V. Manhattan F. Ins. Co., 1 Kern. 532, overruling the same case in the Superior Court, 2 Duer, 191. And the same principle has been applied to a house. Ellmaker v. Franklin Fire Ins. Co., 5 Barr, 183. Provisions on board for the use of the crew were held to be covered by a policy on the ship and furniture in Brough v. Whitmore, 4 T. E. 206 ; and the remark of Lord Mansfield, C. J., in Eobertson v. Ewer, 1 T. E. 127, that "in a policy on a ship sailors' wages or provisions are never allowed in settling the damages," was said to refer, not to the provisions taken on board as a part of the outfit, but to those purchased or used in a port where the vessel was detained. Emerigon, ch. 10, s. 1, § 2 (Meredith's ed.) 234, says: " The expression in the hody embraces in its generality, as I have just said, all that regards the ship ; such are the hull of the vessel, its rigging and apparel, munitions of war, stores, and victualling, advances to the crew, and all that has been expended in the fitting it out." See also, as to provisions, the opinion of the court in Kemble v. Bowne, 1 Caines, 75 - 80. In this case a list of expenses allowed in making up the amount for which the insurers were responsible included hire of hands for rigging and ballasting, bills 380 THE LAW OP MAEINE INSURANCE. [CH. VH. ship, preserving its identity, however extensively or repeatedly re- paired. Whenever partial losses occur by injury to the ship, through storm or by any peril insured against, if the injury be such that the age, weakness, or insufficiency of the thing injured may have contributed to it, as if sails are blown away, spars broken and lost, bulwarks carried away, or boats from the davits, the insured must satisfy the jury that the vessel was sea-worthy when she sailed. If then sea-worthy, the subsequent decay or weakness of the thing, although not caused by a peril insured against, would not prevent the insurers from being liable for a loss actually caused by such a peril ; unless, indeed, it could be shown that the decay had brought the thing below the standard of sea-worthiness, and the vessel had afterwards been in a port in which she might have been restored to sea-worthiness, and this was not done.^ Whatever the loss be, insurers are not liable unless it be caused by one of the perils against which they insure. But it may be by any one of them, as by wreck, fire, collision, stranding, lightning, batttle, or plunder.^ And, as a universal rule, it may be stated that as total loss, general average, and partial loss include all losses for which insurers are responsible, any such loss which does not come in either of the first two classes must belong to the third. As the expenses directly incident to a general average loss form a part of that loss, and are averaged accordingly,^ so the expenses of raising funds for partial loss are to be paid for by the insurer, in the proportion in which he is liable for the loss itself.* of carpenters and blacksmiths, bills for alteration or addition the ship may calking long-boat, for crockery for cabin, undergo by repairs, she will still be for ship-chandler's stores, for cordage, within the insurance. Le Cheminant sails, cable, spars, coopering, for a boat, v. Pearson, 4 Taunt. 367. See Levie v. an anchor, for provisions and water. Janson, 12 East, 648. The outfits of a whaling voyage are ' See Depau v. Ocean Ins. Co., 5 Cow- held not to be covered by a policy on en, 63 ; and what is said on this subject in the ship. Hoskins v. Pickersgill, 3 our chapter on Implied Warranties. Doug. 222 ; Gale v. Laurie, 5 B. & C. ' See chapter on Perils of the Sea. 156, 164. See Hill v. Patten, 8 East, " See chapter on General Average, 373. Probably a chronometer would p. 273, and n. 2. now be considered a necessary appur- * In Orrok v. Commonwealth Ins. tenance to a ship, so as to be covered Co., 21 Pick. 456, the marine interest by the insurance. See Kichardson v. in a bottomry bond was charged to the Clark, 15 Me. 421, 425. Whatever insurers. But it must be remembered CH. VU.J OF PARTIAL LOSS OR PARTICULAR AVERAGE. 381 "We have seen that wages and provisions, during delay and detention for repairs, are generally a general-average loss.^ If incurred for the benefit of the' ship alone, they are not general average, the ship alone bearing them.^ And the question has arisen, whether in that case the insurers of the ship are respon- sible for them. In an "early case in New York, when they were incurred after the cargo had been delivered, and the freight earned, and were therefore held not to come within a general average, the court said : " If these expenses cannot be brought into general average, I do not see how the underwriters on the ship are to be made liable for them." ^ And there are other authorities to a similar effect.* We think, perhaps, a distinction may be taken here : if the crew are only detained by the necessity of mak- ing repairs for the ship alone, it may be said that this is not so directly a part of the cost of repair as to make the insurers of the ship liable. But the wages and provisions of the crew, if they were actually employed in making the repairs, might perhaps seem to be directly a part of the cost of repair. This is regarded by Mr. Phillips as distinctly held in one case in Massachusetts, but we cannot understand this case as positively asserting this doctrine, and the weight of authority would seem to be the other way.^ In that, to hold the insurers, it must appear ble for the marine interest. This case that there were no other means of rais- was followed, and the rule said to be ing money than by bottomry. For it is well settled, in Jumel v. The Mar. Ins. a settled rule that the master has the Co., 7 Johns. 412. authority to bottom the ship only as an ' See chapter on General Average, ultima ratio. In Reade u. Commercial supra, p. 257, and n. 3. Ins. Co., 3 Johns. 352, a vessel reached ' See chapter on General Average, her port of destination badly damaged, p. 264, n. 1, and p. 265, n. 1. Rogers The consignee advanced the money for v. Murray, 3 Bosworth, 357. repairs on a bottomry bond at twenty- * Dunham v. Com. Ins. Co., 11 Johns. five per cent interest. The court said : 315. " It does not appear, nor can it be fairly * See Sage v. Middletown Ins. Co., 1 inferred from the evidence, that the Conn. 239 ; Perry v. Ohio Ins. Co., 5 master ever attempted to obtain the Hammond, Ohio, 305 ; Gazzam v. Cin- money on the credit of the owners, cinnati Ins. Co., 6 Hammond, Ohio, 71 ; .... It was the duty of the master to Webb v. Protection Ins. Co., 6 Ohio, have exhausted all other means of rais- 456, 474. ing the money before he could legally * The case cited by Mr. Phillips is subject the insurer to the payment of an Hall v. Ocean Ins. Co., 21 Pick. 472. extravagant marine interest." And it A vessel insured on a time pohcy, on a was held that the insurers were not lia- voyage from Frankfort, Maine, to Porto 882 THE LAW OF MARINE INSUKANOE. [CH. VII. the first-supposed case, if the delay or detention were for the common benefit, and were therefore held to be a general-average Rico, was compelled to put into Ber- muda to be repaired, and was there , sold by the master. On the trial be- fore the jury, the judge ruled, " that in a policy on time, where a vessel pro- ceeds to a port of necessity, the clause providing that wages and provisions shall go to the general average applies to such charges only as accrue up to the time when the general average ceases by a sale or other disposition of the cargo ; that a reasonable allow- ance for portage bill, including wages and provisions of officers and crew, for such reasonable time as would be requisite to make the repairs, should be allowed as part of the cost of repairs." This ruling was held to be incorrect, and it was held that the wages and pro- visions of the officers and crew, while the vessel was undergoing repairs, were not to be computed as part of the par- ticular average; but as it would be necessary that some person should be employed on the part of the owner to superintend the repairs, this charge was to be considered as for part of the labor employed in the reparation. The court also said : " But the services of the officers and seamen might be rendered by them as laborers in making the re- pairs ; and in such case their labor would be chargeable, just as if other laborers had been employed to make the repairs." This case hardly justifies Mr. Phillips's expression, nor do other authorities bear him out. In Giles v. Eagle Ins. Co., 2 Met. 140, where the crew assisted other workmen in getting off a stranded vessel, it was not pre- tended that the underwriters were lia- ble ibr the wages, &c., on the ground that these items were a particular aver- age, but the insured endeavored to in- clude them among the general-average charges. In Sage v. Middletown Ins. Co., 1 Conn. 239, where the master and crew assisted in making the repairs, the coirrt held that the underwriters were not liable ; as the crew, not having beerf discharged, were obliged to do what they could in preventing and re- pairing the mischiefs incident to the voyage. So held also in Perry v. Ohio Ins. Co., 5 Hammond, Ohio, 305. In Firemen's Ins. Co. v. Fitzhugh, 4 B. Monr. 160, it was held, where a steam- boat had been sunk and raised and car- ried into a port for repair, and this was done for the benefit of the vessel alone, that the expenses were to be adjusted as a partial loss ; and that the under- writers were liable for them, including the wages and provisions of the crew. Nor are the insurers held liable for wages and provisions of the crew while employed on repairs, when the vessel is insured on time. Gazzam v. Ohio Ins. Co., Wright, 202 ; Gazzam v. Cincinnati Ins. Co., 6 Hammond, Ohio, 71. Nor when the vessel is detained by an em- bargo. McBride v. Marine Ins. Co., 7 Johns. 431 ; Robertson v. Ewer, 1 T. R. 127. And in this case see the opinion of the judges. Mr. Justice Bayley says : " If the ship had been detained in con- sequence of any injury which she had received in a storm, though the under- writer must have made good that dam- age, yet the insured could not have come upon him for the amount of wages or provisions during the time that she was so repairing.'' To the same effect, see Fletcher v. Poole, 1 Park, Ins. ch. 2, § iii. (p. 115, 8th ed. 1842) ; De Vaux V. Salvador, 4 Ad. & E. 420 ; Dixon on OH. Vn.J OF PARTIAL LOSS OE PAETICULAB AVERAGE. 383 loss, the insurers of the ship might be held to pay the share of the ship.i But if there was no average of those expenses, and they fell on the ship alone, we understand the practice to be not to hold the insurers responsible. The principle of indemnity is applied to determine the portion of the cost of repairs for which the insurers are liable. They are liable for these repairs, however old or worn the ship may be, if her condition does not amount to unseaworthiness, and thereby prevent the attachment of the policy.^ And it is an unquestion- able principle, that if old and nearly valueless materials, whether timber, canvas, or rigging, be destroyed or removed in the work of repair, the insurers cannot insist that the materials used in their place shall be only of similar character and value.^ It is. Mar. Ins. and Average, 166. See Da Costa V. Newnham, 2 T. K. 407, where the seamen, having been discharged, were employed as workmen to make repairs, and their wages allowed. ' See chapter on General Average. ' Depeyster v. Columbian Ins. Co., 2 Caines, 85 ; Depau v. Ocean Ins. Co., 5 Cow. 63; risk v. Comm. Ins. Co., 18 La. 77. ■ In this case, a brig struck on the Bahama banks, and was seriously injured. She was repaired, and the owner demanded the whole amount of expense from the insurers. This they refused to pay, on the ground that the brig was unseaworthy at the beginning of the voyage, and that the losses were not caused by the perils insured against. The evidence showed that the vessel, though old, was sound and sea-worthy when she sailed ; that, when hauled up for examination, after the disaster, some of the external parts were found to be rotten. The court said : " From all the testimony in the record on this head, it would be dif- ficult indeed to separate and class the repairs occasioned directly by the acci- dent from those proceeding from decay and rottenness; the vessel being old. the repairs must necessarily have been more expensive than those which the same accident would have rendered necessary in a new one ; but as she is represented by most of the witnesses to have been sound and strong, she could have run a long time without any abso- lute want of repairs, but for the injury sustained. The defendants are, we think, bound to defray all the expense of placing her in statu quo." ' A leading authority on this point is Center v. American Ins. Co., 7 Cow. 564, affirmed on error in 4 Wend. 45, where the court was unanimous in sus- taining the ruling of the Supreme Court. The ship Pallas sailed from New Orleans for Havre, and was so damaged by striking on a bar at the mouth of the Mississippi, that she had to give up her voyage. The owner abandoned, and claimed for a total loss ; whereupon the question arose, whether she was damaged to half her value. The vessel required re-coppering, which could not be done at New Orleans ; but she could be rendered sea-worthy for her voyage to Havre by a sheathing of wood. The insurers contended that only the expense of such sheathing as 884 THE LAW OF MARINE INSURANCE. [CH. VII. however, obvious that, if old and worthless materials, as spars, sails, or copper, are replaced by new materials at the cost of the insurers, the insured is far inore than indemnified. Probably, in the early days of marine insurance, it was attempted to form an estimate of the damage done, in each particular case, by an es- timate of the damage suffered in that case, and then, if old materi- als were replaced by new, the insurers would pay only so much as the principle of indemnity required. The extreme inconvenience of this course early led, in different countries, to the adoption of dif- ferent rules to meet this requirement of indemnity. ^ Mr. Stevens mentions a rule of an association of insurers to make no deduction on copper sheathing if it were lost and replaced during its first year, but to deduct one fifth for each succeeding year. Mr. Phil- lips mentions a practice of some insurers in the United States of stipulating for the deduction of two and a half per cent on the new copper put on, for each month that the old had been on. He adds, in a note, that he understands this provision to be gaining ground, and that at Bordeaux they have, or formerly had, a similar usage as to all repairs where old material was replaced by new, varying the deduction for new according to the age of the vessel.^ We have had, however, in this country, until recently, one nearly universal rule. It is to deduct in all cases one third part of the cost of new materials. This the owner bears, and the in- surers are liable to him for the remaining two thirds.^ could be put on at New Orleans should ^ 2 Phil, on Ins. 1431. , be taken into account in estimating the ' In this country, one third is de- expense of repairs. At the trial before ducted in all cases, whether the ship is the jury, the judge charged that the old or new. Mickels v. Maine F. & M. jury were bound to consider her injured Ins. Co., 11 Mass. 253; Sewall v. U. to the amount of half her value, "if S. Ins. Co., 11 Pick. 90; Dunham v. they believed, from the evidence, that Com. Ins. Co., 11 Johns. 315. But in the expense of re-coppering her at Firemen's Ins. Co. v. Fitzhugh, 4 B. Havre or New York, in addition to Monr. 160, it was held that the rule of such partial repairs at New Orleans as one third off new for old proceeded on would have rendered her sea-worthy, the ground that the vessel was improved making the usual deductions and by the repairs ; and it was doubted wheth- charges, would have exceeded a moi- er the rule would apply to steamboats, ety " of her [agreed] value. This rul- which were not considered as improved ing the Supreme Court, and afterwards by repairing. No deduction is made in the Court of Errors, sustained. replacing anchors, either in this country ' See Benecke on Marine Ins. 457, or in England. Iti Brooks v. Oriental et seq. Ins. Co., 7 Pick. 259, 269, Mr. Justice CH. VII.J OF PARTIAL LOSS OR PARTICULAR AVERAGE. 385 This rule is commonly expressed, " one third off, new for old." In England, the deduction was not made if the ship was per- fectly new, or if the materials sacrificed were perfectly new ; ^ and then, to apply this rule, the ship was considered per- fectly new if on her iirst voyage.^ And our notes will show that there has been some difficulty in determining what is a first voyage in this sense.^ It seems to be considered there a Putnam says: "We do not know of anything excepted from the rule of one third new for old, but an anchor. Per- haps it may be true that an old anchor, which has been proved, is better than a new one." And in this case the one third was deducted from the cost of a flew iron strap for a dead-eye. See also Byrnes v. National Ins. Co., 1 Cow. 265; Dunham!). Com. Ins. Co., 11 Johns. 315. ' Weskett, tit. Repair, ii. 1 ; Benecke & Stevens, on Av. (Phillips's ed.) 374 ; Penwick v. Robinson, 3 Car. & P. 323. ^ In Thompson v. Hunter, cited 2 Mood. & R. 51, insurance was effected in Dublin for a voyage from the Hum- ber to the Baltic, and back. The in- sured relied on a usage to consider all vessels as new until they were twelve months old; but the court held that this usage could not be set up, as the policy was an Irish one. In Poingdes- tre V. Royal Exch. Ass. Co., Ryan & M. 378, a vessel, ten years old, had been thoroughly repaired, and was afterwards damaged chiefly in the part which had been repaired. The insured was about to call witnesses to prove a usage to consider a vessel which had been thor- oughly repaired as a new vessel ; but Besl, C. J., said that, as the jury was a special one, they were competent to judge of the usage, and whether any existed, and instructed them that the general rule should govern, unless they saw something in the case to take it out VOL. II. 25 of that rule. See Sewall v. U. S. Ins. Co., 11 Pick. 90, 96. ' In Fenwick v. Robinson, 3 Car. & P. 323, S. C. Dans. & Lloyd, 8, a vessel was insured " on a voyage from Bristol to New York, during her stay there, and back to her port of discharge." She performed her outward trip safely, but on the return met with a disaster, and had to be repaired. The plaintiff (the insured) claimed full indemnity from the insurers, on the ground that, the ship being on her first voyage, there must be no deduction of one third new for old. The question was whether the round trip was one voyage or two. The evidence on this question was conflict- ing. Lord Tenlerden instructed the jury, which was a special one, that the whole voyage seemed to be one adven- ture ; and that, unless the dfefendant had proved to their satisfaction that the return trip was a second voyage, he must pay the whole loss, without deduc- tion. The jury found for the plaintiff, saying that they considered it as all one voyage. In Pirie u. Steele, 8 Car. & P. 200 (S. C, 2 Mood. & R. 49), a ves- sel was insured for one year. As ap- peared by her articles, she was bound to any port in the East Indies, till her arrival in England. She went to Van Dieman's Land, then to Madras, and thence sailed for home. During this last trip, she was damaged, and the plaintiffs (the insured) sought to hold the insurers liable for all the expense of repairs, without the deduction of one 386 THE LAW OF MARINE INSURANCE. [CH. VII. question of fact for the jury, and witnesses were admitted to determine the question by usage.^ Recently, many of the insur- ance companies in this country have gone back to the. rule as to copper, which we have just stated that Mr. Stevens mentions as an ancient rule ; that is, a clause is inserted in the policies, pro- viding that the allowance, new for old, in the case of copper sheathing, or, as is expressed in some policies, " copper or other sheathing," shall be measured by the age of the copper ; a com- mon form beingj " two and a half per cent for each month that it shall have been on the vessel at the time of resheathing." We give this clause in our chapter on Constructive Total Loss.'^ We are not aware that there is in this country any other general exception to the rule of one third off, new for old, no deduction being made on the newest ships or newest materials ; the reason being, that it is here thought that the rule satisfies the justice of all the cases, taken as a whole, when all repairs, either new or old, are included. ^ In one Massachusetts case, already cited, where the deduc- tion was made from the expense of a new iron strap for a dead- eye, the court say, " they do not know anything excepted from the rule, one third new for old, but an anchor." * And in another case, Shaw, C. J., says : " Here the rule is uniform and applied without exception."^ There is, perhaps, no universal rule as to the incidental ex- penses "of repair, such as dockage and towing the vessel to a ship- yard or back. In some places the third is deducted from these expenses. Local usage might decide the question in a case which arose under the usage.^ In a case in Massachusetts, third new for old. Lord Abinger said " In Sewall v. U. S. Ins. Co., 11 Pick, that the question, whether this was a 90, the head-note states that, one third first voyage or not, could not depend on is not to be deducted from the expense the policy. The jury found that the of raising a submerged vessel. But it round trip was all one voyage. does not appear clearly, from the report ' As, will be seen by the cases cited of the case, that this point was de- in the preceding note. cided. Dixon on Mar. Ins. and Aver- ^ See ante, p. 131. age, 149, note, cites the case of Potter ' Supra, p. 384, n. 3. v. Ocean Ins. Co., referred to in the * Brooks V. Oriental Ins. Co., 7 Pick, text, and says that, notwithstanding 259, supra, p. 384, n. 3. Mr. J. Story's ruling, " that the expense ' Sewall V. U. S. Ins. Co., 11 Pick, of transporting the ship to dock, or 90, 96. elsewhere, for repairs, should not be CH. VII.1 OF PARTIAL LOSS OR PARTICULAR AVERAGE. 387 an adjuster of averages, of extensive practice, stated this to be the custom in Boston,^ and Mr. Phillips adopts and con- firms his statement, and thinks the practice " well founded in respect to such charges as are directly incidental to repairs."^ But Judge Story, trying a case in Boston, thought it unreasonable to apply the rule of one third off to expenses which were inciden- tal to the loss, " for in no just sense can it be said that the owner is benefited thereby, or that he receives an enhanced value there- from, beyond his indemnity." ^ A similar question has arisen, whether one third is to be deducted from the expense of raising a siibmerged vessel. A head-note to a case in Pickering's reports states distinctly that the rule of deducting one third new for old does not apply to this expense of saving the ship. On a trial of the case, which turned upon the question of constructive total loss, and in which it was necessary to prove that the expenses of repairs and of weighing the vessel amounted to fifty per cent of the value of the vessel, in order to make it a total loss, Wilde, J., held, that from the amount of the repairs they were to deduct one third new for old, but that the expenses of salvage did not come within this rule. No especial instruction was given in regard to the expense, of weighing; but from the opinion rendered by Shaw, 0. J., it would seem that one third new for old was deducted from the cost of repair, "independent of the general average," and that no deduction was made from the general average, " being the cost of raising and bringing her in."* If old materials are by the work of repair replaced by new materials, the old materials would, to some extent, belong to the insurers, or they should be in some way benefited by their value. Of this there is no doubt; biit a question has arisen as to the way in which the computation should be made, which subject to the deduction of one third"; Boston, in Oirok v. Com. Ins. Co., 21 in practice, it is a rule almost universal Pick. 456, 459. ^ to make the deduction. And he goes on ' 2 Phil, on Ins. 1432. to say : " But one of the oldest and most ' Pott«r v. Ocean Ins. Co., 3 Sumn. respectable adjusters in the United States 27, 45. invariably follows the decision [of Mr. J. * Sewall v. U. S. Ins. Co., 11 Pick. )Story] ; but the underwriters do not gen- 90. A full statement of this case will erally pass a claim made on that basis." be found in the Chapter on Actual Total ' Mr. Tyler, an insurance broker in Loss, supra, p. 70, n. 1. 388 THE LAW OF MARINE INSURANCE. [CH. VII. was once quite uncertain, and may not now be fully deter- mined. This question is, Shall the value of the old materials be deducted from the cost of repair, and one third be deducted from the residue or net repair ? Or is one third to be de- ducted from the gross cost of repair, and then the value of the old materials to be deducted from the two thirds for which the insurers are responsible ? Cases may arise in which these questions would be of extreme importance. Let us suppose that a sea peril renders it necessary to recopper a vessel ; the cost of the new copper is 1 9,000, the value of the old materials is $3,000. If this value is first deducted from the gross cost, it leaves $6,000 as the net cost, and one third of this being deducted new for old leaves the insurers liable for $4,000. But if the deduction one third new for old be made from the $9,000, it leaves $ 6,000, and if the value of the old materials is deducted from this amount, the insurers are liable for only $3,000. The determination of this question must depend mainly, if not entirely, upon the answer to the prior question. To whom do the old materials belong, — to the insured or the insurer ? If to the insurer, they are in his hands as so much money ; and when the loss is ascer- tained by the deduction, from the cost of repair, of one third new for old, the insurer will apply the value of the old materials to the payment of the two thirds for which he is liable. But if the old materials belonged to the insured, he will apply them at once to diminish the cost of repair, and only from this diminished cost of repair will the one third be deducted. It is plain, therefore, that if the old materials are regarded as belonging to the insurer, he gets by the first computation their whole value ; but if they belong to the insured, the insurer gets by the last computation only two thirds of their value. This precise question has been met in a case in New York, and it was distinctly held, that there was no aban- donment of the old materials to the insurers, nor anything like an abaadonment.^ The insured cannot then claim from the insurers the whole value of the old materials to be paid to them directly, but they have the benefit of the deduction of one third from the gross amount of the repair, and then the application of the old materials to the remaining two thirds.^ But, on the other hand, the insured ' Byrnes v. National Ins. Co., 1 Cow. ' See Byrnes ;;. National Ins. Co., 1 265. Cow. 265. CH. Vn.J OF PAETIAL LOSS OE PARTICULAE AVEEAGE. 389 have no right to claim of the insurers repayment of the repairs, with no reference to the value of the old materials in their hands. ^ They are to be indemnified for the cost of repair ; this cost is to be ascertained by deducting from the gross cost the value of the old materials ; and from this loss, under the general rule, one third is to be deducted. In Massachusetts, a similar doctrine was held, and in a subsequent case was affirmed.^ And evidence being offered in this case of a usage in Boston to make the deduction from the gross cost of repair, the court held, that " no particular usage, opposed to the established principles of law, can be sus- tained," and, regarding this as a " well-established rule of law," applied it to the case.^ And if, in the report of a third case in Massachusetts, we may not consider that the word "gross" is a misprint for "net," the reference to the first of the two cases above mentioned is unintel- ligible.* In these two States the practice, we understand, is in conformity to these decisions, and we suppose it to be general, if not now universal.^ *■ See Byrnes v. National Ins. Co., 1 Cow. 265. ' Brooks V. Oriental Ins. Co., 7 Pick. 259. ^ Eager v. Atlas Ins. Co., 14 Pick. 141. ' Giles V. Eagle Ins. Co., 2 Met. 140. ^ The first case on this topic, so far as we are aware, and a leading author- ity to-day, is that of Byrnes v. National Ins. Co., 1 Cow. 265, which came up in 1823. A ship, insured by the defend- ants, was damaged by grounding, so that a part of her copper sheathing had to be removed and replaced by new. In adjusting the loss, the plaintiff first deducted the value of the old copper, which he had sold, and then claimed from the insurers two thirds of the re- mainder. But the insurers insisted that they had a right to claim the deduction of one third new for old on the whole amount of the bill for the new copper. The difference amounted to about $ 280. In the decision, the court say : " The question seems to resolve itself into the inquiry, to whom do the old materials belong ? If they belong to the assured, there is an end of the question ; for, having been applied by them to the payment of the repairs, pro tanto, the assurer cannot possibly claim any fur- ther benefit from them. If there is anything in the nature of an abandon- ment of them to the underwriters, then the principle contended for by the de- fendant may be well founded. But there is nothing like an abandonment. The assured do not, and could not, claim fi-om the underwriters the gross amount of the repairs. They can only claim the difference between that amount and the value of the old mate- rials ; for to that extent only are they injured ; and an indemnity is all that they can claim. It is more analogous to the adjusting of a partial loss [on 390 THE LAW OF MARINE INSURANCE. [CH. vn. It should be remarked that the rule of deducting one third new for old was adopted in one case in the inland navigation of this goods], in which case the title to the goods remains in the assured. The true rule, therefore, seems to be this, — to apply the old materials towards pay- ment for the new, and to allow the de- duction of one third new for old upon the balance." This case- was followed in New York, in 1825, by that of Dickey v. N. Y. Ins. Co., 4 Cow. 222, affirmed on error, 3 Wend. 658, where it became necessary to determine the exact cost of repairs, in order to decide the question of the right to abandon. In the list of expenses given in the opinion of Savage, C. J., p. 254 of the report, it will be seen that the items of expense are first added together, and then from the sum is deducted the value of the old copper. From this remainder the one third is then deducted. In Massachusetts, the question came up, in 1828, in Brooks v. Oriental Ins. Co., 7 Pick. 259. The vessel was re- paired at Salem. The old main-sail, boat, and camboose were sold here, and new ones bought. With reference to the question, whether the one third should be deducted from the gross cost of the repairs, or from the balance, after deducting the money obtained by the sale of the old boat, &c., the court cite Byrnes v. National Ins. Co., supra, and say that the rule there laid down appears to be the best. Before this last case had been reported, the question excited much attention among the Bos- ton insurance companies, and they pro- posed, in substance, the following question to the Supreme Court, asking its opinion thereon : " Since the Boston policies, after enumerating the usual perils insured against, add, ' and all other losses and misfortunes which have or shall come to the damage of the said ship, &c., to which assurers are liable by the rules and customs of assurance in Boston'; whether this clause, coupled with the uniform practice of deducting the one third from the gross cost of re- pairs, would not settle the question as to Boston policies, whatever might be the general rule of law." The opinion which was drawn up by Jackson, J., as given at length in 5 Am. Jurist, 253, answers the question in the negative, for the clause' above quoted " may en- large the list of perils, but cannot afiect the mode of adjustment of a loss ; which must depend, not on the rules and cus- toms of Boston, but on the general principles of law, which govern in all other parts of the country." Another opinion to the same efiect is given in 5 Am. Jurist, 262. The opinion of Sena- tor Allen, in Am. Ins. Co., v. Center, 4 Wend. 45, 55, recognizes the fact that there is nothing like an abandonment in these cases of partial loss, and admits the rule to be as laid down in the text. In 1833 the case of Eager v. Atlas Ins. Co., 14 Pick. 141, came up in Massa- chusetts. A loss had been settled by deducting the one third new for old from the gross cost of the repairs ; and it was agreed, that, if this settlement was erroneous in point of law, the plaintiff should recover the sum of $ 226.87, which was the difference to which he would be entitled if the deduction of one third were to be made only from the net amount, minus the value of the old materials. It was also agreed that at the time of making the policy, and at the time of the loss, it was the usage of the insurance offices in Boston, where the policy was made, to make the CH. VII.] OF PARTIAL LOSS OB PARTICULAR AVERAGE. 391 country, and denied in another. We believe it is now generally applied to steamers navigating our Western waters.^ deduction of one third from the gross cost of repairs, as had been done in the settlement already made. The policy contained the usual clause about the insurers taking upon themselves the risk of perils of the sea, &c., adding, " and all other losses which have or shall come to the damage of the said ship, or any part thereof, to which in- surers are liable hy the rules and customs of insurance in Boston." The words italicized were not in the policy in Brooks V. Oriental Ins. Co., above cited. The court held: (1.) That usage did not settle the question ; for even if the usage were not opposed to the rule of law, and so of no validity; still the parties were not proved to have con- tracted with reference to that usage. (2.) That the old materials belonged to the assured, and not to the underwriter. The previous decisions in New York and Massachusetts were sustained, and judgment given for the plaintiff. The next case was that of Giles v. Eagle Ins. Co., 2 Met. 140, in 1840. This case is mentioned in the text ; and the word " gross," on p. 144, in the opinion of the court must be an error of the re- porter, since the court cite a case where the rule is laid down precisely contrary to what it would be were the word " gross " correct. The words of the court are : " In regard to the repairs, one third should be deducted new for old. And this deduction is to be made from the gross amount, as was settled in Brooks V. Oriental Ins. Co., 7 Pick. 259." In 6 Am. Jurist, 45, is an opin- ion of Willard Phillips in favor of the doctrine of the text. ' Wallace v. Ohio Ins. Co., 4 Ohio, 2 34: Firemen's Ins. Co. v. Fitz- hugh, 4 B. Monr. 160. In the first of these cases, which came up in 1830, a steamboat came in collision with the steamer Hercules, belonging to the plaintiff. The Hercules was injured, and repaired at Cincinnati, at an ex- pense of $1,136. The vessel was in- sured for $ 8,000. By the terms of the policy the insurers were not to be charged, unless the loss amounted to ten per cent upon the amount insured. The insurers refused to pay for the repairs ; because, they contended, the loss, when reduced, according to the marine law, one third, upon the doc- trine of new for old, did not amount to $ 800, and for other reasons. It was agreed that the boat was not improved by the repairs. The plaintiff contended that the rule of " one third off new for old" had no application to the river navigation of the interior. In giving their opinion, the court say that, " in its practical application, the whole law of insurance is new to them ; that it makes no difference whether the vessel is im- proved or not by the repairs, for the rule is of universal application, intro- duced to put an end to controversy, and doing on the whole substantial jus- tice." The court go on to say, that " steamboats had long been in use on the rivers of England and New York, and no intimation had ever been given that the general principles of insurance law are inapplicable to river steamboat navigation Under these circum- stances," say the court, " we hold it safest to adhere to the doctrine as we find it settled, and administer it as an entire system to those who claim at our hands the administration of part of it." So the deduction of one third was made, THE LAW OF MARINE INSURANCE. [CH. VII. A question analogous to that which exists in the law of total loss, as to the effect of an unpaid bottomry bond, has been raised in a case of partial loss. If money is taken upon bottomry to enable the master to make necessary repairs, and the vessel arrives safely, and the owners pay the bond, the insurers are liable for the money raised, and for the maritime interest.^ If the vessel is lost, the bond is discharged. If the vessel arrives safely, and the owners choose not to pay the bond, the vessel goes to the obligees. The repairs are of no benefit whatever to the insured ; but this is no reason why the insurers should not have the benefit of this and judgment was given for defendants. In Firemen's Ins. Co. v. Fitzhugh, 4 B. Monr. 160, an action was brought to re- cover on a policy insuring for one year, in the sum of $ 3,000, the one-fourth interest of the defendants in the steamer William French, valued at $ 15,000. The boat was warranted free from aver- age under ten per cent. She ran on a snag in the Ohio River, and was seri- ously injured. The expense of repairs amounted to $2,095.71; and, the de- fendants having been insured to the ex- tent of four fifths of one fourth of the entire boat, they claimed to recover the same proportion, or one fifth of the en- tire loss. The lower court gave judg- ment for the defendants in the sum of $ 408, and the insurance company ap- pealed. One of the questions which came up was, whether the deduction of one third should be made from the $ 2,095. The court, who were ignorant of the case of Wallace v. Ohio Ins. Co., just cited, came to the conclusion that the insurers were liable whether the deduction were made or not, as the cost of repairs in either case exceeded ten per cent on the amount insured. And they afiirmed the judgment of the court below, saying that the deduction was in fact made by that judgment. But they go on to say, obiter : " We should not feel authorized to decide that there should be a, deduction of one third, new for old, unless bound by authority to do so. And as there are numerous and manifest differences between the case of a sea ves- sel and a steamboat navigating our inland rivers, — differences not 'only in their construction and appendages, but in the manner of their navigation and the nature of the dangers which they have to encounter, — we are not prepared, in the absence of any authority directly upon the question as applicable to the repairs of Western steamboats, and in the absence of any evidence going to show that the general effect of such repairs is to improve the boat, to admit either that the rule [if one third off] is binding here, because it has been adopted elsewhere in regard to a difier- ent subject, or that it is necessary or just to establish any fixed rule on the subject." Thus the Kentucky court did in fact, by affirming the judgment of the lower . court, uphold the rule ; thus agreeing with the Ohio decision, which would seem to be the law. ' See ante, p. 380, n. 4, and Bradlie v. Maryland Ins. Co., 12 Pet. 378. But if after a sale of the vessel, which the underwriters have refused to ratify by accepting the vessel, a bond be given, they are not liable for the marine in- terest. Jumel V. Marine Ins. Co., 7 Johns. 412. CH. VII.] OF PAETIAL LOSS OR PARTICULAR AVERAGE. 393 deduction of one third new for old, because, not being under any obligation to pay the bond, they are not liable for the con- sequences of its non-payment. 1 But if the insurers themselves order the repairs, and money is raised on bottomry to pay for them, it has been held, that, if the insurers then refuse to pay the bond, they are liable for all the damage sustained by the owner in consequence of their refusal.^ ' In Humphreys v. Union Ins. Co., 3 Mason, 429, the schooner Zephyr, bound from Messina for Boston, was severely damaged, and put into Lisbon for repairs, the expense of which ex- ceeded half her value. The master, having no other means of getting money, gave a bottomry bond. As soon as the owner at Boston heard of the loss, and a few days before the arrival of the vessel at Boston, he aban- doned. But the court held that there was no ground for abandonment ; and that, with regard to the deduction of one third, the insurers were entitled to it. And Mr. J. Story, said : " The loss has been voluntary on the part of the owner, by his own default. He was never dis- possessed of his vessel, but under a de- cree which he suffered because he did not choose to pay the ship's debt, con- tracted for his benefit and by the order of his own agent. The underwriters are therefore entitled to the deduction, because they have done no act to pre- vent the fullest possession by the owner.'' In Bradlie v. Maryland Ins. Co., 12 Pet. 378, 405, the Supreme Court say dis- tinctly that " the underwriters have nothing to do with the bottomry bond, but are simply bound to pay the partial loss, including their share of the extra expenses of obtaining the money in that mode.'' And on p. 408 the court say that the loss (in this ease) is a par- tial one ; " and as to the repairs, the underwriters are entitled to the deduc- tion of one third new for old." ' This was held in Da Costa v. Newn- ham, 2 T. K. 407. In this case the ship was so much injured as to give the owner the right to abandon. This he did not do ; but upon the underwriters insisting that the vessel should be re- paired, he undertook to superintend the repairs, with the distinct understanding that they should be at the risk of the underwriters. The master, having no other means of getting money, and the owner, according to the understanding that the underwriters should repair, having refused to advance any, bot- tomed the ship. Afterwards the ship arrived at London, and the bond was tendered to the underwriters for pay- ment, they refused to pay, and the vessel had to be sold. " This," said the court, "put the owner into the same situation as if he had origi- nally abandoned. And now the un- derwriters contend that they are en- titled to the allowance of one third for repair. That indeed is the rule when a ship is repaired and delivered to the owner again for his benefit. But here, as the plaintiff never has been put into free possession again of the ship, and that through the default of the under- writers, he cannot be said to have had any benefit from the repairs, and there- fore he is not bound to make that al- lowance." This case was cited and approved by Mr. J. Story, in Humphreys V. Union Ins. Co., 3 Mason, 429 ; and afterwards in Bradlie v. Maryland Ins. Co., 12 Pet. 378. 394 THE LAW OF MARINE INSURANCE. [CH. VH. We have seen that the expenses for temporary repairs are usually a general-average loss ; as they do not benefit the owner permanently, the deduction of one third is not made from them.^ It may be that extraordinary expenses occur in raising funds for repair or otherwise, or in making repair, by the mere fault of the owner. We know not on what ground this expense can be charged to the insurers ; but such expenses as are necessarily incurred by, or naturally belong to, the work of repair, as marine interest, loss on exchange, commissions, and comj)ensations for assistance in repair, or transaction of business properly connected with it, are added to the cost of repair from which the deduction is made.^ It is quite well settled that the repairs should, in style, charac- ter, and materials, conform to the original construction of the boat. The insurers cannot require that they should be made as cheaply as will suffice to make the ship sea-worthy. Nor can the insured or his master profit by the opportunity of making the repairs in good part at the cost of the insurers, and make it an expense out of proportion to the original character of the vessel.^ An accident to a ship may happen when she is within reach of a port where she could be fully repaired, but only at a great expense. It may then be prudent in the master to make there only such tem- porary repairs as will suffice to take her safely to a home port or other port where she can be fully repaired more economically. The master has necessarily a discretion in this matter ; and if he exercises it without unfairness or gross mistake, the temporary repairs will be added to the final repairs in making up the partial loss.* And the deduction of one third is to be made from the whole .^ ' See chapter on General Average, say ; " And upon the same principle it supra, p. 258. ' is, that the commissions which are paid ' In Sewall v. U. S. Ins. Co., 11 and the exchange on which funds are Pick. 90, the expense of raising and raised, are to be taken into the account, bringing in the vessel was added to the and borne by the party liable to make cost of repairs, in order to ascertain the the repairs." See also Humphreys v. whole amount of the loss for which the Union Ins. Co., 3 Mason, 429. " insurers were liable. So in Orrok v. ^ Center v. Am. Ins. Co., 7 Cowen, Com. Ins. Co., 21 Pick. 469, the court, 564, 4 Wend. 45. after saying that the marine interest ' Brooks v. Oriental Ins. Co., 7 Pick, constituted a part of the loss, go on to 259. The vessel owned by the plain- * Brooks V. Oriental Ins. Co., 7 Pick. 259, cited in preceding note. CH. vn.] OF PARTIAL LOSS OR PARTICULAR AVERAGE. 395 Whether these temporary repairs belong to partial loss or to general average depends upon the question which runs through all parts of this subject. If made from necessity, in a foreign port, to enable the ship to complete her voyage and carry the cargo to its destination, they belong to general average. But if the ship could have gone along without them, and they are made for the convenience of the master and crew, or for the benefit of the ship only, they belong to partial loss.^ It must often be difficult to make this distinction ; and it seems to us that a useful test, when this question arises, is to ask whether the repairs were needed to make the ship sea-worthy, for then they should belong to general average ; if not, they should be adjusted as par- tial loss. We are not aware that any rule of this kind has been definitely applied in adjudicated cases. It seems, however, almost tiff was injured in a gale while on her voyage, and was temporarily repaired at an intermediate port sufficiently to enable her to reach her port of destina- tion, where she was thoroughly repaired. The question arose, whether the insurers were liable for the expense of these temporary repairs, and the court, by Putnam, J., held : " It is objected that the vessel might have been completely repaired abroad, and the fact is proved ; but the expenses would -very greatly have exceeded the complete repairs at Salem. We think the master had a right to exercise a sound discretion upon that matter, and that the defendants are liable for the expenses of the tem- porary repairs of the damage in the September gale, which are to be added to the complete repairs at Salem, which sums together are to be considered the expenses of repairing the damage sus- tained in "that gale." ' In Brooks v. Oriental Ins. Co., 7 Pick. 259, it was held that where a ves- sel insured, having lost her boat and camboose, and had her main-sail dam- aged in a gale, repaired the sail at sea with duck taken from the cargo, and purchased an old boat and camboose at a port of necessity, and upon her arrival at home sold the sail, boat, and cam- boose, and procured new ones, the loss was particular average ; but other re- pairs made abroad from strict necessity to enable the vessel to return, and which were of no value after her return, were held to come under general average. See also Plummer v. Wildman, 3 M. & S. 482, in which Bayley, J., said : " I doubt whether the repair of any partic- ular damage could be placed to the account of general average, inasmuch as it is a benefit done to the ship ; and if the captain could make it a general average, by putting into port to repair, it would always be his interest to en- deavor to do so. If, however, the repairs were merely such as were neces- sary to enable the ship to prosecute her voyage home, and were afterwards of no benefit to the ship, such repairs, I think, would properly come under a general average. Therefore, deducting the benefit, if there be any, which results to the ship from this repair, the act may be placed to the account of general average." 396 THE LAW OF MARINE INSURANCE. [CH. VII. to grow out of the phrase which is often employed to designate repairs which should be adjusted as general average, namely, " repairs of necessity." Collision is, we have seen, one of the risks against which the insurers insure. And we have already considered the question whether and how far insurers are liable for the indirect and con- sequential damages or expenses caused by collision. Here, as so often elsewhere, the question may arise, whether the expense of repair of damages caused by collision is to be adjusted as general average or as partial loss. We know no other answer than that already suggested. It is, of course, the universal rule, that no charges or expenses for injury or damage, whether they befall ship, cargo, or freight, are to be adjusted as general average, unless other interests than those directly injured are benefited by the charges or expenses. If goods are sold in any part of the voyage to raise money to pay for the repair of the ship, the owner is bound to replace them, or pay their value ; and this must be the value they would have had if carried to their port of destination. The cost of doing this, or rather the extra cost of raising money in this way, as tlie only way he had, is to be added to the direct cost of the repairs in making up his loss.^ One rule, which has an equal bearing upon all liability of insur- ers for loss, whether general or particular average, shoxild be stated here. It is, that they are liable only for definite damages, which can be defined, ascertained, and measured. There would seem to be little doubt about the rule itself; but there is often great difficulty in the application of it ; the adjudications on this subject cannot be reconciled ; and the language used by courts in some cases is extremely different from that employed in others. We find it said that the insurers are never liable for invisible, uncertain, and conjectural damages. And in these cases there is distinct intimation of a test of this kind, namely, that insurers are not liable for any damage which is not, in its own nature, capable of repair .^ But we find a later case, in which tfee same ' Alers V. Tobin, cited Abbott on of insurance, that invisible, uncertain. Shipping, 372. and conjectural damages are never the '" In Sage v. Middletown Ins. Co., 1 subject of remuneration. A ship Conn. 243, Baldwin, J., said: "It seems stranded and got off may be strained, to be tacitly understood, in the business and thereby become less valuable ; yet <3H. Vn.] OF PARTIAL LOSS OB PARTICULAR AVERAGE. 397 court, which is strong in its rejection of all claim for such indefinite damages, admits a claim for deterioration of a ship by hogging and general disturbance of her timbers, which it would have been impossible to repair without rebuilding her ; saying, at the same time, that they do not intend to shake the doctrine they have recognized " touching imaginary or theoretical strains." ^ I apprehend the injury is not the sub- $ 1,000. It is contended for the de- ject of adjustment, unless it is of a nature capable of repair in the ordinary course of such business ; and then the loss must be ascertained by the actual ex- penses of such repairs, with such deduc- tions as custom has established." See also Peele v. Suffolk Ins. Co., 7 Pick. 254; Sewall v. U. S. Ins. Co., 11 Pick. 91 ; Orrok v.. Commonwealth Ins. Co., 21 Pick. 456. ' Giles V. Eagle Ins. Co., 2 Met. 140. Opinion by Putnam, J. : " The most material subject of inquiry is the fifth item in the plaintiffs' claim, namely, ' damage of hogging and strain, $ 835.' The facts relating to this claim are, that the plaintiffs repaired the schooner in November, 1837, to the extent of mak- ing her sea-worthy ; and she has been constantly employed, and has performed her voyages well, and is insured at the same premium and at the same valua- tion since as she was before she re- received the damage. But the plain- tiffs had a survey called, after she was thus repaired, to estimate the damage which had not been repaired. And it was proved that the whole body of the schooner was injured ; that some of the timbers were lifted, some of her treenails started, and that the injury from the strain or hogging could not be perfectly repaired except by rebuilding her; that the hogging remained after the repairs, and that it affects, not only the beauty, but also the strength of the vessel. And the damage from the hogging and strain was estimated from $ 800 to fendants that this is an imaginary dam- age, for which they are not responsible ; and that no such charge has been heretofore allowed in the law of in- surance. Sage «. Middletown Ins. Co., 1 Conn. 243; Peele v. Suffolk Ins. Co., 7 Pick. 254. The case is not with- out its difficulties. The assured cannot be permitted to claim for unseen and imaginary damage ; for there can be no standard to measure the correctness of the estimate ; and the result would fre- quently be an allowance against the in- surers commensurate with the wants to make up a total loss wherewith to charge the underwriters. But in the case be- fore us, in consequence of the damage within the perils of the policy, some of the timbers have been lifted, and a ves- sel that is found to have been one of the first class is left, after her repairs, so misshapen as essentially to affect her value. There is no room for mistake about the main fact. She is obviously so much hogged as not to be perfectly repaired, unless by rebuilding her. She has been made sea-worthy ; but it is in evidence that she is not so strong as she would be if she were as straight as she was built. Now the assured is en- titled to an indemnity. If an insurance should be obtained upon the schooner as she now is, and a damage should happen to her, all that could be required of the underwriter would be to put her in as good a state and condition as she was when the policy was made. It could not, on any principle of indem- 398 THE LAW OF MARINE INSUEANCE. [CH. VH. But damages may be in no sense merely " imaginary or theoreti- cal " ; they may be real and unquestionable ; and yet be uncertain and indefinite, and, except in their general effect on the vessel, in- visible. We should say, that by the weight of authority, if they came within this last description, they would not constitute a claim against the insurers. It maybe an important question. where the repairs should be made, because in one place they could be made more cheaply than in another. We have already presented one aspect of this question. But it may be well to say here, what is fully sustained by the authorities, that the master,' in the exercise of his discretion on this subject, is bound to regard the interests of his ship, or rather of the owners, and not those of the insurers. He certainly should not repair her at great cost because he knows that she is insured, when he could about as well have taken her to a cheaper place, and would have done so had she been uninsured. And it may be insurers might found a partial defence on evidence that a large part of the cost was incurred only because it could be thrown on them. But, on the other hand, the insurers have no right to require the master, for their benefit, to make the repairs in any other place or any other way than he would have chosen, whether the ship were insured or not.^ He is certainly not bound to delay his repairs until he reaches home. nity, be required that she should be put ship takes the ground, all her timbers, in a better shape and condition. Here, from the keel to the water ways, must at the time of the insurance, the schooner cf necessity be in some degree disjointed, was of the first class. By the perils of But this is not such a case. Here the the sea she has received an injury ob- danger is actual, visible, and tangible, vious to the eye, and essentially afiect- And if this vessel should hereafter take ing and diminishing her value. How the ground, or encounter extraordinary can it be said that the plaintiffs are in- seas, it is not to be expected that she demnified, if compensation should not would stand the shock as well as if her be made for this damage? We do not timbers had not been lifled and dis- intend to shake the doctrine which we jointed." have recognized touching imaginary ^ Center u. American Ins. Co., 7 or theoretical strains. It may be, Cow. 564 ; Brooks v. Oriental Ins. Co., theoretically speaking, that, whenever a 7 Pick. 249. CH. VII.] OF PARTIAL LOSS OR PARTICULAR AVERAGE. 399 Section II. — Partial Loss of Croods. The simplest case of this occurs .when a part of the goods in- sured are actually lost by a peril insured against. The amount of this loss is at once ascertained, if other goods of like kind and value arrive in safety at the port of destination, and are there sold. It may, however, be quite otherwise. All the goods may be damaged by a sea peril, and all arrive ; or a part only may be damaged, and in that state arrive ; or a part may be wholly lost, and the residue may arrive damaged. In all these cases the end to be sought is the same, but the ways of reaching it are many. There may be a sur- vey and appraisement ; or a sale, with allowance for damage ; or an estimate founded on the invoice price, with the freight, insurance, and other charges necessary to put those goods at that time in that place ; or there may be only a reference to the price current of that time and place, as indicating the market value of the goods if uninjured, and then an allowance for the damage. Any expenses incurred properly, in any of these ways, because necessary to ascertain the amount of damage, are allowed as a part of the partial loss. As, for example, the cost of a sur- vey and appraisement, or of a sale at auction, either of all the damaged goods or of a part of them, or of a sample of the sound goods. The question in all such cases is, Was that expense reason- able and proper as a means of ascertaining the amount of the loss ? for, if so, it is a part of the loss.^ And the same thing is true of truckage, storage,. wharfage, and other similar charges. It ' Muir V. United Ins. Co., 1 Caines, underwriters. It was a voluntary act 48. This was an action on a policy of of the consignee, done probably in con- insurance on the cargo' of the ship sequence of information of the abandon- Dauphin, on a voyage from Surinam to ment, and made therefore at the peril London. It appeared that the vessel of the owner. Had the sale at auction was captured at sea by a French been to ascertain the injury the cargo privateer, recaptured by English ves- had received, and limited to such parts sels of war, and carried into London, as were damaged, it would have been a where, on payment of compromise reasonable charge; but that appears money, she was delivered up to the not to have been the object or effect of consignee, and the cargo sold at auction the auction. The damage had been for the benefit of the underwriters. It previously liquidated by the captain was held that " the charges attending and prize-master ; and, if those damages the auction cannot be considered a loss be allowed against the defendants, it is within the policy to be borne by the all the case will warrant." 400 THE LAW OP MARINE IKSUKANCE. [CH. VH. may, perhaps, be the duty of the court to determine whether these extra charges were necessary to ascertain the partial loss, and therefore formed a part of it; we should say, however, that a jury might properly determine this ; and one English case seems to proceed on this supposition.^ If the goods arrive at the port of destination damaged by a sea peril, the calculation of the partial loss is founded on their gross value or proceeds, and not on their net value. The reason of this is plain. The gross proceeds become net proceeds by deducting from them the charges and expenses necessary to bring them at that time to that place, and turn them then and there into money. And it is obvious, that, if these charges are deducted from the value of the damaged goods, a partial loss may be converted into a total. Suppose an invoice of goods, of which the freight and insurance to their port of destination and the duties there payable amount to more than a quarter of their value there. This may still leave a large profit on them if they arrive in safety. But the freight must be the same if they arrive damaged, and the duties generally are. Now, if we suppose that they have lost by sea damage three fourths of the value they would have had if they had arrived unhurt, here is a partial loss of seventy-five per cent, because they are still worth twenty-five per cent of their sound value. But the freight and duties are more than this fourth part; and if they are deducted from the gross value of the damaged goods to make it net, there is no value left, and the insured has lost the whole. He has lost the whole, but not by a peril insured against. He has lost seventy-five per cent by that peril, and this the insurers must repay. But he has lost the remaining twenty -five per cent, because the freight and duties of the whole are charged on this lessened value. And this is not a loss against which the insurers had insured him, and of course not one for which they are liable.^ ' In Hudson v. Majoribanks, 7 borne by the underwriters or not, as Moore, 463, it was held, that where, in that fact is in the discretion of the an action on a policy of insurance, the arbitrator by whom the amount of the jury find a verdict for an average loss was to be ascertained, loss, the court will not interfere or grant ' Johnson o. Sheddon, 2 East, 581 ; a new trial, on the ground that it Hurry v. Royal Ex. Ass. Co., 3 B. & should have been left to the jury to P. 308. As to the rule for estimating a determine whether the expenses of the loss of goods insured under an open sale of the damaged cargo should be policy, see Usher u. Noble, 12 East, 639. CH. VII.] OF PARTIAL LOSS OR PARTICULAR AVERAGE. 401 When a definite part of tlie cargo — less than one half when estimated as previously stated — is lost by a peril against which the owners are insured, this is paid for by the insurers as a partial loss. So also if the goods be not destroyed, but their value be either destroyed or diminished, the amount which the insurers pay is determined by the valuation of the goods, in a valued policy, or by the invoices if it be an open policy. It seems now to be settled, both as matter of law and of practice, that if there be different valued policies of the same goods, and the valuation in one differs from that in another, the valuation of each policy determines the amount to be paid on that policy. ^ If damaged goods reach the consignee, a sale of them is the obvious and usual way of ascertaining the amount of damage, for that is the difference between what they bring and what such « goods, if uninjured, would have brought at that time and place. This determines the proportion of their value which the goods have lost by their peril ; then the insurer pays this proportion of the value at which he insured them, whether this be ascertained by valuation or by invoice.^ In the case of a sale of cargo at an intermediate port, which might have been carried on in safety to the ship, and with every probability of its safe arrival in specie, so as to be bound for a full For remarks on the case of Johnson v. insurance ; and the only difficulty in Sheddon, see Stevens & Beneoke on this case is to ascertain what portion of Average (Phillips's ed.) 243 et seg. interest in the goat-skins had been ' Murray v. Ins. Co. of Penn., 2 Wash, covered by the prior policy. In estimat- C. C. 186. Kane v. Com. Ins. Co., 8 ing the loss under, that policy , the goat- Johns. 229. The policy in this case skins must have been reckoned at ten contained the usual clause respecting cents each, that being the prime cost. prior insurance. This prior insurance This is a well-settled rule, and it is was by an open policy on the cargo equally well settled that the valuation generally. The policy on which this in a policy is conclusive upon the under- suit was brought was a valued one, on writers, when there is no suggestion of goat-skins specifically, at fifty cents fraud or imposition. Shaw v. Felton, 2 each. Thompson, J. : " In order to East, 109. The defendants are there- give effect to both policies, the first fore estopped from saying they are not ought to be considered as attaching, in answerable for the goat-skins at fifty the first instance, upon that part of the cents, deducting the amount covered cargo not covered by the latter, in by the former policy." order to leave aliment for the latter. ^ Jordan v. Warren Ins. Co., 1 Story, The cargo, exclusive of the goat-skins, 342 ; Pope v. Nickerson, 3 Story, 466 ; was not sufficient to absorb the prior Fleming v. Smith, 1 H. & L. 513. VOL. II. 26 402 THE LAW OF MARINE INSURANCE. [CH. VH. freight, but the sale is made because the advancing decay of the goods makes it certainly for the benefit of the shipper, the assent of the shipper, and his consequent obligation to pay the freight which would have been earned by the carrying on of the goods, will be presumed. And if the goods are sold at an intermediate port, because of danger from spontaneous fermentation and com- bustion, the ship-owner may have a valid claim against his insurers for his partial loss of freight if the loss were caused by a peril in- sured against, or his claim againsfthe shippers of the goods for his freight if the damage were not caused by a peril of the sea. Generally, the insurers are not discharged by any conduct of the master as to drying, restoring, selling, or destroying any cargo, if his conduct be required or justified, either by his bills of lading (if they contain no unusual provisions) or by his general duty as master. If the goods arrive injured by a peril insured against, for this injury the insurers are held as for a partial loss. But the shipper is bound to pay the same freight for the sea-damaged goods as if they were not damaged. This may be regarded as an additional loss on his part. In one sense it is so ; but it is not a loss for which the insurers of the goods are liable. This we consider to be the principle which Lord Mansfield applied to an important case stated in Park's Insurance.-"- Section III. — Partial Loss of Freight. \ QUESTION which may sometimes be a little complicated arises in a case of transshipment. That it is the duty of the master to transship goods, or send them to their destination by another ship when he cannot carry them there himself, we consider as now an unquestionable principle of maritime law in this country. If the goods thus transshipped reach their destination, they earn their ' Baillie v. Mondigliani, B. K. Hil. fendants paid everything but the sum 25 Geo. in. This was an action upon demanded in this suit, which is the a policy of insurance on goods at and amount of freight pro rata itineris paid from Nevis to Bristol. Before the by the plaintiffs as owners of the goods arrival of the vessel at Bristol she was to the owner of the ship. Lord Mans- captured and condemned. In the field gave the unanimous opinion of the parliament of Paris the ship and cargo court for the defendants, and held that were decreed to be restored. The de- the freight was not recoverable. CH. YII.J OF PARTIAL LOSS OR PARTICULAR AVERAGE. 403 freight, and there is of course no loss of freight. If the master fails to transship them when he might have done so, the freight is lost. But it is lost by the master's neglect of duty, and the in- surers of freight cannot be responsible for this. The interests of commerce require that the master should have a certain discretion in this matter. But how the exercise of this discretion affects the rights of the insurers is a distinct question. We may suppose a case in which two things are equally certain, — one, that the master might transship the goods and send them to their destination if he would ; the other, that it is clearly for the interest of the shippers and of the insurers on the goods that he should sell them. He does sell them, and they do earn only a pro rata freight. Are the insurers on freight lia.ble for the partial loss on freight ? It would seem to be settled that they are not liable.^ We have supposed that the goods might be transshipped and sent on, and the freight earned. But if a part of the goods be sea damaged in such a way or to such an extent that they cannot be carried forward in any ship, and are sold for this reason, we kno'*' not why the insurer on freight is not liable for this loss. If the ship-owner is compelled by a peril insured against to transship his goods as the only way- of earning his freight, the cost of doing so is a loss of so much freight, for which the insurers on freight should be answerable. Hence it has been held that, if the goods cannot be sent forward at less than the whole freight which would be earned, this is a total loss of freight.^ ' Hugg el al. V. Augusta Ins. & Bank- insurers of the cargo that it should ing Co., 7 How. 595, was the case of have been so sold, still the plaintiffs are an insurance on " freight of the bark not entitled to recover as for a total Margaret Hugg at and from Baltimore loss of freight, provided they could have to Kio Janeiro, and back to Havana or transshipped the portion sold in specie Matanzas," &c. A quantity of jerked to the port of destination." So in beef was shipped on board at Monte- case of Bradhurst v. Col. Ins. Co., 9 video, for Havana. The beef was seri- Johns. 17, it was held, in an action of ously injured by the ship encountering insurance on freight, that if the master a storm, getting grounded, &c. A part or ship-owner neglects to forward the of the beef was thrown overboard, and goods by another vessel from a port of a part landed at Nassau in a very dam- necessity, when he has it in his power aged condition. This part was there to do so, in consequence of which the sold. Mr. Justice Nelson, in delivering freight is lost, the insurer is not liable, the opinion of the court, says: "If it ' Willard u. Millers' & Manuf Ins. was for the interest of the insured and Co., 24 Mo. 561. The steamboat Cata- 404 THE LAW OF MARINE INSURANCE. [CH. VII. If the cost of transshipment exceeds the whole freight, the in- surers are liable only for the freight they insure. The shippers of- the goods are, however, liable for the excess. And then it may be a question whether the insurers on the goods are not liable for this loss. It cannot be said that the law on this point is conclu- sively settled. But there are cases which would lead to the con- clusion that the insurers on the goods are liable for what the shippers pay for this excess.^ In a recent case, the action was brought to recover a balance of $ Ij'OOO for freight on a cargo of ice shipped by the defendants at Richmond, Me., for Mobile, Ala., on board of plaintiff's vessel. The vessel, while prosecuting her voy- age, lost her foremast, and suffered other damages which rendered it necessary for her to put into New York for repairs, which she did May 28, 1866. In making the repairs it became necessary to take out the old, and put in a new mast. By admitting the air into the hole where the mast was taken out, some of the ice melt- ed, and also by the delay occasioned by putting into New York for repairs. In an ordinary voyage from Richmond to Mobile a cargo of ice would not usually waste more than twenty-five per ceitt ; in this case there was only about fifty per cent delivered. The court held it to be a case of partial loss on freight.^ ract, on a voyage from St. Louis to cargo with the increased freight, and as New Orleans, had her freight-list insured a consequence of that rule it becomes against a " total loss only." The vessel an average loss, and, in case of an in- met with a disaster on the voyage, was surance, must be made good by the in- rendered totally unfit to transport the surers. Emerigon, TraitiS des Assur. cargo, and could not be repaired in a ch. xii. § 16 (a), Code de Com. 350 reasonable time to do so. It was shown (&)." A similar decision was held in that the cargo could not be sent forward Searle v. Scovell, 4 Johns. Ch. 218, to at any less rate than that at which the the effect that the cargo is chargeable Cataract had agreed to take it. The with the increase of freight arising from court held the loss to be a total one, the charter of the new ship. The posi- within the meaning of the policy. tion in the text was definitely decided ' In Shipton v. Thornton, 9 Ad. & in the case of Dodge v. Union Mar. Ell. 336, 337, Lord Benmare, C. J., says: Ins. Co., 17 Mass. 470. Under the " What if the transshipment can only same circumstances, a like decision was be effected at a higher than the original rendered in Mumford v. Commercial rate of freight, which party is to stand Ins. Co., 5 Johns. 262. But see, con- that loss? By the French Ordinance, ira, Shultz v. O. Ins. Co., 1 B. Monr. and the Code de Commerce, and ac- 336. cording to the decisions in America, ' Libby v. Gage. This case was de- the ship-owner is entitled to charge the cided by the Supreme Court of Massa- CH. VII.] OF PARTIAL LOSS OR PAETICULAK AVEEAGE. 405 Section IY. — Of the Adjustment of Partial Loss. A PARTIAL loss is Tisually adjusted at the port of destination. There is not the same reason for this as in a case of general aver- age, because partial loss gives no claim for contribution on property which may not be within reach elsewhere than at the port of des- tination. Still it is obvious that, in most cases, the facts on which the adjustment must be founded may be more easily and accu- rately ascertained at that port than elsewhere. But the adjust- ment of a partial loss on the ship is not unfrequently delayed iintil the return of the ship to the home port, especially if the insurance was effected there ; and this is sometimes done in a case of par- tial loss of goods. There is a radical difference between fire insurance and marine insurance in respect to the adjustment of a partial loss. Under a fire policy, the insurers are held for the whole amount of the loss, up to the limit of the amount insured. In a marine policy, it is always considered that, if the insurance covers only a part of the value of the property insured, the insured stands as his own insurer as to the remainder. The insurers are therefore liable for only that part or proportion of the loss which the amount they have insured is of the value of the whole property insured and at risk. This is equally true whether the property or interest be chusetts in December, 1867. The full port of departure to the port of repair decision has not been published. The did not affect the claim for freight, the rescript sent down to the Superior cargo is to be estimated at the latter Court was as follows : " The contract of port as if it had still been 406 tons affreightment admissible, the freight be- complete ; then such proportion of that ing payable by the ton. The loss of number of tons as the amount of ice ice by waste during delay in the port melted and lost by the opening of the of repair or on the previous and subse- hole for necessary repairs of the ship quent voyage was natural waste, which bears to the quantity on board when was at the risk of the owner of the car- such repairs were begun is to be de- go, and did not affect the ship-owner's ducted from the whole number of 406 claim for freight. But the diminution tons ; and on the residue so computed, in both, from necessary exposure in or- inasmuch as no further deduction is to der to repair injuries which the ship be made for waste on the completion of had suffered from perils of the sea, the voyage, freight is payable at the proportionately reduces the freight due. stipulated rate of $ 7.50 per ton." The As the waste on the voyage from the case was sent to an assessor. 406 THE LAW OF MAEINE INSURANCE. [CH. VII, valued in the policy or left open. If the property insured be valued in the policy, that valuation is as we have seen conclusive, unless it be set aside as fraudulent or grossly excessive. If it be not valued, then, the value must be ascertained. This inquiry is often difficult, especially as to the ship ; and this difficulty is one of the causes which make the great majority of policies on ships valued policies, both in England and in this country. A. Of the Adjustment of a Ps/rtial Loss on the Ship. If the policy be on the ship and is not valued, her actual value or worth to the owner at the port from which the voyage com- mences is taken as the basis of this adjustmerit. And this value includes outfits, stores, and money advanced for wages, premium, and costs of insurance. We have seen that, from the actual cost of repair, one third is deducted, new for old. Mr. Arnould seems to limit this deduction to the case where the damage has been repaired, and its actual cost thus ascertained. 1 It is obvious that, in nearly all cases where the loss is not so great and the repair required so expensive as to jus- tify abandonment and constitute a constructive total loss, the repairs will -be made ; and, if made, the actual c(3st is ascertained, and no estimate is necessary. But in this country the one third is de- ducted in a case of constructive total loss, by reason of the phrase universally used, that there shall be no abandonment as for a total loss, by reason of sea damage, unless the damage amount to more than fifty per cent, estimated as for a partial loss. In the great majority of these cases, this estimate is made on the reports of surveyors or on similar evidence, because the ship is not actu- ally repaired. And we cannot doubt that the same deduction would be made in a case of partial loss without actual repair, when the cost could be ascertained only by surveys and estimates. Where the ship has suffered a partial loss and afterwards a total loss, the partial loss not having been repaired, here no estimates ^ 2 Arnould on Ins. 983. The Ian- the established mode of estimating its guage is : " If the damage done to the amount is to deduct one third from the ship has not been repaired, the only whole expense both of labor and mate- mode of ascertaining its amount is by rials which the repairs have cost, and the estimate of surveyors. Where, to assess the damage at the remaining however, the damage has been repaired, two thirds.'' CH. Vn.] OF PARTIAL LOSS OR PARTICULAR AVERAGE. 407 come in ; claim for tlae total loss exhausts the liability of the insurers. But if the partial loss has been actually repaired, and at a subse- quent time a total loss of the repaired ship takes place, the in- sured may recover (where the policy contains no especial clause forbidding this) for the partial loss in addition to the total loss.^ If the ship be valued in two different policies, at two different values, we have seen that the assured, claiming for a total loss under one policy, is not limited to the amount at which he has valued his ship in another policy ; and the same rule has been applied where the claim was for a partial loss.^ ' Le Cheminant v. Pearson, 4 Taunt. 367, was an action upon a policy of in- siirance at and from Jersey to a port or ports in Norway, there in port and back to London. The ship sailed December 3d, and was by a peril of the sea dam- aged to the amount of £337 ; and the declaration averred this loss, and that the assured labored and travailed to the amount of £337. Afterwards the ship was captured. This action was brought to recover, not only the entire loss in- sured, but' a proportion of the £337. Mansfield, C. J., says : " As to another point respecting the double loss. In practice I know of cases in the Court of King's Bench where such expenses have been recovered as an average loss, with- out making any distinction whether it was recoverable as an average loss from damage repaired, or within the words of the permission ' to laboV, travail,' &c. ; and as no such distinction has been made, we find it safer to adhere to the practice which has obtained, and to call it all average damage." Stewart V. Steele, 5 Scott, N. E. 927. As- sumpsit on a policy of insurance. A vessel sailed from Calcutta for England, and was injured by an accidental col- lision with a steam vessel. She returned. and underwent repair, sailed again, and was obliged to return. Her wales were removed for the purpose of exam- ining her. On examination, she was found so defective as to render it inex- pedient to repair her. She was sold as she lay. Plaintiff claimed for an aver- age and a total loss. Latter negatived, former allowed. In Jumel v. Mar. Ins. Co., 7 Johns. 412, a vessel was insured from New York to Bordeaux, and at and from Bordeaux to New York. The vessel on her return voyage was cap- tured, January, 1808, and carried into England. On 1st June, 1808, the insured abandoned. The correspondents of the insured, at the request of the master, put in a claim for the assured as owners of vessel and cargo. The vessel was condemned and cargo restored in March, 1808. Both parties appealed, and finally withdrew their appeals, and a compromise was effected between master and captors. The court held that the insured were entitled to re- cover for a total loss, and also for all the expenses incurred in endeavoring to recover the property prior to composi- tion between master and captors. ' Bousfield V. Barnes, 4 Campb. 228. 408 THE LAW OF MAEINK INSURANCE. [CH. VII. B. Of the Adjustment of a Partial Loss on Q-oods. We have already seen that the value of the property insured, if it be not fixed by a valuation, must be ascertained, in order to determine how much the insurer has to pay in case of partial loss ; ^ for, if he insured less than the whole value, he pays in the same proportion, less than the whole amount of loss. But the value to be thus ascertained is the value when the insurance was made and the premium was paid, or became payable ; and this is the value of the goods when the ship sailed. And this value is the prime cost of the goods, with all the costs and expenses of getting them on board, whether they were laden on board at the home port or at a foreign port.^ Hence this value cannot be affected in any way by the market price at the port of destination. The principle of indemnity might seem to require a different rule. If two thirds of the goods arrive safely and sell for twice their cost, the owner, in losing one third of his goods, loses thrice the cost of that third. If the two thirds sell for half their cost, the owner has lost but half the cost of the third that is lost. The answer to this is, that the increase or diminution of value by the transportation affects only the profits which the owner makes or intends to make, by shipping the goods ; and profits constitute a distinct insurable interest, independently of the goods.^ Undoubtedly, as we have repeatedly seen, profits may be insured under that name, or in- cluded in a valuation, if it is on goods and is made high enough for that purpose. But it is certain that they cannot be permitted to increase or diminish the value of goods, when that is estimated on an adjustment for the purpose of ascertaining what proportion of their value was insured. So, too, the selling price at the port of destination covers the ' Coffin V. Newburyport Mar. Ins. It was captured and condemned on the Co., 9 Mass. 436. Cotton was pur- homeward voyage. The underwriters chased at the Cape of Good Hope, with were held liable for the value as in- intention to sell the same at the Isle of voiced. See also Usher v. Noble, 12 France, to which place it was carried. East, 639 ; Gahn v. Broome, 1 Johns. While there it was determined to bring Ca. 120; Minturn u. Col. Ins. Co., 10 it to the United States, and for that Johns. 273; Le Roy u. United Ins. Co., purpose it was repacked and invoiced 7 Johns. 343. at its value at the Isle of France, which ^ Beneckd, Pr. of Indem. 3 ; Ste- was higher than its cost at the Cape, vens on Average (Phillips's ed.) 85. CH. VII.] OF PARTIAL LOSS OR PARTICULAR AVERAGE. 409 freight, which is itself a distinct insurable interest, to be insured by itself or included in a valuation of the ship, but is not to be taken into consideration in determining how much of the value of the goods is insured. All this applies only to open policies. If the valuation of the goods be intended to include the expected profits, and is known to be so intended, the insurers are bound by it, and pay the same pro- portion or aliquot part of this value that the amount he insures is of that value. And so it is if the valuation of the ship includes the freight. As we have seen, if all the goods arrive, and some of them are sea damaged and some of them are not, the difference in the prices they bring determines the proportion of the value insured which is lost. But these prices have no effect upon the value of the goods when insured, and that only is the value to be ascertained in order to know what part of their value was insured by the in- surer, and what part by the owner. To ascertain what proportion of the value of goods is lost by sea damage, it seems now to be settled law in England, that the gross sales of the sound goods are to be compared with the gross sales of the damaged goods, and not the net sales with the net sales.^ Arnould says, that since the case of Johnson v. Hudden, ' Johnson v. Sheddon, 2 East, 581. foundation the difference between the Opinion by Lawrence, J. : " This is a net produce of what the goods have motion for a new trial of an action produced and What they would have brought against the defendant, an un- produced if sound, instead of the dif- ierwriter, on goods on board a ship ference between their respective gross called the Caroline, from Sicily from produces. Upon the fullest considera- Hamburg, to recover a partial loss tion that we have been able to give this sustained by the plaintiff, by reason of question, my brothers Grose and Le the sea-water having damaged a cargo Blanc agree with me in thinking there of brimstone and sumach ; and upon should be a new trial, and that the cal- a calculation by Mr. Oliphant, to whom culation is wrong. Some points are it was referred by the parties to ascer- agreed on both sides ; viz. that the tain the loss sustained, it has been set- loss is to be estimated by the rule laid tied after the rate of £76 7s. id. per down in Lewis v. Eiicker, 2 Burr. 1170, cent. And the ground on which the that the underwriter is not to be sub- new trial has been moved for is, that jected to the fluctuation of the market ; Mr. Oliphant has proceeded in his cal- that the loss for which the underwriter culation upon a mistake, inasmuch as, in is responsible is that which arises from estimating the loss, he has taken for his the deterioration of the commodity by 410 THE LAW OF MARINE INSURANCE. [CH. VII. which we give in our notes, " this is invariably acted on in prac- tice as the true rule of adjustment." ^ We believe the practice to be the same in this country .^ This rule is founded on the sup- position, that the full market price (by which is meant the price the owner sells at after paying freight, duty, and all charges of landing) of the sound goods compared with that of the damaged goods measures accurately the deterioration of the goods, or diminution in their value by the damage. Nor is it an objection to this, that the gross sales include a duty, if, as is common if not universal, the duty is the same on the sound and the damaged goods. If, however, articles which are several in their nature are in- sured in the same policy, and each suffers a partial loss under the policy, and this loss is determined by a sale, the loss must be adjusted separately on each. Sometimes there is a clause pro- viding for this. If there be not, the law provides for it ; as other- wise the insurer would be affected by the state of the markets, sea damage ; and that he is not liable for any loss which may be the conse- quence of the duties or charges to be paid after the arrival of the commodity at the place of its destination. In Lewis V. Rucker, Lord Mansfield says : " Where an entire individual, as one hogshead, happens to be spoiled, no measure can be taken from the prime cost to ascertain the quantum of dam- age ; but if you can fix whether it be a third, a fourth, or a fifth worse, the damage is fixed to a mathematical cer- tainty " ; and this, he says, is to be done " by the price at the port of delivery." From hence it follows, that whatever price at the port of delivery ascertains whether a commodity be a third, fourth, or fifth the worse, is a price to which he alludes. And this deterioration will be universally ascertained by the price given by the consumer or the purchas- er, after all charges have been paid by the person of whom he purchases ; or, in other words, by the difference of the gross produce, and not by the difierence of the net produce." The same point was determined in the Court of Com- mon Pleas, in the Michaelmas term fol- lowing, Hurry v. Koyal Exc. Ass. Co., 3 B. & P. 308. As to the rule for esti- mating the loss of goods insured by an open policy, see Usher v. Noble, 12 East, 639. See also remarks on John- son V. Sheddon, in Stevens and Ben- eck^ on Av. (Phillips's ed.) 243, 342,* and note by Mr. Phillips, on p. 360. ' 2 Arnould on Ins. *968. ° It was held in Lawrence v. N. Y. Ins. Co., 3 Johns. Ca. 217, that "the rule by which to calculate a partial loss is case of a policy of insurance on goods arising from sea damage is the difference between the gross proceeds of the sound and damaged ; that is, a proportion of the prime cost of the damaged goods corresponding to the proportion of the diminution of the gross proceeds thereof." See also 3 Kent, Com. 337. CH. VII.] OF PARTIAL LOSS OR PARTICULAR AVERAGE. 411 unless the several goods had risen or fallen in their market price in precisely the same degree, — a fact in itself improbable.^ The sound and damaged goods may be, and often are, sold at the same auction, but separately. It is then possible that the damaged goods are sold for less than they otherwise would bring, because the package is opened or the assortment disturbed. But the insurers are not answerable for this, as it is not the direct eifect of sea damage, but a consequential and remote effect.^ This rule does not apply, or rather this distinction is not made, as to the charges and expenses of the sale by auction, brokerage, com- mission, &c., when that sale is made, as it usually is, for the pur- pose of measuring the sea damage. These are considered as necessary charges. They are added by the adjuster to the amount of the loss, and the whole apportioned upon the insurers.^ If a ship, at an intermediate port, finds a part of its cargo so injured by sea damage, that it is unfit to be carried on, it may be sold at that port. That loss is then adjusted as a loss with salvage. That is, the amount of loss is the difference between the prime cost of the goods and the proceeds of the sales. From these proceeds are deducted the charges and whatever freight may be due upon the goods. If only pro rata freight is earned, and the earning of the whole freight is prevented by a peril insured against, that part of ' Ocean Ins. Co. v. Carrington, 3 case of a separate valuation of the prop- Ct. 357. A requested an insurance on erty insured, the proportion of loss is " 26 horses, valued at % 2,200, and on estimated on the separate value." 20 oxen, valued at $ 800." The policy ^ Stevens on Average, 155-158, was filled out " on 46 head of horses holds the same view. So, too, Benecke and oxen, valued at $ 3,000." Hos- on Indemnity, 436. mer, Ch. J., in his opinion, says : " The " Muir v. Unit. Ins. Co., 1 Caines, plaintiffs (Ins. Co.) have insisted that, *54. One of the charges contended in the event of a partial loss, the in- for in this case by the insured was the sured would derive no benefit fi-om a amount of auction duties. The court distinct and separate valuation in the held that, in this particular instance, policy ; in other words, as all policies the auction charges did not come within are open to adjust a particular loss, the policy. But they say : " Had the that the result in every case must be sale at auction been to ascertain the in- the same. Nothing can be more incor- jury the cargo had received, and limited rect. In the event of an aggregate to such parts as were damaged, it would valuation, the partial loss is compared have been a reasonable charge." with the aggregate sum ; but in the 412 THE LAW OF MARINE INSURANCE. [CH. VII. it which is not earned is a partial loss. This pro rata freight may be earned by the acceptance of the goods by the shipper at an in- termediate port, and may be paid by him. Then the partial loss is determined by deducting from the whole freight the part earned and received, and the balance is adjusted as a partial loss. If the goods are actually transshipped by the owner or master, what he pays for this transshipment is what he loses, for by this payment he earns his whole freight. But if the goods are not actually transshipped, nor offered, received, and paid for as in the case first supposed, then the adjuster deducts from the whole, and charges as partial loss the estimated cost of forwarding the goods.^ . One way in which the adjuster may estimate this is by the geo- graphical proportion of distance, which was the earlier mode in Eng- land ; ^ and it has been applied in this country, but only because it seemed to the court to be the juster method in that case.^ The oth- er may be called the commercial way. The principle on which it is founded is, that the shipper pays the ship-owner for all the benefit he has received by the amount of transportation of the cargo by the ship. And the common way of ascertaining this is to determine what it will cost the shipper to forward his goods, and he charges the owner with this, or, in other words, deducts it from the whole freight, and pays the owner the difference. This difference is the partial loss of the owner. This we suppose to be the prevailing method of adjusting this partial loss on freight in this country.* ' Bork V. Norton, 2 McLean's C. C. opinion : " The loss on freight must be 423. decided, not by the proportion in time ° Luke V. Lyde, 2 Burr. 882. Here of sailing, but by the respective rates the master had come seventeen days of of freight. Let the average from Dem- his voyage, and was within four days of arara to Biddeford, if she had not been the destined port, when the accident wrecked, be ascertained, and deduct happened. Lord Mansfield decided he therefrom the expense of bringing the ought to be paid his freight for ^ parts goods on.'' of the foil voyage. The rule adopted in Mar. Ins. Co. v. ' See Robinson v. Marine Ins. Co., 2 Lenox, cited in 2 Johns. 323, was to Johns. 323, and cases there cited from ascertain how much of the voyage had 2 Caines, 21, and 1 Johns. 27. been performed, not when the ship first * Coffin V. Storer, 5 Mass. 251. A encountered the peril and was inter- vessel was wrecked on Cape Cod, on a rupted in her course, but when the voyage from Demarara to Biddeford. goods had arrived at the intermediate Parsons, Ch. J., said in the course of his port, because that is the extent of the CH. VIL] of partial loss OB PARTICULAR AVERAGE. 413 Arnoiild speaks of this mode of adjusting partial loss of freight, by deducting expense of forwarding, as the way of " adjusting it in the United States as a salvage loss " ; but he suggests no other way prevailing In England. ^ In an English case, where in a continuing policy covering cargoes in many vessels for a certain time, a partial loss on goods in one of them occurring, the question arose, whether the loss should be adjusted by estimating the percentage on all the goods carried tinder the policy during the whole time, or on the value of all the goods actually at risk under the policy, when the loss took place. And the last method was adopted.^ What we have already said of the force and effect of an adjust- ment is as applicable, or very nearly as applicable, to an adjust- ment of a partial loss as to one of general average. Whatever difference there is arises from the fact that here there is no con- tribution, and therefore the adjustment is not complicated by con- sidering and determining the rights of many parties who may live out of each other's reach. And any material change ,.in the rela- tion of any one to the rest involves, or may involve, a change in all. It need hardly be said that an adjustment, like every other bargain or agreement effected by fraud,i or founded on material voyage performed as it respects the in- v. Union Ins. Co., 3 Binn. 437 ; Hurtin terest of the shipper. The court, in 2 v. Union Ins. Co., 1 Wash. C. C. 530 ; Johns. 323, expressly say that it is Caze v. Bait. Ins. Co., 7 Cranch, 358 ; more just than the one they adopt, but Sampayo v. Salter, 1 Mason, 43 ; Cat- that in the case under consideration lett v. Col. Ins. Co., 12 Wheat. 383. they had not sufficient data given by Corresponding with the change in ap- ■which to apply it. plication of the principle in Luke v. The case of Luke v. Lyde, 2 Burr, Lyde is a change in the rule of adjust- 882, was first understood in this conn- ment, as shown in the preceding note, try to justify the claim of a pro rata and the cases cited at the beginning of freight, whether there was a voluntary this. The rule stated in the text, as in or a compulsive acceptance of the goods force generally in this country, is stated at an intermediate port, by the owner of unqualifiedly by Mr. Arnould in his them or his agent. But beginning with work on Insurance, vol. 2, p. 991, to be Mar. Ins. Co. v. Unit. Ins. Co., 9 Johns, the rule here adopted. Nor do we 186, it was held to apply only to a know certainly of any other way as voluntary, unequivocal, unconditional prevailing in England, acceptance, and only in such a case ^ 2 Amould on Ins. 991. was there a right to freight pro rata. ^ Crowley u. Cohen, 3 B. & Ad. 478. This doctrine is the prevailing one ^ In Herbert v. Champion, 1 Campb. now, and was asserted in Armroyd 134, it was held that an underwriter 414 THE LAW OF MARINE INSURANCE. , [CH. VH. mistake^ (of fact, not of law^), may be set aside altogether, or opened for correction. It may, however, be well to remark, that the common principle of denying to new evidence any power to disturb a settled ques- tion, if it be cumulative evidence, that is, more of evidence of the same sort and to the same effect as evidence already received and considered, would undoubtedly b^ applied to any attempt to dis- turb an adjustment. Such is the importance of an adjustment, as determining the rights of many parties, that courts are wisely reluctant to admit local usages in reference to any of the material estimates, as of force against the generally accepted principles or rules of the law- merchant.* If, hQwever, instead Of a regular adjustment in the customary way, the parties choose to settle their mutual claims or defences themselves, and enter into a compromise for that purpose, this bar- gain, if not tainted by fraud or voidable through mistake, binds the parties, And where one of two part owners, authorized to in- sure, and making insurance, for both, made a compromise with the insurers, receiving from them his own share under the compro- who, upon a full disclosure of the facts, Park on Ins. 267; Dow v. Smith, 1 has signed his initials to an adjustment Caines, 32. on the policy without paying the loss, is * Eankin v. Am. Ins. Co., 1 Hall, N. not precluded afterwards in an action Y., 6, 19, action on policy of insurance, against him from taking advantage of opinion by Oakley, J. . " In the present circumstances with which he had been case, the judge was called upon to hear made acquainted before signing the ad- evidence of a usage controlling the con- justment, which in this case were fraud- struction of the policy, so as to render ulent. See also Haigh v. De la Cour, necessary the production of a particu- 3 Campb. 319. In Faugier v. Hallett, lar document as a part of the prelimi- 2 Johns. Ca. 233, it was held that " an nary proof If such evidence had been adjustment of loss indorsed on a policy admitted, counter-evidence on the part of insurance, and signed by the insurer, of the plaintiffs to repel the usage must is not conclusive ; and the party may have been gone into, and thus the show that it was made on the misrepre- judge would have been drawn into the sentation of the insured ; and whether trial of a fact, instead of confining him- such misrepresentation proceeded from self to the decision of the law as arising design or mistake makes no difference." upon the state of the proof as exhibited " Faugier v. Hallett, 2 Johns. Ca. by the plaintifis. This, in my judg- 233, supra. ment, is clearly inadmissible. The ' See Bilbie v. Lumley, 2 East, 469, usage in question, if it could avail the overruling Rogers v. Maylor, cited defendants at all, would be a bar to the CH. Vn.J OF PARTIAL LOSS OE PAETICULAB AVERAGE. 415 mise, and thereupon released the insurers from all claims and demands under the policy, it was held that the other part owner might elect to consider the compromise as made for the benefit of both part owners, and on this ground recover from the part owner making it the proportion which would be due to him had the money paid under the compromise been paid to one part owner for both ; or he might say the other part owner had no right to make the compromise and discharge the insurers, and on that ground I'ecover from the compromising part owner the amount which he could have claimed from the insurers, had no compromise been made.i plaintiffs' right of action ; and in this Coit v. Conn. Ins. Co., 7 Johns. 389. view it was also offered to be proved at In this light its effect is, not to alter the the trial. The judge again properly contract of the parties, but merely to rejected it. The rule as to the admis- ascertain what that contract is. But it sion of usage to control the construction is well settled that a usage can never be of a policy seems to be that it may be set up to affect or vary an express resorted to to fix the sense of particu- agreement, nor to contradict a rule of lar terms in the instrument where they law. Frith v. Barker, 2 Johns. 335 ; have acquired a peculiar meaning, as Homer v. Dorr, 10 Mass. 26." between the assurers and the assured. ' Briggs v. Coll, 5 Met. 504. 416 THE LAW OP MARINE INSURANCE. [CH. VIII. CHAPTER VIII. OP AGENTS. Section I. — Of Insurance Agency in Gfeneral. The contract of insurance may, in every respect and in all its parts, be effected by agents ; whose acts bind their principals in the same way as in other business transactions. It is more common for the insured to act by an agent, than for the insurers ; and more common for insurers against fire than for marine insurers. But insurers against perils of the sea sometimes have their agents to originate, er even to make their contracts ; and very frequently act under their own contracts, in case of actual or alleged loss, by agents. There are no principles which belong exclusively to agency in insurance matters ; none, that is, which are not recognized as a part of the general law of agency. But there are some peculiari- ties in the application of these principles, and it is rather of these that we propose to speak in the present chapter. Much that belongs to this topic has indeed been already stated, by anticipation, while considering other subjects. Thus, we have already treated of the implied authority to act as agents, in effect- ing insiirance, which persons may have because of their relations to the owners pf the property ; for example, as ships' husbands, or as joint owners, or as copartners. We have also considered quite fully the subject of ratification of an authority, either by bringing suit or otherwise. Also, rep- resentations or concealments by agents. Also, the agency for the ■ insurers cast upon the insured or his master or servants by a loss and abandonment. In this chapter, after a few remarks on these and similar topics, we propose to consider in separate sections, first, the powers of agents ; secondly, the duties of agents ; thirdly, the rights of agents ; fourthly, the law concerning voluntary agents. We remark in general, and rather that these universal princi- CH. Vm.] OF AGENTS. 417 pies may be kept in mind than because of their especial relation to insurance, that no agreement by, or act of, an agent binds his principal, unless the agent acted therein within the scope of his authority, whether that were express or implied. Next, that any lawful act purporting to be done by an agent for a principal may be ratified by that principal, and, being so ratified, has the same effect as if done by previous authority.^ And even if the contract of insurance violates a statute, and a loss occurs under it which the insurers pay to the agent, he miist pay it over to his principal, if the insurers have not notified him to hold it as theirs, in which case it does not rightly belong to his principal.^ The courts of England differ from those of this country, in regard to the rights of the insurers, when a contract of insurance is made by an agent. There, they seem to permit the insurers, in the settlement of the loss, to set off all claims against the agent ; and to consider the principal only as subrogated to the rights of the agent, without any enlargement whatever, unless there be some contrary provision in the policy.^ Here, if the insurance is, in effect (whatever be its form), made by A for the benefit of B, the insurers can set off against B's claims only their claims against B himself.* The peculiar view of the English courts seems to be derived, in some degree at least, from the peculiar usages of their country in respect to insurance brokerage. There, it would appear, nearly all insurance business is managed by insurance brokers, who constitute a regular profession, and are as distinctly recognized in the law as well as in practice as the insurers are. As each insurance company is very likely to have many contracts effected by the same broker, it seems that both^ usage and law ' Thus, as we have already seen, ante, insurers with the amount, and were af- vol. 1, p. 49, n. 7, the owner of property terwards notified not to pay it over to may adopt an insurance effected by an the underwriters. It was held that the agent. See also Sidaways v. Todd, 2 latter could not bring an action for Stark. 400. money had and received, the contract " Tennant v. Elliott, 1 B. & P. 3 ; being illegal, and the money not having Farmer v. Russell, lb. 296. In Ed- been actually paid over. See also gar V. Fowler, 3 East, 222, the insured Booth v. Hodgson, 6 T. K. 405. had not actually paid the premium on ' See 1 Arnould, Ins. 108 - 142 ; Gib- an illegal contract of insurance over to son v. Winter, 5 B. & Ad. 96 ; Wilkin- the defendants, who were insurance son v. Lindo, 7 M. & W. 81. brokers, but the latter had credited the ' See ante, vol. 1, p. 504, n. 5. VOL. II. 27 418 THE LAW OF MARINE INSURANCE. [CH. VIII. permit them to regard the broker as in some degree the principal. They usually know only him, and look to him as their security ; and the broker is considered as the agent of both parties.^ Section II. — Of the Powers of Agents. The first rule is, that a special agent cannot exceed his author- ity, however that be conferred. Thus, if the act of incorporation* of a company provides that the business shall be conducted in a particular manner, and that the concurrence of a certain number of of&cers is necessary to make an act valid, the mode prescribed must be followed.^ And generally, if an agent has specific duties to perform, he cannot bind his principal by acts not within the scope of such duties.^ But a general agent may bind his principal by an act within the scope of his authority, although he has private instructions which limit his power, if these instructions are not known to the in- sured.* ' See 1 Arnould, Ins. 108-142. ^ See ante, vol. 1, p. 35, n. 1, Beatty V. Marine Ins. Co., 2 Johns. 109. ' Thus, an agent of Lloyds' in a for- eign port has no power to bind the com- pany by a certificate of the amount of damage, and such certificate is therefore not admissible in evidence. Drake v. Marryat, 1 B. & C. 473. And in Jel- linghaus v. New York Ins. Co., 6 Duer, 1, it was held that»the burden was on the insured to show that the vice-pres- ident of an insurance company had authority to bind the company by ac- cepting goods. And the secretary of a railroad company has no authority to bind it. Williams v. Chester & Holy- head Railway Co., 5 Eng. L. &Eq. 497. Nor has the treasurer of a corporation any right to release a claim which be- longs to the corporation. E. Carver Co. V. Manufacturers' Ins. Co., 6 Gray, 214 ; Dedham Institution for Savings v. Slack, 6 Cush. 408. ' Lightbody v. North American Ins. Co., 23 Wend. 18. In McEwen v. Montgomery County Mutual Ins. Co., 5 Hill, 101, notice of a prior insurance given to a travelling agent of the in- surer, whose duty it was to solicit insur- ances, make surveys, and receive applications, was held to be notice to the insurer. See also Sexton v. Mont- gomery County Mutual Ins. Co., 9 Barb. 191. And notice to an agent of an incumbrance on the property in- sured is notice to the insurer. Masters V. Madison County Mutual Ins. Co., 11 Barb. 624. In Mellen v. Hamilton E. Ins. Co., 5 Duer, 101, it was held, that the knowledge of a further insurance by an insurance broker, who procured the policy for the assignor of the plain- tilF from the defendants, could not be considered as knowledge to them, there being no proof of his being such a gen- eral agent as would make them liable for his acts of knowledge. And in Vose CH. Vni.] OF AGENTS. 419 If an agent, having sufficient authority for his acts, fails to report to his principals (being an insurance company) facts or informa- tion which his duty to them required of him, this does not invali- date his acts as their agent, so far as the insured are concerned.^ Nor has an agent of insurers any implied authority to annul or dispense with any specific rule of the insurers made known to the insured. Thus, if the policy requires that certain facts (as, for example, subsequent insurance) should be indorsed on the policy, an assurance by the agent of the company, that his own entry of it on his own records will do as well, has been held not to bind the insurers, if the entry were not actually made on the policy .2 The second rule may be said to be, that, whenever the author- ity of an agent arises from a necessity, it is measured by that necessity. As to authority derived from some other relation besides that of sole ownership, it may be said, in general, that wherever any actual interest in property vests in any person, by contract or by operation of law, or even officially, it carries with it the power of causing the property to be insured, either as agent or as principal, as the case may be.^ An agent is not only limited by the terms of his authority, or by the necessity from which it springs, but also by the general principles of trust. Thus, an agent, who has any charge of or in respect to insured property, if he be an agent to sell, cannot buy ; and if he be an agent to buy, he cannot be interested in the sale.* An authority carries with it, in general, power' to do all lawful acts necessary to the execution of the authority. , Thus, an agent of an insurance company who is intrusted with printed forms of policies, which are signed by the officers of the company, and are V. Eagle Life & Health Ins. Co., 6 Cush. ' Gloucester Manuf. Co. v. Howard 42, 49, it was held that the knowledge F. Ins. Co., 5 Gray, 497. See also of an insurance agent, whose duty it Wing v. Harvey, 5 De G. M. & G. 265, was' merely to receive the application 27 Eng. L. & Eq. 140. and forward it to the company, of the ' Worcester Bank v. Hartford P. condition of the health of the assured Ins. Co., 11 Cush. 265. in a life policy, was not sufficient to ' See anie, vol. 1, ch. on Insurable In- avoid the effect of a misrepresentation by terest. the assured on the subject of his health. * See ante, p. 192, u. 4. 420 THE LAW OF MARINE INSURANCE. [cH. vm. to be filled out, countersigned, and issued by him, has authority to add to the policy before it is delivered a memorandum that the property insured is in course of construction.^ And in cue case, in the absence of any proof of any limitation of the power of the agent, it was held that the agent, after an open policy of insurance declared to be " on property on board vessel or vessels, as per in- dorsement to be made thereon," had been signed, might agree that the policy should cover a number of bales of cotton on shore at New Orleans from date of storage until shipped.^ The power to effect insurance for a principal carries with it the power to sign a premium note for the principal ; and generally the principal may be held liable for such a premium. But he cannot be sued on the note itself, if that be signed by the agent in his own name only, and without words indicating that he signs as agent.^ So, it is held, that the authority to effect insurance for the in- surers carries with it the authority to adjust, or agree to an ad- justment of, a loss.* And that the authority to make a contract of insurance in behalf of the insured gives the agent power to make an abandonment.^ ' Gloucester Manuf. Co. v. Howard F. Ins. Co., 5 Gray, 497. ' Kennebec Co. v. Augusta Ins. & Banking Co., 6 Gray, 204. = See ante, vol. 1, ch. 15, § 1, pp. 502, 504. * Richardson v. Anderson, 1 Campb. 43, n. In Goodson v. Brooks, 4 Campb. 163, the agent who subscribed the policy, on the happening of a loss, agreed to refer the matter to arbitrators. There was no direct prooft of his authority to agree to the reference ; but it appeared that he was in the habit of settling losses for the defendant, which the latter afterwards paid. It was held that this was sufficient evidence of agency to render the award binding on the in- surer. But an insurance broker has no implied authority to pay a loss, due from the underwriter who employs him, to the assured. Bell v. Auldjo, 4 Doug. 48. ' Cassedy v. Louisiana State Ins. Co., 18 Mart. La. 421 ; Parker v. Towers, 2 Browne, App. 80. This point was also expressly decided in Chesapeake Ins. Co. V. Stark, 6 Cranch, 268, where the jury found a special verdict that the in- surance was effected by the agent of the insured, and that the same agent aban- doned "for the plaintiff." Marshall, C. J., said : " The agent who made the insurance might certainly be credited, and in transactions of this kind always is credited, when he declares that, by order of his principal, he abandons to the underwriters. In this case the jury find that the abandonment was made for the plaintiff; and this finding estab- lishes that fact." In a case where a part owner, insured in his own name for the benefit of whom it concerned, on a loss having taken place, abandoned the property by a letter signed with his own name only, and not stating what interest was abandoned, it was held CH. Vm.] OF AGENTS. 421 It has been held that if an agent is authorized to make a con- tract of insiirance, to take eifect from the time when the premium shall be paid and shall be received at the office of the insurance company, provided the office shall recognize the rate of premium, and be otherwise satisfied with the risk, then if the usual premi- um is paid to the agent, and he takes the risk, the company are liable although the premium is not received by them before the loss ; and that they cannot arbitrarily be dissatisfied with the risk or with the premium.^ But generally the authority of an agent does not empower him to issue a policy when the property has been destroyed while the application for the insurance was on its way to the agent from the owner of the property .^ The authority of an agent to issue a policy is to be determined by the rules of agency applicable to all other contracts. As a general rule, the instrument under which the agent acts need not be produced, and his agency may be inferred from the fact that the under- writer has paid losses without objection on other policies issued by him.^ If the insured delivers up the policy to an insurance broker for the purpose of obtaining the amount due on it from the under- writer, and the latter pays the sum over to the broker, the broker thereupon becomes the debtor of the insured, and the under- writer is discharged.* But the question has arisen, whether the fact of the account being settled between the broker and the underwriter by the broker debiting the underwriter with the amount of the loss, and crediting the insured with the same, and the underwriter crediting the broker with the amount, is a suffi- cient payment to the broker. It has been held that, if the under- writer's name is not struck off the policy, he is still liable, not- withstanding this transfer on the books of the parties.^ And it that he was duly authorized, prima /acie, '^ Bentley v. Columbia Ins. Co., 17 to make the abandonment for himself N. Y. 421. and those for -whom the insurance was = Haughton v. Ewbank, 4 Campb. 88. made in his name, and that, as there * Scott v. Irving, 1 B. & Ad. 605. was no evidence of dissent on their See also Erick v. Johnson, 6 Mass. 193. part, the abandonment was sufficient. » Russell li, Bangley, 4 B. & Aid. Reynolds u. Ocean Ins. Co., 22 Pick. 395 ; Todd v. Reid, 4 B. & Aid. 210 ; 191. See also Hunt v. Royal Exch. Jell v. Pratt, 2 Stark. 67. In Stewart Ass. Co., 5 M. & S. 47. V. Aberdein, 4 M. & W. 211, 224, the ' Perkins u. Washington Ins. Co., 4 case of Todd v. Eeid being cited, Parke, Cow. 645. 422 THE LAW OF MARINE INSURANCE. [CH. VIII. makes no difference if the name is struck off, if this is done without the assent of the insured. ^ These cases proceeded prin- cipally upon the ground that the authority to the agent to receive the amount of the loss gave him only a power to receive it in cash, and that the underwriter was not discharged by merely crediting the broker with the amount ; and that no knowledge of any usage to the contrary was brought home to the insured. But there seems to be no good reason why the payment should be required to be made in cash ; ^ and in a case where the party was proved to have known the usage, it was held that he was bound by it.^ As soon as the insurance broker has received credit, in account with the underwriter, for the amount of the loss, it has been held that he is liable to the assured in an action for money had and received.* And he certainly is liable if he receives the acceptance B., said : " With regard to that case, it certainly is incorrectly reported. I was counsel in the cause, and there was no proof at all of any settlement in account between the broker and the under- writer.'' ' Bartlett v. Pentland, 10 B. & C. 760. See also Scott v. Irving, 1 B. & Ad. 605. ' In Stewart v. Aberdein, 4 M. & W. 211, 218, at the trial at nisi prius, Lord Abinger, C. B., expressed his opinion, " that if any one man has to pay another money on account of his principal, and there is money due to him from such other person, it makes no difference to the principal whether there is an inter- change of bank-notes, or a mere trans- fer of accounts from one side to the other, and that it is equally a payment, if it is done without fraud." ^ Stewart v. Aberdein, 4 M. & W. 211. Lord Abinger, C. B., in this case, said : " It must not be considered, that by this decision the court means to over- rule any case deciding that wherever a principal employs an agent to receive money, and pay it over to him, the agent does not thereby acquire any authority to pay a demand of his own upon the debtor, by a set-off in account with him. But the court is of opinion, that where an insurance broker or other mercantile agent has been employed to receive money for another, in the general course of his business, and where the known general course of business is for the agent to keep a running account with the principal, and to credit him with sums which he may have received by credits in account with the debtors, with whom he also keeps running ac- counts, and not merely with moneys actually received, the rule laid down in those cases cannot properly be applied, but it must be understood, that where an account is bona fide settled according to that known usage, the original debtor is discharged, and the agent becomes the debtor, according to the meaning and intention, and with the authority of the principal." See also Erick v. John- son, 6 Mass. 193. * Andrew v. Kobinson, 3 Campb. 199. See also Ovington v. Bell, 3 Campb. 237. CH. Vin.] OF AGENTS. 423 of the underwriter payable at a date later than that at which the loss would be payable.^ When a loss is payable at a certain time after the preliminary proofs are presented, it would seem that the underwriter may pay the same to the agent of the assured who is authorized to receive the amount, within the time, and that a revocation of the authority of the agent, subsequent to payment, but before the expiration of the time designated in the policy for the payment would not render the underwriters liable.^ The same person may be the agent of both parties ; or, being the general agent of one, he may be made the special agent of the other ; and this special agency may be inferred from circumstances. And if a party who desires to be insured employs a person who Is agent of the insurers, and so employs him as to make him his agent, he is as responsible for the acts or omissions of such agent in his behalf as he would have been if that person had not been the agent of the other party. ^ But generally, in any contract re- quiring the exercise of judgment and discretion, a person cannot act as the agent of the two parties in interest. Thus, if a person is a director of one company and the agent of another, he cannot as such agent insure with the second any interest belonging to the first company.* A single partner has all the powers which his ' Wilkinson u. Clay, 6 Taunt. 110,4 person who was the agent of the defend- Campb. 171. The broker in this case ants, for the purpose of receiving and debited the underwriter with the amount forwarding applications, with the request of the loss, and took his acceptance for that he would fill it out subsequently, the balance of the account between there being no conveniences for writing them payable at a time subsequent to there, and forward it. Nothing was that when the loss would be payable, said about encumbrances in the applica- It was held that he was liable for money tion, or by the parties, but the agent had and received. made a statement in the application, " It was so decided in Scott v. Irving, that there was no encumbrance except 1 B. & Ad. 605 ; but the court were of one mentioned. It was held that the a different opinion in Bethune v. Neil- agent acted as the agent of the insured son, 2 Caines, 139, where it was held in filling out the application, and that that an agent, although in possession of they were liable for the consequences . the policy, had no right to receive pay- of his act. ment till the time mentioned in the * New York Central Ins. Co. v. Na- poliey had expired. tional Protection Ins. Co., 14 N. Y. 85 ; ' Smith V. Empire Ins. Co., 25 Barb. Utioa Ins. Co. v. Toledo Ins. Co., 17 497. The parties desiring insurance in Barb. 132. this case handed an apphcation to a 424 THE LAW OF MARINE INSURANCE. [cH. vin. firm, who are agents of an insurance company, have to make a contract of insurance.^ Section III. — Of the Duties of Agents. Any person undertaking any work for compensation impliedly warrants that he has sufficient knowledge, and will take sufficient care, to do it as it should be done. But this obligation on the part of the agent is affected by circumstances, because it must always be qualified by the rule, that the party employing him cannot demand of him more skill or more care than he had a right to expect. If, therefore, one desiring insurance goes to a professed insurance broker, he has a right to insist upon proper professional skill and reasonable care.^ But if he chooses to employ any friend who has only a general mercantile knowledge or even less, he has a right to make such a man his agent, but not a right to demand from him the same skill or the same care that he could expect from one practised in this business and professing to make it his twn. ^ Kennebec Co. v. Augusta Ins. & Banking Co., 6 Gray, 204. ^ Thus in Chapman v. Walton, 10 Bing. 57, where it was contended that the defendant had not correctly obeyed the orders of the plaintiff, Tindal, C. J., said : " The point therefore to be determined is not whether the defend- ant arrived at a correct conclusion upon reading the letter, but whether upon the occasion in question he did or did not exercise a reasonable and proper care, skill, and judgment. This is a question of fact, the decision of which appears to us to rest upon this further inquiry, namely, whether other persons exercising the same profession or calling, and being men of experience and skill therein, would or would not have come to the same conclusion as the defendant. For the defendant did not contract that he would bring to the performance of his duty on this occasion an extraordi- nary degree of skill, but only a reason- able and ordinary proportion of it." Reasonable skill and ordinary diligence are defined in Mechanics' Bank v. Mer- chants' Bank, 6 Met. 13, 26, as follows : " By reasonable skill is understood such ' as is ordinarily possessed and exercised by persons of common capacity, engaged in the same business or employment ; and by ordinary diligence is to be under- stood that degree of diligence which persons of common prudence are accus- tomed to use about their own affairs." Thus, if a custom prevailed to transact business in a particular way, an agent would not be liable if he conformed to that custom, although the custom should be afterwards decided to be contrary to law, there being no obligation on the part of the agent to correctly decide dubious points of law. Pitt v. Yalden, 4 Burr. 2060 ; Baikie v. Chandless, 3 Campb. 17; Mechanics' Bank w. Mer- chants' Bank, 6 Met. 13. CH. VIII.J OF AGENTS. 425 If a person promises, for a valuable consideration, to effect in- surance for another, he is of course liable if he neglects to do so.^ And the right to require that a party should effect insurance for another, and to hold him liable for not doing it, seems to rest on the same principle, namely, that the owner has, in reason and good faith, a right to consider himself insured. Thus it is said, that this right exists if the owner, when he sends orders to his agent, has effects in that agent's hands, or if he sends or consigns effects, with his orders, or if he has been accustomed to send such orders and find them complied with, and nothing of word or fact has occurred to indicate that this custom will be broken.^ If goods are sold on an "order and sent to the vendee, it appears to be the custom in some parts of the country for the vendor to insure them, and, in case of his neglect to do so, it seems that he would be liable to the consignee.^ In any of these cases, or in any case to which a similar principle applies, if the agent fails to make insurance, and the principal suf- fers loss thereby, he may hold the agent liable therefor.* And it. ' Ela V. French, 11 N. H. 357. ^ Per Buller, J.', in Smith v. Lascelles, 2 T. R. 187. See also Wallace v. Tell- fair, cited 2 T. R. 188. In De Tastett V. Crousillat, 2 Wash. C. C. 132, and in Morris v. Summerl, lb. 203, it was held, that a foreign merchant, who was in the habit of insuring for his correspondent, was liable, if, on receiving an order to insure, he neglected to do so, or did it in a manner different from his orders. ' Walsh!). Frank, 19 Ark. 270. The action in this case was for goods sold and delivered. The defence was, that they never reached the defendant, the consignee, and that the consignor ought to have insured them. It was held, that whether it was the duty of the shipper to insure the goods without an order to do so depended upon the general custom of merchants, unless there was a special custom at the place of shipment, known to the purchaser, which was different from the general one. And it was held, that knowledge of such general custom might be shown by the previous course of busi- ness between the same parties. See also Shirtliff u. Whitfield, 2 Brev. 71. * In Seller v. Work, 1 Marsh. Ins. 299, where an insurance broker em- ployed another broker at the request of the plaintiff to obtain a policy of insur- ance, but omitted through inadvertence to deliver to the second broker a letter containing material information, in con- sequence of which the underwriters were discharged, it was held, that the first broker was liable. So a merchant, who, having accepted an order for in- surance, limited the broker to too small a premium, in consequence of which no insurance could be effected, was held liable. Wallace v. Tellfair, cited 2 T. R. 188. In Strong v. High, 2 Rob. La. 103, an agent who had the general charge of a vessel, and had insured her, was held liable for neglecting to renew the policy when it expired. 426 THE LAW OF MARINE INSUEANCE. [CH. VIII. has been held in England, that a broker, who represented that he had caused a policy to be made for a party, might be sued by him in trover for that policy, although none were made.^ If the orders to insure are absolute, the insurance must be effect- ed at any rate ; but it seems, in this country, that the agent need not go out of his vicinity, and, if he cannot effect insurance there, he is not bound to do so at all.^ The agent is also bound to effect the insurance within a reasonable time.^ If the agent has no particular directions as to the risks to be insured against, or otherwise as to the terms of the contract, it is his duty, and all his duty, to cause it to be made in the way which is customary, as to such property on such a voyage, at the place where he is to make it.* ' Harding u. Carter, 1 Marsh. Ins. 303. ' Sanches v. Davenport, 6 Mass. 258. The defendants in this case, being mer- chants in Boston, were requested by the plaintiffs in Surinam, in case the vessel should not arrive before a certain day, to procure insurance on the cargo to the amount of 56,600 guilders. The defendants endeavored to procure in- surance in Boston, Salem, Newburyport, Portsmouth, and Providence, but with- out success, the vessel being out of time. They then wrote to their agents in New York, requesting them to procure in- surance on a certain amount, less than the whole, and limiting the premium. The agents in New York could not ob- tain insurance on these terms, but it was finally effected at a higher rate, though not on the whole amount which the plaintiffs requested. It was con- tended, that, although the defendants might not have been under any obliga- tions to extend their endeavors to New York, yet, as they had in fact done so, they were liable for any negligence or want of sufficient caution in obtaining insurance there. But the court held, that the defendants were not liable, and Sedgwick, J., said : "It is believed to be impossible to find an instance, where a man in a voluntary effort (not required by any principle of law) to render a benefit to another has been holden to make good any loss which may have happened merely because his generous efforts did not succeed. The utmost for which he can be responsible is a positive loss which his efforts may have occa- sioned ; and as there is none such in this case, we are all of the opinion" that the defendants are not liable. See also Smith v. Cologan, 2 T. K. 188, n. ' Turpin v. Bilton, 5 Man. & G. 455. * Thus, where a vessel had been in- sured, and a letter mentioning a change of voyage was put into the hands of an insurance broker, and he was told to do " the needful," it was held, that, to determine whether he had done his duty, the papers might, at the trial, be placed in the hands of insurance brokers as experts, and they might be asked what alterations in the policy, in their judgment, a skilful broker ought to have made. Chapman v. Walton, 10 Bing. 57. If any usage exists, they are bound to conform strictly to it. In Mallough V. Barber, 4 Campb. 150, where insur- ance brokers were ordered to procure a CH. VIII.] OF AGENTS. 427 It has been held in England, that, if an agent is ordered to effect insurance generally, it is sufficient if he does so with an incorporated company, and he is not liable for not effecting insur- ance with a private underwriter, although he would have obtained, at the same rate of interest, a policy more favorable to his princi- pal.i Neither a special nor even a general agent has any authority to effect insurance merely as such an agent. But in a particular case special circumstances may confer this authority upon him, and make it his duty to insure ; but his duties in this respect must depend very much upon usage.^ No agent has, by the mere fact of his agency, full power of sub- stitution,^ unless there is a usage to this effect. But if his acts are adopted by his principal, he is not liable for a loss caused by the policy " at and from Teneriffe," it was held, that they were liable for not caus- ing a clause, giving liberty to touch at all or any of the Canary Islands, to be inserted; it being shown that a usage existed to cause such a clause to be in- serted in the policy without any partic- ular instructions to that effect. And if the agent inserts a clause in the policy which is unusual, and the underwriters are in consequence exempt from respon- sibility, the agent is liable. Thompson V. Read, 12 S. & R. 440. App. ' Comber u. Anderson, 1 Campb. 523. The insurance in this case was effected with a chartered company, by whose policy the cargo was warranted against partial loss, although the ship should be stranded. It was held that no action lay against the broker for not effecting insurance with a private underwriter, who would have been liable for a partial loss by stranding. In Moore v. Mourgue, 2 Cowp. 479, general orders were given to an agent to effect insurance on a cargo of fruit. He accordingly did so with the London Insurance office, whose policies on fruit contained the clause, free from particular average. It was shown that the policies of the Exchange Assurance Company did not contain this clause. In an action against the agent for not effecting the insurance with the latter company, the jury having found a verdict for the defendant, on the ground that he had acted " bona fide, to the best of his judgment," the court refused to set it aside. " Shirtliff V. Whitfield, 2 Brev. 71. ' Corlett V. Gordon, 3 Campb. 472. The plaintiff in this case sent a bill of lading of some cotton to the defendants, requesting them to effect insurance to the whole amount. The defendants had not done business for the plaintiffs before, and they refused to accept the consignment, but indorsed the bill of lading over to a friend and creditor of the plaintiff. He effected the in- surance and received the goods, and afterwards became insolvent while in possession of the proceeds. The court held that, if the defendants refused the authority sought to be conferred upon them, they could not turn it over to another, and they were accordingly held liable. 428 THE LAW OF MARINE INSUEANCE. [CH. vin. knavery of the sub-agent.^ He may employ a sub-agent to make inquiries, and do many things for him ; all which, perhaps, do not bind the principal ; but possibly the act of the sub-agent would bind the principal when the thing done is merely ministerial, and implies no discretion or personal judgment.^ If it is his duty to effect insurance, and he does this, and the insurers become notoriously insolvent, it would seem, both in reason and on authority, that it is his duty to effect another insur- ance.^ He is, of course, bound to follow his instructions ; and the more minute and detailed and the more peremptory they are, the less is his discretion.* It is certain, however, from the nature of the ' Smith V. Cologan, cited 2 T. R. 188. M, '' Mason v. Joseph, 1 J. P. Smith, 406. The underwriter in this case had given an insurance broker a power of attorney, authorizing him to underwrite any policy of insurance not exceeding £100, and to subscribe the same in his (the underwriter's) name, and to settle and adjust losses. The broker signed a slip for the policy, and the policy was afterwards signed by the broker's clerk. The court expressed a very strong opinion that the act of signing the pol- icy, being but a ministerial act, and not one requiring any exercise of judgment or discretion, might be performed by the clerk. But the point was not de- cided, as the court were of the opinion that the subsequent act of the defend- ant showed that he had ratified the signing by the clerk. This was, that on an adjustment of the loss signed by the broker being presented, together with the policy, to the underwriter, he offered terms of settlement. ' This question is considered at length by Mr. Duer in his valuable work on Insurance, vol. 1, p. 188-198. The foreign authorities are shown to be in conflict, and it is said, "that in the United States the mere insolvency of the insurers can never give a right to the agent to effect a second policy, since, by virtue of the clause in Ameri- can policies relative to prior insurances, the second policy would be wholly void if effected while the first is still in force." It is also said, and this we have seen to be true, that the insolvency of the insurers does not dissolve the con- tract. The question is also considered whether, in case the policy is dissolved by consent on the insurers becoming insolvent, it is the duty of the agent to procure another insurance. The case of Petrie v. Aitchison, 3 Sess. Ca. 501, before the Court of Sessions in Scot- land, is cited to the point that, where a policy becomes inoperative after the risks have commenced, fi:om a devia- tion or breach of a warranty, it is the duty of the agent to procure another policy applicable to the risks as altered. But in this case a special order was given to this effect. See the next note. * Leverick v. Meigs, 1 Cow. 645, 662; Glaser v. Cowie, 1 M. & S. 52; Bundle V. Moore, 3 Johns. Ca. 36. In Miner v. Tagert, 3 Binn. 204, the lia- bility of the defendants as agents, for neglecting to insure, was admitted, and CH. VIII.J OF AGENTS. 429 case, that he must possess a reasonable discretion (which can hardly be defined in words), both as to the construction and appli- cation of his instructions, and as to the expediency of exact com- pliance under special circumstances, especially if these were unknown to his principal. If the written instructions are followed, the broker is not liable for omitting to insert a clause respecting a subject about which there had been some prior verbal communications between the parties.^ But it is no excuse for a neglect to effect insurance on one subject, that the broker was also instructed to insure another subject against an ilLegal risk, if the illegality would only have avoided the policy pro tanto? The discretion of the agent has been especially considered as to abandonment. This is often a very important step. But if it be left entirely to his discretion, all that he is answerable for is the honesty and care with which he exercises this discretion.^ By' it was also agreed that they were to be ter's effects, as well as on the vessel and considered liable as if they had insured the vessel themselves. They defended on the ground that the vessel was not sea-worthy, and that they were not obliged to give a valued policy. The order for insurance was by the corre- spondent of the plaintiff, and was as fol- lows : " Charge the premium to my account, and advise me thereof. The brig he (Miner) values at $4,000, but wishes to have $ 3,000, say three fourths, insured." It was held that, although this did not order a valued policy, eo nomine, yet it was a fair inference from the words used. In Petrie v. Aitohison, 3 Sess. Ca. 501, the master was the joint owner of the vessel and the cargo, together with the defendants who acted as agents. They had pro- cured insurance on the vessel, cargo, and master's effects. The vessel de- viated, and the master wrote home in- forming them of the fact, and requested them to make the necessary insurance in consequence of the alteration of the voyage. It was held that they were bound to make insurance on the mas- cargo. We have seen, ante, p. 49, n. 4, that if goods are insured at and from a cer- tain place, beginning the adventure from the loading of the goods on board the said ship, the goods were not covered unless they were loaded at the place specified. It was accordingly held, where the following letter was written from Malaga to the insurance broker, "I request you will insure £1,000 on goods shipped on board The Pearl from Gibraltar Bay, .... where I shall send a letter on shore," and the agent effected an insurance on goods by The Pearl, " at and from Gibraltar to Dub- lin, beginning the ad venture, upon the said goods from the loading thereof on board the said ship,'' that the goods loaded at Malaga were not covered, and that the agent was therefore liable. Park V. Hamond, 4 Campb. 344, Holt, N. P. 80, 6 Taunt. 495, 2 Marsh. 189. ' Fomin v. Oswell, 3 Campb. 357. ^ Glaser v. Cowie, 1 M. & S. 62. ' Comber v. Anderson, 1 Campb. 523, 525. 430 THE LAW OF MARINE INSURANCE. [CH. VIII. this abandonment, the agent of an insured, who makes the aban- donment, may become thereby the agent of the insurers. As, for example, if a master of a ship, wrecked near the insurers and far from the insured, has been appointed an agent by the insured, with sufficient power to make an abandonment, an abandonment properly made by him would transfer the property to the insurers ; and he would become, of necessity, the agent of the insurers. Of course, however, such an agent of the insured can have no power to make the abandonment effectual'1)y acceptance as agent of the insurers. An insurance agent, like every other agent, is bound to keep his principal informed, with all due promptitude, fulness, and accuracy, ■of whatever matter relating to the business intrusted to him it is important to the principal that he should know.^ And if a broker, who obtains the insurance, keeps possession of the policy after a loss has taken place, it seems that he is bound to demand payment of the underwriters, and, if he neglects to do so, he is liable for any loss that may accrue in consequence thereof.^ We may close this section upon the duties of agents in insur- ance transactions with the general remark, that, whenever it is their duty to do any particular thing, they are liable to the prin- cipal for any injury he may sustain by their omission to do that thing ; and the extent of the injury is the measure of their lia- bility.^ And where an agent who had been ordered to procure ^ Devall V. Burbridge, 4 Watts & S. Scotland, 501 ; De Tastett v. Crousil- 305. And if a person, although not a lat, 2 Wash. C. C. 132 ; Morris v. Sum- regular insurance broker, undertakes to merl, lb. 203. And if the policy would procure insurance and is not successful, have been void had the agents obeyed there is an implied obligation resting their instructions, they are not liable for upon him to give notice to his employer not effecting the insurance. Alsop v. of the fact. Callander v. Oelrichs, 5 Coit, 12 Mass. 40 ; Webster v. De Tas- Bing. N. C. 58. tet, 7 T. R. 157. See also Delany v. ' Bousfield V. Creswell, 2 Campb. 545. Stoddart, 1 T. R. 22. So, if the non- ' Thus, insurance agents who neglect insertion of a particular clause, contrary to obtain insurance are generally con- to orders, in no respect injured the in- sidered as liable for the amount which sured. Fomin v. Oswell, 3 Campb. 357. their principal would have obtained In one case, where a suit was brought from the insurers had they obeyed their on the policy, which was not successful instructions. They are, therefore, enti- on account of a concealment of a mate- tied to deduct the amount of the pre- rial fact by the broker, and then an ac- mium. Petrie v. Aitchison, 3 Sess. Ca. tion was brought against the broker, it CH. Vm.] OP AGENTS. 431 insurance to a certain amount did so, and afterwards, without authority, cancelled the policy and obtained another for a smaller amount, he was held liable for the original amount, deducting the premium.! If a broker effects insurance for a part owner, and receives from the underwriters on a loss taking place the whole value of the property insured, he cannot as agent dispute the claim of his principal to the whole amount.^ The authority of the agent to effect insurance may be revoked at any time before he has entered into a binding contract with the underwriters. And if he does any acts after this, he does them in his own wrong.^ Bankruptcy, also, of the principal, acts as a rev- ocation of the authority of the agent.* And if the broker pays over the premium to the insurers after he is informed by his prin- cipal that the risk has not been run, he cannot recover it from his principal.^ In one case, the broker engaged to effect insurance with such " names" as should be to the satisfaction of the insured. The voyage was performed, and the insured did not ask to see'the names on the policy, and it was held, in a suit by the broker for the premium, that it was not intended that the names of the underwriters should be submitted to the assured for previous •was held that the broker was liable, but without offering the defendants the op- not for the expenses of the suit on the tion of insisting on the plaintiffs' right policy, it not appearing that the suit to retain the money so paid. The judge was brought by the desire or with the before whom the case was tried left it concurrence of the broker. Seller v. it to the jury to say, " whether the plain- Work,' 1 Marsh. Ins. 299. tiffs were bound so to mix themselves In Maydew v. Forrester, 5 Taunt, with the brokers that they were pre- 615, the assured, who had sustained eluded from paying back those sums to losses to the amount of £18,000, failed the underwriters without resisting an in two suits in consequence of the neg- action for them." The jury having lect on the part of the defendants, who found for the plaintiffs, on the ground were brokers, to communicate certain that they had pursued a reasonable material letters to the underwriters, and course, the court refused to set aside incurred costs to the amount of £2,400. the verdict. They then gave the defendants permis- ' Gray v. Murray, 3 Johns. Ch. 167. sion to try as many more causes as they ^ Roberts v. Ogilby, 9 Price, 269. saw fit, which they declined. The ^ Warwick v. Slade, 3 Campb. 127. plaintiffs afterwards refunded to certain ^Parker v. Smith, 16 East, 382; underwriters, who had paid the losses Minnett v. Forrester, 4 Taunt. 541. without being sued, the sums so paid, ' Shoemaker v. Smith, 2 Binn. 239. 432 THE LAW OF MARINE INSURANCE. [CH. YIH. approbation, but merely that they should be unexceptionable names, and it was held that the broker was entitled to recover.^ Section IV. — On the Rights of Insurance Agents. The first and most important right of an agent (which grows out of tlae general principles of mercantile agency) is, his lien on the policy, and thereby a claim on the insurers for a loss under the policy, for his indemnity for all his charges, expenses, and lia- bilities in, about, and on account of the same policy. But his lien is confined to these,^ unless there be an agreement of the par- ties extending it; or a usage of the place where both parties reside ; or a custom between the parties themselves, sufficient to have this effect.^ Whether he may retain, as his indemnity for. future or immature liabilities for his principal, sums paid on the policy, must depend upon whether he has such lien on the policy, or upon his having incurred these liabilities rightfully on the credit of the policy.* As a lien is, at common law, only a right of retaining and con- tinuing possession, it is lost by a voluntary giving up of the pos- session.^ But that means a giving of it up to the principal, or for ' Dixon V. Ilovill, 4 Bing. 665. "I find nothing in the case to show that ^ See Man v. Shiffner, 2 East, 523; this policy was effected by (the de- Green «;. Farmer, 4 Burr. 2214. This fendants) in the course of their business question was much discussed in Dixon as factors. A factor is a person who is V. Stansfeld, 10 C. B. 398, 11 Eng. L. employed to sell goods on commission. & Eq. 528. In this ease there had been There was no employment to sell at all extensive dealings between the parties, •connected with the employment under the defendants acting as factors for the which this policy was effected." plaintiffs. While this state of things ° See Castling v. Aubert, 2 East, 325. continued, the defendants received or- By the usage of trade a factor has a lien ders to effect insurance on a vessel, for the balance of his general account, which they did, and claimed to hold the Godin v. London Ass. Co., 1 Burr. 489, policy as security for the balance of 494 ; Hammonds v. Barclay, 2 East, their general account as factors. The 227 ; Man v. Shiffner, 2 East, 523. evidence in the case was somewhat But only for his services as factor, voluminous, and the court held on the Dixon v. Stansfeld, note supra. whole that the transaction in question * See Olive v. Smith, 5 Taunt. 56. was not made by them as factors, and ' Cranston v. Philadelphia Ins. Co., it was accordingly held that the lien 5 Binn. 538. See also Sweet v. Pym, claimed did not exist. Maule,J., said: 1 East, 4. CH. Vin.] OF AGENTS. 433 his benefit ; for if the agent hands the policy to another person to hold for the benefit of the agent, this is still, by construction, his possession.^ It is held, however, that he may keep only, and not use ; and therefore if he pledge it as his own, and for his own use, he loses his lien.^ But he may assign his balance or his demand against his prin- cipal to a third person, and if he holds the policy as his security therefor, he may transfer this security also, by placing the policy in the hands of the assignee, to be thus held for the benefit of the agent.^ An agent may have possession of the policy for a special purpose only, as for custody, and in such a case, although he makes advances to the insured, he has no lien therefor on the policy.* But even if a broker has a lien on the policy for premiums which he has paid, he cannot refuse to produce it in a suit against the underwriter, and he is a good witness to prove all matters con- nected with the policy.® So, it is said, he loses his lien, by taking a promissory note or a bill of exchange, payable in the future, for his claim on his princi- pal.^ The reason is, that this is now an agreement for a credit ; and therefore, by implication, waives the lien on the policy. But this must depend upon the question, whether the terms of the credit were inconsistent with the existence of the lien ; for if they were consistent with the preservation of the lien, they would raise no presumption of an intention to waive or extinguish the lien. If he loses his lien by restoring the policy to his principal, and, while his claims are unpaid and unsecured, the policy returns into his hands from his principal, in general his lien revives, unless something said or done indicates that this is not the purpose of the parties.^ And this has been held where the agent recovered ' Urquhart v. M'lver, 4 Johns. 103. Carolina Ins. Co., 8 Wheat. 268. It ^ M'Combie v. Davies, 7 East, 5. was held in this latter case that the lien ' See Urquhart v. M'lver, 4 Johns, revived for specific, but not for gen- 103. eral advances. But in Whitehead u. * Muir V. Fleming, Dowl. & K., N. P. Vaughan, Cooke's Bankruptcy Laws 29. (8th ed.) 576, it was held that the lien * Hunter v. Leathley, 10 B. & C. 858. for premiums other than that due on ° Hewinson v. Guthrie, 2 Bing. N. the policy in question revived on the C. 755. broker's obtaining possession again of ' Levy V. Barnard, 2 J. B. Moore, the policy. 34, 8 Taunt. 149; Spring v. South VOL. II. 28 434 THE LAW OF MARINE INSUBANCE. [CH. Vni. possession of the policy, for this purpose in fact, but on a different pretence.^ If the insurance is effected under a special order, the terms of which are inconsistent with the existence of a lien, it is held that none exists ; as where an agent, who is ordered to effect insurance and forward the policy, does the former, but retains the policy, it is held that he has no lien.^ A sub-agent has no lien on the policy as against the agent who is his principal for the general balanc^ of accounts.^ Nor has he a general lien against the first principal, if he knew or had cause to know that the person who employed him was only an agent.* But if he did not know that he was a sub-agent, and supposed that he was effecting insurance for his employer who was the actual insured, it might be otherwise ;^ but this exception does not ap- pear to us to be unquestionable. Even if the agent have no lien on the policy itself, it is possible that he may have, by the local law of set-off, or by agreement with his principal, or a practice and usage which affect both parties, a right to demand and receive and receipt for sums payable from the insurers, and to set these off against his demands upon the insured. The questions, however, which have arisen on this sub- ject. have turned so much on the peculiar laws of set-off of differ- ent countries, that we do not propose to consider them in detail.^ If an agent is answerable to his principal for a loss, either be- cause he has for a commission guaranteed the policy, or because he is answerable for his negligence in not procuring any, or any sufficient insurance, he is, in respect to salvage, subrogated to his principal's rights, and may have his claim for salvage, or any similar allowance. ' Whitehead v. Vaughan, Cooke's Westwood v. Bell, lb . 349. But see Bankruptcy Laws (8th ed.) 576. Lanyon v. Blanchard, 2 lb. 597. ^ Eeed u. Pacific Ins. Co., 1 Met. 166. " The English cases are considered See also Walker o. Birch, 6 T. R. by Mr. Arnould, vol. 1, p. 115-126. 258. See also Olive v. Smith, 5 Taunt. 56 ; " Man V. Shiffner, 2 East, 523. Rose v. Hart, 8 Taunt. 499 ; Young v. ' Maanss v. Henderson, 1 East, 335. Bank of Bengal, 1 Moore, P. C. 150; See also Snook u. Davidson, 2 Campb. Dixon v. Stansfeld, 10 C. B. 398, 11 218 ; Foster v. Hoyt, 2 Johns. Ca. Eng. L. & Eq. 528 ; Leeds v. Marine 327. Ins. Co., 6 Wheat. 565 ; Moody v. Web- ' Mann v. Forrester, 4 Campb. 60; ster, 3 Pick. 424. CH. Vni.] OF AGENTS. 435 If a principal could sixe his insurers only by making an aban- donment, and sues not tliem but an agent by whose fault the insurance failed to be made, it seems that there must be an abandonment to him to convert a partial into a constructive total loss.^ An agent on commission, paying a loss guaranteed by him, may, it seems, sue the insurers in the name of the insured if the policy be payable only to him, or in his own name if the policy be made out to him.^ An agent may be liable to the insurers for the premium. But he can be liable for nothing more than his principal is or would be liable for, if there were no agency.^ Section V. — Of Voluntary Agents. There are three kinds of voluntary insurance agents : or, to express our meaning more accurately, three classes of persons have been called voluntary insurance agents. A. Those who, without authority or request, express or implied, and without payment made or promised in any way, voluntarily undertake to effect insurance, or do something in relation to a contract of insurance. B. Those who undertake to do this because they are so re- quested, but to whom no payment is made, or promised in any way. C. Those who are factors, or general agents, of, or have some other business relating to, the insured, by reason of which they effect insurance, or act for the insured in relation to it. Of the class C we have already said all that seems to be neces- sary, and shall confine our remarks to the other two classes. Of Class A. Any such contract, or act, by any agent of this class, may be ratified by the alleged principal, provided it purports to be made by him as agent, and provided the whole transaction is in good faith, and the ratification, as to time, manner, and all other circum- ' See 2 Duer on Insurance 326. ' See Shee u. Clarkson, 12 East, 507; ' See 2 Duer on Insurance 336. Phoenix Ins. Co. v. Fiquet, 7 Johns. 383. 436 THE LAW OF MARINE INSURANCE. [CH. VIII. stances, works no injustice to the insurers, and such a ratification accepts and adopts the whole contract with all its obligations as well as all its rights. This subject of ratification has been also considered. One question, however, is suggested by text-writers, although it has never been submitted to adjudication. It is this : If an agent exceeds his authority, and the principal is informed thereof, and does not with reasonable promptitude disclaim the act, he will, in general, be regarded as adopting and ratifying it. But if we suppose him to be perfectly silent, when informed by insurers of an insurance effected in this gratuitous and officious way, the question may arise. Is this an adoption or a rejection ? We apprehend that the circumstances of each case must aid in deciding this question : but, generally, we think that it should be regarded as a rejection, and should have the efiect of a declara- tion by the alleged principal that he would have nothing to do with it. If this be so, the insurers could not hold him for the premium ; nor could he, by any act, after once rejecting it by a sufficient silence, adopt and ratify it so as to derive any benefit from it, unless with the consent of the insurers. If such a contract or act be ratified, the self-created agent may claim of his principal all his reasonable and proper expenses in the matter ; and also a proper charge or commission for services which have thus been accepted, where the circumstances indicated that he did not consider himself as giving his assistance, but as acting as a business agent, for pay. It might be, however, that he rendered his aid only as a gift, and that it was accepted as such ; but we think that the burden of proof would lie on the acceptor to prove this. If the contract or act be not ratified, the agent has, of course, no claim whatever against the party whom, without his request, he sought to make his principal or employer_, but who did not accept this relation. Of Class B. Concerning a requested, but gratuitous or unremunerated agent, we have more difficulty. Doubtless the principal would now be held for the acts of such agent without any further ratification. And every agent, in our judgment, has (unless there be a waiver or a gift on his part) a claim, not only for his reasonable expenses, CH. Vm.] OF AGENTS. 437 but also for his reasonable compensation. But this question in- volves another, which seems to have been considered as of some importance. A contract or a transaction of this kind has been learnedly and elaborately considered in a case in New York.^ The law which has been inferred from it is, first, that a person so requested to effect insurance, and promising to do it, and having attempted or begun to do it, or having done something of or in or about the transaction, but not in such a way as to make a valid insurance, would be liable to the party making the request. And secondly, that if he is requested, but is neither paid nor promised anything, and agrees to do as requested, and without excuse does nothing whatever, he is not liable at all, for want of compensation, or of consideration for his promise. These conclusions have been generally assented to by those who have had occasion to speak of them. We think them, how- ever, open to some exception or qualification. The distinction between him who does nothing, or who begins but does not finish, and him who does in a wrong way what he does, rests upon no other foundation that we can discern than the difference between nonfeasance and misfeasance or malfeasance. For the first he is not answerable, either ex contractu or ex delicto ; because no action lies against him for simply leaving that undone which he was not bound to do ; while he who injures another, by any misfea- sance or malfeasance, is liable for the tort. We are not without me doubt, whether, under this distinction, there must not be more than a mere beginning, more than an incomplete doing of that which needed not to be done at all, and something which is enough more than this to constitute a positive tort, in order to make a wholly unremunerated agent liable.^ ' Thome v. Deas, 4 Johns. 84. afterwards, but never did it. The ves- ' ^ In Thome v. Deas, the plaintiffs sel was lost, uninsured, and an action were copartners, and joint owners of on the case was brought for the non- one half of a vessel, and the defendant feasance. The court held that the ao- was sole owner of the other half of the tion could not be maintained, Kent, same. On the day the vessel sailed on C. J., saying, " that by the common a voyage, one of the plaintiffs requested law, a mandatary, or one who under-* the defendant to effect insurance on the takes to do an act for another, without vessel ; this the defendant promised to reward, is only responsible when he do, and repeated the promise some days attempts to do it, and does it amiss. In 438 THE LAW OF MARINE INSURANCE. [cH. vm. But we have some difficulty with the second conclusion also. Chancellor Kent, throughout this case, seems to consider it as other words, he is responsible for a mis- feasance, but not for a nonfeasance, even though special damages are averred." In the second volume of his Commen- taries, p. 570, he refers to this case, and repeats as unquestionable law the rule there laid down. And yet, we should hesitate to admit that here was any such important difference in law (there is no such difference in fact) between not beginning to do what one has prom- ised, and " attempting "♦or barely be- ginning and leaving off at once. The cases cited in Thome v. Deas (which was most elaborately argued as well as decided) lead to no other conclusion than this : that he who, without consid- eration, pj'omises, and does nothing, " has merely told a falsehood " (says Kenyan, C. J., in Elsee v. Gatward, 5 T. R. 143), for which no action lies. But if he has actually done something, and so done it as to inflict an injury, he is liable for the misfeasance. But the very definition of misfeasance (to distinguish it from malfeasance on the one side, and nonfeasance on the other) is the doing of some lawful act in an unlawful way. See 2 Vin. Abr. 35, Doct. PI. 62. Now, the mere " attempting to do," to use the words of the court in Thorne v. Deas, does not seem to us enough to constitute, of itself, » actual misfeasance. In French v. Reed, 6 Binn. 308, the case of Thorne v. Deas (under the name of Thornbury v. Day) is referred to and approved ; but with- out any extended consideration of the reasons or authorities. In England, in •Wilkinson v. Coverdale, 1 Esp. 75, Erskine cited, from manuscript, Wal- lace V. Tellfair, wherein Buller, J., held, that, " where a party voluntarily under- took to procure insurance, and pro- ceeded to carry his undertaking into effect by getting a policy underwritten, but did it so negligently or unskilfully that the party could derive no advan- tage from it, he should be liable to an ^ action.'' And " Lord Kenyan acquiesced in the decision, and suffered the cause to proceed " ; but the plaintiff failed to prove any promise, and was nonsuited. In Balfe v. West, 13 C. B. 466, 22 Eng. L. & Eq. 506, a somewhat similar ques- tion was presented. The head-note is : " One who gratuitously accepts the office of steward of a horse-race is not responsible for a loss resulting to one who enters a horse for the race, from his mere nonfeasance in omitting to ap- point a judge, — at all events, unless it appears that he has actually entered upon the of duties the office," — the words we have italicized implying that ■ the reporter understood the court as leaving it in doubt whether the defend- ant would even then have been respon- sible. There was a general demurrer to the declaration, and it appeared on the argument that the declaration did not show that the defendants entered upon the execution of the office. Garth, for the plaintiffs, said : " It must be con- ceded, that, if this declaration does not show that the defendants had actually undertaken the office of stewards, the action cannot be maintained. In that respect, probably, the court will allow the plaintiff to amend." Jervis, C. J. : " You may amend on the usual terms." Cresswell, J. : " You must not assume that the court gives you the slightest hint that you can sustain your declara- tion with the proposed amendment." In the course of the trial, Jervis, C. J. CH. vm.] OF AGENTS. 439 arising under the law of mandate, and perhaps as under the law of bailment.' Certainly it was not a case of bailment, for nothing whatever was bailed, and nothing whatever was received ; nor was it a case of mandate, if a mandatary, as commonly defined, and by Kent himself, ^ is a gratuitous bailee, who is requested to do or have something done about the thing bailed. A mandate, however, may perhaps be only a voluntary commis- sion, offered and undertaken wholly without compensation ; and in this sense the defendant in Thorne v. Deas might be called a mandatary.^ The essential question upon which this case actually depended was this : Was the defendant a gratuitous accepter of a commis- said : " The rule is well put in Smith's Mercantile Law : ' If he [an unremu- nerated agent] do commence his task, and afterwards be guilty of misconduct in performing, he will, though unre- munerated, be liable for the damage so occasioned ; since, by entering upon the business, he has prevented the employ- ment of some better qualified person; and the detriment thus occasioned to his principal is a sufficient consideration to uphold an undertaking on his part to act with care and fidelity.'" The rea- son here given for the rule qualifies and construes it. One who promises and does nothing may cause as much dam- age and as effectually prevent the em- ployment as if he promises and barely begins to perform, or, in Kent's words, " attempts to do it," and stops at once ; but still he is not, and we think neither of them would be, liable. And it is to be remembered, that the decision in Thorne v. Deas, so far as it relates to what would make an agent to whom no compensation had been promised re- sponsible, is altogether obiter, as the whole pzse proceeds on the supposition that the defendant was wholly unre- muuerated, and rests on that ground. Upon the whole, an examination of all the authorities satisfies us that the true distinction is not between one who, without remuneration, after a promise to do, attempts or begins to do, and only begins or attempts to do, — but between him who, on the one hand, promises and either does nothing, or so little that it is only as injurious as noth- ing would be, and him, on the other hand, who, after such a promise, injures the party to whom the promise is given, either by doing a wrong thing, which would be malfeasance, or by doing a right thing in a wrongful and injurious way, which would be misfeasance. ' 2 Kenty 558. So it seems to be considered as belonging to the law of bailment in 1 Smith's Leading Cases 82, and cases gathered to illustrate Coggs v. Bernard. It has been held that the de- livery and acceptance of any letter, or parcel, or money, or note, or indeed of any chattel, makes a new case of it, and brings in a new consideration. Dumford v. Patterson, 7 Mart. La. 460; Shillabeer v. Glyn, 2 M. & W. 145 ; Kobinson v. Threadgill, 13 Ired. 39 ; Whitehead v. Greetham, 2 Bing. 464, 1 MoLellan & Y. 205, and 10 J. B. Moore, 183. ' Pothier de Mandatis, n. 1. 440 THE LAW OF MARINE INSURANCE. [CH. VIII. sion ? The court came to the conclusion, from the attendant cir- cumstances, that he had never intended to ask or receive a com- pensation, and would have had no right whatever to demand one, had he performed the service. And if this be assumed there can be no doubt whatever that the case was decided aright. The general rule, however, must be this : if A asks B to render him a service, and B agrees to do it, and does it, B thereby ac- quires a right to demand from A a reasonable compensation, which A is accordingly bound to pay. Ahd'this obligation of A to pay for the service when rendered is a good consideration for the prom- ise to render it. We doubt whether there be any exception to this rule. But there certainly may be a waiver of the right of the agent or ser- vant to his compensation, which may be express, or it may be implied from some special relation of the parties, or any circum- stances which indicate an agreement or understanding of the par- ties that there shall be no pay for the service. "We are, however, quite confident that this waiver cannot be always, or even generally, implied from the mere silence of the parties in relation to the compensation. We should say, therefore, that the general rule of law is, that one acting in regard to insurance transactions by the request of another acquired a right to compensation, as perfect as if he sti|>u- lated for pay and it were promised him. And that if he did the work well, or did it ill, or neglected to do it at all, his rights, and the rights of others in respect to him, would be much the same as if he were a common paid agent. CH. IX.] ACTION. 441 CHAPTER IX. ACTION. Section I. — Of the Form of the Action. Op the general principles of action on contracts we do not pro- pose to treat, but only of their application to policies of insurance and to questions arising out of the business of insurance. The form of the action is much modified in matoy of our States by modern codes of practice ; but wheresoever the common law re- mained in force, and actions are founded upon its rules, if the policy be sealed the action should be covenant or debt.^ A marine policy is not generally sealed now in England. In this country it is seldom, if ever, sealed. When not under . seal it is a simple contract, and assumpsit is the proper action.^ ^ The foUowiDg cases are instances •where covenant was brought on a sealed policy: Sullivan v. Mass. Mut. F. I. Co., 2 Mass. 318 ; Maryland Ins. Co. v. Graham, 3 Harris & J. 62. And there are many cases, some- of which are cited in the books as authorities on this point, where covenant has been brought, while it does not appear from the reports whether the policy was sealed or not ; as the following : Watson v. Ins. Co. of N. A., 1 Binn. 47 ; Sutron v. Mass. Mut. F. Ins. Co., 4 Mass. 330 ; Smith v. Universal Ins. Co., 6 Wheat. 176; Bal- timore Ins. Co. V. Taylor, 3 Harris & J. 198. In New York an early statute declared that policies executed in a cer- tain way, though not under seal, should have the effect of specialties ; and the parties were allowed to sue either in covenant or on the case. Ferriss v. N. A. F. Ins. Co., 1 Hill, N. Y. 71. If an action of debt is brought, the plaintiff may recover a less sum than that demanded in the writ when an en- tire sum is demanded, and it is shown by the counts to consist of several dis- tinct accounts, or where the precise sum demanded is diminished by extrinsic circumstances. Hughes u. Union Ins. Co., 8 Wheat. 294. To sustain an ac- tion of covenant on the new contract founded on an assignment of the policy, the assignment must be under seal. Bayle v. Willsborough Ins. Co., 3 Dutch. 163. ^ In Ludani v. American F. Ins. Co., 2 Whart. 167, the plaintiff was insured for one year in a fire policy under seal, which contained a clause that persons desirous of continuing their insurances might do so by a timely payment of the premium, without being subject to any charge for the policy. Accordingly the insurance had been annually renewed for several successive years, and these 442 THE LAW OF MARINE INSUKANCE. [CH. ES. If an action of any kind be brought upon a policy, and carried to judgment, we know not why all rights and remedies under this judgment are not the same as under any other. Section It. — Who can hring an Action on a Policy. One who is insured by name can always sue upon the policy. But in many of our marine policies, and perhaps in a large major- ity of them, he who is insured is not insured for his own exclusive benefit, nor perhaps for his direct benefit at all, but for the interest or benefit of other parties. "We have already seen that this is usually expressed by the phrase, " for whom it may concern," or " for account of ," or by other language of similar meaning and effect. In any such case the party whose name is in the renewals without seal had been indorsed on the policy with variations in the amount insured, and in the premium. The court held that these indorsements were not specialties, nor a part of the original specialty, but were at most only parol contracts ; and therefore covenant would not lie. The court said, however, that the plaintiflf might have demanded a policy in conformity with the clause above mentioned, and have maintained an action for breach in case he had been refused ; or he might, perhaps, have maintained assumpsit on the contract remaining in parole. Mut. Ins. Co. in Bait. Co. v. Deals, 18 Md. 26, was somewhat similar to the above. There was an original policy, under seal, against fire, on which there had been two indorsements, without seal, of additional insurance. There were three actions brought : one of covenant on the policy, and two of as- sumpsit on the indorsements ; and the case above quoted from 2 Wharton was cited as an authority for the form of the actions. In reference to this matter, the court say, per Dartol, J. : " There is nothing in the original covenant which continues it in force as a specialty, bind ing the company by subsequent indorse- ments of additional insurance. They are new distinct contracts by parole." In Marine Ins. Co. v. James Young, 1 Cranch, 332, thfe question of the kind of action on a sealed policy came squarely before the court. The defend- ant had been insured by the plaintifis on a sealed policy, and brought an ac- tion of assumpsit to recover the amount insured, in the Circuit Court of the District of Columbia. Judgment was given for the insured, whereupon the Insurance Co. obtained a writ of error assigning as one of the grounds of error that assumpsit had been brought on a sealed contract. The case went up to the Supreme Court, where this point was argued, and the judgment of the court was as follows : " The court re- versed the judgment, and ordered it to be arrested, because the action is a special action on the case on the policy, and the declaration shows that the pol- icy is a specialty. The court seemed to be of opinion that an action of cove- nant would lie upon it against the com- pany in their corporate name." CH. rx.] ACTION. 443 policy may bring an action in liis own name for tlie benefit of all who are concerned or interested ; ^ or the party who is actually ' This point was settled as early as 1815, in the case of Davis v. Boardman, 12 Mass. 80, which was an action of as- sumpsit brought by the plaintiff on a policy underwritten by the defendant. The policy stated that "Mr. Samuel Davis, or as agent, doth make insurance and cause to be insured, lost or not lost, the sum of three thousand dollars," &c. , It was objected by the defendant that the plaintiff having insured for himself, " or as agent," could not recover more than one half of the sum insured. The court, per Jackson, J., said : " The par- ties have agreed, in their statement of the case, that this insurance was in truth made for the use and' benefit of the plaintiff and Richardson ; and we s^e no difficulty in carrying that inten- tion into effect. It is an insurance of all the interest which the plaintiff and Richardson, or either of them, had in the property at risk to the extent of the sum insured by this policy. If this be not the meaning, we must suppose that the plaintiff, when procuring this insur- ance, did not know whether he wanted it for himself or for Richardson, although he knew that one or the other of them intended to be insured, and he was will- ing to become responsible for the pre- mium. So, as to the insurers, we must suppose 'that they were willing to insure this vessel and cargo either for the plaintiff or for Richardson ; but that they would not insure for both of them jointly. This is to suppose that both parties acted without motive, or in a manner wholly inconsistent with the usual course of such transactions It is therefore the opinion of the court, that the plaintiff is entitled to recover for a total loss on the cargo to the ex- tent of his own and Richardson's inter- est therein," &c. The same question came up in Ward v. Wood, 13 Mass. 539. The plaintiff caused to be insured for whom it might concern the sum of $5,000 on the ship Hyder^li, &c., and averred in his declaration that the insur- ance jvas intended to cover the interest of himself and C. S., both of whom were interested in the property. The action was brought by Ward alone ; and it was objected by the defendant that C. S. should have been joined in the action. But the objection was over- ruled, and the court said, per Parker, C. J. : " The plaintiff caused the insur- ance for whom it might concern, and the interest of C. S. was known at the time to the underwriters. It is in con- formity with the contract that the plain- tiff should maintain the action in his own name ; and it is agreeable to usage that he should do so on policies in this form. The principle on which this ob- jection is overruled is settled in the case of Davis v. Boardman," supra. The same principle is acknowledged in Copeland v. Mercantile Ins. Co., 6 Pick. 198 ; and again in 1856, in Pro- tective Ins. Co. V. James Wilson & Co., 6 Ohio State, 553. Wilson & Co. were insurance brokers, who had effected in- surance on goods for other parties, and brought an action in their own names to recover for a loss. The goods were shipped by a canal-boat, and were dam- aged in consequence of a defect in one of the decks. Shaw & Co. were the shippers of the goods, and Samuel Kuhn and others were the consignees and parties in interest. Wilson & Co., the plaintiffs, in the court below recov- ered judgment, which was affirmed on 444' THE LAW OF MARINE INSURANCE. [CH. IX. insured under such a clause, the policy being made for his benefit, may, although he is not named in the policy, bring an action upon it in his own name.^ appeal to the District Court ; where- upon the insurance company obtained a writ of error to the Supreme Court, assigning as their grounds of error, first, " that neither the plaintiffs below nor Shaw & Co. had an insurable inter- est in the loss " ; and second, ^' that this particular insurance was not made for the parties for whose use the plain- tiffs sued." The court say, per Bowen, J. : " The parties who sued in this case were nominal plaintiffs only, .... they were the agents of the several owners of the cargo in perfecting this insurance Shaw & Co. ac- quired no insurable interest themselves, nor any right to sue. But Wilson & Co. occupy quite a different relation to the consignees. They procured and held in their own names, but for those whom it might concern, the policy and its indorsement. An interest covered by the insurance was thus created, which it is proper for them to enforce, and which is of such a nature as author- ized the suit to be brought and carried on in their names for the use of those who have sustained the loss." And the judgments of the courts below were af- firmed. See also Jefferson Ins. Co. v. Cotheal, 7 Wend. 82 ; Jackson v. Farm- ers' Mut. F. I. Co., 5 Gray, 52; Munson V. N. E. Mut. Ins. Co., 4 Mass. 88. Under a policy of insurance to the charterers of a vessel " for whom it con- cerns," " on fi'eight on board," the char- terers may recover the amount of the money payable under the charter-party at the termination of the second voyage, and which they have agreed to get in- sured, although the vessel is totally lost at the outward port. SiUoway v. Nep- tune Ins. Co., 12 Gray, 73. If the loss be paid to the party inr sured, but not interested, as he re- covered for the benefit of the party interested, so the latter has an action for money had and received against the former to recover the amount paid. See burrows v. Turner, 24 Wend. 276. In this case Burrows, who together with Turner owned a vessel, had her in- sured. The words of the policy were as follows : " Silas E. Burrows, on ac- count of , do make insurance," &c. The vessel was lost; and, Burrows having recovered the amount insured on her, Turner brought an action for money had and received, and recovered judgment. Burrows excepted, and on error took the case to the Supreqie Court, where the judgment of the court below was affirmed. See also Eoberts V. Ogilby, 9 Rice, Exch. 269. If the action on a policy be brought in the name of the agent who procured the insurance, the declaration should state who were the real parties in interest at the time the policy was made and at the time of the loss. Eider v. Ocean Ins. Co., 20 Pick. 259. Under a policy insuring A, for whom it may concern, payable to B (the claim of B on A having been satisfied before the action was brought), the rights and duties of the parties were held to be the same as if the clause for the payment of the loss to B had not been in the policy. Eider V. Ocean Ins. Co., 20 Pick. 259. ^ This is only the application to policies of insurance of a general prin- ciple in the law of contracts, that,- when a contract is made for the benefit of a third person, we may maintain an ac- tion upon it. 3 Bos. & Pul. 149, note ; Button V. Poole, 2 Living, 210 ; Hall v. CH. IX.j ACTION. »445 The technical rules of the common law would not permit a party thus interested, but not named, to bring an action if the policy Marston, 17 Mass. 575. And Mr. Justice Bayley, in Sargent v. Morris, 3 Barn. & Aid. 276, says: "You may bring your action eitlier in the name of the party by whom the contract was made, or of the party for whom the contract was made. In policies of in- surance, it is a common practice to bring your action either in the name of the agent or principal." The point was expressly decided in Farrow v. Com. Ins. Co., 18 Pick. 53, which was an ac- tion brought by the owner of a vessel to recover on a policy in which the de- fendants insured " C. & L. for the owners, payable to C. & L." The ac- tion was brought with the consent of C. and L., who certified that they had no interest in the case. .The defendants insisted that there was an express con- tract to pay to C. & L., which could not be varied without the consent of both parties. In giving the opinion of the court, Putnam, J., says : " If the ac- tion were brought in the names of C. & L., and they should recover judg- ment and execution, the money would be payable to them, and it would be for the use of the owners And if these words were not inserted in the policy, it seems to be conceded that this action might well be maintained in the names of the owners There are obvious reasons for the introduction of the clause in question. The insurance brokers might desire to have the loss paid to them to indemnify them for any advances for premium or otherwise which they might have against the owners; and the insurance company might desire to have that clause to enable them to set off any legal claim which they might have against the in- surance brokers. And it would au- thorize them to pay the loss to the brokers, without any power of attorney from the owners. But in the case at bar these reasons do not apply The insurance brokers consent [to the plaintiffs bringing the action], and say that tiiey have nothing to do with the matter; and the defendants do not show that they have any matter of set- off against the brokers.'' And the court unanimously gave judgment for the plaintiffs. We have cited this case at length, because it not only supports the doctrine of the text, but goes so much further. The doctrine that the party for whose benefit the insurance is made may bring an action in his own name is also established in the earlier case of Ruan V. Gardner (1804), 1 Wash. C. C. 145. In this case insurance was effected by one Sparks, " in the name of Henry Sparks and all others inter- ested." The plaintiff, who was the owner, introduced Sparks as a witness, who was objected to by the defendants on the ground of interest ; but being examined on the voir dire, he denied any interest in the event of the cause. Then it was objected that Ruan could not recover on a policy made in the name of Sparks. But the court said that there was no weight in the objec- tion ; for " Ruan is not only the nomi- nal, but substantial and real plaintiff'; it being clearly proved that Sparks effected the policy upon property be- longing to him and at his request." In Maryland Ins. Co. v. Graham, 3 Har. & J. 62, the policy stated that H. & W. Young, for account of T. G. (the de- fendant), did make insurance, and cause themselves and their and every of them 446 » THE LAW OF MAEINE INSURANCE. [CH. IX. were under seal. In a recent case in England, however, the right to bring the actionj by one interested and not named, is extended to sealed policies.^ The reasoning by which this conclusion is reached has the aspect of an ingenious effort to overcome a merely technical difficulty. Perhaps a similar conclusion might now be reached in this country, if, contrary to the usual practice, such a policy was sealed ; it has, however, been held, here and in England, that if the policy be under seal, the action of covenant upon it must be in the name used in the policy, although for the benefit of the parties interested.^ The action is generally brought in this to be insured, &c. Graham alone brought the action, which was covenant, the policy being under seal, anB re- covered ; and on appeal, in which the objection that Graham was not a party to the specialty, and therefore could not sue upon it, was strongly insisted on, the judgment of the lower court was affirmed. See also Skinner v. Stocks, 4 B. & Aid. 437 ; Felton v. Dickinson, 10 Mass. 287. ^ Sunderland Mar. Ins. Co. v. Kear- ney and Another, 16 L. B. 925, 6 Eng. L. &E. 312. In this case the insurance company had issued a sealed policy, in- suring Kearney, who was stated by the policy to have " represented to the company that he was interested in or duly authorized as owner, agent, or oth- erwise to make the insurance." Kear- ney and Woonan, both of whom were interested, brought an action of debt; and it was objected that Woonan, not being named in the policy, could not join as plaintiff. To this Lord Campbell, when the case went up on error, said : " It seems to us that the insurers cove- nanted to pay to the persons who were interested in that subject-matter, and for whom the policy was effected; cerium est quod cerium, reddi potest. A designation which cannot be mistaken is, for this purpose, as good as the act- ual name of the individual. The com- pany engaged to make good all losses and damages which • might happen to the subject-matter of the said policy. To whom were they to make good ? Necessarily to the parties interested in the subject-matter who were damnified by the loss. These parties were the assured, and accordingly the stipulations by the company aje with the assured. And he goes on to say : " There are no reported decisions on this point, be- cause the objection has never before been taken Upon [sealed] poli- cies effected by brokers many actions have been brought in the names of the parties interested, without any objection being made or thought of respecting the right of the parties interested to sue." The judgment was for the insured. See also Maryland Ins. Co. v. Graham, 3 Harris & J. 62, cited supra, p. 443, u. 1. ' In Gilby v. Copley, 3 Lev. 138, it was held, that "where a deed is be- tween parties, then no one that is a stranger can tfike advantage thereof by way of action." And in Offley v. Waide, 1 Lev. 235, it was held, that on an ob- ligation to A to the use of B, B cannot sue, for he is no party to the deed ; nor can he release the obligation. See also Pigottu. Thompson, 3 Bos. & P. 147 ; American Ins. Co. v. Insley, 7 Pa. St. 223, citedjDos<,p. 446, n.; De BoUe v. Pa. Ins. Co., 4 Whart. 68, cited below, same note. CH. IX.] ACTION. 447 country in the name of the person procuring the insurance, and who is named as insured, unless the others who are intending to be insured are also named. ^ There are cases in Pennsylvania to the effect that no action can be maintained unless it be brought in the name of the party who is named in the policy. We think the prevailing rules are as we have above stated.'^ ^ Davis V. Boardman, 12 Meiss. 80; Ward V. Wood, 13 Mass. 539 ; Reed v. Pacific Ins. Co., 1 Met. 166 ; American Ins. Co. V. Insley, 7 Pa. 223 ; Munson V. New England M. Ins. Co., 4 Mass. 88 ; Kemble v. Rhinelander, 3 Johns. Ca. 130 ; Goodall v. New England Ins. Co., 25 N. H. 169 (5 Foster) ; Barnes V. Union Ins. Co., 45 N. H. 21. 2 De Bolle v. Pa. Ins. Co., 4 Whar- ton, 68. This was an action of covenant on a sealed policy of insurance, made between the defendants of the one part, and Joseph Fleming, " as well in his own name as for and in the names of all and every other person and persons to whom the property thereby insured did, might, or should appertain," of the other part. It was objected that on such a policy only Joseph Fleming, who alone was named as a party, could bring the action ; and with regard to this point the court say : " A covenant being an agreement, it is plain that in legal as also in common parlance there must be at least two parties to it. And it would seem to be equally plain that no cove- nant can be deemed perfect, unless the names of the parties are set forth or made known by it in some way ; for without this it does not appear that there are parties to it ; and without parties it is obvious there can be no agreement or covenant. Nor can a person be made a party to a mere personal covenant in a deed, who does not appear to be such, or whose name does not appear in any way on the face of it by averment, so as to enable him to maintain an action therein in his own name. " And they go on to say that the reason why the party in interest may bring assumpsit on an unsealed policy is, that not only has the consideration, viz. the premium, moved from him, but because he is the party actually injured by the loss. " But in regard to an action of covenant which is founded ttpon a deed, the moving or original cause for executing it is not looked to for the purpose of maintaining the action, because the sealing and de- livering the deed is a sufficient con- sideration for that, and renders it binding upon the covenanter to the covenantee alone, though the considera- tion which actually induced the making of the covenant should appear in the deed to have come from a third person ; and whether the covenant or obligation created thereby appears to be for the benefit of the covenanter or a third person, the action must be brought in the name of the covenantee. Fleming being the only covenantee named in the deed here, we therefore think that no action can be supported upon it against the defendants, unless it be brought in his name." In American Ins. Co. V. Insley, 7 Pa. State, 222, an action was brought on a sealed policy by the parties named as insured, who recovered. And with regard to the point now under consideration, the court say : " The policy is joint, and the suit 448 THE LAW OF MAKINE INSURANCE. [CH. IX. Sometimes, while one party is mentioned as insured, it is pro- vided in the policy that the loss is payable to another. Here it must be certain that this other may sue in his own name.-' is consequently joint, in which the plaintiffs are the legal party, and con- sequently entitled for whomsoever it may concern, without setting out the equitable and derivative interests, which are no part of the title. Even as trustees, they could recover by showing a fiduciary interest ; for, as a suit on a sealed policy must be brought in the name of the covenantee, if the plaintiffs could not recover the other parties would be without remedy." By comparing the opinions in these two Pennsylvania cases with that of Lord Campbell in Sunderland Mar. Ins. Co. v. Kearney, 16 Q. B. 925, cited ante p. 445, n. 1, it will be seen that they cannot be reconciled. Shep. Touch. 369, is an authority against Lord Campbell; for he says: "If an ob- ligation be made to J. D. to the use of I. S., this is a good obhgation for I. S. in equity ; and some have said he may release it ; but this is much to be doubted, for it is certain I. S. cannot sue the obligor in his own name ; but when he hath cause of suit, he may compel J. D. in chancery to sue the obligor." ' Motley V. Manuf Ins. Co., 29 Me. 337, was an action of assumpsit on a policy of insurance, procured by lessees of mortgaged property according to a covenant in their lease to keep the property fully insured. In the policy was a stipulation that, in case of loss, the same should be paid to Motley, the mortgagee. During the life of the policy the buildings were destroyed by fire ; but, after their destruction, the land was a sufficient security for the mortgage debt. One of the grounds of defence was that the promise was not made to the plaintiff, nor expressed to be for the benefit of any but the persons named. The court say: "It is sound doctrine, applicable to simple contracts generally, and the appropriate and well- established doctrine of contracts of in- surance, that, if one make a promise to another, for the benefit of a third, the latter can maintain an action upon it in his own name. Bringing the action is a sufiicient ratification by the plaintiff of the acts of the lessees, in procuring the insurance for his benefit. A mort- gagee is entitled to recover the full amount of the insurance in case of loss, if such sum does not exceed the amount due and secured by the mortgage. Upon these principles the plaintiff is entitled to recover." In Rider v. Ocean Ins. Co., 20 Pick. 259, the defendants in- sured the plaintiff, loss payable to W. Curtis. We find in the report the fol- lowing dictum by Putnam, J. : The plaintiff "had^a right to enforce the policy in his own name, for the benefit of whomsoever it concerned ; or the action might have been brought in the name of the cestui que trust." And the doctrine is admitted in Farrow v. Com- monwealth Ins. Co., 18 Pick. 53. Myers V. Keystone Mut. Life Ins. Co., 27 Pa. St. 268, seems to favor the same view, but it does not appear from the report how the policy wds worded. The policy was on the life of one Myers for the benefit of his wife, who was the plaintiff in this action. The decision rested on other grounds; but with reference to ' this point, Lowrie, J., says: "Though we incline to think that this action is rightly brought in the name of the per- son for whose benefit the insurance was effected, yet this is not material." Hen- CH. IX.] ACTION. 449 Sometimes, when one party is insured by the policy, an indorse- ment on the policy states for whom the insvirance is made ; and in one case, in which this indorsement stated that the insurance was for the person mentioned, and two others, each one third, payable to the person mentioned, it was held that an action might be brought on the policy by the three persons jointly. ^ In some cases it would seem that the assent of the persons named as insured, as those to whom the loss is payable, was neces- sary to enable the owners of the property for whom the insurance was made to bring an action in their own names ; ^ and this assent was required from the person named as the party to whom the loss was payable, to enable the party insured to bring an action in his own name.^ ahaw V. Mut. Safety Ins. Co., 2 Blatchf. 99. But in the case of mutual companies, where the insured is a menjber, the action should be brought in his name, and not in that of the party to whom the loss is payable. Nevins v. Rocking- ham Mut. F. Ins. Co., 25 W. H. 22; Blanchard v. Atlantic Mut. F. Ins. Co., 33 N. H. 9. ' Williams et al. v. Ocean Ins. Co., 2 Met. 303. The court, per WUde, J., say : " The plaintiifs were the party in- sured, and the defendants' promise must be considered as made to them, although the loss was payable to Bridge. But he had no interest in the policy, except as part owner ; and by the indorsement on the policy it is expressly stipulated that the insurance should attach for the plaintiffs, one third each, payable to B. But if this indorsement had not been made, we think it quite clear that this action might be well maintained. B. was insured 'for whom it may con- cern ' ; and on such a policy unques- tionably the. owners of the property insured may maintain an action in their own names to recover a loss B, .n procuring the policy, acted as prin- VOL. II. 29 cipal as to his own share of the vessel, and as agent of the other owners as to their shares. The contract, therefore, is to be construed as a contract between the defendants and the owners of the ^ This was evidently the opinion of Putnam^ J., in Farrow v. Commonwealth Ins. Co., 18 Pick. 53 (cited fully supra, p.443,n. 1), though the point was not ex- pressly decided. If the reason usually assigned for having the policy made in the name of the agent, or the loss made payable to him, — viz. that the agent may thus be secured for any advances he may have made, — be the true one, as is asserted in the above cEise, then, in order that the precaution may be effect- ual, the agent must have the option of giving or withholding his consent to the action. See Hurlbert v. Pacific Ins. Co., 2 Sumn. 471. ^ This seems evident ; for in such cases the loss is made payable to an- other than the owner, either as security or indemnity, which he cannot be pre- sumed to have relinquished. Farrow V. Commonwealth Ins. Co., 18 Pick. 53; and see Motley v. Manuf. Ins. Co., 29 Me. 337. In Jackson v. Tanners' Mut. F. 450 THE LAW OF MARINE INSURANCE. [CH. IX. If persons are jointly insured, the action must be in their names jointly.! It was, however, held in New York in a fire policy, but Ins. Co., 5 Gray, 52, the defendanta insured the plaintift's property, with the provision, " in case of loss by fire, pay- able to S. L., mortgagee, to amount of $ 400. The plaintiff brought the action ■with the assent of the mortgagee, and it was objected by the defendants that it should have been in the name of the mortgagee. This objection was over- ruled at the trial, and afterwards on exceptions' by the Supreme Court, — Shaw, C. J., saying: "Under such a contract as this, where the money in whole or in part is made payable to a mortgagee in case of loss, the original assured does not cease to be a party to the contract, and to have an interest in the insurance. He has an interest to have the money paid to his mortgagee, because it extinguishes his own debt pro lanto, and inures to his benefit as if paid to himself We think, therefore, that, with the knowledge and eissent of such mortgagee, the action may be brought and maintained by the original assured ; but with this difference : if such authority and assent were given before the commencement of the action, the plaintiff will be entitled to recover his costs ; but if they were not given till after the suit was brought, the plaintiff will not be entitled to recover costs of the suit. In Eunis v. Harmony F. Ins. Co., 3 Bosw. 516, which was an action to recover on a policy insuring the plaintiff, " loss, if any, payable to E. B. Graves, mortgagee," the court say : "There is no averment that Graves has been paid It is plain then that Ennia alone cannot recover the amount of the loss so long as Graves, the mortgagee, remains unpaid. Graves has an absolute right to recover the amount of the loss; and payment to Ennis, without the assent of Graves, would not discharge the liability of the company to the mortgagee. So long as the mortgage remains unsatisfied, Graves is a necessary party to the ac- tion^' ' This was distinctly decided in Blanchard v. Dyer, 21 Me. 111. • This was assumpsit on a policy of insurance whereby several underwriters insured four persons, one of whom was the plaintiff, on a certain schooner. The action was brought in the name of Blanchard alone, to recover for his share of the loss. At the trial before the District Court the judge directed a nonsuit, on the ground that other per- sons should have been Joined as plain- tiffs ; and at a subsequent argument on exceptions before the Supreme Court, the nonsuit was confirmed. The court say : " If the same principles apply alike to this and ordinary contracts, the action cannot be maintained in the name of one only of the assured. Numerous cases have been cited, in order to show that policies of insurance are exceptions to the general rule in this respect ; but we do not perceive an analogy between those cases and the one at bar. It is true, policies are in- formal contracts, and are to be liberally construed ; but we cannot believe that established rules are to be broken down, unless reason and necessity justify it. Nothing is here presented which shows a severance of the contract in any man- ner ; and' it is not pretended that any change has taken place in -the interests of the assured since the policy was made. The policy does not purport to be to the plaintiff or any other as agent CH. IX.] ACTION. 451 for reasons that would apply equally to a marine policy, that where two persons are jointly interested in, and jointly insured upon, certain property, and one conveys his interest therein to the other before the loss, they cannot maintain an action jointly for the loss ; ^ and we have authorities that the assignee must bring his action in his own name, no joint action being maintainable.^ In a case where two persons were insured, and the policy de- clared that it was for account of a third person, and that " them- selves, and their, and every one of them, were insured," it was held that this third person might bring an action in his own name.* of the owners ; but it runs to all, eact being expressly named." And in con- clusion : " But we can find no case where the general principle, — that the suit shall be between the parties to the contract, according to its terms, when all are interested, and there has been no severance, — so essential to prevent litigation, has been violated." Williams v. Ocean Ins. Co., 2 Met. 303, was an action on a policy which insured S. G. Bridge, " for whom it may concern " ; on which policy there was the following indorsement : "It is under- stood that the within insurance attaches for S. G. Bridge, G. Adams, and I. H. Williams, one third each, payable to S. G. Bridge." The action was brought in the names of all the insured jointly, and was held to have been properly brought. ' Murdock v. Chenango Co. Mut. Ins. Co., 2 Comst. 210. ' In Ferriss & Eaton v. N. A. F. Ins. Co., 1 Hill (N. Y.) 71, the plaintiffs had been insured jointly ; but Eaton had subsequently assigned to Ferriss all interest in the policy and the subject of the policy. The act incorporating the insurance company settled this question in favor of the defendant ; but the court seemed to think that, apart from this act, the joinder of Eaton was bad. See also Howard and Ryckman v. Albany Ins. Co., 3 Denio, 301, in which Ryck- man had assigned his interest in the property insured before the loss hap- pened. It was held, Branson, C. J., dissenting, that the plaintiffs could not recover, because they had no joint in- terest in the property at the time of the loss. And the same doctrine was held in Murdock v. Chenango Mut. Ins. Co., 2 Comst. 210, and the above case rec- ognized as binding. In this case the question was, whether, if two tenants in common were insured, but before loss one of them conveyed all his interest in the premises to the other, they could maintain a joint action on the policy ; and it was held that they could not. The court say : " In general, the action on a contract must be brought in the name of the party in whom the legal interest in such contract is vested. The moment that Garratt sold all his inter- est in the property insured, he ceased to have any interest in the contract of insurance." See Work v. Mer. & Far. Mut. F. Ins. Co., 11 Cush. 271. But Hobbs V. Memphis Ins. Co., 1 Sueed, 444, is a case directly contrary to all the above-cited authorities, with which the court expressly say that they do not concur. ' Maryland Ins. Co. v. Graham, 3 Harris & J. 62. 452 THE LAW OF MARINE INSURANCE. [CH. IX. No person can bring an action under a policy, unless he is actu- ally interested in the property insured, and also interested in the policy itself.^ Policies are often so made as to cover interests ' There must be an interest in the property insured. See Routh v. Thomp- son, 11 East, 428, where a policy effected by captors on a captured ship was held to give them no right of action, because the captured property belongs to the government. Haynes v. Rowe, 40 Me. 181, was an action by a ship-owner to recovA- money which had been paid by an insurance company to the defendants. The insurance had been effected by the master of the vessel, and was alleged by the defendants to have been pro- cured solely for his benefit. The court say : " The language ' on account of whom it may concern,' or ' for the bene- fit of the captain and owners,' does not necessarily secure any benefit to the captain or the owners of the schooner. The person who has an interest in the property insured cannot for that reason alone be entitled to the amount covered by the policy in case of a loss. The rifht to recover in such event must de- pend upon the interest acquired as a party to the contract." Where a factor had effected insurance on cotton con- signed to him which the owner had ordered not to be insured, it was held that he could not recover on the policy. Lambeth v. Western M. & F. Ins. Co., 11 Rob. La. 82. And in Frierson v. Brenham, 5 La. Ann. 540, the court say that it is " a well-settled principle in the law of insurance, that an insur- ance for account of whom it may con- cern is not only to be limited to those who have an insurable interest in the property, and may be lawfully insured, but must be also restricted to those for whom the insurance was in fact in- tended, and by whom it was previously directed or authorized, or subsequently in due season adopted." In Newson's Adm'r v. Douglas, 7 Harris & J. 417, the court say, per Buchanan, C. J. (p. 450) : " But ' whom it may concern ' is a technical phrase, common to policies of insurance, and is understood to mean, not any and every body who may chance to have an interest in the thing insured, but such ojjtly as are in the contempla- tion of the contract." And again (p. 452) : " For no one can, by subsequent adoption, avail himself of such a policy, who was not at the time in the con- templation of the party procuring the insurance, and for whose benefit it was not intended, notwithstanding any in- terest he may have had in the thing insured." In Seamans v. Loring, 1 Mass. 127, one of the questions was, Where did the policy attach ? And Mr. Justice Story declares the law to be, that " the assured must have a sub- sisting interest at the time when the policy by its terms would attach, other- wise it will be void for want of- an in- surable interest. Such an interest, subsequently acquired, would not " avail. See also Birdsey v. City F. Ins. Co., 26 Conn. 165 ; Peabody v. Washington County M. Ins. Co., 20 Barb. 339; Alliance Mar. Ins. Co. v. La. State Ins. Co., 8 La. 1, 11 ; Protective Ins. Co. v. Wilson, 6 Ohio St. 553 ; Crosby v. N. Y. Mut. Ins. Co., 5 Bosw. 369. In Saddlers' Co. v. Badcock, 2 Atk. 553, Lord Hardwicke says: "lam of opinion, it is necessary the party insured should have an interest or property at the time of the insuring, and at the time the fire happens," in order to bring an action. And the interest must be averred in the CH. IX.] ACTION. 453 acqiiired subsequently to the execution of the contract. So that the same policy may cover many successive cargoes in the course of a trading voyage, and save to the owners the trouble of effect- ing a new insurance, or making a new indorsement for each new cargo. Whether the same principle applies to the changing of ownership of vessels is a different question ; though it has been said that " there is strong color for the doctrine that the party intended to be insured will be protected if he had an interest at the time of the loss, without any express stipulation to that effect, although he had no interest at the commencement of the risk." ^ Still the weight of authority requires an interest both at the beginning of the risk and at the time of the loss.^ However this may be, it has been held that it is competent for the parties to a policy so to contract that, under the words " for whom it may con- cern," the interest of every successive owner of the property may be covered ; and whoever may be the owner at the time of the loss be entitled to his action on the policy. Hence, in an action on such a policy, the declaration need not aver that the plaintiff was interested at the time the contract was made or at the com- mencement of the risk, but only that he was interested at the time of the loss.^ The clause " for whom it may concern " (or any similar phrase) lets in evidence to prove whom it did concern, and they only have an interest in the policy ; and they may bring an action upon it.* declara'tion. Fowler v. N. Y. Indem. ' Henshaw v. Mut. Safety Ins. Co., Ins. Co., 26 N. Y. 422. This was a 2 Blatchf. 99. complaint by tlie assignee of a policy. * A ship was insured " on account of The complaint averred the assignment ," and the person whose interest of the policy with the consent of the was intended to be covered brought an insurers, &c., but did not aver any in- action, proved his interest, and re- terest of the plaintiff or his assignor in covered. The court say : " It is the the subject insured ; for which defect it constant practice to show by proof was held bad on general demurrer. See aliunde the real owner, when the insur- Rollins V. Columbian M. F. Ins. Co., 6 ance is general for whom it may con- Foster, 200 ; Paradise v. Sun Mut. Ins. cern. The Uank here is equivalent." Co., 6 La. Ann. 596. Burrows v. Turner, 24 Wend. 276. In ' Henshaw v. Mut. Safety Ins. Co., Pacific Ins. Co. v. Catlett, 4 Wend. 75, 2 Blatchf. 99. the words of the policy were : " L. B. ' Seamans v. Loring, 1 Mass. 127 ; & Co., on account of owners, do make Hancox V. Fishing Ins. Co., 9 Sumn. insurance," &c. The owners were ad- 132, 140; Rider v. Ocean Ins. Co., 20 mitted to prove their interest; and the Pick. 259. court say : " It being an open policy, 454 THE LAW OF MARINE INSURANCE. [CH. IX. But one bringing an action on a policy may recover for all of his interests which were intended to be insured, although they were the insured are bound to prove that they were owners, and had an interest in the cargo." And at a previous argu- ment of the same case, 1 Wend. 561, the court uses the following language : " Nor if it be admissible to show by ex- trinsic evidence that the term ' cargo,' as used in a policy, means not the whole cargo, but an undivided share or inter- est therein, why is it not competent to show, by the same species of evidence, that the word ' owners ' in a policy was not intended to embrace all the owners, but such of them only as caused the insurance to be effected ? The evi- dence contradicts the policy as much in one case as in the other. But in truth it is no contradiction : it is only reducing to certainty that which was left uncer- tain by the general phraseology of the policy." And the judgment of both courts was that the evidence ought to be admitted. See also the same case, 1 Paine, C. C. 594, where the court, per Thompson, J., says, with reference to the phrase " for account of owners " : " It must of course be open to explana- tion by extrinsic evidence." In Shaw- mut Sugar Refining Co. v. Hampden Mut. Ins. Co., 12 Gray, 540, a policy was issued insuring " K. and others." The plaintiff corporation, of which K. was a member, claimed to be the party in interest. At the trial a formal ver- dict was taken, by the direction of the court,* for the plaintiffs, to the amount of the premium only. To this the plaintiffs excepted, on the ground that upon the evidence produced the jury could properly find that they were the parties in interest. And the court say : " Upon examination of the policy, it becomes at once apparent that, while its objects and purposes are distinctly developed, and all the stipulations con- tained in it are expressed in clear and intelligible terms, it is necessary to re- sort to some external proof to ascertain who are the contracting parties. Words are used in this contract which may be applied with equal propriety to many different persons. It is an ambiguity' which needs explanation, and which the law allows to be explained. For the purpose of determining who takes, or is entitled to take, an interest in any written instrument, every material fact that will enable the court to identify the person mentioned in it is admissible in evidence. The words " P. E. King- man and others," in the policy, are ob- viously indefinite and uncertain. But this is no reason why the real party in interest, whoever he may be, should lose his rights under the contract ; and the law accordingly allows him to re- move this uncertainty by any legal and competent proof" And the Supreme Court sustained the exceptions. In Sunderland Mar. Ins. Co. v. Kearney, 6 Eng. L. & Eq. 312, 16 Q. B. 925, the phrase was that the insured was " inter- ested in, or duly authorized, as owner, agent, or otherwise." In Sanders v. Hillsborough Ins. Co., 44 N. H. 238, the declaration recited a policy made with S. C. M. and B. under the name of S. and others, and the policy offered in evidence was with S. and others, with- out mentioning the names of C. M. and B. But evidence was introduced tend- ing to show that C. M. and B. were jointly interested "with S. in the prop- erty insj^red, and were the persons in- tended by the term " others." A ver- dict was given for the plaintiff ; and on CH. IX.] ACTION. 455 different in their character.^ A policy " for has been exception there was held to be no vari- ance, and the plaintiff recovered. But the authorities on this point are no less numerous than unanimous. See the following : Waters v. Monarch L. & F. Ins. Co., 5 Ellis & B. 870, 34 Eng. L. & Eq. 116 ; Dunton v. Sun Ins. Co., 12 La. Ann. 486. Augusta Ins. Co. v. Abbott, 12 Md. 348, 372; Newson's Adm'r v. Douglas, 7 Harris & J. 417, 450, 8 T. R. 13 ; Frierson v. Brenham, 5 La. Ann. 540 ; Lee v. Mass. F. & M. Ins. Co., 6 Mass. 208 ; Finney v. Fairhaven Ins. Co., 5 Met. 192; Haynes v. Rowe, 40 Me. 181 ; Crosby v. N. Y. Mut. Ins. Co., 5 Bosw. 369 ; Walsh v. Washington M. Ins. Co., 32 JSr. Y. 427. ' Such seems to be the doctrine laid down in Pacific Ins. Co. v. Catlett, 4 Wend. 75, per Walworth, Chancellor : " If the policy is in behalf of the owners, no other person than the owner can re- cover, although he may have an interest in the subject by lien, respondentia, or otherwise." In Carruthers v. Sheddon, 6 Taunt. 14, the plaintiff as agent had effected insurance for the firm of D. & Co. It appeared in evidence that, be- sides the firm, several other parties were associated with them in the adventure ; that D. & Co. were interested in seven sixteenths of the' adventure, and besides had an interest in the whole as con- signees. Oibhs, C. J., thought that, " if the insurance was intended to be on the interest of D. & Co. only, they had an insurable interest upon which they might recover under this policy beyond their seven-sixteenths part, to the amount of all the advances they had made for the benefit of the other partners, and for which they had a lien on the cargo ; and that, as consignees of the cargo, they had an insurable interest to the whole amount, for that a con- signee may insure as well as a princi- pal." The jury found that by the words " D. & Co." all the parties con- cerned in the adventure were intended, and found a verdict for the plaintiffs for the whole amount insured. Finally, after an argument to enter a nonsuit, the court " was unanimous that D. & Co. might protect all their species of inter- est under one policy, and that it was unnecessary to express in the policy the nature of the several interests which they possessed, nor were they bound to make any election." And the court all agreed that the verdict was right. In Oliver V. Green, 3 Mass. 133, the plain- tiff owned one half of the vessel in- sured, and had charteted the other half for eighteen months, agreeing to pay to the other part owner $ 1,800 if the ves- sel were lost during that time. The plaintiff had procured insurance to the amount of $ 3,000 on the vessel. The defendant objected that the plaintiff could recover only one haii of the sum insured. But the court said, per Par- sons, C. J. ; " By virtue of the contract [of charter] the plaintiff had a special property in the chartered moiety, which was at his risk during the term. The contract was fair and legal, and the plaintiff might indemnify himself against the. loss by causing himself to be insured. When the schooner was lost, he lost the whole of her ; of one moiety he was the absolute owner, and of the other he was the special owner, being liable to pay for her at an agreed price. We are therefore of opinion that the plaintiff is entitled to recover of the assurers the sum insured on the vessel." In Millau- den V. Atlantic Ins. Co., 8 La. 557, where the policy was against loss by 456 THK LAW OF MARINE INSURANCE. [CH. IX. held to mean the same thing as a policy " for whom it may con- cern." ^ Where more than one party is insured by a policy, and an ac- tion is brought in the name of the assured, for the benefit of all interested, and one or more of them withdraw his or their author- ity to prosecute the suit, it may then be carried on for the benefit of those who authorize it.^ And we should say generally, that where a policy is effected for more than one party, and any of fire on the " goods, stock in trade," &c., of the plaintiff, it was held that the pol- icy covered goods in stores bought on joint account and sold for the mutual profit of the insured and another per- son, the former being also in advance on the adventure. See also Murray v. Co- lumbian Ins. Co., U Johns. 302; Al- drioh V. Equitable Ins. Co., 1 Wood. & M. 272. ' This was held in Turner v. Bur- rows, 8 Wend. 144, by the Court of Errors. In the policy in this case there were several blanks, as follows : " Bur- rows, on account of , do make insurance, and cause to be in- sured," &c. Chancellor Walworth says : " I see no objection which could arise to the filling the blank in this policy with the names of any persons who are le- gally entitled to the benefit thereof; and if the words ' for whom it may con- cern ' were inserted in the blank, they could not have extended its legal effect any further I shall, therefore, treat this policy as one in which the person.who procured, it to be underwrite ten had authority to insert the names of all or any of the owners of the brig who had any interest in the policy, or to fill up the blank with the words whom it may concern.'' And in Bur- rows V. Turner, 24 Wend. 276, the Su- preme Court, per Cowen, J., use the following explicit language : " It is the constant practice to show by proof ali- unde the real owner, when the insur- ance is general for whom it may concern. The blank here is equivalent." " Copeland v. Mercantile Ins. Co., 6 Pick. 198. In this case the vessel in- sured was owned by the plaintiff, the master. A, & B ; and the plaintiff ef- fected insurance on her in his name for whom it might concern. After loss, action was brought by plaintiff for the parties interested, where- upon the master executed a sealed instrument, revoking the authority of the plaintiff to carry on the action for him. But the court held that the master could not thus put a stop to the proceedings ; and they say : " He might well prohibit the plaintiff from maintaining the suit for his proportion of the loss ; but the policy was in the name of the plaintiff. The action is brought by him for the benefit of him- self and the other owners ; and it would^ be manifestly unjust that one owner, having received payment for his part of the loss, having compromised with the underwriters, or being unwilling to liti- gate the claim, should have the power to defeat the legal rights of the others." The master " could not annul the au- thority which the other owners had given to sue for them, much less the right which he [the plaintiff] had to maintain the action in his own name for his own benefit." CH. IX. J ACTION. 457 them refuse to authorize a suit, it may be begun and maintained by the others for their own benefit.-^ Many questions have arisen as to the rights of the mortgagor and mortgagee to bring their action. We have seen that either possesses an insurable interest, and may therefore be insured.^ But either may be insured for his own benefit alone. ^ If a mort- gagor is insured for his own benefit, the mortgagee has no interest in that policy, and cannot sue upon it either in law- or in equity.* But the mortgagor may make the policy for the benefit of the mortgagee, and then the mortgagee may adopt it ; ^ but the gen- eral principles which have been already stated respecting agency, authority, and ratification would be applied here. ' This seems a necessary inference from the case cited in the preceding note; and is certainly within the rea- soning of the court in that case. ' See Blotley v. Manuf. Ins. Co., 29 Me. 337, and cases there cited; and the chapter on Insurable Interest. ' See chapter on Insurable Interest. * This was held in Columbia Ins. Co. V. Lawrence, 10 Pet. 507. Objection was made to the competency of a wit- ness, on the ground that he was inter- ested in the recovery by Lawrence, the insured. It appeared that the witness, Howard, had, together with the insured, bought the property insured, giving back a mortgage on the premises ; and that Howard had afterwards contracted to convey his interest to Lawrence, sub- ject to various liens, and to the above- mentioned mortgage. Howard, it was insisted, was still personally liable for the payment of the mortgage debt, and consequently interested in the recovery on the policy. At the trial before the Circuit Court, the objection to the com- petency of Howard was overruled ; and now, when the case comes before the Supreme Court on error,'that court, per Mr. J. Story, say : " It is insisted that the proceeds of the policy, if recovered, will go pro tanto in discharge of the mortgage debt. Assuming that How- ard is personally liable for that debt, still, unless the creditors have not mere- ly a lien on the premises, but a lien on the policy for it, Howard has no interest which renders him incompetent in this suit. Now we know of no principle of law or of equity by which a mortgagee has a right to claim the benefit of a pol- icy underwritten for the mortgagor on the mortgaged property, in case of a loss by fire. It is not attached, nor an incident to his mortgage. It is strictly a personal contract for the benefit of the mortgagor, to which the mortgagee has no more title than any other creditor." ° As was done in Jackson v. Farmers' Mut. F. Ins. Co., 5 Gray, 52; and in Motley V. Manuf Ins. Co., 29 Me. 337. In both these cases the insurance was effected by the mortgagor, and the loss made " payable to the mortgagee " ; and in the latter the mortgagee brought the action on the policy in his own name, and recovered, — bringing the action " being held to be a sufficient ratification by the plaintiff of the act of those who procured the insurance for his benefit. See this case more fully cited, ante, p. 447, n. 1. 458 THE LAW OF MARINE INSUEANCE. [CH. IX. A mortgagee, while he may cause himself to be insured for his own benefit, has no right to do this at the expense of the mort- gagor, and therefore cannot charge the premium to the mortgagor,^ unless he authorizes him to do so. If the policy be in the name of two or more as jointly insured, and only one of those thus named has any interest in the subject- matter of such insurance, it has been said that he may sue alone.^ But he can have this power only where the policy is so worded as to cover his interests.^ « If two or more are insured in one policy, and a joint action is brought, the plaintiffs are not confined to the proof of their joint interests ; but the several and separate interests of each of them may be proved.* ' Saunders v. Frost, 5 Pick. 259, was a bill in equity brought by subsequent mortgagees to redeem the land from prior mortgages. The defendant re- sisted, on the ground that the plaintiffs had not tendered enough, and claimed as one of his charges, which the plain- tiffs were bound to pay, the sum of $ 6.75 for insurance. Contending that, in case of loss, the mortgagor and his assigns would have the benefit of the sum paid by the underwriter, which would be applied to the mortgage debt. But the court ruled distinctly that the defendant was " not to be allowed for insurance." ^ Marsh v. Kobinson, 4 Esp. 98. The policy was effected in the names of E. M. & Son ; but the action was brought in the name of the son only. There was an averment in the declaration that the son was solely interested. Le Blanc, J., was' of opinion that this averment let in the plaintiff to prove a sole interest in himself, notwithstanding the policy bore the joint names of two. And the plain- tiff failed to recover, only because of the want of some formality required by statute as evidence of ownership. ' This seems to follow from the well- settled principle that a party bringing an action on the policy must be inter- ested, not only in the property, but in the policy also. See supra, p. 458, n. 2. And see Graves v. Boston Mar. Ins. Co., 2 Cranch, 41 9, where it was held that one interested in the property, and intended to be insured by the policy, could not bring an action thereon, nor recover in any way at law or in equity, because neither was he insured by name, nor was there any general clause in the pol- icy as " for whom it may concern," un- der which his interest could be included. ' McCormick et al. v. Eerrier, Hayes & Jones, 12. This was an action of assumpsit on a policy of insurance for the benefit of the plaintiffs. The sepa- rate interest which each had was not specified. A joint interest had not been averred in the declaration, but merely an interest generally. A verdict was found for the plaintiffs to the full amount insured, which was afterwards, on a motion to set aside the verdict, sustained. The court say : " It has been urged that the verdict is against law, because the interest insured was a joint interest, and that proved was a separate interest But, supposing CH. IX.J ACTK)N. 459 Various questions have arisen as to the right of aa assignee. A general and familiar rule of the common law is, that the as- signee of a chose in action must bring his action in the name of the assignor, and this has been applied to the assignee of a policy of insurance,^ even where the policy had provided that the interest of the assured should not be assigned without the consent of the corporation, and such an assignment was made with the consent of the insurers.^ It is not so in Louisiana, for there the assignees that the interest must be joint, the ac- tion was still maintainable ; because it is admitted that there was a joint inter- est as far at least as £ 50. Then the question is, Has justice been done ? .... The policy was effected for both ; the defendants have not been obliged to pay more than they ought ; the plaintiffs have not received more than they were entitled to ; and the defend- ants undertook that they should receive so much. The defendants also have not been able to show any authority that distinct and separate interests cannot be insured in one policy." It is worthy of note, however, that in this case there was a joint interest to some extent. ' Hobbs V. Memphis Ins. Co., 1 Sneed, 144 ; Jessel v. Williamsburg Ins. Co., 3 HiU, 88; New England F. & M. Ins. Co. V. Wetmore, 32 111. 221 ; Granger V. Howard Ins. Co., 5 Wend. 202 ; Peoria M. & F. Ins. Co. v. Hervey, 34 HI. 46, 62 ; Conover v. Mut. Ins. Co., 3 Denio, 254 ; Bayles v. Hillsborough Ins. Co., 3 Dutch. 163. In this case the policy had been assigned by the in- sured to the plaintiff as collateral securi- ty on a bond. The Chief Justice, in his opinion, says that there is no averment of a new contract between the assignee and the insurers ; but that " the action is clearly founded on the original cove- nants of insurance, and dannot be main- tained by the assignee." And in the same case, Urdenburgh, J., says : " The policy not being assignable at common law, the plaintiff must show statutory authority for it. In N. H. Savings Bank v. Union Mut. F. Ins. Co., 38 N. H. 232, the plaintiffs, as assignees of a policy, brought the action against the defendants, who were the insurers. The policy had been assigned as collateral security for a mortgage and note to the plaintiffs. The court say, per Bell, J. : " The assignee cannot ordinarily main- tain a suit in his own name. His rights must be enforced in the name of the assignor." And as no new contract appeared to have been made between the insurers and the assignees, the court held that the plaintiff could not recover in this action, but must sue in the name of the assignor. See also Flanagan v. Camden Mut. Ins. Co., 1 Dutch. 506 ; Folsom V. Belknap Co. M. F. Ins. Co., 10 Foster, 231, cited pos(, p. 459, n. 3. ' Hobbs & Henley v. Memphis Ins. Co., 1 Sneed, 444. In this case Hobbs & Henley, partners, were insured ; and Hobbs, before the loss, assigned all his interest in the subject insured to Henley, with consent of insurers. The action was sustained ; though it should be observed that the joinder of the plaintiffs, who had ceased to have a joint interest in the property, was directly contrary to other cases, one of which is Howard v. Albany Ins. Co., 3 Denio, 301. In Jessel v. Williamsburg Ins. Co., 3 Hill, 88, where the policy 460 THE LAW OF MABINE INSURANCE. [CH. IX. may bring the action in their own name.^ And in some of our States the statute authorizes, and in some cases requires, assignees of choses in action to bring the action in their own name, subject, however, to all the equities of defence which would be applied if the action was in the name of the assignor.^ Hence, the change is only in the form of the action, and not in the effect of it. As an exception to the rule, that the assignee must bring his suit in the name of the assignor, there is a rule that, where the party making the promise consents to the assignment, and thereupon makes a promise to the assignee, the assignee may have an action in his own name. This has been applied to policies of insurance.^ contained the clause mentioned in the a good consideration for such promise, text, the insured assigned his interest with consent of the insurers, and the assignee sued in his own name. The court held that the action should have been brought in the name of the as- signor, and the plaintiff was nonsuited. And the court said that the only case in which the assignee could sue in his own name was where " the defendant had expressly promised the assignee to respond to him." ' Hermann v. Louisiana St. Ins. Co., 7 La. 502. ^ In New York, Alabama, Pennsyl- vania, and Louisiana at least. ' And there are many cases in which the consent of the insurers to the assign- ment has been held in iteelf to be a sufficient promise to the assignee to enable him to sue, notwithstanding Jessel V. Williamsburg Ins. Co., 3 Hill, 88. This is laid down in Wilson v. Hill, 3 Met. 66, per Shaw, C. J.: "If, on a transfer of the estate, the vendor g,ssigns his policy to the purchaser, and this is made known to the insurer, and is as- sented to by him, it constitutes a new and original promise to the assignee. .... And the exemption of the in- surer from further liability to the vendor, and the premium already paid for in- surance for a term not yet expired, are and constitute a new and valid contract between the insurer and the assignee." See Phillips v. Merrimack Mut. F. Ins. Co., 10 Cush. 350 ; Flanagan v. Cam- den Mut. Ins. Co., 1 Dutch. 506 ; Barnes V. Union Mut. F. Ins. Co., 45 N. H. 21. In Folsom v. Belknap Co. Mut. F. Ins. Co., 10 Foster, 231, it was said that if the charter or by-laws of a mutual com- pany contain a provision that an as- signee may become a member of the company, if the assignment is made and. ratified, he may sue in his own name- But in this case, there being no such provision, it was held that, although the assignment had been agreed to, yet the action should have been brought in the name of the assignor. In Bodle v. Chenango Co. Mut. Ins. Co., 2 Comst. 53, A effected insurance in his own name, and then sold part of the subject insured to B, without transferring the policy. The defendants agreed that the insurance might stand. A loss having occurred, a suit in equity was brought in the names of both. Held, that this was the proper and only form of relief, for an action at law would not lie in such a case in the names of both. In Granger v. Howard Ins. Co., 5 Wend. 200, it was held, that if the act of incor- poration allows the assignee to sue in CH. IX.] ACTION. 461 Some policies contain a provision that an assignee, who becomes so with the knowledge and consent of the insurers, may bring an his own name, in case the subject has been transferred to him, he must aver that he became the purchaser or as- signee of the subject-matter insured, and a general averment that he became and was interested in the buildings in- sured, and that the insured transferred all his right and interest in the policy to him, -is not sufficient. In Wiggin v. Suffolk Ins. Co., 18 Pick. 145, a policy was assigned to the plaintiff, with the consent of the com- pany ; who, however, reserved to them- selves all the rights expressed in the policy regarding premium notes, debts, &c., and were held entitled to set off such claims against the amount due from them to the assignee on the policy. Shaw, C. J., says : " The consent of the defendant company in the present case was essential to enable the plaintiff to maintain his action ; and that being given on terms, by his acceptance of it, the plaintiff assents to and becomes bound by these terms." And in Wig- gin V. Am. Ins. Co., 18 Pick. 158, where the facts were nearly the same as in the preceding case, the court say: " Generally, in the case of an assign- ment of a chose in action, a new de- mand against the assignor, arising after notice of the assignment has been given to the debtor, cannot be set up against the assignee. But in this case the de- fendants assented to the transfer of the policy only upon a reservation of their rights expressed in the policy." And the court go on to say that, whatever claims the defendants had against the original aissured, they would be entitled to set off the same against the assignee. In Kingsley et al. v. N. E. Mut. F. Ins. Co., 8 Cush. 393, a policy issued to the owner of buildings insured was by him assigned, with the assent of the com- pany, to a purchaser of the premises, who mortgaged back the premises to his grantor, and with the assent of the company reassigned the policy to him as collateral security. The buildings were burned. It was held that the original assured might maintain an ac- tion on the policy in his own name, and the court say : " If, as the defendants admit, the plaintiffs' assignment to C. [the grantee of the premises] authorized him [C] to sue in his own name, we do not see why his [C.'s] assignment to them does not authorize them to sue in their names." In Rollins v. Columbian M. F. Ins. Co., 6 Foster, 200, the act incorporating the company provided that, upon an alienation of the property insured, the policy should become void, unless it should be assigned to the alienee, with the assent of the company. Before the loss, the plaintiff appears to have mortgaged the premises, and to have assigned the policy to the mort- gagees, which assignment was approved by the insurers. The by-laws of the company also provided that a purchaser or mortgagee of insured premises might have the policy assigned to him with consent, &c., whereupon he should be entitled to all the privileges and habil- ities of other members of the company. At the trial a nonsuit was ordered, on the ground that the action should have been in the name of the assignee. But the Supreme Court set aside the non- suit, and held that a mortgage was not an alienation within the act of incorpo- ration ; and would not avoid the policy, and so prevent the plaintiff from main- taining this action. 462 THE LAW OF MARINE INSURANCE. [CH. IX. action on the policy in his own name, and this provision applies to an assignment made during the continuance of the risk.^ Gener- ally, however, in this country, an assignment is prohibited ; but this prohibition may be waived, and is so when the insurers indorse their consent to it,^ which is often done. In mutual companies the assignee of a policy usually becomes a member of the company. Folsom v. Belknap Co. M. F. Ins. Co., 10 Foster, 231 ; Flana- gan V. Camden M. Ins. Co., 1 Dutch. 506 ; Barnes v. Union M. F. Ins. Co., 45 N. H. 21. ' For the provision would be nuga- tory, if it referred only to assignments made after the loss ; in which case the as- signs have only a " right to recover a sum of money actually due, which, like the assignment of any other chose in action, would give the assignee an equitable in- terest, and a right to recover in the name of the assignor." Per Shaw, C. J., in Wilson v. Hill, 3 Met. 66. And the point was expressly decided in Courtney v. N. Y. City Ins. Co., 28 Barb. 116; Brichta v. Lafayette Ins. Co., 2 Hall, 372 ; Lazarus v. Common- wealth Ins. Co., 5 Pick. 79 ; Mellen v. Hamilton F. Ins. Co., 17 N. Y. 609. " The reasons for prohibiting the assign- ment of the policy without the consent of the company, during the continuance of the risk, are supposed not to exist after the loss takes place, which fixes tional Protective Ins. Co., 25 Barb. 189 ; Rogers v. Traders' Ins. Co., 6 Paige, 583, 599. ' This is in accordance with the gen- eral' principle that any one may re- nounce the benefit of a stipidation introduced entirely in his own favor. Coddington v. Davis, 3 Denio, 16-21. And a clause against assignment with- out consent of insurers is null after loss has happened and the risk is ended. Carter v. Humboldt F. Ins. Co., 12 Iowa, 287. In Goit v. National Protective Ins. Co., 25 Barb. 189, the policy con- tained 'a clause to the effect that the lia- bility of the company should cease in case the policy should be assigned with- out their consent, " either prior or sub- sequent to loss." The policy was assigned after loss, and without, consent of the insurers. The court held the condition invalid, and said : " The con- tract of insurance is one eminently of personal confidence, and the character of the insured forms an important ele- ment among the inducements of the un- derwriters to assume the risk There is certainly not the. same reason the liability of the defendant ; and of for prohibiting an assignment after a course he can receive no detriment by a change of ownership of the claim, espe- cially as the company can set up the same defences against the assignee as they could against the assured." Carter v. Humboldt F. Ins. Co., 12 Iowa, 287. In Peepke u. Resolute F. Ins. Co., 17 Wis. 378, it was held that the assignee took the policy subject to all the equi- ties that existed between the_ insurers and the assignor. See also Goit t. Na- loss, as before. After a loss, the confi- dential relation of insurer and insured no longer exists, but a new relation, .... to wit, that of debtor and cred- itor.'' The court go on to say that it is necessary that the insured should be able after loss to get his indemnity as soon as possible, without being compelled to wait upon the caprice of the insurers ; and that it is the policy of the law to place all the property of a debtor, not CH. IX.] ACTION. 463 As no action can be broxight biit by one interested in the policy ,i so, if a part owner insures in his own name, this will be construed to be an insurance of his own interest in the ship ; ^ and unless it excepting insurance claims, within the reach of the creditors. And they con- clude by declaring that " the contract of insurance proper terminated with the loss, and the provisions relied on ought not to be allowed to defeat this claim." This case was approved in Courtney V. N. Y. City Ins. Co., 28 Barb. 116. But it was also held in Day v. Pough- keepsie Ins. Co., 23 Barb. 623, that if the parties choose to make such a bar- gain they are bound by it. ' See supra, p. 451, n. 1. " In Finney v. Warren Ins. Co., 1 Met. 16, the plaintiff effected insurance on a vessel in his own name, but did not mention, nor did the defendants know till after the loss, who were inter- ested. It appeared that the plaintiff owned one eighth in his own right, and three eighths as administrator ; there "were several counts, in one of which the plaintiff claimed for an entire loss, in others for his individual interest in one eighth, and for his interest as adminis- trator, &c. The court held that the plaintiff could recover for his own inter- est and for his interest as administrator, that is, one half of the loss. But that the circumstance that the plaintiff kept the accounts of the vessel, was ship's husband, &c., gave him no insurable interest in the other one half, nor any right to insure for the other part owners without their authority. And the court say : " This is not on the face of the policy for another part owner, but for the plaintiff himself .... He did not purpose to effect insurance for the ben- efit of the other owners, or for whom it might concern, but for himself. The contract must be construed according to its clear provisions." In Finney et al. v. Bedford Com. Ins. Co., 8 Met. 348, the defendants caused one Bates, who was one of the plaintiffs, to be assured on a whaling vessel ; and there was no clause in the policy showing that the assured acted as agent. The plaintiffs offered to prove that Bates was the plaintiffs' agent, and was known to be so by the defendants ; that Bates owned but a very small part of the vessel ; and that it was the intention of all the parties to cover the interest of all the owners. The evidence was rejected, and a ver- dict taken for the defendants, subject to the opinion of the whole court. Mr. J. Dewey, in giving the opinion of the court, said that the question was not as to the competency of Bates to effect in- surance for his associates, but whether upon the face of the policy he had done so. That if Bates had intended to in- sure them all, he should have put in the policy some such phrase as " for whom it may concern." That when one owner alone is, by the terms of the policy, in- sured, parol evidence cannot be admit- ted to vary the written contract and extend the benefit of the insurance to others. And the ruling of the judge at the trial was sustained. But leave was given to amend by striking out the names of all the plaintiffs except Bates. See also Pearson v. Lord, 6 Mass. 84 ; Murray v. Columbian Ins. Co., 11 Johns. 302 ; Turner v. Burrows, 5 Wend. 541. In Graves v. Boston Mar. Ins. Co., 2 Cranch, 419, it was held that an insur- ance in the name of a part owner " as property may appear," does not cover the interest of another part owner ; the words " as property may appear " being 464 THE LAW OF MARINE INSURANCE. [CH. IX. appears that the other part owner was intended to be covered, and had authorized or ratified the insurance as of his interest, the insured cannot charge him with the premium,^ nor is he liable to him for any part of what he recovers,^ nor can the other part owner bring any action.^ If two or more persons are insured in a policy, and the separate interest of each is expressly declared and defined in the policy, each one of them may have his own action for his own interest.* In an English case, the parties to a bond made an agreement considered as applying to the one in whose name the policy issued; and Marshall, C. J., said : " The contract ought to have been so expressed as to show that the interest of some other than Graves was secured, if such was to be the effect of the instrument. A pol- icy, though construed liberally, is still a special contract ; and under no rule for pi-oceedings on a special contract could the interest of a copartnership be given in evidence on an averment of individ- ual interest, or the averment of l;he interest of a company be supported by a special contract relating in its terms to the interest of an individual." ' See Taylor v. Lowell, 3 Mass. 330 ; Finney v. Fairhaven Ins. Co., 5 Met. 192. ' In Garrell v. Hanna, 5 Har. &. J. 412, the plaintiff and defendant were joint and equal owners of a vessel, which had been insured to the amount of $1,500, and was valued at $ 2,500. The policy was made in the name of Hanna, and " as well in his own name as for and in the names of all and every other person or persons to whom the same doth, may, or shall appertain in part or in whole," &c. It did not ap- pear otherwise that the policy was ef- fected for the benefit of both, or that there was any ratification by Garrell of the insurance. The vessel was lost, and the $1,500 paid to Hanna. The court held that the plaintiff could not recover. ° Because, though interested in the property insured, he is not in the policy. See supra, p. 451, n. 1. * " When the covenant is made with the covenantees, et cum quolibet eorum," these words make the covenant several in respect of their several interests.'' 1 Saund. 155, n. 2 ; 2 Leon. 47. Where three persons bound themselves jointly and severally in a bond, and two paid the whole, it was held that they could not join in an action against the third obligor for contribution. Kelby V. Steel, 5 Esp. 194. In James v. Emery, 8 Taunt. 245, the rule is de- clared by Gibbs, C. J., to be, that, if the interest be joint, the action must be joint, although the words of the covenant be several ; and if the interest be sev- eral, the covenant will be several, al- though the terms of it be joint. Smith V. Hunt, 2 Chitty, 142. So in Servante V. James, 10 Bam. & G. 410, where there was a covenant to pay certain persons a certain sum, "in such pro- portions as were set against their several names," it was held that each covenantee must sue separately. And see James V. Emery, 5 Price, Exch. 529. There is no reason why the contract of insurance should differ from other contracts in this respect, though we are not aware that the question has ever arisen on a policy. CH. IX.] ACTION. 465 by parol for the payment of the debt by instalments, and the court held that the obligee might bring assumpsit on the parol promise, or, disregarding this, might bring covenant on the bond.^ If the action is on a policy and is covenant, the policy being under seal, it must be brought in the name of the insured, although he is in- sured for other persons, and although the insurance is made with phraseology and under circumstances which would permit the action to be broxight in the'name of those for whom the insurance is made if there was no seal.^ But the plaintiff, recovering in covenant, would recover for the benefit of the parties actually interested.^ And it has been held in this country, that where a policy under seal insured one party, but expressly for the benefit of another party, this other may sue on the policy in his own name.* If the insurance be by a part owner, in his own name, the prima facie presumption is, that the insurance is for his separate interest, and he would bring the action in his own name, and hold the amount recovered without liability to the other part owners. Ifj however, the insured be only trustee for another, as he may insure in his own name without specifying his interest, so he may bring the action in his own name;^ but whatever he recovers will be ' Morton v. Burn, 7 Ad. & El. 19. no concealment of any material fact, ^ See supra, p. 445, n. 2, and Sunder- this did not affect his right to recover, land M. Ins. Co. v. Kearney, 16 Q. B. In Locke v. N. A. Ins. Co., 13 Mass. 295 ; 6 Eng. L. & Eq. 312, contra quoted 61, A had borrowed money of B, giving supra, p. 445, n. 1. And De Bolle v. as security a bill of lading of a cargo, Pa. Ins. Co., 4 Whart. 68 ; Am. Ins. with an arrangement that in case of Co. V. Insley, 7 Pa. St. 223 ; Shep. loss B should receive the amount of the Touch. 369, quoted supra, p. 441, u. 2. insurance which was effected in A's ' De Bolle v. Pa. Ins. Co., 4 Whart. name. Held, that A was entitled to 68 ; Am. Ins. Co. v. Insley, 7 Pa. St. recover the insurance ; and the court 223, quoted supra, p. 446, n. 2. say, per Parker, C. J. : " We are satis- * Maryland Ins. Co. v. Graham, 3 fied, as the law stands, that a honajide Har. & J. 62, quoted supra, p. 443, u. 1. equitable interest in property, of which ' In Oliver v. Greene, 3 Mass. 133, the legal title is in another, may be in- the plaintiff procured insurance on a sured under the general name of prop- vessel of which he owned one half, and erty, or by a description of the thing had chartered the other half under an insured, unless there should be a false arrangement to pay for that half, should affirmation or representation, or a con- the vessel be lost. Nothing was said in cealment after inquiry of the true state the policy about the plaintiff's interest ; of the property." See Bell v Western but the court held that, as there was M. & F. Ins. Co., 5 Kob. La. 423 ; Stet- VOL. n. 30 466 THE LAW OF MARINE INSURANCE. [CH. IX. held bound to the trust.^ If two or more persons are insured in the same policy, upon distinct interests, which are specified as dis- tinct, we should hold their rights of action to be as distinct as if there were as many policies. But if the policy purports to be in the names of parties who are jointly interested at the time of the loss, the general rule of law to which we have already referred, and which requires that the action be in their names jointly, will apply.2 But if two parties, who are jointly interested in property, are jointly insured thereon, and afterwards, but before the loss, one assigns his interest in the property to the other, they can have no joint action on the policy.^ , Whoever may be insured, the policy may provide that the loss shall be payable to another party ; and it may make this provision either in the body of the policy or by indorsement made with the consent of the parties.* In that case, the party to whom the loss is payable may bring the action in his own name.^ But where, on a policy thus made, the party to whom the loss was payable in- dorsed upon the policy a receipt of the demand against the insured, which the policy was intended to secure to him, it was held that the policy then stood as if this clause were cancelled.® So it would be if, in any way whatever, the party to whom the loss was payable directed that the loss should be paid to the insured.'' son V. Mass. M. F. Ins. Co., 4 Mass. hold that, ^nmayacie, she renewed it in 330 ; Bartlett w. Walter, 13 Mass. 267 ; the character in which she was entitled Eider v. Ocean Ins. Co., 20 Pick. 259 ; to renew it, namely, as executrix." Finney v. Warren Ins. Co., 1 Met. 16. ^ Seeanie,p.449,n.l,p.450,n.land2. ' In Parry v. Ashley, 3 Sim. 97, a ^ See an^e, p. 449 andn. 1, p. 450, n. 2. testator devised property charged with ' In the policy in Motley v. Manuf. an annuity, and insured, to S. A. in fee, Ins. Co., 29 Me. 337 ; Rider v. Ocean making S. A. his executrix. Soon after Ins. Co., 20 Pick. 259 ; Farrow v. Com- the death of the testator, the policy ex- monwealth Ins. Co., 18 Pick. 53. By pired, and was renewed by the execu- indorsement in Williams v. Ocean Ins. trix. The annuity not being paid, the Co., 2 Met. 303. These cases are person to whom it was due filed a bill cited ante, p. 447, n. 1, p. 448, n. 1. in chancery to get it. Before answer, * See ante, p. 447, u. 1. the insured property was burned; and " Rider u. Ocean Ins. Co., 20 Pick. 259. the plaintiff filed a supplemental bill, ' In Farrowu. Commonwealth Ins. Co., praying that the insurance company 18 Pick. 53, cited at length, a?i(e, p. 443, might be ordered to pay the insurance n. 1, the persons to whom the loss was money into court, and be restrained fi-om made payable by the policy simply gave paying it to the executrix. The vice- their consent to the action brought by chancellor so ordered, saying : " I must the assured, and a certificate to this CH. IX.] ACTION. 467 If there was a loss under a marine policy, and the insured died before the loss, or after the loss and before payment, the claim would go to the personal representatives of the deceased, like any other personal claim.^ It is not usual to mention executors, admin- effect was put into the case. The ac- tion was sustained. See Ennis v. Har- mony F. Ins. Co., 3 Bosw. 516. ' In Mildmay v. Folgham, 3 Ves. Jr. 471, a bill in chancery was filed by the heir, to whom certain insured property had descended, to compel the insurers to pay a loss to him. The policy pro- vided that loss should be paid to the insured, her " executors, administrators, or assigns," and it had never been as- signed. It was sought to make the executrix a trustee for the money. Lord Chancellor Loughhoroiigh said : " It is utterly impossible to make the executor a trustee. This is a personal contract, not connected with the real property, not affecting the real property. No person can have the benefit of the policy but the personal representative." And the bill was dismissed. See Norris V. Harrison, 2 Mad. 268 ; Lynch v. Dal- zell, 3 Bro. P. C. 497. In Finney v. Warren Ins. Co., 1 Met. 16, the plain- tiff, who was a part owner, had effected insurance on a vessel to her full value, without specifying his interest. After- wards one of the owners died, and the plaintiff, being appointed his adminis- trator, recovered the insurance both for his own share of the loss and for that of his intestate. In Wyman v. Wyman, 26 N. Y. 253, the plaintiff was adminis- tratrix of an estate on which certain in- sured buildings were burned after the intestate's death. The policies ran to the assured, " his executors, adminis- trators, or assigns," and contained this clause : " The interest of the assured in this poHcy is not assignable, unless by consent of this corporation, manifest in writing ; and in case of any transfer or termination of the interest of the insured, either by sale or otherwise, without such consent, this policy shall be void and of no effect." The insurance money was paid to the guardian of the intestate's children, under a stipulation that he should hold it subject to the direction of the court; and the action was in the nature of a bill of interpleader to try the right of the parties. The Supreme Court decided in favor of the adminis- tratrix as against the heirs, and this was an appeal. The Court of Appeals modified the decision of the lower court, and held that the money stood in the hands of the administratrix, not as per- sonal assets, but as realty, subject to dower, and to the lien of creditors by judgment before distribution among the heirs at law. And the court say, per Emott, J. : " Policies of insurance against fire, however, are personal con- tracts with the assured. They are agreements to indemnify him against loss, and not guaranties of the immunity of the property insured. Such con- tracts do not attach to the realty, nor do they pass as incident to a conveyance or transfer of the title to lands. The contract is made with the assured, 'his executors, administrators, and assigns.' Both by force of these words, and from the nature of the contract itself, the right of action upon the death of the assured vested in his personal repre- sentative. It is not easy to see how any one but his administratrix could have sustained actions on these poli- cies for any loss, whether it had occurred before or after the intestate's 468 THE LAW OF MARINE INSURANCE. [oh. IX. istrators, or assigns in the policy, nor would these words make any difference.^ Where a part of the premium is to be returned by the insurer, this is due to the insured who paid the premium. As a general rule, any party who might sue for a loss, either as nomi- nally insured, or as actually insured, and covered by the policy, may sue for a return of the premium.^ In a miitual company, the premiums constitute a fund, for the benefit of all the creditors, which each member, in his character of insurer, is bound to make good ; while as insured he is entitled only to a pro rata dividend from that fund. Therefore a member of a mutual company cannot, upon its insolvency, set off against premiums that he owes a loss due to him from the company.^ Section III. — Against whom the Action may he brought. If there be double insurance, or an insurance of the same prop- erty against the same risk, the insured may sue all the insurers or either of them separately. And the insurer who pays the whole or more than his share may demand contribution.* The death It is said by the heirs that the administratrix could not have sustained such an action, because she had no interest in the property in- sured. It is unquestionable that the assured must have an insurable interest in the premises at the time of the loss. But in the present case the title and in- terest in the lands passed to the heirs ; yet, as we have seen, the right of ac- tion on the contract vested in the ad- ministratrix Thus the contract of insurance, by the death of Wyman, became by its terms a contract with his administratrix for the protection of the interest of his heirs The administratrix would thus have sus- tained her action upon the policy as a person with whom a contract is made for the benefit of another." And the judge goes on to draw a distinction between this case and that of Mildmay v. Folg- ham, 3 Ves. Jr. 471, supra. ' See opinion of Emott, J., in Wyman V. Wyman, 26 N. Y. 253, cited in pre- ceding note. 2 Martin v. Sitwell, 1 Show. 156. Martin, an insurance broker, had eflfect- ed insurance for B., and had paid the premium ; but it turned out that B. had no property subject to the risk, and so the policy was void. It was objected that the action ought to have been brought in B.'s name. " To all which Holt, C. J., answered, that, the policy being in Martin's name, the premium was paid in his name and as his money, and he must bring an action upon the loss, and so upon avoidance of the policy for to recover back the premium." Moreover, an objection was made to the form of the action, which was indebitatus assump- sit; but the court held the action prop- erly brought. ' Lawrence v. Nelson, 21 N. Y. 158. * In Newby v. Reed, 1 Wm. Blk. CH. tS.] ACTIOK. 469 same thing would be true if tliere were several distinct insurers on the same policy.^ This was once common in this country, but is now very unusual. Nor is it so common in England as it once was. Still it occurs there so often that it is provided for by a rule 416, it was held, "that upon a double insurance, though the insured is not en- titled to two satisfactions, yet upon the first action he may recover the whole sum insured, and may leave the defend- ant therein to recover a ratable satis- faction from the insurers." In Lucas v. Jefferson Ins. Co., 6 Cow. 635, the de- fendants insured the plaintiff $ 4,000 ; another company, $ 5,500 ; and a third, $ 6,000, — all on the same property. In the policy underwritten by the de- fendants was the following clause : " In case of any other insurance upon the property hereby insured, whether prior or subsequent to the date of this policy, the insured shall not, in case of loss or damage, be entitled to demand or re- cover on this policy any greater portion of the loss or damage sustained than the amount insured shall bear to the whole amount insured on the said property." The other two companies had volun- tarily paid the amount of their insur- ance. Woodwortk, J., in giving the opinion of the court, laid down the law as given in Newby v. Heed, and said that the clause above quoted would pro- tect the defendants against any claim of the plaintiff beyond a ratable pro- portion of the loss ; so that, in order to get his whole insurance at once, the plaintiff would have to bring his action against one of the companies not pro- tected by such a clause. In Wiggiu v. Suffolk Ins. Co., 18 Pick. 145, two policies were made on the same day, on cargo worth $ 17,000, — one by the de- fendants and one by another company, for $ 10,000 each. It was stipulated in both policies that they should not be held to cover any risk already covered by a prior policy ; and that the policy, so far as it covered risks not already covered by any prior policy, should not be considered as in any respect affected by any subsequent policy. The two companies agreed to consider the poli- cies as simultaneous. The court, per Shaw, C. J., said : " This is a case of double assurance The party holding such double assurance may in the outset, and before making any elec- tion, consider each debtor as liable to bear a proportionate part of the com- mon burden, and recover accordingly, or he may require either of the parties liable to pay the whole ; and then it follows, as a rule of law founded on the broadest principles of equity, that when one of two parties has paid the whole of a debt for which each was originally and ultimately liable, the party who has paid the whole or a disproportionate part of the common debt shall have a remedy against the other for a contribu- tion, so that the burden may be borne equally, according to their respective liabilities." And one of the companies having charged itself with half the loss, and having paid into court the balance of the half, after making certain deductions, which sum had been taken out by the plaintiff, the court held that this action of the plaintiff was prima facie evidence that he meant to consider each insurer as liable for one half ' Because they bind themselves sev- erally. This is well settled in practice (see cases cited next note), and is too obvious to have come up for adjudica- tion. 470 THE LAW OF MARINE INSURANCE. [CH. IX. of court, which is called a " consolidation rule," the effect of which is, that one action alone is brought, and that all the suits and rights of action await and abide the results of that one.^ The same effect would be reached by what is a common practice in this country wherever many cases depend upon precisely similar questions, namely, to bring all the actions and enter them on the docket, one by one, an entry being made on the docket under all but one, referring to that one, and stating that the others would " await and abide " that one. If the word " await " alone were used, its effect, strictly speaking, would only be to delay the other actions until the first was decided. The consolidation rule is peculiar to English practice, but we give a brief account of it in our note. An action at law may be brought upon an agreement to make out and give a poliqj^.^ And it has been held that if, in pur- ' For a full explanation of the Eng- lish Consolidation Rule, see 2 Arnould on Ins. *1277. It was introduced by Lord Mansfield, and is briefly this: When a number of actions are brought by the same plaintiff, on the same policy, for the same loss, and on the same risk, against diflferent underwriters (or even on several policies), a rule will be granted to stay proceedings in all but one of the actions, upon application of the defendants, and the consent of the plaintiffs, on condition that the defend- ants in the other actions agree to be bound by the verdict in the action tried ; and that the defendant in this action undertakes not to file a bill in equity or bring a writ of error. The courts act on the principle that the order of con- solidation is a favor to the defendants, and regulate their proceedings accord- ingly. See Camden v. Edie, 1 H. Blk. 21 ; Foster v. Alvez, 3 Bing. N. C. 896 ; Kynasten v. Liddell, 8 J. B. Moore, 223 ; Doyle v. Anderson, 1 Ad. & El. 635. But the consolidation rule does not bind the plaintiff. Doyle v. Doug- las, 4 B. & Ad. 544. ^ In Perkins v. Washington Ins. Co., 4 Cow. 645, the plaintiff applied to the agent of the defendants for insurance. The agent agreed that the company should insure, and should execute a policy, &c. The premium and other charges were paid to the agent, who gave a receipt therefor, acknowledging the purpose for which they were paid. Afterwards, and before the premium had been sent to the company, or the policy issued, the property insured was burned. The company, subsequently, upon notice and proof of loss and ten- der of the premium to their president, refused to execute a policy or indem- nify the plaintiff. Chancellor Kent decided against the plaintiff, but his decision was unanimously reversed by the Court of Errors. The court held that the acts of the agent were binding on the company. And Colden, Senator, said : " It will not be questioned that, if the premium had been paid at the office of the company in New York, and the president or secretary had signed the receipt which was given by Russell [the agent], the insurance would have been as binding as if a policy had been executed." .... Such receipts CH. IX.] ACTION. 471 suance of such an agreement, the policy is made out, but not " are intended to give immediate effect to the insurance, and supply the place of a formal policy until one can be pre- pared. It has been decided that these receipts are as binding as a policy could be." But the Senator says that such a receipt can be made available only in chancery. In Hamilton v. Lycoming Mut. Ins. Co., 5 Pa. St. 339, the plain- tiff applied to the agent of the defend- ants for insurance on a building, de- livered to him the premium note, and made certain cash payments required, including the price of a policy. The agent returned to the plaintiff a certif- icate reciting the application, payments, &c., and stating that S 1,050 "will be insured on the property, if the company approve the said application." The company did not approve the applica- tion, but notified the agent that the plaintiff must make certain changes in the building, &c., and when the com- pany should be certified that these requisites had been complied with, they would send him a policy. The plaintiff complied with all the conditions, notified the agent thereof, and requested him to caU and see for himself. This the agent did not do. Afterwards the building was burned ; whereupon the agent wrote to the insurers, stating that it was through his own neglect that he had not examined the premises. The plaintiff brought his action upon the agreement to give a policy. Gibson, C. J., in giv- ing the opinion of the court, says: " Actions on mere agreements to insure are not uncommon ; . . . . but it appears that the terms of the contract must have been settled by the concurrent jissent of the parties, and that nothing must have remained to be done but to deliver the policy, else the risk will not have been begun ; in other words, that the agreement must have had at some par- ticular instant that aggregatio mentium which is indispensable to the constitu- tion of every contract." And he goes on to say that the company were bound by the acts of the agent; that there was no negligence on the part of the plaintiff, but only on the part of the de- fendants or their agent. And the court held that there was a complete parol agreement for a contract, by which the corporation was bound, and that the plaintiff consequently could recover. In Taylor v. Merchants' F. Ins. Co., 9 Harris, 390, the plaintiff had received from the deffndants proposals of insur- ance, and had deposited in the mail a letter accepting the terms, after which the property was burned. The plaintiff filed a bill in equity ; and the defend- ants objected that his remedy, if he had any, was af law. This, the court say, per Nelson, J., " may very well be ad- mitted ; but it by no means follows from this that a court of chancery will not entertain jurisdiction." In Rockwell v. Hartford Ins. Co., 4 Abbott's Practice, 179, it was held that where there is an agreement to insure and deliver a policy, and a loss occurs before such delivery, it is not necessary that the assured should proceed to compel the delivery of apolicy before he can recover the insurance; but he may maintain an action upon the agreement, taking judgment for the amount of the loss, not exceeding the sum insured. So in Ins. Co. of Valley of Virginia w. Mordecai, 22 How. Ill, an action was brought on a memo- randum on the policy, the policy itself not being filled up nor sealed ; and the insured recovered. The memorandum was this : " Messrs. M. & Co. are in- sured in the sum of four thousand dol- lars on the freight of the bark Susan, 472 THE LAW OF MARINE INSURANCE. [CH. IX. delivered, an action of assumpsit will lie on the contract.'^ So trover will lie for a policy, if it be made out.^ And it seems to hence to Rio Janeiro and back to any port of discharge in the United States. $4,000 at 2 per cent, $80. June 11, 1855." And there was no attempt in this case to resist the plaintiff's right to bring the action. In Bunten v. Orient Mut. Ins. Co., 8 Bosw. 448, it was held that the insured could recover on an agreement to insure, though the amount to be covered and the rate of premium were contingent ; provided the agreement af- forded the means of ascertaining them. And on such an agreement the assur- ers were bound to give a policy on the happening of the contingency, and the insured was bound to pay the pre- mium. ^ In Loring v. Proctor, 26 Me. 18, the court say, that an instrument in writing, to be effectual, must ordinarily be delivered. " But in reference to parol agreements, and as policies are not often, if ever, under seal, every- thing must depend on the intention and understanding of the parties. They may consent that a writing which is intended to contain the evidence of an agreement between them, though it may be left in the hands of the one party or the other, without any formal delivery of it by either to the other, shall be evidence ^ of their agreement. What the intention of the parties may be, as to a writing prepared between them, in reference to its efficacy, is a question referable to a jury, as matter of fact, and not altogether of law, ref- erable to the court." In Blanohard v. Waite, 28 Me. 51, a policy had been made by the under- writers, and recorded on their books, but had not been delivered. One of the owners of the vessel insured — Loring — had taken the premium note from the insurance office to get it signed by the other owners. By the time that the note had been signed and delivered to the underwriters, the loss had oc- curred, and they refused to deliver the policy. It was admitted by the parties, that premium notes often remained in the jpsurance offices till the risk had ter- minated ; and that cases had occurred, where the papers were not exchanged before loss had happened, but the con- tracts were held good. The action was assumpsit on the contract. The court held that the plaintiff could recover, and they said : " A contract of insurance is completed when there is an assent to the terms of it, by the prrties, upon a valuable consideration. Neither the giving the premium note, nor the recep- tion of the policy by the insured, are prerequisites to its consummation The note was signed by all the plain- tiffs, but not presented at the office un- til after the loss. This act, together with the commencement of the suit, must be considered a ratification of what Loring did in procuring the in- surance.'' But if the action is brought upon a policy, and not upon an agree- ment to insure, the policy must be com- plete and fully executed. Peoria M. & F. Ins. Co. V. Wals§r, 22 Ind. 73. Where a court of equity has acquired jurisdiction of the case, it will proceed and give final relief, and not turn the party over to an action at law on the policy. Tayloe v. Merch. F. Ins. Co., 9 How. 390 ; Union Mut. Ins. Co. v. Com- mercial Mut. M. Ins. Co., 2 Curt. C. C. 524; 19 How. 318. ^ This is laid down in all the text- books ; but, so far as we know, the only case on the point is that of Harding v. Carter, cited in next note. CH. IX.J ACTION. 473 have been held that, where an agent wrote that he had effected a policy, and had not done so, trover would lie.^ We should have some doubts, however, whether such action could be maintained under such circumstances. Policies frequently stipulate that the insurers shall not be bound to pay the loss until a certain period elapses, which is usually sixty days or ninety days after proof of loss. The parties have, of course, a right to make this stipulation, and are therefore bound by it ; but it is open to construction. The first question is. What is meant by proof of loss ? The insurers are not bound to pay at all without proof of loss ; but when we say this we mean that they are not bound to pay unless there be suf&cient evidence of the loss to charge them with the liability, and, if need be, found a judgment against them. But this is certainly not the meaning of the phrase " proof of loss " in this stipulation. Much less than legal and complete proof is sufficient to begin the period at the end of which the insurers are to pay.^ in this case could not mean legal proof, ■which can only be taken in a course of legal proceeding." See also Savage v. Corn Exch. Ins. Co., 4 Bosw. 1. But no action can be maintained by the in- sured, until the notice and proof re- quired by the policy have been given. Nor can a company be charged as trus- tees of the insured, in an action begun after loss, but before notice and proof have been given. Davis v. Davis, 49 Me. 282. So where, besides notice of loss, there was required a certificate from the churchwardens, &c., importing "that they knew the character of the assured, and believed that he did sustain the loss, and without fraud," it was held that no action could be maintained, until such certificate had been procured, even if the churchwardens, &c., wrongfully refused to give it. Worsley u. Wood, 6 T. R. 710. Nor will a right of action, which has been barred by a condition, that actions shall be brought within a certain time after loss, be revived by an acknowledgment or a new promise. Williams v. Ver- ' Harding v. Carter, Park. Ins. ch. 1 , p. 4. In this case. Lord Mansfield held, that the defendants, who were brokers, must be considered the actual insurers. It was said, for the defence, that the letter was written by a clerk, by mistake ; and that trover could not be maintained for that which never ex- isted. But the court would not suffer the defendants to contradict their own misrepresentation . ^ Norton v. Rensselaer & Saratoga Ins. Co., 7 Cow. 645. In this case, the court sa^, that "no more information has been required of the party than ap- peared to be within his control." And in Lenox v. United Ins. Co., 3 Johns. Ca. 224, the court say, per Thompson, J., of the clause requiring preliminary proof: " I cannot think it [the clause] ought to receive a construction that will impose on the insured the necessity of produ- cing the same proof, preliminarily, that would be requisite on the trial to en- title him to recover.'' And, in the same case, Radcliff, J., says : " The parties 474 THE LAW OP MARINE INSXJEANCE. [CH. IX. The clause has always been, both in practice and in adjudica- tion, liberally, though somewhat variously, construed.^ In a case in New York, Chief Justice Thompson said, this clause " is con- strued to require only the best evidence which the party possessed at the time." ^ This cannot be literally true ; for it would require of the insured nothing more than that when he communicates the fact of the loss, he should give his reasons for the communication ; and, whatever they were, the period would begin. The insured may make, and it may be proper that he should make, an abandonment upon much slighter evidence than would satisfy the requirement of this clause. Indeed the very reason given by Chief Justice Thompson for the above statement would show that it needs some limitation. He says that the clause which makes this preliminary proof necessary, before payment of the loss can be demanded, " requires only reasoAable information to be given to the underwriters, so that they may be able to form some estimate of their rights and duties before they are obliged to pay." ^ But the best evidence which the party possesses at the time may be insufficient to give this information. The insurer is undoubtedly entitled to all the evidence, or documents, which the insured has. The question of the admissibility of any document in an action on the policy does not bear upon this question ; for if a document be material, in reference to the information which the insurers ought to have, they are entitled to it, although it would be legally inadmissible as evidence in a trial.* Usually the insured gives to mont Mut. F. Ins. Co., 20 Vt. 222. But v. Phcenix Ins. Co., 8 lb. 307 ; Lycom- see and compare with Worsley v. Wood ; ing Co. Mut. Ins. Co. v. SchoUenberger, Stout V. City F. Ina. Co., 12 Iowa, 44 Pa. St. 259 ; Sogers v. Tracers' Ins. 371. Co., 6 Paige, 583 ; Walsh v. Washing- ' See Norton v. Eensselaer & Sara- ton M. Ins. Co., 32 N. Y. 427. toga Ins. Co., 7 Cow. 645 ; Lawrence v. ' Lawrence v. Ocean Ins. Co., 11 Ocean Ins. Co., 11 Johns. 241, 260. Johns. 241, 260. See preceding note. In Child V. Sun Mut. Ins. Co., 3 Sandf. ' Lawrence v. Ocean Ins. Co., 11 26, the court say, per Sand/ord, 3. : Johns. 241, 260. " The 'proof of loss' required by the * Thurston v. Murray, 3 Binn. 826 ; policy, preliminary to the obligation to Flindt v. Atkins, 3 Campb. 215 ; Sexton pay, is not Ze^rf ^TOo/", such as would be v. Montgomery Co. Mut. Ins. Co., 9 competent to carry the cause to the Barb. 191. In these cases an attempt jury, on the question at issue." Talcot was made to put in as evidence, at the V. Mar. Ins. Co., 2 Johns. 130 ; Barker trial, documents which had been given CH. IX.] ACTION. 475 the insurer the protest of the master, the surveys and all commu- nications which have been received from him, or from any quarter,^ and, if the insurance be on the cargo, the bill of lading and invoice should be given.^ to the assurers as preliminary proofs of loss, and they were ruled inadmissible. In Am. Ins. Co. v. Franoia, 9 Pa. St. 390, a question was made as to whether a protest, somewhat irregular in form, was properly given to the assurers, as one of the preliminary proofs. With reference to this, the court say, per Gibson, C. J. . " In Fleming o. The Mar. Ins. Co., we certainly laid a strong hand on protests, as proofs, under the idiosyncrasy of our system, of facts before a jury ; not, how- ever, to affect them as preliminary proofs." In Fleming v. Mar. Ins. Co., 3 Watts & G. 144, Oibson, C. J., says, that only in Pennsylvania is a mariner's protest evidence for the jury of the facts set forth in it; but everywhere else it is only one of the preliminary proofs. He says that the Pennsyl- vania rule originated in ignorance, and is mischievous in its tendencies. •' A protest is the act of the master and some of his people, all of whom are an- swerable to the owners for negligence, when it has existed ; and it is, conse- quently, their interest to saddle the in- surers with the consequences of it." 1 Child V. Sun Mut. Ins. Co., 3 Sandf. 26. So an abandonment may be made on the information which the insured have received of the loss, and before they are in possession of the protest. Craig V. United Ins. Co., 6 Johns. 226, 249. In Norton v. Rensselaer & Sara- toga Ins. Co., 7 Cow. 645, it was held, that, where all the papers relating to the goods insured were burned up with the goods, a statement of the gross amount lost, with circumstances of the loss, were sufficient. In Haff v. Mar. Ins. Co., 4 Johns. 132, it was held, that the survey was a necessary part of the pre- liminary proof. In Munson v. N. E. Mar. Ins. Co., 4 Mass. 88, where the vessel insured had been captured, a let- ter from her pilot, and a copy of a letter from the master afterwards, were held sufficient ; the captain, being a prisoner, could make no protest, " which," the court say, " is the usual evidence, when it can be obtained." ^ In AUegre v. Maryland Ins. Co., 6 Har. & J. 408, where the insurance was on the cargo, and the insured delivered to the assurers after loss the protest of the master and the bill of lading, the assurers refused to pay, on the ground that the invoice was a document usually given on such occasions, which was proved to be the case. The court held that the invoice should have been pro- duced, and they say : " The court think that the true construction of this clause of the policy is, that the insured is bound to offer, as his preliminary proofs, such documentary proofs in his posses- sion as are usually required in adjusting a partial loss, — that is, the protest, bill of lading, and invoice, or such equiva- lent proofs as the nature of the case is susceptible of. These proofs remain with the assured only, or his agents; the burden of producing them therefore rests on him." In Lenox v. United Ins. Co., 3 Johns. Ca. 224, where the insurance was on cargo, the insured, after loss, exhibited to the insurers the protest of the master, stating the loss and the bill of lading and invoice, of the goods. The two latter were not sworn to ; wherefore the 476 THE LAW OF MARINE INSURANCE. [CH. IX. It is quite obvious that what proof is necessary under tliis stipu- lation may depend upon the circumstances of the case. In one instance it was held sufficient, where the managing owner, in whose name the ship was insured, produced the register of the ship, and made his own affidavit that the ship had sailed twenty months be- fore, from a distant port, and had not been heard from for fifteen months.^ So where the master was a prisoner and could not make a protest, it was not held necessary.^ Upon the whole it would be difficult to give a better definition of the proof requisite under this clause, which is always called preliminary proof, than to say that it must be all which the insured then possesses, and that it must be sufficient to give to the insurers such information, as would enable them, in the words of Chief Justice Thompson, already quoted, " to form some estimate of their rights and duties before they are obliged to pay." The requirement of this preliminary proof may be waived or qualified by the insurers ; ^ and this may be done expressly, or by defendants refused to admit the invoice. But the plaintiff refused to swear to it, as not requisite on his part. The court held that the preliminary proof was enough without the oath. See Pacific Ins. Co. V. Catlett, 4 Wend. 83. '■ Child V. Sun Mut. Ins. Co., 3 Sandf. 26. = Munson v. N. E. Mar. Ins. Co., 4 Mass. 88. See ante, p. 474, n. 1. And where a voyage had been broken up through fear of capture, and the insured had abandoned before the ship had ar- rived at her home port, it was held that the protest of the master as preliminary proof of loss was not essential, because the owners were not in possession of it. Craig V. United Ins. Co., 6 Johns. 226. In Barker v. PhceniK Ins. Co., 8 Johns. 307, where the loss was payable thirty days after proof, &c., the insured aban- doned, October 5th, and produced cer- tain preliminary proofs, which the as- surers claimed were insufficient. But on the 21st October the insured fur- nished more ample proofs, which, taken with those already furnished, were un- questionably sufficient. The action was not brought till thirty days after the latter date. The court said, per Kent, C. J. : The communications "might well be considered as an entire transaction, begun on the 5th, and con- summated on the 21st of October ; and admitting the proof to have been at first insufficient, .... it was fully supplied on the 21st, and gave the plaintiff his right of action at the expiration of the thirty days." ' AUegre v. Maryland Ins. Co., 6 Harris & J. 408 ; Vos v. Robinson, 9 Johns. 192; Francis v. Ocean Ins. Co., 6 Cow. 404 ; Ocean Ins. Co. v. Francis, 2 Wend. 64; Mclntyre u. Bowne, 1 Johns. 229 ; Martin v. Fishing Ins. Co., 20 Pick. 389 ; Child v. Sun Mut. Ins. Co., 3 Sandf 26 ; Coursin v. Pa. Ins. Co., 46 Pa. St. 323 ; Savage v. Corn Exch. Ins. Co., 4 Bosw. 1 ; Fox v. Con- way F. Ins. Co., 53 Me. 107. CH. IX.] ACTION. 477 any conduct which justified the insured in believing that the proof he offered was deemed sufiicient.^ It has been held also that this clause was satisfied, although the notice op information was not given by the insured himself, provided the insurers had received it otherwise.^ The notice with proof may be sufficient for one purpose and not for another, as where sixty days were required and notice was given of a total loss ; and subsequently a notice was given of a general-average loss, and an action was brought more than sixty days after the first notice, but less than sixty days after the second notice, it was held that the action was brought too soon for the average claim.^ The policy may contain other analogous clauses. One, fre- quently called the rotten clause, which provides that the insurers are not bound if the vessel be declared unseaworthy by reason of her being unsound or rotten, upon a regular survey/. In a case on a policy containing this clause, in the preliminary proof nothing was wanting but the survey^ and the absence of this proof was held to be f*tal.* In this case, however, the court go somewhat on the ground that the survey was, in its own nature, the proper proof of ' See the cases in preceding note. Lloyd's books as captured; that the In all cases of implied waiver, the ques- insurer was a subscriber to Lloyd's, and tion arises, Who is to determine whether in the habit of examining the books the acts of the assurer amount to a there daily. Moreover, the broker who waiver ? Sometimes, as in Allegre v. effected the insurance swore that he be- Maryland Ins. Co., 6 Heuris & J. 408, lieved the insurer had notice. On this this seems to have been regarded as the evidence the jury found for the insured, province of the court, and again as the So it is no matter if all the owners do province of the jury. But in Martin w. not unite in presenting the preliminary Fishing Ins. Co., 20 Pick. 389 ; Drake proofs, or if changes in their respective V. Farmers' Union Ins. Co., 3 Grant, interests are not stated in the proofs 325 ; and Franklin F. Ins. Co. v. Up- presented. Walsh v. Washington M. degraff, 43 Pa. St. 350, it was distinct- Ins. Co., 32 N. Y. 427. ly held that, whether certain facts ^ Bryant v. Commonwealth Ins. Co., amounted to a waiver of preliminary 6 Pick. 131. proofe or notice of loss, was a question * Haff u. Mar. Ins. Co., 4 Johns. 132. for the jury alone. So in Coursin u. As to the time of making the survey, Pa. Ins. Co., 46 Pa. St. 323. the wording of it, and the manner of ' Abel V. Potts, 3 Esp. 242. In this pleading it, see Griswold v. Nat. Ins. case the insurer pleaded no notice, and Co., 3 Cow. 96 ; and Rogers v. Niagara the evidence was that the loss of the ship Ins. Co., 2 Hall, 86 ; Brandegee v. Nat. was publicly known ; that she stood on Ins. Co., 20 Johns. 328. 478 THE LAW OF MARINE INSUKANCE. [CH. IX. such a fact, and still more on the ground that the circumstances of the case warranted the court in assuming that a regular survey of the vessel had been made. We cannot but think that in such a case, if there were no survey, and the insured could show good reason why the survey had not been made, or why, if made, it was not produced, the preliminary proof might be sufficient with- out it. It must be understood that, in this matter of preliminary proof, the essential requisite is entire good faith on the part of the in- sured. ^ If the insurers, on the presentment of any preliminary proof, positively refuse to pay the loss, without grounding their refusal in any way on any objection to the proof, it seems to be quite clear that this is a waiver of their right to have full prelimi- nary proof.^ And it has been held that where the insurers, upon ' See remark of Dorset/, J., in AUegre V. Maryland Ins. Co., 6 Harris & J. 408 - 412; Peacock u. N. Y. L. Ins. Co., 1 Bosw. 338, 20 N. y. 293. ' In Francis v. Ocean Ins. Co., 6 Cow. 404, when the preliminary proofs were presented, the insurers answered that " they would not settle the claim in any way." The court say : " The de- fendants waived whatever imperfections there may have been in the preliminary proofs, &c., by not putting their refusal to pay upon that ground." This case went up to the Court of Errors, where the ruling was sustained. Ocean Ins. Co. V. Francis, 2 Wend. 64. In Vos V. Robinson, 9 Johns. 192, when the preliminary proofs, which did not in- clude the ship's register, were sworn to the underwriters, they made no objection to the sufficiency of the pre- liminary proofs, but refused to pay, on the ground of a deviation. The court say : " As the underwriter made no objection to the deficiency of the pre- liminary proof, and placed his refusal to pay solely on the ground of deviation, he must be deemed to have admitted the plaintiff's interest in the vessel. or to have waived the necessity of pro- ducing the proof of it." In Peacock v. N. Y. L. Ins. Co., 1 Bosw. 338, affirmed 20 N. Y. 293, the court state the reason of presuming a waiver, unde^ the cir- cumstances mentioned in the text, as follows : " When what are presented to them [the insurers] in good faith as preliminary proofs are in any respect de- fective, common fairness requires that such defect be suggested; and that it be not held in reserve, to be used after- wards to obtain a further delay of pay- ment, or to defeat a suit brought for the money.'' In AUegre v. Maryland Ins. Co., 6 Harris & J. 408, the president of the insurance company wrote a letter to the insured, after he had made his demand for payment and presented his preliminary proofs, stating that " the company decline the payment, under the persuasion that they are not liable for the same." This was held to be a waiver of all objection to the prelimi- nary proofs. In Katteborn v. City F. Ins. Co., 31 Conn. 193, the general agent of the company, acting within the scope of his agency in relation to the particular loss CH. IX.] ACTION. 479 the preliminary proof, admit themselves liable for a partial loss, and pay the money into court, this is a sufficient admission of the sufficiency of the proof.^ ' Where, however, the president of an insurance company, on being asked what further proof was re- quired, answered, " The policy will show," this was held to be no waiver of proof.^ If the provision of the policy makes the insurers liable to pay, in a certain time, after a certain act of their own, and they refuse to perform this act, the right to bring an action is complete with- out it.^ But if any such stipulation gives a certain time to the in question, stated to an agent of the plaintiff, who had prepared the prelim- inary proofs, that it was only the quan- tity and value of the property that the company disputed. This statement was held to be admissible in evidence, as going to prove a waiver by the com- pany of all objection to the preliminary proofs on account of defects in them. In Baltimore F. Ins. Co. v. Loney, 20 Md. 20, the policy, provided that loss should be paid within sixty days after proof, &c. The insured presented their proofs, and made demand for payment; whereupon the insurance company ad- mitted the loss, and offered payment of what they considered to be due, which was, however, too little. The insured claimed that interest should be allowed on the money due them from the date of the demand. The court held, that the condition as to the time of payment was waived, and that the sum for which the insurers were bound became due and recoverable with interest from date of the demand. See also Rogers v. Traders' Ins. Co., 6 Paige, 583 ; Martin v. Fish- ing Ins. Co., 20 Pick. 389 ; Molntyre v. Bowne, 1 Johns. 229 ; Child v. Sun Mut. Ins. Co., 3 Sandf. 26 ; ActuaF. Ins. Co. V. Tyler, 16 Wend. 385 ; O'Niel v. Buf- falo F. Ins. Co., 3 Comst. 122 ; Tayloe V. Merch. F. Ins. Co., 9 How. 398 ; Kim- ball V. Hamilton F. Ins. Co., 8 Bosw. 495 ; Heath v. Franklin Ins. Co., 1 Cush. 257 ; Clark v. N. E. Mut. F. Ins. Co., 6 Cush. 342. So where the agent of the insurer objected to the prelimi- nary proofs, but refused to return the documents that they might be corrected, this was held to be a waiver. Turley V. N. A. F. Ins. Co., 25 Wend. 374. ' Johnson v. Columbian Ins. Co., 7 Johns. 315. ' Spring Garden Mut. Ins. Co. v. Evans, 9 Md. 1. ' In Strong v. Harvey, 3 Bing. 304, the plaintiff and defendant were mem- bers of an association of ship-owners, who had entered into a mutual engfige- ment for the insurance of each other's ships. The plaintiff's ship was wrecked, and got off with the aid of another ves- sel. The Admiralty Court at Savan- nah awarded salvage to the amount of half the value of the cargo. There was reason to suspect fraud on the part of the plaintiff, who was on board of his vessel ; and the members of the associa- tion refused to adjust the loss, because the plaintiff would not explain the trans- action satisfactorily. The rules of the association required that any loss should be paid for in two months after adjust- ment. And upon the refusal to adjust, the plaintiff commenced actions for some £1,500, whereupon the members of the association tendered to the plain- 480 THE LAW OF MAKINE INSURANCE. [CH. IX. insurers to perform this act, and they refuse to perforin it, the question whether the insured has ^ right of action immediately upon the refusal, or must wait until the time expires within which the insurers may perform it, thus giving them a locus penitentice, is a difficult and different question. We do not know that this ques- tion has arisen directly under policies of insurance. Under the general law of contracts it has arisen not unfrequently, and the tendency of the decisions is to give to the other party the right of immediate action.^ But we should have some doubts of this, under a marine policy, unless the capacity of the insurers could not be restored before the day. In a case in Maryland it is held that tiff £400, "in full of plaintift's demand." The defendant insisted that the plaintiff could not recover, because no adjust- ment had been made. But the court held that, in order to make this objec- tion sound, the defendant must show fraud on the part of the plaintiff. If the whole claim were fraudulent, say the court, "it would be an answer to the action ; but the jury have found that there was nothing fraudulent in the plaintiiPs conduct until after the ship was carried into Savannah, and the plaintiff had a claim for general and particular average before the ship ar- rived at Savannah. This part of the claim the defendant ought to have ad- justed, and paid two months after adjust- ment." The court ruled th^t the ten- der was conditional and bad, even if it were enough to cover the sum actually due to the plaintiff, and that the action was properly brought. In Nevins v. Rockingham F. Ins. Co., 25 N. H. 22, the act incorporating the company required the directors to settle and pay all losses within three months after notice. Due -notice was given ; but no settlement or payment was made up to the time when the action was brought, some five months after the notice. The defendants objected that the action could not be maintained, be- cause it was begun before the directors determined the amount of the loss. But the court said that the directors were bound to decide, at the latest, within three months after notice. " If the plaintiff cannot maintain his action with- out a previous determination of the loss "hy the directors, it is not easy to see how an action to recover a loss can in any case be maintained, if the company and directors neglect the duty imposed on them by the charter. They (the defendants) say that the plaintiff should have applied to the equitable jurisdiction of this court, and thus compelled the directors to act. If this is the true con- struction of the charter, it leaves the assured to an unusual, dilatory, and very inconvenient remedy, in case the di- rectors should neglect their duty, as they have here ; for suppose this court should assume the power to compel the directors to act on the loss, unless they should choose to admit and pay it, the insured would still be left to all the additional delays and difficulties of a contested suit on the policy." ' For the cases on this point, see 2 Parsons on Contracts, pp. 666 and 667, notes a, b, c (5th ed.). CH. K.] ACTION. 481 this stipulation as to preliminary proof looks only to the case of an amicable adjustment by the parties, and that, when this can- not be made, the stipulation loses all force, and the right of action immediately accrues. ^ Fire policies sometimes contain a clause requiring that the ac- tion shall be brought within a certain definite period after the occurrence of the loss. This clause has been repeatedly held to be valid ;2 and in one case it was so held, although the company was a stock company doing business in a State other than that where the action was brought.^ And in another case, where the action was commenced within the specified time, and the plaintiff became nonsuit because of a defect in his proof without his fault, and an action was then brought after the expiration of the time, the court held that it was too late.* In two cases, however, this clause was held to be wholly inoperative.® Where the provision was that the suit should be brought in the county where the insurer had his ' Allegre v. Md. Ins. Co., 6 Harris & J. 408. ' In Cray v. Hartford Ins. Co., t Blatohford, C. C. 280, the policy pro- vided that, unless suit was brought within twelve months after loss, the claim should be barred. Nelson, J., said : " The condition simply requires vigilance in the pursuit of the remedy, beyond the requirement of the law." And he held the condition valid. This case was cited and approved by Red- field, C. J., in Wilson v. Mtna. Ins. Co., 27 Vt. 99. See also Amesbury v. Bowditch Mut. F. Ins. Co., 6 Gray, 596 ; Ketchum v. Protection Ins. Co., 1 Allen, 136 ; Carter v. Humboldt F. Ins. Co., 12 Iowa, 287 ; Woodbury Savings Bank v. Charter Oak F. &M. Ins. Co., 31 Conn. 517; Portage Co. Mut. F. Ins.' Co. u. West, 6 Ohio St. 599. In this case the clause was in the act of incorporation. See opinion of Perkins, J., though con- trary to that of the majority of the court, in Eagle Ins. Co. v. Lafayette Ins. Co., 9 Ind. 443 ; Brown v. Roger Williams VOL. n. 31 Ins. Co., 5 E. I. 394 ; Brown v. Roger Williams Ins. Co., 7 K. I. 301 ; North- western Ins. Co. V. Phcenix Oil Co., 31 Pa. St. 448; Ripley v. ^tna Ins. Co., 30 N. Y. 136 ; Patrick v. Farmers' Ins. Co., 43 N. H. 621 ; Brown v. Sa- vannah Mut. Ins. Co., 24 Ga. 97 ; Peoria M. & F. Ins. Co., v. Whitehill, 25 111. 466. = Fulham v. N. Y. Union Ins. Co., 7 Gray, 61. * Wilson V. Mtna. Ins. Co., 27 Vt. 99. * French v. Lafayette Ins. Co., 5 Mc- Lean, 461 ; Eagle Ins. Co. v. Lafayette Ins. Co., 9 Ind. 443. In the latter case, however, the court were not unanimous. The question is one of much difficulty ; at least it is one on which much may be urged on both sides. Courts differ, and judges of the same courts differ, but we think that the weight of authority is decidedly in favor of the validity of the clause requiring actions to be brought within a certain time after loss ; and the authority of Judge McLean is virtually unsupported. 482 THE LAW OF MARINE INSURANCE. [CH. IX. place of business, this has been held to have no force,^ the dis- tinction being taken that the time of payment is within the con- trol of the parties, and flaay be regulated ' by their agreement, whereas the law itself determines before what tribunal the action may be brought, and the parties have no control of the subject. But when a similar question has arisen as to other contracts, it has been held that an agreement not to sue within a certain time, even under seal, is no bar to the action nor a release of action, but that the defendant must rest upon his action for a breach .^ There seems to be no very good reason why, if this principle be just in relation to other contracts, it is not applicable to policies of insurance. In the case in which it was held that this clause as to time in a policy of insurance was inoperative,^ the decision was put upon the ground that the agreement affected the remedy and not the con- tract, and was in conflict with the statute of limitations which pre- scribed the proper time in which a suit might be brought ; and upon the further ground, tliat it was an attempt to discharge or bar a right of action before the right accru^ed, and was therefore contrary to the principle that a release can only operate upon an existing claim. We doubt the force of those reasons ; and if applicable to these questions under a fire policy, they would be equally applicable if they arose under a marine policy. It may be added as quite certain, that, if the insurers by their acts prevent the insured from bringing a suit within the time specified, this will amount to a waiver of the clause.* ' Nute V. Hamilton Mut. Ins. Co., 6 such an act is to be construed strictly ; Gray, 174; Hall v. People's Mut. P. and if the precise case pointed out does Ins. Co., lb. 185. But as in Massa- not occur, the insured may bring his fchusetts all acts of incorporation are action in any county. Boynton v. made public acts, Gen. St. tit. 1, ch. 3, Middlesex Mut. F. Ins. Co., 4 Met. 212. § 5, the legislature, by providing in an ^ Lowe v. Blair, 6 Blackf. 282 ; Bury act of incorporation that all actions in v. Bates, 2 Blackf. 118; Cuyler v. Cuy- certain cases shall be brought in a ler, 2 Johns. 186 ; Harrison v. Close, particular county, thereby repeals to lb. 448. this extent all other public acts which ^ French v. Lafayette Ins. Co., 5 are inconsistent therewith, and an ac- McLean, 461. tion can be brought in the cases speci- * Ames v. N. Y. Union Ins. Co., 4 fied only in the particular county. Kern. 253. The policy in this case con- Boynton v. Middlesex Mut. F. Ins. Co., tained two clauses, — one that the loss 4 Met. 212. See also Portage Co. Mut. was to be paid within ninety days after Ins. Co. V. Stukey, 18 Ohio, 455. But proof of loss, and the other that action CH. IX.J ACTION. 488 Our marine policies very commonly contain a clause by which the parties agree to submit any claim which may arise under the policy to arbitration. But it would seem to have been settled by a long course of uniform decisions, both in England and in this country, that the parties to a contract cannot oust the courts of their jurisdiction by any agreement that claims arising under it shall be submitted to arbitration.^ In an English case such a clause was held to have no eiFect whatever, although the matters in controversy had been referred to arbitrators, and were still pending at the time of action brought.^ So courts of equity have should be brought within six months after loss. The loss took place July 5th. The proofs were furnished July 14th. A defect in them was pointed out October 7th, and supplied October 14th. The application for payment was made January 2d, when the secretary of the company said that the money would not be due till the 14th, when it should be paid. Finally the company refused to pay. The plaintiff brought an action on the 18th, and recovered. The court say : " The acts and promise of the officers of the company were directly calculated to lull the plaintiff into in- activity, and to assure him that if he would forbear suing until the 14th January, his money should be promptly forthcoming. He was told in effect that the defendants would insist on the condition as to the time when the loss was due and payable ; and that, if he commenced an action to save the bar [six months], they should interpose the defence that, by the contract, the insur- ance money was not yet due and pay- able. It cannot be doubted, under the proof in the case, that the defendants intended to and did waive the limita- tion " of the time within which the ac- tion should be brought. See Grant v. Lexington F. L. & M. Ins. Co., 5 Ind. 23. In Peoria Mar. & F. Ins. Co. v. Hall, 12 Mich. 202, there was a condi- tion that no action should be brought, unless within twelve months after the loss ; and during that time it happened that, owing to the absence of the com- pany's agent, no process could be served. Wherefore, as the plaintiff had issued a' snmmons within the time, and another on the return of the first, after the time had expired, the court held that the action was maintainable. 1 Kill V. Hollister, 1 Wilson, 129; Thompson v. Charrock, 8 T. R. 139; Goldstone v. Osborn, 2 C. & P. 650; Mitchell U.Harris, 2 Ves. 129; Welling- ton u. Mackintosh, 2 Atk. 569; Nichols V. Chalie, 14 Ves. 265 ; Robinson v. Georges Ins. Co., 17 Me. 131; Hill v. More, 40 Me. 515; Allegre v. Md. Ins. Co., 6 Harris &' J. 408 ; Gray«. Wilson, 4 Watts, 39 ; Contee v. Dawson, 2 Bland, 264 ; Randel v. Chesapeake & Del. Canal Co., 1 Barring. Del. 233; Hor-» ton V. Stanley, 1 Miles, 418 ; Stone v. Dennis, 3 Porter, 231 ; Haggart v. Morgan, 4 Sandf 198, 1 Seld. 422; Roper V. Lendon, 1 Ellis & E. 825 ; Dyer v. Piscataqua F. & M. Ins. Co., 53 Me. 118. ^ Harris v. Reynolds, 7 Q. B. 71. Though in Kill v. Hollister, 1 Wils. 129 (1746), the court seemed to think that if a reference had been made, or an award given, the action might have been barred. 484 THE LAW OF MARINE INSURANCE. [CH. IX. also refused to decree specific performance of an agreement to refer to arbitration, or to compel a party to appoint an arbitrator under such an agreement,^ or to order the arbitrators to proceed where a case was referred to arbitration by consent.^ This would seem to be as^well established as a rule could be by decision. But quite recently it has been certainly weakened, if not overthrown, by the courts,^ and it is now provided in England ' In Tobey v. County of Bristol, 3 Story, 800, Mr. J. Story, says : " It is an established principle of courts of equity never to enforce the specific perform- ance of any agreement, where it would be a vain and imperfect act, or where a specific performance is, from the very nature and character of the agreement, impracticable or inequitable to be en- forced The very impracticability of compelling the parties to name arbi- trators, or, upon their default, for the court to appoint them, constitutes a complete bar to any attempt on the part of a court of equity to compel the specific performance of any agreement to refer to arbitration. It is essentially an agreement which must rest in the good faith and honor of the parties, and .... must be left to the conscience of the parties, or to such remedy in dam- ages for the breach thereof as the law has provided." See Wellington v. Mack- intosh, 2 Atk. 569 ; Street v. Eigby, 6 •Ves. 815 ; Milnes v. Gery, 14 lb. 400 ; Blundell v. Brettaigh, 17 lb. 232 ; Gour- lay V. Duke of Somerset, 19 lb. 429; Wilks V. Davis, 3 Meriv. 507; Agae v. Macklew, 2 Sim. & S. 418; Mexbor- ough V. Bower, 7 Beav. 127 ; Copper v. Wells, Saxton, 10. In Tattersall v. Groote, 2 B. & P. 131, the court seemed to think that no action at law could be maintained for refusing to nominate an arbitrator in pursuance of a covenant. And in Cobb v. N. E. Mut. Mar. Ins. Co., 6 Gray, 192, where there was an agree- ment to submit to arbitration, &c., and the insurers, though refusing to accept an abandonment, repaired the ship, this proceeding was held to be a waiver of the submission to arbitration. " Crawshay v. Collins, 1 Swanst. 40. ' The first innovation upon the rule was in 1778, in the case of Halfhed v. Jenning, 2 Dickens, 702, nom. Halfhide V. Penning, 2 Bro. Ch. 336. In this case a bill was filed by one partner against another, &c., for an account, and for a production and a discovery. The defendants pleaded that there was a clause in the articles that no bill or suit should be brought respecting the part- nership until the matter should have been referred to arbitration, and the arbitrator should have made his award ; and the plea was sustained. This decis- ion has generally been thought wrong ; but it is sustained by Lord Ch. Sugden, in Dimsdale v. Robertson, 2 Jones & La Touche, 58. In this case a submission had been, entered into by the parties, the arbitrators were designated, and their powers and duties fully pointed out. But before they had done any- thing, the plaintiff' filed his bill alleging that the arbitrators could not do him justice under the powers conferred upon them. It is provided in England and Ireland by statute, that after the arbi- trators are appointed, in pursuance of any submission to reference, containing an agreement that such submission shall be made a rule of court, &c., the sub- CH. IX.] ACTION. 485 by statute, that whenever there is an agreement in any written instrument to refer a cause to arbitration, and a suit is brought, mission cannot be revoked by either party without leave of court. The chancellor held, that the bill could not lie in this case ; and the whole Subject of the power of a court of equity in the premises was considered at length, and the case of Halfhide v. Penning was considered as correctly decided. In 1853, came Scott v. Avery, 8 Ex. 487, 20 Eng. L. & Eq. 327,in which case there was a rule of the insurance association, that " no member should be entitled to maintain any action, &c., until the matters in dispute should have been referred to, and decided by, arbi- trators, and then only for such sum as the arbitrators should award ; and that the obtaining the decision of such arbitrators should be a condition prece- dent to the right of any member to maintain any such action." The Court of Exchequer gave judgment for the plaintiff. The case was then taken to the Exchequer Chamber (Avery v. Scott, 8 Exch. 497, 20 Eng. L. & Eq. 334), where the preceding judgment was reversed, on the ground that the provisions men- tioned did not oust the courts of their jurisdiction, but merely provided that the amount due should be decided in a particular way, before the party was at liberty to sue ; and that this was in the nature of a condition precedent. After this, the case was taken, on error, to the House of Lords (Scott v. Avery, 5 H. L. Ca. 811, 36 Eng. L. & Eq. 1), where the decision of the Exchequer Chamber was finally affirmed ; and, the opinions of the judges being taken, only three were opposed. Lord Chancellor Cranworth, in giving judgment, said, that the language used by the parties indicated that their intention was, that the amount to be paid should be ascer- tained in a particular way ; and, until that way was adopted, no right of action should exist." In other words, that the right of action should be, not for what a jury should say was the amount of the loss, but for what the persons designated in that particular form of agreement should so say If, in considera- tion of a sum of money paid to me by A. B., I agree with him, that, in case J. S. should decide that A. B. had ftil- fiUed certain conditions, and had sus- tained certain damage, and J. S. should make his award accordingly, I would pay to A. B. the sum so ascertained and awarded, no right of action could exist until J. S. had made his award." And Lord Campbell follows, thus : " There is an express undertaking, and then abundant consideration ; therefore, un- less there is some illegality in the con- tract, the courts are bound to give it effect. There is no statute against such a contract ; then on what ground is it declared illegal '? It is contended, that it is contrary to public policy ; but what pretence can there be for saying that there is anything contrary to public policy in allowing parties to contract that they shall not be liable to any action, until their liability has been as- certained by a domestic and private tribunal, upon which they themselves agree ? .... It seems to me that it would be a most expedient encroach- ment upon the liberty of the subject, if he were not allowed to enter into such a contract Is there anything contrary to public policy in saying, that the company shall not be harassed by actions, the cost of which might be ruinous, but that any dispute that arises 486 THE LAW OF MARINE INSUKANCE. [oh. IX. the court may grant a rule to stay proceedings at the request shall be referred to a domestic tribunal, which may speedily and economically determine the dispute ? [The doctrine that the courts could not be ousted out of their jurisdiction] probably origi- nated in the contests of the different courts, in ancient times, for extent of jurisdiction. Where an action is indis- pensable, you cannot oust the court of its jurisdiction over the subject, because justice cannot be done without the exer- cise of that jurisdiction All that has hitherto been decided .... is this : that, if the contract .... simply contains a clause or covenant to refer to arbitration, and goes no further, then an action may be brought, in spite of that clause, although there has been no arbitration. But there is no case that goes the length of saying, that, where the contract is as it is here, that no right of action shall accrue until there has been an arbitration ; then an ac- tion may be brought, although there has been no arbitration. Now, in this contract of insurance, it is stipu- lated, in the most express terms, that, until the arbitrators have determined, no action shall lie in any court what- soever. This is not ousting the. courts of their jurisdiction, because they have no jurisdiction whatsoever, and no cause of action accrues, until the ar- bitrators have determined." In this same case, Creswell, J., said : " The whole of the doctrine as to ousting the jurisdiction of the courts appears to have been based upon Co. Litt. 536 : ' If a man makes a lease for life, and by deed grants that, if any waste or destruction be done, it shall be redressed by neighbors, and not by a suit or plea, notwithstanding, an action of waste shall lie, for the place wasted cannot be re- covered without plea.' The case is not to be found in the Year Book re- ferred to, but is in Fitz. Ab. Waste, fol. 5 ; and the whole of it is given in Co. Litt. 536. It seems, that this decision proceeded on the ground that the neigh- bors could not redress the wrong done ; that it could only be done by plea ; therefore, notwithstanding, an action of wa^e would lie. There is not a word leading to the supposition that an action would have beeii maintainable if the neighbors could have given the appropri- ate redress ; or that it might not have been granted by deed, that, if a dispute arose about waste, neighbors should say whether there had been waste or not." In Russell v. Pellegrini, 6 Ellis & B. 1020, 38 Eng.L. & Eq. 99 (1856), Lord Campbell, C. J., said: "For some time the courts had a great horror of arbi- trations, and doubts were entertained, whether a clause for referring matters in dispute, introduced in an agreement, was not illegal. But I cannot imagine why parties should not be allowed to settle their differences in the manner which they think most convenient. When a cause of action has arisen, the courts are not to be ousted of their juris- diction; but parties may come to an agreement that there shall be no cause of action, until these differences have been referred to arbitration." In Tredwen v. Holman, 1 Hurlst. & Col. 72 (1862), the policy contained a clause to the effect that all disputes should be referred, and that the decision of the arbitrators should be final ; and no action should be brought till the decision had been given. The plaintiff brought an action for total loss, before the claim had been adjusted and settled by arbi- tration. The court say, per Martin, B. : " The case of Scott v. Avery, 5 H. L. Ca. 811, decided that the insurer and the CH. IX.] ACTION. 487 of the defendants.^ Mr. Phillips, in his third edition, says of this agreement only : " I am not aware of any reported decree or judgment enforcing this stipulation." ^ And in his fifth edition : " The validity and effect of this provision have been subjects of doubt." It might be quite enough to say this and no more, were it not for the probability, at least the possibility, that the courts of this country might be influenced either by regarding the late Eng- lish statute as declaratory of the common law, or by the reasons underwriter may contract that no right of action (to be enforced in a court of law) shall accrue until an arbitrator has decided, not merely as to the amount of damages to be recovered, but upon any dispute that may arise upon the policy. The question, therefore, is one of con- struction, and we think the parties to this policy have so agreed The agreement is clear and unambiguous, and 'the parties probably want to act upon Scott V. Avery, and exclude the jurisdiction of the courts of law, except for the purpose of enforcing the award to be made by the arbitrators. The plaintiff is therefore in the wrong. The ■ defendant proposed to him to refer the matter in dispute, to which he refused to accede, and he has failed to perform that which is a condition precedent to his maintaining the present action." In Livingston v. Ralli, 5 Ellis & B. 132, 30 Eng. L. & Eq. 279, there was a contract containing a provision that, if any difference arose, it should be re- ferred. The declaration averred that a difference arose, and that the defendant refused to refer. The plea set forth the contract, and averred a difference, which the defendant claimed was frivo- lous ; but on demurrer the court held that the action lay. ' 17 & 18 Vict. ch. 125, §11. "When- ever the parties to any deed or instru- ment in writing to be hereafter made or executed, or any of them, shall agree that any then existing or future differ- ■ ences between them, or any of them, shall be referred to arbitration, and any one or more of the parties so agreeing, or any person or persons claiming through or under him or them, shall, nevertheless, commence any action at law or suit in equity against the other party or parties, or any of them, or against any person or persons claiming through or under hifti or them, in respect of the matters so agreed to be referred, or any of them, it shall be lawful for the court in which such action or suit is brought, or a judge thereof, on application by the defendants, or any of them, after appearance and before plea or answer, upon being satis- fied that no sufficient reason exists why such matters cannot be or ought not to be referred to arbitration, according to such agreement as aforesaid, and that the defendant was, at the time of the bringing of such action or suit, and still is, ready and willing to join and concur in all acts necessary and proper for causing such matters so to be decided by arbitration, to make a rule or order staying all proceedings in such action or suit, on such terms as to costs and other- wise as to such court or judge may seem fit : provided always, that any such rule or order may at any time afterwards be discharged or varied as justice may re- quire." 2 2 Phil, on Ins. 1941. 488 THE LAW OF MARINE INSURANCE. [CH. IX. on which the English courts have rested their recent decisions, to make a similar change in our adjudication on the subject of arbi- tration.i An agreement in a policy executed by a foreign insur- ance company, that the insured shall bring no action save in the courts of the State which incorporated the company, has been held to be void, not only as contrary to a statute of the State where the insured lived, but on grounds of public policy.^ Section IV. — Of Rights of AStion acquired by Insurers. The insurers may pay a loss, under a mistake of a material fact, and because they were led by that mistake into the belief that they were liable when they were not so in fact. The common rules of law would perhaps apply in this case. If the mistake were their own fault, that is, if they had] sufficient means of infor- mation and neglected to make use of them, they could not profit by this negligence.^ But in a later English case it is held, that the insurers are not barred from recovering money paid under a mis- take, even by their own laches, or by their not choosing to make inquiries which it was in their power to make.* If after such pay- '■ In Cobb V. N. E. Mut. M. Ins. Co., loss was adjusted ; and that the loss, 6 Gray, 192, the court, after stating that therefore, had been paid under a full the invalidity of a reference condition knowledge of the facts. A verdict was seemed to have been settled, say : " The at the trial found for the plaintiff, recent oases, however, of Scott v. Avery, which was by the whole court on ex- Livingston V. Ralli, and Kussell v. Pel- captions set aside. In Elting v. Scott, legrini, may possibly lead to some re- 2 Johns. 157, Kent, C. J., waived the vision and qualification of the doctrine question, but seemed to approve the as heretofore understood." doctrine of the above case. ' Reichard v. Manhattan L. Ins. Co., * Townsend v. Crowdy, 8 C. B. 31 Mo. 518. N. S. 477. In this case the party ' This was settled in England in Bil- seeking to recover the money paid bie V. Lumley, 2 East, 469. Bilbie was had free access to certain documents an underwriter who had paid a loss to which would have informed him how the defendants, and now sought to re- much he was bound to pay, but did cover the money on the ground that, at not examine them. Williams, J., said : the time when the insurance was ef- " No doubt at one time the rule, that fected, a certain material letter had not money paid under a mistake of fact been shown to him. The defendants might be recovered back, was subject admitted that the letter, was not mate- to the limitation that it must be shown rial, but alleged that it had been sub- that the party seeking to recover it mitted to the underwriter before the back had been guilty of no laches. But CH. IX.] ACTION. 489 ment they discover a fact which would have barred or defeated an action of the insured, they may now bring assumpsit for what they paid, as for money had and received for their use, or any other appropriate action.^ This has been held where the policy has been forfeited by a breach of warranty.^ And also in a case where an insurance was made by a mortgagor, and a loss paid to him, and the insurers dis- covered after the payment that the policy wae made only to cover the mortgagee's interest.^ The general principle of law would also be applied, which limits this right of action of discovery of mis- take to a mistake of fact, the rule being that all persons are held responsible for their own knowledge of the law ; or, in a phrase since the case of Kelly v. Solari, 9 M. & W. 54, it has been established that it is not enough that the party had the means of learning the truth, if he had chosen to make inquiry. The only limitation now is, that he must not waive all inquiry." ' In Cox V. Prentice, 3 Man. & S. 344, the defendant, an agent, had re- ' ceived some silver from his principal abroad, and had carried it to the plain- tiffs, who, having had it assayed, bought it, paying for as many ounces of silver as the assayer declared it to contain. It was afterwards discovered that there had been a mistake in the assay, in con- sequence of which the plaintiff had pstid too much, and he thereupon de- manded a return of the money, offering to return the silver. This the defend- ant refused to do, on the ground that he had forwarded his account to his princi- pal, and in it had placed the price re- ceived to the credit of his principal. Held, that the plaintiff could recover. This principle was applied to insurance cases by Columbus Ins. Co. v. Walsh, 18 Mo. 229. The company issued a policy to the defendant, insuring his interest in a steamboat in the sum of $ 6,000 ; and there was a clause in the policy which avoided the contract in case any other insurance shoidd be obtained on the same interest. A loss occurred, and was paid for by the insurers. Afterwards it came to the knowledge of the insur- ers that another insurance had been obtained after the issuing of their own policy, which covered the same interest. They brought this action to recover the amount which they had paid. The court said : " There is no doubt at this day that nioney, which has been paid under a mistake of facts which, had they been known, would have been a defence to bar the recovery, may be recovered back. Here there was an act on the part of the assured directly against the policy stipulation, which would have discharged the office from all liability to the assured arising under the policy, had it been known at the time of the adjustment of the loss There- fore, money paid on a loss by an insur- ance company, in ignorance of the fact that the assured had avoided the policy by subsequent assurance, may be recov- ered back." ' De Hahn v. Hartley, 1 T. R. 343 ; and see Elting v. Scott, 2 Johns. 157. ' Irving V. Richardson, 2 B. & Ad. 193. 490 THE LAW OF MARINE INSURANCE. [CH. IX. commonly used, are presumed to know the law. In one case where material information had been withheld from the insurer before the policy was made, which concealment would have barred an action on the policy, and a letter containing the information was given to the insurer before he paid the loss, and he paid the loss, either from neglecting to read the letter or from mistake as to its kgal effect, he was not permitted to recover back the money he paid.i * We cannot doubt that where an insurer is induced by falsehood and fraudulent deception to pay a loss without an action, he may recover it back.^ We should extend this rule to cases where the fraud was previous to the making of the policy, and caused the making of it.^ If, however, the insured resisted the payment, and an action being brought by the insured he recovered judgment thereon, and the insurer satisfied the judgment and afterwards discovered a fraud which would have given him a good defence to ' Bilbie v. Lumley, 2 East, 469. 'i Lefevre v. Boyle, 3 B. & Ad. 877 ; Buller V. Harrison, Cow. 565. In this case the insurer, the plaintiflf", had paid the loss to an agent of the insured, who had passed it to the credit of the prin- cipal, but had not paid it over. Subse- quently the insurer, finding that the loss was foul, brought this action and recov- ered. The judgment of the court is upon the point whether the action would lie against the principal ; and the law that relates to the rule in the text is contained in the direction that Lord Mansfield said he should have given to the jury : " If you are satisfied that the money was paid by mistake, and the de- fendant's situation not altered by any new circumstance since, but that every- thing remained in the same state as it was on the 20th of April, you ought to find for the plaintiff." In all the cases on this point there seems to be no se- rious dispute of the insurer's right to re- cover, which is generally settled at the trial ; while the arguments before the whole court are upon other issues. See cases in the two following notes. ' In Court V. Martineau, 3 Doug. 161, an action was brought by the plaintiff, an underwriter, to recover back the amount of a loss paid by him on a pol- icy of insurance, which, as it was con- tended, was avoided by concealment. The case was tried twice. At the first trial, Buller, J., thinking the conceal- ment material, directed a verdict for the plaintiff. At the second, Lord Mansfield thinking it not material, a verdict was found for the defendant, which was sustained. The conceal- ment in this case was, of course, at the time of making the policy or before, and was the only matter discussed ; for the right of the insurer to recover the money, if the concealment were ma- terial, seems to have been admitted on all sides. So when a life policy had been fraudulently effected, and a loss paid, the insurer recovered back the money. Lefevre v. Boyle, Ellis's Ins. 163. CH. IX.] ACTION. 491 the action, it would seem that he could not recover back the money he thus paid by a distinct action therefor.^ The decision in this case rested on abundant authority to the effect that, where a cause has been determined by a tribunal hav- ing jurisdiction in an action where all matters of defence were open to the defendant, the judgment is conclusive until reversed by a superior court, which has jurisdiction on the same cause on a writ of error. The court rested their decisi&n also upon the fact that, in Massachusetts, where the case was tried, provision was made by statute for a review of judgments within a time thought reasonable by the legislature, and it might be inferred that a limi- tation of time was intended to the right of parties to complain of wrong done them by such judgments. We may believe that this rule would be applied wherever the insurers had an adequate remedy in their power of reversing the judgment. But where this could not be done, and no statute of limitation interfered, we should suppose some remedy would be found for such a case at law or in equity. ' Homer u. Fish, 1 Pick. 435. In this case, Parker, C. J., says : " It cer- tainly is a principle admitted by all courts in the abstract, that a matter of controversy which has been inquired into and settled by a court having juris- diction of the subject cannot be drawn in question again, in another suit be- tween the same parties, for the purpose of defeating or avoiding the effects of a judgment of the court to which it has been submitted. It is so laid down in express terms by all the judges, in the case of Philips v. Hunter, 2 H. BIk. 415. And even in the case of Moses v. Mac- ferlan, 2 Burr. 1008, in which it has been supposed by some that the prin- ciple was violated, Lord Mansfield says : ' It is most clear that the merits of a judgment can never be overhaled by an original suit eithe^ at law or in equity. Till the judgment is set aside or reversed, it is conclusive, as to the subject-matter of it, to aE intents and purposes.' " He then quotes the author- ity of Lord Redesdale, in Bateman v. Willoe, 1 Sch. & Lefr. 204, and Chan- cellor Kent, in Smith v. Lowry, 1 Johns. Ch. 322, and continues : " Common-law courts have held the same doctrine as in Smith v. Lewis, 3 Johns. 157; Peck li. Woodbridge 3 Day, 36 ; Marriott v. Hampton, 7 T. E. 269. The court in Connecticut, in the case reported by Day, say that 'it is a principle of the common law that a man cannot collat- erally impeach, or call in question, a judgment of a court of law, or decree in equity, to which he is a party. It can only be done directly by writ of error, petition for a new trial, or bill in chan- cery.' The same principle has been recognized by this court in the cases, Homes v. Aery, 12 Mass. 137 ; Thatcher V. Gammon, 12 Mass. 268 ; Eowe v. Smith, 16 Mass. 308; Loring v. Mans- field, 17 Mass. 394." 492 THE LAW OF MARINE INSURANCE. [CH. IX. Section V. — Against whom an Action may he brought. Where insurers accept an abandonment, they acquire thereby, together with all salvage abandoned to them, all the rights of ac- tion of the* insured.i They hold them however only as assignees, the abandonment being in fact an assignment to them.^ And ' In Kennedy v. Baltimore Ins. Co., 3 Harris & J. 367, the plaintiff's vessel had been insured by the defendants, and captured. Immediately after the cap- ture the plaintiff abandoned to the insurers. The freight on the cargo had been paid to the insurers, and plaintiff brought this action to recover it. It vras held that he could recover that portion of the freight earned up to the time of the capture. The court lay down the law as follows : " The aban- donment of the ship for a total loss, on account of the capture, did, by operation of law, transfer all the right and interest of the appellant [plaintiff] in the ship to the appellees [defendants], on their aQceptance of the abandonment, and all the benefits and advantages directly or incidentally accruing from the ship subsequent to the capture." And in Chesapeake Ins. Co. u. Starke, 6 Cranch, 268; Marshall, C. J., says: "If the abandonment was legal, it put the underwriters completely in place of the assured." See Mellon v. Bucks, 5 Mart. La. N. S. 371, quoted infra, p. 498, n. 1 ; Columbian Ins. Co. v. Ashby, 4 Pet. 139; Yates v. Whyte, 4 Bing. N. C. 272, quoted infra, p. 493, u. 1 ; Walker V. United Ins. Co., 11 Sug. k K. 61, infra, p. 497, n. 1 ; Atlantic Ins. Co. v. Storrow, 5 Paige, 285, infra, p. 495, n. 1 ; Mercantile Ins. Co. v. Calebs, 20 N. Y. 1 73, infra, p. 493, n. 2 ; Gould v. Citizens' Ins. Co., 13 Mo. 524; Mut. Safety Ins. Co. V. Cargo, &c., Olcott, Adm. 89 ; Rog- ers u. Hosack, 18 Wend. 319 ; Coolidge V. Gloucester, M. Ins. Co., 15 Mass. 341. " See remark of Dallas, C. J., in Davison v. Case, 8 Price, Exch. 542, 560. In Coolidge v. Gloucester M. Ins. Co. the court say : " After the loss has happened, the insurers, in virtue of the abandonment, become the owners, and are liable for the repairs and expenses, and entitled to the earnings, of the ship. . . . . By the abandonment of the ship, the insurers stand in no better situation than the assured in respect to the ves- sel, but succeed to his rights." In Schieffelin v. N. Y. Ins. Co., 9 Johns. 21, Kent, C. J., says: "An abandon- ment, when founded upon a statement of facts justifying it, relates back to the time of the loss, and renders the in- surer proprietor of the subject from that time, with the rights and risks at- tached to that relation. 2 Emerig. 196, 235." In Mercantile Ins. Co. v. Calebs, 20 N. Y. 173, goods were delivered to the defendants, as common carriers, under an agreement that, in considera- tion of reduced prices for transportation, the shippers should take the risk of loss or damage from the dangers of lake and river navigation, fire, &e. ; and that, in case of loss or damage for which the carriers might be liable, they should have the benefit of any insurance by or for account of the shippers. The goods were damaged to the extent of more than half their value, without fault on part of defendants, and abandoned to the insurers, who paid to the shippers the full value of the goods, having no knowledge of the special agreement; and then brought this action against the CH. IX.] ACTION. 493 wherever the law requires that the assignees must bring their ac- tions in the name of the assignor, the insurer must bring his action in the name of the insured.^ carriers, claiming to be subrogated to all the rights of the insured. This claim the court admitted, but held that the insured would have had no right of action against the carrier, in conse- quence of the special agreement. The court say, per Allen, J. : "If there had been no special agreement between the insured and the defendants, the plain- tiffs would undoubtedly be entitled to recover, if the defendants were liable for the loss of the goods The abandonment has all the effect of an assignment by the insured, when the assignees would become possessed of all the rights against the carrier which the insured possessed at the time of the assignment, and no more The contract, therefore, having been lawful and tainted with no fraud, the plaintiffs could only take it from the insured with such rights as they [the insured] had against the carriers." And judgment was given for the defendants. See Deduer v. Del. Ins. Co., 2 Wash. C. C. 61; Gould V. Citizens' Ins. Co., 13 Mo. 524. ^ In London Ass. Co. v. Sainsbury, the property insured having been burned by rioters, the insurers paid the loss, and brought this action against the hun- dredors in their own names. The court were divided ; but the Exchequer Cham- ber gave judgment unanimously against the right of the plaintiff to maintain the action. Lord Mansfield said : " My lean- ing is strongly in favor of the plaintiffs, if the case will bear me out ; for otherwise they must lose a sum of money for want of a remedy In respect of salvage, the insurer stands in place of the in- sured, and vice versa as to damage. I take it to be a maxim, that, as against the person sued, the action cannot be transferred. As between the parties themselves, the law has long supported it for the benefit of commerce ; but the assignee must sue in the name of the assignor, by which the defence is not varied The case of a sheriff who has paid the whole debt is very strong, for he stands in the place of the debtor by act of law ; yet he must sue in the name of the plaintiff. If the insurer could sue in his own name, no release by the insured would bar, nor would a verdict* by him be a bar. It is impos- sible that the insured should transfer, and yet retain his right of action. Trus- tee and cestui que trust cannot both hav.e a right of action. It is a great hardship for which I cannot find a remedy ; but it is better that the general rule of law should prevail, that, as against the person sued, the right of action cannot be trans- ferred, nor the defence raised." On the authority of this case was decided Rock- ingham Mut. F. Ins. Co. V. Bosher, 39 Me. 253. But in equity the insurer may sue in his own name. Garrison V. Memphis Ins. Co., 19 Hon. 312. So also in admiralty; for in Mut. Safety Ins. Co. V. Cargo of Brig George, Olcott's Adm. 89, Betts, J., says : " The abandon- ment conferred on them [the insurers] every interest and right in the ship pos- sessed by her owners. They take all title and authority of the assured, even the spes recuperandi ; his agents become theirs, and they stand subrogated to every privilege and power he possessed and might legally exercise. If this com- plete substitution of the assurers in the place of the assured should fail to confer 494 THE LAW OF MARINE INSURANCE. [CH. IX. As the insurers not only acquire by abandqnment all the inter- ests in the subject-matter of the insured, but all his rights of action connected with it ; so the insured must concur in whatever measures are necessary to the full benefit and advantage of the interests and rights transferred to him.^ They may use his name in all actions where it is necessary, and may claim whatever com- pensation or contribution the insured could claim against other persons.^ And as the insurers become owners of the property also the capacity to sue at law in their own names, they would meet no such technical impediment in this court ; an assignee of an interest may maintain an action upon his title as if originally vested in him." See Mason v. Sainsbury, 3 Doug. 61. ^ In Rockingham Mut. F. Ins. Co..u. Bosher, 39 Me. 253, the court say: "Payment to the owner by the insurer does not bar the right against another party originally liable for the loss, but the owner, by recovering payment of the underwriters, becomes trustee for them, and by necessary implication makes an equitable assignment to them of his right to recover in his name." In Mason v. Sainsbury, which was an action by the insurers, who were paid a loss, against the hundred, Lord Mans- field said : " The oflSce paid without suit, not in ease of the hundred, and not as co-obligors, but without prejudice. It is, to all intents, as if it had not been paid. The question then comes to this. Can the owner, having insured, sue the hundred? Who is first liable? If the hundred, it makes no difference ; if the 'insurer, then it is a satisfaction, and the hundred is not liable. But the con- trary is evident from the nature of the contract of insurance. It is an indem- nity. Every day the insurer is put in the place of the insured. In every abandonment it is so. The insurer uses the name of the insured." And the plaintiff" recovered. So in Randal v. Cockran, 1 Ves. Sen. 98, where certain reprisals had been made, the benefit of which went to the owners of captured vessels, the plaintiff", an insurer who had paid the loss, brought a bill in chancery to recover a part of the value of the prizes. The Lord Chancellor was of opinion "that the plaintiifs had the plainest equity that could be. The per- son originally sustaining the loss was the owner, but after satisfaction made to him, the insurer. No doubt but from that time, as to the goods themselves, if restored in specie, or compensation made for them, the assured stands as a trustee for the insurer, in proportion for what he paid."- C. J. Shaw, in Hart v. West- ern R. R., 13 Met. 99, says of Randall V. Cockran : " This was a case in chan- cery ; but where the same principle can be carried into effect in the ordinary forms of proceeding in a court of law, the same principle will be applied. If the trust consists in an equitable liabil- ity to pay money, it will be recognized and enforced in a suit at law." See also Yates v. Whyte, 4 Bing. N. C. 272, where it was held that the defendants, who had damaged the plaintiff''s ship by colKsion, were not entitled to deduct from the damages to be paid by them a sum of money paid to the plaintiff" by insurers for that very loss. And see Hart V. Western R. R. 13 Met. 99, cited in next note. • ^ See cases in preceding notes. In Hart V. Western R. R., 13 j^et. 99, a CH. IX.] ACTION. 495 abandoned to them, they have all the actions and remedies of an owner for any torts, as barratry or others, committed after their building was destroyed by fire from the defendants' engine. Sparks from this building set on fire the dwelling-house of the plaintiff, and it was partially consumed. The action was founded on a statute of Massachusetts, which pro- vides that when any injury is done to a building " by fire compaunicated " by a locomotive-engine of a railroad corpora- tion, the corporation shall be responsible in damages to the person so injured. " The plaintiffs were insured by the Springfield M. F. I. Co., who requested the plaintiffs to commence a suit against the defendants to compel payment by them of the plaintiffs' loss, and offered to indemnify the plaintiffs from costs, and to save them harmless in reference to said suit. The plaintiffs refused to commence a suit as requested, but de- manded the amount of their loss of the said insurance company, who paid the same, first giving notice to the defend- ants that they did not intend thereby to relinquish an^ claim which they might have against the defendants for the amount in their own or in the plaintiffs' names. The insurance company, in the name of the plaintiffs, then brought this action to recover the amount paid by said company to the plaintiffs. Af- ter the action was commenced, and be- fore the entry of the writ, the plaintiffs executed an instrument declaring that they had received payment of their loss of the insurance company ; that they had no claim against the defendants ; that they [the plaintiffs] had not au- thorized the commencement of this ac- tion against the defendants, and did not wish to have it prosecuted ; and fuUy releasing any claim which they might have against the defendants on account of said loss." The first question in the case was whether the railroad corpora- tion was liable to anybody under the statute for the building destroyed. This the court answered in the affirma- tive ; and with reference to the right of the insurance company to maintain this action, they say, per Shaw, C. J. : " When the owner, who prima facie stands to the whole risk and suffers the whole loss, has engaged another person to be at that particular risk for him, in whole or in part, the owner and the in- surer are, in respect to that ownership and the risk incident to it, in effect one person, having together the beneficial right to an indemnity provided by law for those who sustain a loss by that par- ticular cause. If, therefore, the owner demands and receives payment of that very loss from the insurer, as he may by virtue of his contract, there is a mani- fest equity in transferring the right to indemnity, which he holds for the com- mon benefit, to the assurer. It is one and the same loss for which he has a claim of indemnity, and he can equita- bly receive but one satisfaction. So that, if the assured first applies to the railroad company and receives the dam- ages provided, it diminishes his loss pro tanto, by a deduction from and growing out of a legal provision attached to and intrinsic in the subject insured. The liability of the railroad company is in legal effect first and principal, and that of the insurer secondary ; not in order of time, but in order of ultimate liabil- ity. The insured may first apply to whichever of these parties he pleases ; to the railroad company by his right at law, or to the insurance company in virtue of his contract. But if he first 496 THE LAW OF MARINE INSUKANCE. [CH. IX. ownership began. If the owner has a claim against the master for barratry before the abandonment, or against any other persons for torts, we suppose these claims pass to the insurers by abandon- ment, and they hold them as assignees.^ A common instance of applies to the railroad company, who pay him, he thereby diminishes his loss, by the application of a sum arising out of the subject of the insurance, to wit, the building insured, and his claim is for the balance. And it follows as a neces- sary consequence that, if he first applies to the insurer and receives his whole loss, he holds the claim against the rail- road company in trust for the insurers. When such an equity exists, the party holding the legal right is conscientiously bound to make an assignment in equity to the person entitled to the benefit ; and if he fails to do so, the cestui que trust may sue in the name of the trus- tee, and his equitable interest will be protected." The court then cite Mason V. Sainsbury, 3 Doug. 61 ; Clark v. Hund. of Blything, 3 Dowl. & R. 489, 2 B. & C. 254 ; Yates v. Whyte, 4 Bing. N. C. 272, 5 Scott, 640; Randall u. Cockran, 1 Ves. La. 98 ; CuUen v. But- ler, 5 M. & S. 466 ; Grade v. N. Y. Ins. Co., 8 Johns. 245 ; Brooks v. McDon- nell, 1 Y. & Coll. Exch. 500 ; and say in conclusion : " In regard to the right of the insurance company to sue in the name of the insured, we think the cases fully affirm the position that, by accept- ing payment of the insurers, the assured do implicitly assign their right of in- demnity from a party liable to the in- surers. It is in the nature of an equi- table assignment which authorizes the assignee to sue in the name of the as- signor for his own benefit ; and this is a right which a court of law will support, and will restrain and prohibit the as- signor from defeating it by a release. The formal discharge, therefore, given by the nominal plaintiffs, is not a bar to the action. See Payne v. Rogers, 1 Doug. 407 ; Whitehead v. Hughes, 2 Cromp. & M. 318 ; Phillips v. Clagett, 11, M. & W. 84; Timan v. Leland, 6 Hill, 237." But the insurers cannot claim any compensation that the insured could not. Mercantile Ins. Co. v. Calebs, 20 N. Y. 1 73, quoted supra, p. 491, n. 2. So where a railroad company by their neg- ligence caused the death of a passenger, in consequence of which an insurance company had to pay the sum due on a policy on the life of the deceased, it was held that, as at common law no action lay for the destruction of human life, the insurers had no right of action against the railroad company. And this, notwithstanding a statute of the State gave an action for damages to the personal representatives of the de- ceased. Conn. Mut. L. Ins. Co. v. N. Y. & N. H. R. R. Co., 25 Conn. 265. ' Bird V. Thompson, 1 Esp. 339, was an action to recover on a policy of in- surance. The loss was by barratry ; and the master of the vessel was produced by the defendant to disprove the barra- try. The witness was objected to, as he had no release from the underwrit- ers. Lord Kenyan sustained the objec- tion, and said that, " if the plaintiffs obtained a verdict, he conceived that the defendant might maintain an action against him [the master], the loss hav- ing arisen from the barratry, which was his act ; for though he knew of no ac- tion of that sort ever having been brought, yet he conceived that, when- ever a man acted contrary to his duty, CH. IX.] ACTION. 497 this transfer of claim is where the insurers thus become possessed of the rights of the insured to general-average contribution.^ Shippers can claim compensation from the owners or master of the ship for any losses caused by their fault, or by any negligence of the officers or mariners, whether by bad stowage, by collision, or by unjustified deviation. For these claims the shipper may bring his own action for his own benefit ; ^ but if he transfers the whereby another received a damage, or was rendered respon^ble or liable to damages, he might maintain an action ex delicto against the person who had so subjected him." But for barratry com- mitted before abandonment, the action, if brought by the insurers, must be in the name of the insured, for there is no privity between the master or mariners and the insurers, until the latter become actual owners in consequence of aban- donment. And the insurers could as assignees have no higher rights against . the barrators than the insured. This seems in accordance with the doctrine laid down in Rockingham Ins. Co. v. Bosher, 39 Me. 253, where it was held that the insurers in their own names cannot have an action against a person who sets fire to a building insured by them. For the court say : " The rea- son of the doctrine that an action may be maintained in the name of the owner, as the trustee of the insurer who has paid the loss, against the wrong- doer or party first liable as principal, is wholly inconsistent with the principle that the insurer can in his own name recover for money paid on the contract of insurance in an action against the wrong-doer. For the insurer and as- sured being in effect one person, each cannot maintain an action at the same time and for the same loss, when there can be but one satisfaction." See also Conn. Mut. L. Ins. Co. v. N. Y. & N. H. R. R. Co., 25 Conn. 265, to the same VOL. II. 32 effect; and Hart v. Western R. R., 13 Met. 99, where the insurer, standing in a position analogous to that of a ma- rine underwriter after abandonment, brought his action in the name of the insured, and recovered. See this ease quoted fully, supra, p. 493, n. 2. '■ See Walker v. TJ. S. Ins. Co., where there was a general-average loss, pre- vious to the total loss, for which the plaintiff sued. The court held that the plaintiff could recover as for a total loss, leaving to the defendant [the aban- donee] the right to pursue against the cargo, or those who are responsible in respect of it, for contribution," &e. " PhiilUps V. Baillie, 3 Doug. 374. In this case the defendant advertised a -ship to sail with convoy. The plaintiff shipped goods on her, which he insured with a warranty that the ship should sail" with convoy. Preliminaries of peace having been gazetted, she sailed with no con- voy, and was lost. No notice was given to the plaintiff by the defendant that the ship would sail without convoy. The plaintiff was nonsuited in an action against the insurers, and then brought this action. Lord Mansfield said that " it was the duty of the defendant to give notice to the plaintiffs, so as to enable them to alter their insurance " ; and it was held that the plaintiff could recover. See also Parker v. James, 4 Campb. 112, where the loss took place in consequence of deviation. 498 THE LAW OF MARINE INSURANCE. [CH. IX. goods to the insurers by abandonment, he will, generally at least, transfer to them all such rights of action.^ So of the action ' In Mellon v. Bucks, 5 Mart. La. 371, the plaintiff claimed the value of certain goods shipped by him on board a vessel of the defendant. On the voyage the vessel was condemned as unseaworthy, and the cargo, being of a perishable nature, was sold. Before beginning this action the plaintiff had abandoned and claimed for a total loss, and was at this time pursuing the claim in court. The court say : " On receiving information of the accident which affected the vessel and her cargo, the plaintiff was bound to consider and determine whether, ac- cording to occurrences, he would abandon to the insurers, and pursue them as for a total loss, or retain his right to the property insured, and prosecute for a partial damage or injury. He has chosen the former method of pursuit, and by so doing has divested himself of all title to the property claimed in the present suit, and transferred it to the insuran^fe com- pany, at least so far as his will was con- cerned in the transaction We therefore conclude that as owner he cannot maintain the present action. See 6 Cranch, 268 ; 1 Caines, 292." In Atlantic Ins. Co. " Storrow, 5 Paige, 285, the defendant was insured on goods which had been shipped, but were stolen before the ship sailed. Storrow aban- doned to the insurers^ and then began an action at law on the policy, and re- covered. The insurers then expressed their readiness to pay the loss, provided Storrow would put them in possession of the bill of lading, &c., and make suitable covenants that the remedy against the ship-master or owners was not impaired ; •but that, unless this was done, they would seek relief in chancery. In reply, Stor- row stated that the bill of lading had been delivered to the ship-master to be cancelled. Whereupon the insurers brought this bill in equity ; and the vice- chancellor decided that the underwriters were, by the loss and abandonment, en- titled to be subrogated to the rights of the assured, if they paid the loss. And he decreed that the complainants be allowed the amount which the master or ship-owners would have been liable for, and that the judgment should only be enforced for the residue, if anything. On appeal, the chancellor (^Walworth') af- firmed the decree, and said, after com- ing to the conclusion that the insurers were liable for the loss of the goods by theft: "It is insisted, however, on the part of the respondents, that, although . they have succeeded in satisfying the superior court that this was a loss for which the underwriters were liable on this policy, it was a case in which the underwriters and ship-owners were equally liable, and that the equities of both were equal as to the assured. Even if this were so, it does not follow that the assured had a right to receive the amount of the loss from either, and assign over to the one from whom it was received the right to claim the full amount from the other party. It would rather present a case of equitable con- tribution, in which each should contrib- ute a moiety towards the loss, as in the case of a double insurance. The in- surers, however, are not liable to con- tribute for a loss, for which the master or ship-owners are also liable to the assured. The contract of insurance is a new contract of indemnity to the as- sured against such losses as he may actually sustain by reason of any of the perils assured against. And upon an CH. IX.] ACTION. 499 of the owners against pilots for damage against their misconduct,^ or against captors for an unlawful capture.^ It is to be remembered, however, that in all such cases the aban- donment alone gives to the insurers no rights of action ; for an abandonment is an assignment which cannot take effect as such until both parties consent, that is, until the insurers accept the abandonment. Before that takes place, they have no more stand- ing in court, and no further interest in the rights of the insured, than any other persons who are creditors of the insured, or have received offers from them.^ abandonment and payment, or upon a recovery as for a total loss, the under- writers are entitled to subrogation, at least in equity, to all the rights and remedies which the assured has to the property which is not actually destroyed, including the spes recuperandi, from any other source, unless the underwriters have relinquished that right by a stipu- lation in the policy If it had ap- peared upon the trial of the suit at law that the assured had received a compen- sation for his loss from the ship-owners or the master, and that the assignment was made for their benefit merely, to enable them to recover back the amount of the insurance from the underwriters on the policy, there can be no reasonable doubt that it would have been a good defence at law, at least to the amount thus received." 1 In Mcintosh v. Slade, 9 Dowl. & R. 738, where a barge had been sunk by a brig in consequence of the fault of the pilot of the latter, it was held that the owners of the barge could recover for their loss against the pUot. = Boehm v. Bell, 8 T. R. 154 ; Apple- ton V. Crowninshield, 3 Mass. 443, 8 Mass. 340. These cases establish the right of the owners to recover of the captors for an unlawful capture ; and, on the principle of the cases in the fore- going notes, the insurer who had paid a loss would have an action in the name of the insured against the captors. ' The Ship Packet, 3 Mass. 255. This vessel being injured at sea, the master borrowed money on bottomry to repair her. She finally reached her home port, when she was libelled in admiralty by the bottomry bondhold- ers, and vessel and cargo sold. Among the claimants of the proceeds in the registry was an insurance company, which had underwritten an insurance on the ship, and to whom she had been abandoned; but the abandonment had not been accepted. Mr. J. Story said : " The first point which I am called upon to consider is, whether an under- writer who has refused to accept an abandonment can be permitted to claim property in the ship in this court. In my opinion, it is perfectly clear that he cannot. He has not, and pretends not to have, any jus ad rem or jus in re. All that can be said is, that he may ul- timately have an interest in the ques- tions here litigated. But an interest in the question forms no title to claim property in the admiralty. This court looks only to rights in the thing itselfi to ownership general or special, and to such claims as are direct in the proprie- tary interest, such as a legal title or j^is in re, or to such as are indirect, as a lien or jus ad rem Underwriters, as 600 THE LAW OF MARINE INSURANCE. [CH. IX. Section VI. — Of an Action hy one effecting or ordering Insurance through an Agent. If the insured procured his insurance through a broker or other agent, and was injured by his negligence, he has his claim for damages.^ And an action has been sustained in England by an such, cannot litigate here as to the rights of the libellants or the claimants. They are mere strangers, and no more entitled to be heard than any contingent debtor or creditor of either party.'' ' In Park o. Hammond, 1 Holt, 80, 4 Campb. 344, GJSfis, C. J., says : " The law on this point is clear. A broker is bound to have knowledge and diligence, and must execute his orders ; but it is not every mistake which makes him re- sponsible." In this case the error of the broker was in not stating correctly the port where the goods insured were loaded; and he was held liable. In Mallough V. Barber, 4 Campb. 150, the brokers effected insurance " at and from Teneriffe," without inserting in the pol- icy " a liberty to touch and stay at all or any of the Canary Islands." It was proved to be the invariable custom to insert this clause in Teneriffe policies, even without special instructions ; and the brokers were held liable. Moore v. Mourgue, Cowp. 479, was an action against a broker who procured insur- ance on fruit at an office whose poli- cies always contained the exception, " free from particular average." It ap- peared that certain other offices insured at the same rate, but without this excep- tion. And it was contended that, on gen- eral instructions to insure, the broker was guilty of gross negligence in not in- suring at the latter offices. But the jury found for the broker, and the court refused to grant a new trial. So when a broker effected insurance, but neg- lected to get the policies from the in- sureip, who afterwards refused to de- liver them, it was held that the insured could recover against the broker. Tur- pin V. Bilton, 5 Man. & G. 455. When a broker had effected certain policies which required alteration, and was re- quested by his principal " to do the needful" about them, and thereupon had them altered, but not so as to cover a loss which afterwards took place, it was held that, inasmuch as the altera- tions were such as a skilful insurance agent would have made, the broker was not liable to his principal. Chapman v. Walton, 10 Bing. 57. It has been held to be the duty of an insurance agent to give notice to his principal of his inabil- ity to effeet an insurance according to special instructions. CaDand v. Oel- richs, 5 Bing. (N. C.) 58. If a party undertakes to procure insurance with- out consideration, he is liable to an ac- tion on the case for negligence, provided he takes any steps in the business, but acts so negligently that his principal gets no benefit from the insurance. Wilkinson v. Coverdale, 1 Esp. 75. Under some circumstances a party may become liable to another merely by re- ceiving an order to insure. These are : " First, where a merchant abroad has ef- fects in the hands of his correspondent here, he has a right to expect that he will obey an order to insure, because he is entitled to call his money out of the other's hands when and in what man- ner he pleases. Second, when the CH. IX.] ACTION. 501 insured against the secretary of an insurance company for false representation as to the affairs of the company, whereby the plain- merchant abroad has no effects in the hands of his correspondent, yet, if the course of dealing between them be such that the one has been used to send or- ders for insurance, and the other to comply with them, the former has a right to expect that his orders for in- surance will still be obeyed, unless the latter give him notice to discontinue that course of dealing. Thirdly, if the merchant abroad send biUs of lading to his correspondent here, he may engraft on them an order to insure, as the im- plied condition on which the bills of lading shall be accepted, which the other must obey, if he accept them, for it is one entire transaction. It is true, that, unless something has been held out by the person here to induce the other to think that he will procure insurance, he shall not be compelled to insure." Bay- ley, J., in Smith v, Lascelles, 2 T. E. 187. So where a merchant had ac- cepted an order for insurance, and lim- ited the broker to too small a premium, in consequence of which no insurance could be procured, the, merchant was held liable to his correspondent. Wal- lace V. Tellfair, 2 T. R. 188, n. But if the insurance is to be effected on something not insurable, and the agent neglects to effect it, he is not liable. So when a mate, who was to receive as part of his wages three slaves, had ordered the defendant to insure them, which the defendant had neglected to do, it was held, that no action lay against the defendant, be- cause seamen's wages are not insurable, and the plaintiff could not have re- covered from the insurer had the policy been procured. Webster v. De Tastet, 7 T. fi. 157 ; Glaser v. Cowrie, 1 Man. & S. 52. See also Maydew v. Forester, 5 Taunt. 615; Smith v. Colog^, 2 T. R. 188, n ; Delaney v. Stoddart, 1 T. R. 22. The above are all English cases ; but the American authorities are to the same effect. • Where an agent was in- structed to effect insurance on a vessel valued at $ 4,000, to the extent of three fourths her value, which he neg- lected to do, the jury found a verdict against the agent on the footing of a valued policy for $3,000. The court reiused to disturb the verdict, on the ground that, though there was no ex- press instruction to get a valued policy, such a desire was implied in the letter of instructions. Miner v. Tagert, 3 Bin. 204. So when the agent neglects to remit the premium, whereby the obligation does not attach, the agent is liable to the principal. Per Colden, Senator, in Perkins v. Washington Ins. Co., 4 Cow. 645. The measure of damages seems to be the amount which the principal would have received, had he been insured ac- cording to his directions. Perkins v. Washington Ins. Co. 4 Cow. 645 ; Strong V. High, 2 Rob. La. 103. If an agent agrees to procure insurance, with no instruction as to the amount, he is liable, in case of his neglect to effect the insurance, for the value of the sub- ject to be insured. Ela v. French, 11 N. H. 356. So where an agent, em- ployed to settle with the insurers for a total loss, settled for an average loss, and cancelled the policy, he was held liable to his employers, the insured, for the whole amount of the loss. Rundle V. Moore, 3 Johns. Ca. 36. 502 THE LAW OF MARINE INSUEANCE. [CH. IX. tiff was induced to effect an insurance with them.^ And we know no reason to doubt that this action would be sustained by the courts of this country. In one very peculiar case, which we have elsewhere noticed, a part owner undertook gratuitously to effect insurance for another owner and failed to do so, and, an action being brought against him to recover damages for the loss of the uninsured vessel. Chancellor Kent, in a most elaborate decision, held that the defendant was not liable, because he had received no consideration for his undertaking.^ "We have already inti- mated that there may be room to doubt the decision, on the ground that a person who is employed to do any business, and who, if he does it, may bring an action for a fair compensation on a promise to pay, implied by the request, is not a mandatary, or an agent without compensation. And if a part owner in this case had effected the insurance, he was entitled to the same compensa- tion which any other person might have claimed by way of com- mission or otherwise. It has been held that, if such an agent enters upon the perform- ance of his undertaking, he is bound to pursue his instructions, and is liable for any damage resulting from his failure to do so.^ ' Pontifex v. Bignold, 3 Man. & G. they [Fellowes & Co.] were bound to pro- 63. ceed with reasonable care and diligence, ' Thorne v. Deas, 4 Johns. 84. See according to the terms of the mandate. ante p. 431, n. 2. .... A bailee, receiving property un- ' In Fellowes v. Gordon, 8 B. Monr. (Jer particular directions as to its dispo- 415, Fellowes had received a note from sition, impliedljr undertakes to dispose Gordon, with instructions to collect the of it according to those directions, and amount due, and in default of payment may be made liable for the loss conse- to attach a certain steamboat. Fel- quent upon his failure or neglect to do lowes collected $100, but did not attach so, and especially if he actually proceed the boat, in consequence of which Gor- with the business committed to him. don's claim was lost, or at any rate in- .... If [Fellowes & Co.] were unwill- deflnitely postponed. Gordon brought ing to incur the trouble or responsibil- the action to recover from Fellowes the ity or cost likely to arise under the in- amount due on the note more than the struetion, they should have promptly de- $100, which had been received. The clined the commission.'' See also Coggs Court gave judgment for Gordon, and v. Bernard, 1 Ld. Raym. 909 ; 1 Smith, said: " Having undertaken the commis- Lead. Ca. *82. Wilkinson u. Corndale, sion, and proceeded in its execution, 1 Esp. 75, CH. X.] EVIDENCE. 503 CHAPTER X. EVIDENCE. A POLICY is a written contract on the part of the insurers. It is as much a contract on the part of the insured as if he signed it, and the contract remains a written contract as to both parties. The general rules as to the law of evidence apply to it, but from the peculiar nature of the contract their application has given rise to peculiar questions and decisions. In this chapter we do not propose to consider the law of evidence as it is in itself, but the results of this law, when applied to the many questions arising out of the contract of insurance. The first question that we meet with, and the most general question as to all written contracts, is, when, to what extent, and for what purpose parol evidence or evi- dence from outside the contract is receivable to affect its construc- tion or interpretation. Here the first and usual rule is, that no evidence from without is admissible to vary the contract or make it another contract than that which the parties made,^ for the ob- vious reason that when the parties reduced their contract to writing, the necessary presumption is that they included in it all that they considered essential to their bargain. They may have added something which they intended to omit, or forgotten some- thing which they intended to insert, but this cannot be shown by evidence for the purpose of making the contract other than they wrote it, for if it could there would no longer be any security or advantage in a written contract.^ But evidence is admissible to ' Tait on Ev. 326. See also Herring if the contract be in the end reduced V. Boston Iron Co., 1 Gray, 134 ; Eenard into writing, nothing which is not found V. Sampson, 2 Kern, 561. in the writing can be considered as a ^ " Where the whole matter passes in part of the contract." Per Abbott, C. parol, all that passes may sometimes be J., in Eain v. Old, 2 B. & C. 634. See taken together as forming parcel of the to same effect Vandervoort v. Smith, 2 contract, though not always, because Caines, 155 ; Mumford v. M'Pherson, 1 matter talked of at the commencement Johns. 414 ; Pickering v. Dowson, 4 of a bargain may be excluded by the Taunt. 786. The reason of this rule is language used at its termination. But well stated in the Countess of Kutland's 504 THE LAW OF MARINE INSURANCE. [CH. X. explain the words they used if they are of doubtful meaning, or if they are shown by evidence to be equally susceptible of many meanings.^ There is scarcely any question in the law that has been found so difficult, or has given rise to more multifarious ad- judication, than how to draw the line between evidence which is not admissible because it would vary the contract, and that which is admissible because it does not*vary but explains the contract. For the general rules on the subject we must refer to the works on evidence. As to policies of marine insurance, the distinction may be illustrated by the refusal of the courts to apply a policy, insuring one part owner in his own name,^ to the interest of an- case, 5 Rep. 26 a: "It would be incon- venient that matters in writing, made by advice and on consideration, and which finally import the certain truth of the agreement of the parties, should be controlled by averment of the parties, to be proved by the uncertain testimony of slippery memory." ' In the case of Colpoys v. Colpoys, 3 Jacob's Rep. in C. C, the Master of the Rolls thus states the rule and its reason : '.' Where the terms used are wholly in- definite and equivocal, and carry on the face of them no certain or explicit meaning, and the instrument furnishes no materials by which the ambiguity thus arising can be removed, if in such cases the court were to reject the only mode by which the meaning could be ascertained, viz. the resort to extrinsic circumstances, the instrument must be- come inoperative and void. As a minor evil, therefore, common sense and the law of England warrant the departure from the general rule, and call in the light of extrinsic evidence." In Peisck v. Dickson, 1 Mason, 11, Mr. Justice Story said : " There seems indeed to be an in- termediate class of cases, partaking of the nature both of patent and latent am- biguities ; and that is, where the words are all sensible and have a settled mean- ing, but at the same time consistently admit of two interpretations, according to the subject-matter in the contempla- tion of the parties. In such a case, I should think that parol evidence might be admitted to show the circumstances under which the contract was made and the subject-matter to which the parties referred. For instance, the word 'freight' has several mean- ings in common parlance ; and if by a written contract a party were to as- sign his freight in a particular ship, it seems to me that parol evidence might be admitted of the circumstances under which the contract was made, to ascer- tain whether it referred to goods on board of the ship, or an interest in the earnings of the ship, or, in other words, to show in which sense the parties in- tended to use the term." See also Bunn u. Winthrop, 1 Johns. Ch. 329 ; Le Farrant v. Spenser, 1 Ves. Sen. 97 ; Avery v. Stewart, 2 Conn. 69 ; AVil- liams V. Oilman, 3 Greenl. 276. ^ This is well illustrated in the case of Finney v. Bedford Commercial Ins. Co., 8 Met. 348, where Dewey, J., in giving the opinion of the court, said : " The real question here is, whether a policy, made in the name of a particular person, who is the owner of a small proportion in interest of the prop- erty insured, without any words indicat- CH. X.] EVIDENCE. 505 other part owner of whom the insured is neither agent nor trustee. Cases may be cited applying thg same rule to fire policies, upon principles which would be equally applicable to marine policies.^ ing an intention to insure beyond his own interest, can be made effectual to coYer the interest of others, upon paroj proof that the application for insurance was for such others, as well as for the party named, and that this was well known to the insurers, and that it was the intention and understanding of all the parties, that the policy was to cover the interest of all the owners. The general rule excluding parol evidence, when offered to contradict or vary the teiTHs of a written contract, seems to forbid it. When the parties have put their agreement into writing, and the terms of it are plain and direct, leaving no uncertainty as to the nature of it, we must treat it as the whole engagement of the parties; and this excludes all parol evidence of conversations or dec- larations of the intentions of the parties tending to show another and different contract. This principle, we appre- hend, applies as well to contracts of insurance as to other agreements." In Graves v. Boston Marine Ins. Co., 2 Cranoh, 419, it was held that a policy in the name of one part owner, with the words added, " as property may appear," without the clause stating the insurance to be for the benefit of all concerned, does not cover the interest of another joint owner ; the words " as property may appear " being considered as applicable to the property of the one in whose name the policy issued. Marshall, C. J., says : " The contract ought to have been so expressed as to show that the interest of some other than Graves was secured, if such was to be the' effect of the instrument. A policy, though construed liberally, is still a special contract; and under no rule for proceedings on a special con- tract could the interest of copartnership be given in evidence on an averment of individual interest, or the averment of the interest of a company be sup- ported by a special contract relating in its terms to the interest of an individ- ual." See also Staokpole v. Arnold, 11 Mass. 31 ; Pearson v. Lord, 6 Mass. 84; Murray v. Columbian Ins. Co., 11 Johns. 302; Turner v. Burrows, 5 Wend. 541 ; Finney v. Warren Ins. Co., 1 Met. 18. ' The case of Holmes v. Charles- . town Mutual Fire Ins. Co., 10 Met. 211, was as follows: An application for insurance against loss of a meet- ing-house and its fixtures, by fire, was made to a mutual fire insurance com- pany, that could not, by statute and its own by-laws, insure upon any building an amount exceeding three fourths of the value thereof ; and, in the applica- tion, the value of the building was stated to be $4,000. The company executed a policy, insuring $ 3,500 on the meeting-house and fixtures. The house was destroyed by fire, and the company paid $ 3,000 to the assured to- wards the loss. The present suit was then brought on the policy, to recover the balance of $500. It was de- cided that the plaintiffs could not re- cover. Hubbard, J., in delivering the opinion of the court, says : "On re- ferring to the application, the value of the building is agreed to be $ 4,000 ; and the plaintiffs now ask liberty to show that it was, in fact, worth a much larger sum at the time of the insurance. But such evidence is inadmissible ; and 506 THE LAW OF MARINE INSURANCE. [CH. X. As policies of insurance are partly written and partly printed, the general rule has been applied to them, that greater force is given the valuation, if made in good faith, is binding on both parties. The value being fixed at $ 4,000, the contract does not, by law, cover more than three fourths of that sura; for the fixtures are a part of the building itself, and are included in the estimates of its value." In this case, the rules and regulations referred to are regarded as representations, and are considered as part of the contract, in the same man- ner as if they had been introduced into the body of the policy. " In fire poli- cies, representations, so far as they are distinctly referred to in the policy, be- come parts of the contract, and are to be construed with it." Per Hubhard, J., in same opinion. Another case, il- lustrating the same point, is that of The Mutual Safety Ins. Co. v. Hone, 2 Comst. 235. There in a policy of re- insurance, the underwriter agreed to " reinsure," and to " make good unto the reinsured all such loss or damage (not exceeding the sum specified) as shall happen by fire, the loss or damage to be estimated according to the true and actual cash vlaue of the property at the time the same shall happen." An attempt was made to introduce evi- dence of a local custom among insurers, to pay only such a proportion of the loss as the amount of reinsurance bears to the original policy. It was held that there was no ambiguity in the terms employed, and that the usage went to contradict the plain, unequivocal lan- guage of the policy, and was, therefore, inadmissible. " The usage is, in this case, if admitted, to prove that the word ' all ' means less than half." The case of Stacey v. The Franklin Fire Ins. Co., 2 Watts & Serg. 506, was substan- tially as follows : The first insurance by a fire office was upon " merchandise generally, including liquors and grocer- ies, contained in store No. 37 South Wharves, for the use of whom it may concern, — say, merchandise, without exception." A record was made in an- other office, on coffee and other mer- chandise, without exception, either on board the J. S., in this port, or in the brick store. No. 37 South Wharves, in the city of Philadelphia. A loss hap- pened, by fire, on goods in the store, not brought in the J. S., or landed there- from. It was held, that facts and cir- cumstances, out of the instrument, are inadmissible to show the intention of the parties, as to the second policy being a specific insurance on other goods, not covered by the first. See, further, the important case of Dodge V. Essex Ins. Co., 12 Gray, 65, in which an open policy of insur- ance " on property on board vessel or vessels at and from any port or ports in the United States to any other port or ports in the United States, as per indorsements, with liberty to stop at any intermediate ports or places," bore this indorsement : " Liberty is given to stop at Norfolk or other ports for trade, by adding one eighth per cent for each. This policy attaches as follows : schooner Potomac, Norfolk to Salem or Boston." The Potomac sailed from Norfolk, and arrived at Salem, where the master was informed at the plaintifi^s counting-room that his port of discharge was Boston, and he received orders to go there ; but the schooner was wrecked on her passage. Evidence of former usage under similar policies between the same parties to put into Salem, and then pro- CH. X.J EVIDENCE. 507 to the -writteii words, if there be any conflict between them, be- cause the written words may be supposed to have been chosen by the parties as appropriate to that very bargain.^ The date of a ceed to Boston, and to settle with the underwriters afterwards by paying an additional premium of one eighth per cent, did not affect the policy. Shaw, 6. J., says : " The terminus a quo is Norfolk, and the terminus ad quern is either Salem or Boston, as the assured might direct. It is left uncertain by the contract, but it must be made cer- tain at some time, and must be deter- mined by the court. At whatever time that election might be made, within the stipulated limits, whether at the time of departure from Norfolk or at any time before arriving at the dividing point in the voyage, or at what other time, it must be before the termination of the risk, and that risk will terminate on arrival at Boston or Salem, whichever shall first happen. This appesirs to be the clear legal result of the contract; and we see nothing in the anterior usage or practice of the parties to vary this result." A similar case is that of Seccomb v. Provincial Ins. Co., 10 Allen, 305. This was an action on a policy of insurance on a, vessel from New Tork to ports in South America, and thence to ports of discharge in the United States, with an indorsement thereon of, " Liberty to deviate by going to port or ports in Europe, by paying an equitable premium therefor." This does not include a distinct and inde- pendent voyage, having no connection with the general objects and purposes of the voyage insured, and any evidence of a usage to vary the legal meaning of the deviation clause was held inadmis- sible. So too of any conversation, at the time it was written, between the underwriters and the assured, tending to control the meaning of the clause. See also Sheldon v. Hartford Fire Ins. Co., 22 Ct. 235 ; Liddle v. Market, &c. Ins. Co., 4 Bosw. 179 ; Mercantile Ins. Co. V. State Ins. Co., 25 Barb. 319. ^ The case of Coster v. The Phoenix Ins. Co.,. 2 Wash. C. C. 51, is to the point. The printed clause in a policy liberated the underwriters from par- ticular average to any amount on ar- ticles of a perishable nature, and on other articles where the loss amounts to less than five per cent. The written clause discharges the underwriters from aU responsibility for average losses, whether general or particular, under ten per cent. Washington, J., says : " These clauses are inconsistent with each other, and one or the other must give way. If the written clause varies from the printed, it is evidence of a special contract made in that particular case, different from the usual contract of insurances ; and it must necessarily be considered as the real agreement of the parties. If the written and the printed clauses can be reconciled by any fair construction, it ought to be done ; if they cannot, the former must prevail." In the case of Wallace et al. V. Ins. Co., 4 La. 289, Porter, J., in delivering the opinion of the court, says : " The written parts of a policy control those which are printed, but this principle can only receive a proper application in cases where it is not pos- sible to satisfactorily reconcile them." In case of Benedict v. Ocean Ins. Co., 31 N. Y. 389, Wright, J., says: "If there is any repugnancy in the clauses, in construing the instrument (a policy), the written should prevail over that 508 THE LAW OF MARINE INSURANCE. [CH. Xi contract implies that it was then delivered and went into effect. The word " date " being only a contraction of datum, " given." But this is not a part of the contract which is closed against evidence.^ And it may be proved that it was delivered and took effect on a different day.^ Section I. — Of the Making of the Contract. The principal question which has arisen here arises when a plaintiff claims to be actually insured by one who was his agent. To prove this agency, no particular evidence is necessary. The production of a letter directing the insurance is sufficient.^ And if the question arises whether the authority was given before the work was done, the postmarks on the letters are, unless contra- dicted, evidence that the letter was posted when and where the postmark indicates.* And it is a familiar rule, that if a letter which is printed." Lord Ellenborough states the same principle in the case of Robertson v. French, 4 East, 130 : " The words in a policy superadded in writ- ing are entitled, if there should be any reasonable doubt upon the sense and. meaning of the whole, to have a greater effect attributed to them than to the printed words, inasmuch as the wfitten words are the immediate language and terms selected by the parties themselves for the expression of their meaning." See also Wall v. Howard Ins. Co., 14 Barb. 383 ; Bargett v. Orient Ins. Co., 3 Bosw. 385 ; Moore v. Perpetual Ins. Co., 16 Mo. 98. ' In the case of Lorent v. So. Caro- lina Ins. Co., 1 Nott & McCord, 505, Mr. Justice Richardson says : " The writ- ten date is but prima facie proof of the true date, and may be contradicted by extrinsic testimony. See also Breck V. Cole, 4 Sandf 79 ; Abrams v. Pome- roy, 13 HI. 133 ; Stone v. Bale, 3 Lev. *349. * In the case of Hall v. Cazenove, 4 East, 477, Lord Ellenborough held that a deed might be proved to be indented, made,, and concluded on a day subse- quent to that on which the deed itself is stated on the face of it to have been indented, made, and concluded. See further, to same effect, Davis v. Jones, 17 C. B. 625. ' Arcangelo v. Thompson, 2 Campb. 620. Lord Ellenborough here held, that the production of a letter, dated abroad, and addressed to J. S., in Eng- land, with the English ship-letter post- mark upon it, which directed a policy to be effected, is sufficient to prove that J. S. was " the person residing in Great Britain, who received the order for, and effected such policy." * It was decided in Rex v. Plumer, Russ. & Ry. 264, that the post-office marks, proved to be such, are evidence that the letters on which they are were in the office to which those marks be- long, at the dates those marks specify. See also Rex v. Johnson, 7 East, 65, where the fact of the postmark on a letter was admitted as evidence that it had been put into the office denoted by CH. X.] EVIDENCE. 509 directed with sufiBcient accuracjr is sent by mail, it is a presump- tion of law that the party to whom it was addressed received it by due course of mail.^ The subscription to the policy must be proved in the usual way of proving signatures. If the subscrip- tion be by an agent, and the question is as to his authority, evi- dence that the agent had often subscribed policies in the party's name, who had known and sanctioned this, and thus or otherwise held him out to the world as having authority to do so, has been held sufficient.^ It has been doubted, however, whether this proof was sufficient, unless it was strengthened by the additional fact that the insurer had been in the habit of paying losses on policies so subscribed.^ "We should be disposed to say that whether such evidence was admissible was a question of law, and should answer it in the af&rmative, and that whether there was a sufficiency of the evidence when admitted was a question of fact for the jury.* the postmark. In Fletcher v. Braddyll, 3 Starkie, 64, it was held, by Halroyd, J., that the postmark upon a letter was prima facie evidence as to the existence of the letter at the time of the date. See also Langdon v. Hulls, 5 Esp. 156 ; New Haven County Bank v. Mitchell, 15 Ct. 206. The rule is different, how- ever, in criminal cases. Rex v. Watson, 1 Campb. 215. ' Saunderson v. Judge, 2 H. Bl. 509 ; Woodcock V. Haldsworth, 16 M. & W. 124 ; Bussard v. Levering, 6 Wheat. 102; Ogden v. Cowley, 2 Johns. 274; Shed V. Brett, 1 Pick. 401. ^ In Neal v. Erving, 1 Esp. 61, it was proved that the defendant's name had been subscribed to a policy by one Hutchins. No special authority was proved in this instance. Lord Kenyan held, that his having subscribed several policies in the defendant's name was sufficient evidence of that authority to charge the defendant. ' In the case of Courteen v. Touse, 1 Campb. 43, the policy was signed by one Butler, for the defendant. A wit- ness proved Butler's handwritings and swore that he had often observed him sign policies for the defendant ; had not seen any power of attorney from the defendant to Butler ; nor did he know that the defendant had given Butler any authority to sign this specific pol- icy, and he did not know of any in- stance in which the defendant had paid a loss upon a policy so subscribed. Lord Ellenborough held, that the proof of agency must be carried further. How much further is probably indicated by his decision in the case of Haughton v. Ewbank, 4 Campb. 88, where he held, that it was sufficient proof of the agency, that the defendant was in the habit of paying losses upon policies so subscribed by the agent in his name. ' See Brocklebank v. Sugrue, 5 C. & P. 21 ; Guthrie v. Armstrong, 1 Dowl. & Ryl. 248 ; Mead v. Davison, 3 Ad. & Ell. 303. 510 THE LAW OF MARINE INSURANCE. [OH. X. Section II. — Compliance with Warranties and Conditions. All express warranties may be regarded as conditions precedent, and therefore the policy does not attach until they are complied with.^ These warranties and conditions are of different kinds and susceptible of different kinds of proof, and perhaps of differ- ent degrees of proof. There are some things which if the insured did he could prove at once by direct and conclusive evidence, and other things which it would be di^cult or impossible so to prove. The law would always be reasonable in its requirement of proof. It is a general rule that everything is to be proved by the best evi- dence the nature of the thing admits, and can be proved by secon- dary evidence only when the absence of the first evidence is account- ed for. In cases which have arisen under policies, the very nature of the thing to be proved sometimes accounts for the absence of direct and conclusive evidence, and therefore admits secondary evidence to be sufficient unless it be contradicted. As in a war- ranty of nationality or of sailing under convoy.^ The word " warranted " may be used when in fact it means only an excep- tion.^ If the insured warrants free from average, and claims no loss which has anything to do with average, he offers no proof about this warranty. So if the phrase be " warranted against war risks," " against a loss in a certain place," or " against unlawful trade," he offers no evidence unless*' the question arises whether the case comes within these exceptions. But a warranty of national char- ' In case of Craig v. United States was free from all danger of capture, and Ins. Co., 1 Pet. C. C. 410, Washington, that the captain addressed himself to the J., says : "Every warranty in a policy, consul of that nation in a foreign port, whether express or implied, constitutes So, in the case of D'lsraeli v. Jowett, 1 a condition precedent. The plaintiff Esp. 427, iJj/re, C. J., held the log-book cannot, in any instance, where he has of a man-of-war, which convoyed the entered into a warranty, recover against fleet, to be evidence of the time of its the underwriters, without first averring sailing. He says, also, that, as the cap- and proving performance of those stipu- tain swore that he sailed with the oon- lations." See also Wilson v. Hampden voy on a certain day, and as there was F. Ins. Co., 4 R. I. 159. no evidence to contradict, the point was ^ Thus, in case of Arcangelo v. settled. Thompson, 2 Campb. 620, it was held ' See Kingsley v. N. E. Ins. Co., 8 to he prima facie evidence of national- Cush. 393; Westfall v. Hudson R. F. ity of a ship, that she carried the flag of Ins. Co., 2 Dev. 490. " that particular nation, at times when she CH. X.J EVIDENCE. 611- acter or neutral character, or to sail with license or with convoy, or within such a time or from such a place, must be proved by liim.^ Where the warranty is in its terms negative, as that the ship shall not within a certain period be in certain seas or certain latitudes, or that goods of a certain kind shall not be carried, we should say that he need offer no proof concerning this warranty, unless evidence produced by himself or by the other party indi- cated a breach of it. Hitherto we have spoken only of express warranties or conditions. Of implied warranties, as of sea-worthi- ness and the like, it may be said as we have seen in a former chapter, that the insured need offer no evidence of compliance with these, unless in rebutter or explanation. This at least is the general rule. Section II. — Proof of Interest. If the insurance is on a ship, the best evidence will be docu- ments of title ; but actual possession is a very strong indicium of property in this as in all cases of chattels.^ And in one case ' In 2 Condy's Marshall, 714, it is said : " In the case of a wairanty that the thing insured is neutral property, it is usual to give general evidence of the truth of that warranty, and leave it to the defendant to falsify it, or prove a breach or forfeiture of it." In the case of The Ocean Ins. Co. v. Francis, 2 Wend. 64, Walworth, Ch., held that, where a vessel is warranted as being British, general evidence of her national character is prima facie suflScient, until doubts are raised by proof on the other side. In case of Catlett and Keith v. Pacific Ins. Co., 1 Paine, 594, the na- tional character of a vessel was held to be shown by the Msured in the fact of having on board a register of the par- ticular nation. See also Craig v. U. S. Ins. Co., Pet. C. C. 410; Arcangelo v. Thompson, 2 Campb. 620 ; Thornton v. Lance, 4 Campb. 231 ; Murdock v. Che- nango County Mutual Ins. Co., 2 N. Y. 210. ^ In the case of Bas v. Steele, 3 Wash. C. C. 381, Washington, J., says : " Possession and assertion of ownership are sufficient evidence thereof. Docu- mentary evidence is not necessary, un- less the asserted ownership is denied." It was held in Sharp v. U. S. Ins. Co., 14 Johns. 201, that the register of a ship, which was in the name of other persons, was not even prima facie evidence to show that the plaintiff (who was in pos- session of the ship, and who insured her) was not the owner of the vessel. See also Lamb v. Durant, 12 Mass. 57, where a sale, by a partner, of a ship, accompanied by transfer of possession, was held to pass the property, even though there had been a prior sale by a copartner. Vinal v. Burril, 16 Pick. 401 ; U. S. V. Amedy, 11 Wheat. 392; Hozey v. Buchanan, 16 Pet. 215 ; Rob- ertson V. French, 4 East, 130 ; Thomas ' V. Foyle, 5 Esp. 88. •512 THE LAW OF MARINE INSUEANCE. [CH. X. where the evidence showed that the plaintiffs held the ship by a bill of sale to them, possession of the ship was held to be sufficient evidence to rendet the production of the bill of sale unnecessary.^ The register of the ship in the proper custom-house is required by law, and is undoubtedly important evidence in regard to the title, but the registering of the vessel is the act of the owuer him- self; and on this ground it has been said that, if it be offered by the party in whose name the ship is registered, it is no evidence of ownership. Mr. Phillips is of this opinion, and cites many author- ities.^ That it is rebuttable evidence cannot be doubted, but we should not be inclined to say that in an action under a policy of insurance it was inadmissible or of no value. The more difficult question is, whether it be necessary. This indeed involves a prior question, whether the property in a ship can pass except by writ- ten transfer. That such is the usual and ancient mode of transfer • is certain.^ It is indeed so universal, that very few cases arise in which property in a vessel is founded on mere oral transfer. But we have never been able to see that in this country it is essential, or, in other words, that neither a ship nor any interest in a ship can pass by oral transfer.* The statute of the United States of ' Robertson v. French, 4 East, 130. tered there as the sole property of It was held in this case, in an action on Woodward and Tarras. Under these a policy, that the property of a ship circumstances, there is no bill of sale may be proved by parol evidence of the necessary. These facts are evidence of possession of the assured, and' that this property sufficient to call on the de- was not disproved by showing a prior fendant to explain in it." It was de- register in the name of another and a cided in Wendover v. Hogeboom, 7 subsequent one to the same person. In Johns. 308, that a bill of sale was not Thomas v. Poyle, 5 Esp. 88, Lord Ellen- essential to transfer the property in a borough held it to be sufficient proof of vessel, but that the same passed by ownership that the one claiming to be delivery, like any other chattel. See owner had ordered and paid for stores also Carral v. Boston Marine Ins. Co., for the ship; and he did not consider it 8 Mass. 515. necessary to have a bill of sale produced ^ 2 Phillips, 657 to 660. to substantiate it. In Woodward v. ' The Sisters, 5 Rob. Adm. 155; Larkin, 3 Esp. 286, Lord Eldon said: Weston v. Penniman, 1 Mason, 306. " The" register states that the ship in ' The general rule of the common question was a British built ship, cap- law, in respect to the sale of every tured by the enemy ; that the register species of personal property, is, that an , was destroyed ; that she was sold to a oral sale for a valuable consideration, neutral subject; was then become the with delivery of possession, passes the property of a British subject, and regis- property in the thing sold absolutely, CH. X.] EVIDENCE. 513 Franklin Ins. Co., 8 Pick. 86 ; Weaver V. The S. G. Owens, 1 Wallace, Jun. Leonard v. Huntington, 15 Johns. Badger v. Bank of Cumberland, 359 298 1850, which declares that no bill of sale, or conveyance of any vessel or part of any vessel of the United States, should be valid and no writing can do it more effect- ually. The earlier statutes of registra- tion make the express exception to this principle of the sale of ships; but it was with a definite view and for a specific purpose. Mr. Justice Story, in the case of Weston V. Penniman, 1 Mason, 306, says, in reference to the general sub- ject : " The registry acts have not in any degree changed the common law as to the manner of transferring this species of property." The general opinion, supported by the usage of merchants and the statements of writers of author- ity, that the transfer of a ship by a written instrument of some kind is usual, proper, and necessary, has not, we think, the force of law. The English Statute of Registry of 26 Geo. 3 differed fi-om our act of 1792 in this : the English statute makes a trans- fer of a ship wholly void, if not in writing and recorded; ours only de- nies to a vessel transferred without writ- ing or registry the privileges of an American ship. Thus it will be seen that the American statute does not touch the title of the ship, only its pecu- liar privileges. In the act of 1850, re- ferred to in the text, there is a proviso that a transfer of any kind, which before the statute was adequate to pass the property in the ship, is now perfectly valid in reference to persons having no- tice of it. So far as the decisions of this country, out of admiralty, go, we have very positive declarations of common- law courts, that the property in the ship may pass like that of any other chattel, without any instrument in writing. For this position we can cite the following cases : Wendover v. Hogeboom, An- thon's N. P. 121, 7 Johns. 308 ; Taggard V. Loring, 16 Mass. 336 ; Bixby v. VOL. n. 33 26 Me. 428 ; Barnes v. Taylor, 31 Me. 329; Mitchell U.Taylor, 32 Me. 434. In the case of Weston v. Penniman, 1 Ma- son, 306, 31 7, the decision by Mr. Justice Story distinctly sustains a merely equi- table title, resting upon no bill of sale whatever. Thus far, then, we have no case in any American court, in which the rights of any party are made to depend upon.the rule in reference to the neces- sity of a written instrument of trans- fer. Even in Ohl v. Eagle Ins. Co., 4 Mason, 172, 390, when we look at the facts in the case, the force of Mr. Justice Story's language, " I think that a title to a ship cannot pass by parol, when she is sold to a purchaser," is much abated. There the plaintiff had re- ceived a bill of sale of the ship to him- self and another ; and he undertook to show that the bill of sale was in fact in- tended to pass the property in the whole ship to him alone. But says Story : " The legal title passed to both ; and to introduce the parol proof would be to contradict the direct allegations of the deed." This was of course made impos- sible by the rules of evidence. So far as this case is to be regarded as author- ity, we must consider the preceding re- mark of the court as obiter, or as appli- cable only to facts like those then under consideration. Our conclusion then is, that no case is to be found in America in which a purchaser in good faith of a ship, or a part of a ship, was dispossessed of his property merely because the transfer to him had not been made by a written instrument. 514 THE LAW OF MAEINE INSURANCE. [CH. X. against any person other than the grantor, his heirs, and devisees, and persons having actual notice thereof, unless it be recorded in the proper office of the collector of customs, would seem to imply that it would be valid as against the grantor or those deriving title from him, and persons having actual notice thereof. Even in England, where the registry laws on this subject are quite differ- ent from our own, it has been held that one insured on a ship may prove his interest otherwise than by proving that the ship is regis- tered in his name.i Our notes *Vill show an uncertainty, not to say a conflict, upon the question, how far the registry or non- registry aifects the rights of the insured.^ It should, however, be remarked that, while the register is not conclusive proof of the ' It was held in the case of Robertson V. French, 4 East, 130, that the ,prop- erty of a ship may be proved by parol evidence of the possession of the as- sured, without resorting to the register. Per Lord Ellenborougli. See also Thomas v. Foyle, 5 Esp. 88, to the same point. ' It appears to be the settled doctrine in the English courts, that the register is a private instrument and the mere dec- laration of the party making it. Some of the earlier American cases hold it to be a public record or title. U. S. v. Johns, 4 Dall. 412; Coohdge v. N. Y. F. M. Ins. Co., 14 Johns. 315. But the weight of authority here tends to the same doctrine as in England. See an unqualified statement to this effect in Jones t;. Pitcher, 3 Stew. & Port. 135, 155. It follows that the register is not even prima facie evidence to charge those who are not shown to be parties to it, by their own act or assent, although their names appear on its face. Tinkler v. Walpole, 14 East, 226 ; Baldney v. Kitohie, 1 Stark, 338 ; Pirie v. Ander- son, 4 Taunt. 652. See, however, Stokes V. Came, 2 Campb. 339. As to the fact of ownership, the registry in this country is only prima facie evidence against the party named therein as owner. Ring v. Franklin, 2 Hall, 1 ; Weston V. Penniman, 1 Mason, 306 ; Colson V. Bouzey, 6 Greenl. 474 ; Lord V. Ferguson, 9 N. H. 380. From its very nature, the registry can only be evidence of ownership at the time it was made, and the continua- tion of the exclusive title in the parties whose names appear on its face is a mere presumption of fact, liable to be disproved by competent evidence of a subsequent transfer to others. Colson V. Bouzey, supra; Vinal v. Burril, 16 Pick. 401. Certainly the registry in this country is not conclusive evidence of property against those who are par- ties to it, and not even prima facie evi- dence between third parties, and is not by force of the statute of registry made exclusive evidence of ownership in such cases. Lord v. Ferguson, 9 N. H. 380 ; Hozey v. Buchanan, 16 Pet. 215. In Weaver v. The S. G. Owens, 1 Wal- lace, Jun. 365, the court held generally, that, in a question of ownership inter partes, the register is prima facie evi- dence of title in the person in whose name the ship is registered, liable to be rebutted by proof of actual ownership in another. See, however, Lincoln v. Wright, 23 Penn. State, 76 ; Ligon v. CH. X.] EVIDENCE. 515 ownership of the party who appears in it as owner, it has been held in England to be conclusive against the ownership of one not named as owner in the register.^ We have said that possession Js an indicium of 'ownership, and the question may arise. How is pos- session itself proved ? This may be done by acts of control and possession ; and words connected with these acts would be admis- sible evidence. But mere words would have but little force.^ Whatever may be the force of the necessity of registry in the courts of one's own country, it has been held in England that the counts of that country would not defeat his insurance on a vessel on the ground that the registry laws of his own country had been violated.* This is but an application of the doctrine established in England in maritime cases ; where, upon questions of illegality, the Courts pay no regard to the laws of a foreign country. This rule has been so far adopted by our courts, that it would probably lead them to a similar decision. An interest in freight is proved by proving in the first place an interest in the vessel sufiicient to sustain a claim of freight, and then that goods were shipped, or some contract entered into, or some act done, which was sufficient to give to the insured an insurable interest in the freight.* Ail interest in goods is proved by evidence of having bought Orleans Nav. Co., 19 Mart. (La.) 682 ; it was held that an American, who was Dudley «. The Steamboat Superior, owner of a ship only as trustee, and U. S. Dist. Ct. Ohio, 3 Am. Law Keg. would not thereby be entitled to the 622. privileges of the American flag under ' See Marsh v. Robinson, 4 Esp. 98. the laws of his own country, had a suffi- See, further, Fraser v. Hopkins, 2 cient interest to maintain an action on Taunt. 5. a policy. ' In Pirie v. Anderson, 4 Taunt. 652, * In Camden v. Anderson, 5 T. R. it was held that proof of one of three 709, two parties purchased a ship under plaintiffs having conversed with a broker a bill of sale, and afterwards took in two about stopping the cargo as security for other partners, but there was no transfer the freight amounted to nothing when of the ship to them jointly with the offered to show their interest in the others, and it was held that, as these ship In TuUock v. Boyd, 1 Holt, 487, four partners had neither a legal nor an Mr. C. J. Gibbs thought the expressions equitable title to the ship, so they had of an agent to the effect that the ship no insurable interest in the freight. In was " his " were not conclusive against giving the opinion. Lord Kenyan, C. J., him, and were subject to the explanation said : " The right to freight results from that he was agent. the right of ownership, and if the plain- ' In Ehind v. Wilkinson, 2 Taunt. 237, tiffs have no title to the ship, they have 516 THE LAW OF MARINE INSUEANCE. [CH. X. and paid for them, or by any document which shows a transfer of the title to the insured, or by showing possession and control of them by the insured, or that he has acted as an owner ; as, for ex- ample, that he shipped the goods ; for any such fact, although re- buttable, is sufficient until contradicted.^ The usual evidence, and therefore the proper evidence (unless its absence is accounted for), is the bill of lading. By this the master acknowledges that he has received goods from one party, the consignor, to be delivered to the consignee. In point of fact,* the goods are almost as likely to be the property of the one as of the other ; perhaps they are more frequently the property of the consignor than of the con- signee. But the presumption of law is, that the consignee is the owner, unless the bill of lading itself says otherwise.^ Either of these parties has an insurable interest. But if one is insured and the property is in the other, there must of course be proof of authority. It has been held in England, that the bill of lading proved only that the goods were shipped or were in existence.^ So in McAndrew v. Bell, 1 Esp. 373, the production of the bill of lading, and the evidence of the captain of the ship that he had the goods mentioned in it on board, was sufficient to prove an interest in the insured. In Peyton v. Hallett, 1 Caines, 363, it was held sufficient proof of interest in cargo that the articles were bought by the plaintiff, and were put on board. See further, to same effect. Marsh v. Robinson, 4 Esp. 98 ; Savage v. Corn Exch. Fire & Inland Nav. Ins. Co., 4 Bosw. 1. ' Hibbert v. Carter, 1 T. R. 745, de- cides that the indorsement and delivery of a bill of lading to a creditor prima facie conveys the whole property in the goods from the time of its delivery. This may be varied by intention of parties. In Carruthers v. Sheddon, 6 Taunt. *17, it was held that the consignees of the cargo had an insurable interest to the whole amount of it. To the same effect, Seagrave v. Union Marine Ins. Co., Eng. C. L. Reps. 1866, p. 304. ' In Haddon v. Parry, 3 Taunt. 303, a no interest in the freight." In Robins V. N. Y. Ins. Co., 1 Hall, 325, a part of the freight had been advanced by the charterer. The court say : " The ad- vance of the freight gives no right to insure beyond the amount of the ad- vance. But to enable him to recover, he must prove the fact of advance.. His covenant or agreement to make it is not sufficient. In most cases the charterer will have a lien upon the freight for the advances he makes the ship-owners; that lien gives him an interest under the charter-party, which he may insure." ' In Robertson v. French, supra, the interest in goods was proved the same way as interest in the ship, viz. by parol proof of possession. So in Thomas v. Foyle, 5 Esp. 88, the fact of the owner having ordered and paid for stores for his ship was prima facie evidence suffi- cient of ownership in them. In Amory v. Rogers, 1 Esp. 209, the fact of a person having exercised acts of ownership in directing the loading, &c., of the ship, was sufficient proof of interest. CH. X.] EVIDENCE. 517 We know no such ruling in this country, and should suppose the bill of lading would be not only admissible evidence but presump- tive evidence of ownership. Mr. Justice Washington did not con- sider that the bill of lading of the outward cargo was evidence of an interest in a homeward cargo, without further proof that the outward cargo was applied to procure the homeward cargo.^ But the same judge admitted in the same case the written certificate of a deceased supercargo. Where the insurance was on goods in a time policy, it was held that the interest of the assured in the cargo carried in any particular passage must be proved in the same manner as if the policy had been on that voyage only.^ Interest in profits would follow an interest in the goods. If the policy be not a valued one, the value of the interest, whatever the subject- matter of the insurance may be, must be proved by proper evi- dence. And if it be a valued policy, and the whole of the interest valued be not at risk, the proportion of it which is must be proved. Section IV. — Proof as to a Sufficient Description. It is obvious that after the insured has proved that he made or authorized the insurance, and that he has an insurable interest in the subject-matter thereof, he may still be held to prove that this falls within the description in the policy, both as to the subject- matter and as to the time and place or other circumstances of the risk. Thus the question has arisen. What is comprehended in the word " cargo " both in England and in this country ? ^ ' And when bill of lading, signed by a master of a paid before the ship's departure from vessel, since deceased, for goods to be India, is still not estopped, as against the delivered to a consignee, but guarded assignee of such bill, from claiming by saying " contents unknown," ia not freight when the vessel arrives here, evidence of property in the consignee. We think such a position cannot be sup- In Dickson v. Lodge, 1 Starkie, 226, ported." So in Berkley v. Watling, 7 Lord EUeriborough held that a bill of Adol. & El. Pattison, J., says : " The bill lading signed by the captain is not evi- of lading made out by the consignee's dence to prove the plaintiff's interest in agent is not conclusive between con- the goods. See also Mc Andrew v. Bell, signee and the defendants." Esp. 373, supra; Howard v. Tucker, ' Beale v. Pettit, 1 Wash. C. C. 1 Bam. & Ad. 712, in which the court 241. say : " The point contended for is, that ' Wolcott v. Eagle Ins. Co., 4 Pick, an ownfir having given a bill of lading, 429. by which freight appears to have been ' Houghton v. Gilbart, 7 Car. & P. 518 THE LAW OP MARINE INSURANCE. [CH. evidence has been required, in a policy on a certain voyage, that the ship had sailed on that voyage, or that cargo had been shipped on that voyage, circumstantial evidence was admitted which was anything but conclusive in its character.^ Section V. — Proof of Loss. The insured must prove an extraordinary peril of the kind insured against, and a loss by that peril.^ It is a very frequent subject of inquiry, whether the damage which is unqiiestionable as a fact was caused by a peril insured against or by some other cause. The burden of proof is of course on the insured, first, to prove the damage, and then to show that it arose from such a peril ; and it is admissible evidence against him to show that similar damage had been caused to similar goods by other means.^ 1, p. 84, n. 3, and 701. See ante, vol. cases there cited. ' Thus in Marshall v. Parker, 2 Campb. 69, a license was held prima facie evidence that, when a ship left her port of outfit, she sailed upon the voy- age insured. So in Cohen v. Hinckley, 2 Campb. 51, in order to prove that when a vessel left the port of outfit she was bound upon the voyage insured, the convoy bond, mentioning the port of destination in the common form, was admitted as prima facie evidence. In Johnson v. Ward, 6 Esp. 47, a copy of the searcher's report of the cargo of a ship, even though the witness producing it did not know of its correctness, was admitted as evidence. So in the same case was the affidavit of an agent to prove a fact against his principal, when the principal had accepted and used it in an application to the court. ' In Coles V. Marine Ins. Co., 3 Wash. C. C. 159, Washington, J., says: "If the loss arose Scom the ordinary circum- stances of such a voyage as this was (from a port on Brazil coast to Canton), as from sea damage or the wear and tear which, without the action of any extraordinary cause, was to be expected, the insurer is not liable. But if it hap- pen in consequence of the violence of the winds and waves, running on rocks, or the like, these are perils against which the insurer agrees to indemnify. It is not sufficient for the insured to prove that there were storms during the voyage, unless he can fairly trace the injury sustained to that cause." See, further. Flamming v. Marine Ins. Co., 4 Whart. 59, where it is said : " It is not sufficient that the goods should appear to have been in a damaged state when they were landed, to entitle the plain- tiff to recover ; but it ought to appear that that damaged state was occasioned by some extraordinary disaster which occurred on the voyage, such as a vio- lent storm or hurricance, the effects of which neither human foresight nor ef- forts could well guard against or pre- vent." The same principle is stated in Coffin V. Phoenix Ins. Co., 15 Pick. 291 ; Louisville Mar. Ins. Co. v. Bland, 9 Daw. 143 ; Marcy v. Sun Ins. Co., 14 La. An. 254 ; Trew v. Koyal Ass. Co., 5 Hurlst. &Norm. 211. ' In Bradford v. The Boylston F. & CH. X.] EVIDENCE. 519 It is never necessary to prove what the law presumes, even by a presumption of fact ; and Lord Kenyon applied this to an action for barratry of the master, holding that the plaintiff need not prove that the master was not owner, because this would be presumed.^ And it was held in the same case, that the person was guilty of the misconduct, on proof that he was acting as master, without proof that he was so actually. Nor is it necessary for the insured to prove, or permissible for the insurer to prove in defence, any- thing beyond and in addition to the conditions of the policy.^ We have seen that an abandonment, besides being a transfer of the salvage and notice of the loss, must give to the insurers such information concerning the loss that they may judge of tlieir ob- ligation to pay it. Hence it has been held, where the abandon- ment expressed the cause of the loss, the instired must be confined to that which was assigned to the insurers as the cause of the abandonment.^ In the case referred to, the court held that there Mar. Ins. Co., 11 Pick. 162, it was held, in an action against underwriters to re- cover for an alleged sea damage to bales of blankets bought of the manufacturer in Great Britain and imported into this country, where the defence was that the damage arose in the manufacture or packing of the blankets ; and evidence was offered to prove that the damage was of a peculiar kind, and different from salt-water damage ; and that other bales of blankets, made by the same manufacturer and imported in other vessels in the same year, had sustained damage of a like nature ; that this evi- dence was admissible. • Ross V. Hunter, 4 T. E. 33. ^ Kankin v. Am. Ins. Co., 1 Hall, 619. In this case, which was an action on a policy of insurance, where the claim was for damage sustained by the perils of the sea ; and, on the arrival of the goods at New York, they were landed before the wardens of the port had held a survey upon them ; the de- fendants were not allowed to prove, either as an objection to the prelimi- nary proofs, or in bar of the action, that, " by the usage of trade in the port of New York, the master of the vessel is responsible for damages sustained by goods delivered by him to the owner or consignee, unless there has been an actual survey on board the vessel by the port wardens, by which it shall have been found that the goods were proper- ly stowed and were damaged on the voyage by the perils of the sea ; and that by a similar usage, as between as- surers and assured, the survey so made is a document indispensable to be pro- duced in order to charge the under- writers, and that the preliminary proof is deemed insufficient unless such docu- ment is exhibited as a part of it." A similar point, viz. on the neglect, omis- sion, or refusal of the master to make a survey, being a bar to the insured re- covering his average loss, was included in the case of Bentaloe v. Pratt, Wal- lace, C. C. 60. ' Craig V. United Ins. Co., 6 Johns. 226. The case was as follows : A ves- sel was insured from New York to Bar- 520 THE LAW OF MARINE INSURANCE. [oh. X. ■was no variance between the proof and the abandonment, nor are we aware of any case in which the insured was limited in his puoof on any such ground. It is usual for the insured to exhibit to the insurers the protest and survey, if they have been made, and any consular or other certificates, and the log-book also, if this bears upon the question of loss. It must be remembered, however, that none of these documents are admissible as evidence, unless they are authenticated by oath.^ There is some exception to this in the case of an American consul. Statutes of the United States impose upon him certain duties and give to him certain powers. His certificate, under his official seal, of any official ,act done by him under these statutes might be received as evid'ence.^ It is not often, however, that such acts are important in cases of insur- ance. Beyond this his certificate requires authentication. A celona ; was boarded by a British cruis- er, and warned not to enter any of the ports of France, Spain, Holland, Den- mark, Italy, &c. The master, fearing he should be liable to British capture if he proceeded to Barcelona without first touching at a British port, put into Gib- raltar for advice, and there obtained permission to proceed on his voyage ; but hearing of the Milan decree and the Spanish, and that Barcelona was occupied by French troops, he aban- doned the voyage. Kent, Ch. J., says : " The preliminary proof consisted of an affidavit of two of the plaintiffs, as to the interest, and of three letters of the captain, which contained the informa- tion of the warning given by a British cruiser, of the orders in council, of the cause of going into Gibraltar, and the subsequent leave to depart, and of the existence of the French and Span- ish decrees. When the captain after- wards, in his deposition, assigns as the reason for breaking up the voyage the apprehension of capture in going from Gibraltar to Barcelona, the danger must have been understood to arise from those decrees authorizing the capture. The variance was not essential in sub- stance, but, if there be any variance, the party must undoubtably be confined to that which was assigned to the de- fendants as the justifiable cause of aban- donment." ' In Drake v. Marryat, 1 B. & C. 473, the certificate of an underwriter's agent, resident abroad, was not admissi- ble to prove the amount of the damage sustained by the goods. ' For English laws, however, see Wal- dron V. Coombe,. 3 Taunt. 162. Per Mansfield, Ch. J. : " There is no rule in the English law which makes the cer- tificate of a vice-consul evidence." In Catlett and Kieth v. Pacific Insurance Co., 1 Paine, C. C. 594, it is held, that the certificate of the American consul is not sufficient to authenticate the rec- ord of condemnation of a vessel in a court of vice -admiralty. Thompson, J., says : " The law of nations recog- nizes him (consul) only in commercial transactions, but not as clothed with any authority to authenticate judicial proceedings." In Church v. Hubbart, 2 Cranch, 187, Mr. Ch. J. Marshall, says : " Consuls do not appear to be intrusted CH. X.] EVIDENCE. 521 seal is an ancient instrument of authentication, and sometimes has great force. The great seal of a state requires no proof within that state.^ The seal of a foreign state or a foreign court has been received as proving itself ; ^ the general rule, however, is that such a seal must be proved.^ The Constitution of the United States provides that full faith and credit shall be given in each State to the public acts, records, and judicial proceedings of every other State, and that Congress may by general laws prescribe the manner in which such things shall be proved, and the effect thereof. And in execution of this power, the act of Congress of 1790, chapter 37, makes such provision.* This, however, has no with the power of authenticating the laws of foreigD nations." See also Vaudervoort v. Smith, 2 Caines, 155, where Thompson, J., says : " The trans- lation, by a consul, not on oath, of a Portuguese document, can have no greater validity than that of any other respectable man." ' Lincoln v. Battelle, 6 Wend. 475, in which it is decided that the public seal of a state, affixed to the exemplifi^ cation of a law or judicial proceeding, proves itself. United States v. Johns. 4 Dallas, 416. In this case the court say, that " the seal to the acts of legisla- tures is, in itself, the highest test of authenticity." In Henry v. Adey, 3 East, *222, n., it is said : " The public seal of a state is recognized by the law of nations, and presumed to be known to the courts of all other states by whom the law of nations is acknowl- edged. It is in itself the highest test of authenticity.'' ^ Anonymous, 9 Modern, *66. An exemplification of a sentence in Hol- land, under the common seal of The States, was admitted to show merely that the plaintiff had suffered there. No demand was founded upon it, and the case was proved entirely upon other evidence. ' Vandervoort v. Smith, 2 Caines, 155, where it was held that a copy of the proceedings in a foreign tribunal, certified under the seal at arms of a foreign minister of the kingdom in which the tribunal exists, is not even prima fade evidence, unless it be mide to appear that such minister has the official custody of such proceedings. In Church V. Hubbart, 2 Cranch, 187, Mr. Ch. J. Marshall, says : " Foreign laws are well understood to be facts which must, like other facts, be proved to ex- ist before they can be received in a- court of justice. The sanction of an oath is required for their establishment, unless they can be verified by some other such high authority that the law respects it not less than the oath of an individual." See also the opinion of Parker, C. J., in case of Raynham v. Canton, 3 Pick. 296,297; Gardere v. Columbian Ins. Co., 7 Johns, 514. * The statute referred to in the text is entitled " An Act to prescribe the mode in which the public acts, rec- ords, and judicial proceedings in each State shall be authenticated so as to take effect in every other State,'' and is as follows : " Be it enacted, by the Senate and House of Representatives of the United States of America in Con- gress assembled; that the acts of the legislatures of the several States shall 522 THE LAW OF MARINE INSURANCE. [CH. X. effect upon the records of foreign courts. Our notes will show what has been held necessary for the authentication of such records in England and in this country .^ If a judgment is of- be authenticated by having the seal of their respective States affixed thereto ; that the records and judicial proceed- ings of the courts of any State shall be proved or admitted in any other court within the United States, by the attes- tation of the clerk and the seal of the court annexed, if there be a seal, to- gether with the certificate of the judge, chief justice, or presiding magistrate, as the case may be, that the said attes- tation is in due form. And the said records and judicial proceedings, au- thenticated as aforesaid, shall have such faith and credit given to them in every court within the United States, as they have by law or usage in the courts of the State from whence the said records are or shall be taken. The following are some of the cases arising under the above statute : In Ferguson V. Harwood, 7 Cranch, 408, Mr. J. Story held, that if a clerk of a court certify at the foot of a paper purporting to be a record, " that the foregoing is truly taken from the record of the proceed- ings" of his court, and if the judge, chief justice, or presiding m^istrate certify that such attestation of the clerk is in due form of law, it is to be pre- sumed that the paper so certified is a full copy of all the proceedings in the case, and is admissible as evidence. But if the writing purports to be a mere transcript of minutes extracted from the docket of the court, it is not admis- sible as evidence. So in Drummond u. Magruder, 9 Cranch, 122, it was held, that a copy of a deed from the clerk of the court, without the certificate of the presiding judge that the attestation of the clerk is in due form, cannot be re- ceived as evidence in a suit in equity. In Baker v. Field^ 2 Yeates, 532, it was decided that the copy of the records of a court of Georgia, not having a seal and not certified according to the act of Congress of 26th May, 1790, might be received as prima facie evidence, but not as conclusive. In EUmore v. Mills, 1 Haywood, 359, the plaintiflT oflTered to produce a registered copy of a deed, certified by the clerk of a county court in Virginia, and the gov- ernor had certified that he was the clerk of that court. The court say : " This is well certified, though not in the mode prescribed by the act of Con- gress ; that act is only affirmative, and does not abolish such modes of authen- tication as were used here before it passed, and this was the usual mode before that act." ' In Aloes v. Bunbury, 4 Campb. 28, Lord Ellenborough held that, in an ac- tion on a foreign judgment, the judg- ment produced at the trial must be authenticated by the seal of the foreign court, or evidence must be given that the court has no seal; and then the judgment may be established by proving the signature of the judge. The same judge held, in Buchanan v. Rucker, 1 Campb. 63, that no action Will lie upon a foreign judgment on the face of which it appears that the defendant, not resi- dent within the jurisdiction of the foreign court, was neither served with process, nor came in to defend the ac- tion, although such judgment may have been obtained according to the course and practice of the court in similar cases. It appeared in Cavan v. Stewart, 1 Stark. 525 (which was an action on a CH. X.] EVIDENCE. 623 fered in evidence, it must not only be duly avithenticated, but it must either appear from the record itself, or be shown by proof. foreign judgment), that the foreign court had a seal which was so much worn as to be incapable of making any impression ; but that it was still occa- sionally used for the purpose of sealing writs of execution and for other pur- poses, but that it had never been used for the attestation or exemplification of judgments. Lord Elleriborough said: " Since it appears that there is a seal of the court, it is necessary that the judg- ments of the court should be authenti- cated under that seal, and a mere cer- tificate without the seal is inadmissible. If the seal had been so worn as to be no longer capable of making an impres- sion, another ought to have been pro- cured ; till then, as the seal of the court, it ought to have been used." It was held also in the same case that a party is not bound by a foreign judgment, unless it either appear that he was sum- moned, or it be proved that he was once resident within the jurisdiction; and it is not sufficient that on the face of the proceedings he is described to be an absentee. In Appleton v. Lord Braybrook, 6 Maule & Selw. 34, which was an action on two judgments re- covered in the Supreme Court of Jamaica, copies of the judgments pur- porting to be signed by the clerk of the court, and certified by him to be true copies, accompanied by a certificate of a notary public of his being clerk of the said court, and by another certificate of the governor, under the seal of the island, that the person certifying was a notary public, were held inadmissible evidence to prove the judgments. See also the case of Appleton v. Lord Bray- brook (cited above), reported again in 2 Stark. 7 ; Henry v. Adey, 3 East, 221. This was also an action on a foreign judgment, and it was insufficient to prove the judge's handwriting sub- scribed to it, without proving the seal affixed thereto is the seal of the court. This case is also reported in 4 Esp. 228. Catlett & Keith v. Pacific Ins. Co., 1 Paine, 594. Here admiralty proceed- ings of the court in the Isle of France, purporting to be under the seal of the court, certified by the register, and ac- companied by a certificate of the Amer- ican consul, under his seal of office that he was such register, were ofiered. Thompson, J., says : " These proceed- ings are not so authenticated as to en- title them to be read in evidence. The seal does not prove itself There is no impression from which any conclusion can be drawn that it is the seal of that or of any other court. And some proof aliunde is always required, either that it is the seal of the court by a witness who knows the fact, or by proof of the hand- writing of the judge or the clerk, or by an examined copy, compared with the original in the proper office, or some other evidences of a similar character. They do not alone, unaided by extrinsic evidence, carry with them that verity as to make them evidence in foreign courts." Talcott v. Delaware Ins. Co., 2 Wash. C. C. 449. The copy of a record of the condemnation, in the Superior Court at Havana, of property insured, was ofiered in evidence, without the seal of the officer who made out {he copy ; but there were on the margin of each page fiourishes with the pen. No proof was given that the officer had or had not a seal. The court rejected the evidence. In Thompson v. Stewart, 3 Conn. 171, the record of a decree of the 624 THE LAW OP MARINE INSURANCE. [CH. X. that the court had jurisdiction over the subject-matter and the question, and authority to enter up the judgment.^ By the fact of giving the judgment the court may be considered as asserting its jurisdiction ; and tliis assertion will have more or less weight, or, in other words, this question of jurisdiction will be more or less fully examined, in accordance with the character of the case. If the jurisdiction is determined by the laws or regulations of the foreign country in which the judgment is rendered, this assertion of the court will have very great 'weight; less, however, if the question arises under international laws which courts of all nations are equally competent to inquire into.^ In our note we Court of Vice- Admiralty in Bermuda, The Helena, 4 Eob. 3. He then sums purporting to be certified by the deputy registrar, under the seal of the court, was offered in evidence, Tntli no other proof of authenticity, and was held to be admissible. ' In Rose v. Himely, 4 Cranch, 269, Marshall, C. J., states the general rule as follows : " Upon principle, it would seem that the operation of every judg- ment must depend on the power of the court to render that judgment ; or, in other words, on its jurisdiction over the subject-matter which it has determined. In some cases, that jurisdiction unques- tionably depends as well on the state of the thing as on the constitution of the court. If, by any means whatever, a prize court should be induced to con- demn, as prize of war, a vessel which was never captured, it could not be con- tended that this condemnation operated a change of property. Upon principle, then, it would seem that, to a certain extent, the capacity of the court to act upon the thing condemned, arising from its .being within or without their juris- diction, as well as the constitution of the court, may be considered by that tribunal which is to decide on the effect of the sentence." He then cites The Flad Oyen, 1 Bob. 114 ; The Christopher, 2 Hob. 173; The Kierlighett, 3 Rob. 82; up as follows : "It is apparent, that the courts of that country hold themselves warranted in examining the jurisdiction of a foreign court, by which' a sentence of condemnation has paissed, not only in re- lation to the constitutional powers of the court, but also in relation to the situa- tion of the thing on which those powers are exercised, — at least, so far as the right of the foreign court to take juris- diction of the thing is regulated by the law of nations and by treaties. There is no reason to suppose that the tribu- nals of any other country whatever deny themselves the same power. It is, therefore, at present considered as the uniform practice of civilized nations, and is adopted by this court as the true principle which ought to govern." So, in Snell v. Faussatt, 1 Wash. C. C. 271, it is decided that, where the constitu- tion of a foreign court is known, it is proper for the court here to examine into it. See further, to the same effect, The Comet, 5 Rob. 255 ; The Henrick & Maria, 4 Rob. 35 ; Oddy v. BovU, 2 East, 473. " In Rose v. Himely, 4 Cranch, 241, it is decided that, if the sentence of a foreign court cannot, consistently with the law of nations, exercise the juris- diction which it has assumed, its sen- CH. X.] EVIDENCE. 525 give some cases in which this question of jurisdiction has been con- sidered. All courts require, in order that a judgment may be valid, that the parties to the case shall have had sufficient notice and opportunity to appear and protect their interests.^ But where it is clear that the court had competent jurisdiction, that a question was distinctly before it, and that the parties had an opportunity for a full trial of it, such a judgment has been held conclusive upon the tence is to be disregarded ; but of their own jurisdiction, so far as it depends upon municipal laws, the courts of every country are the exclusive judges. In Hudson V. Guestier, 4 Cranch, 293, it is decided that the trial of a municipal seizure must be regulated exclusively by municipal law. No foreign court can question the correctness of what is done, unless the court passing the sen- tence loses its jurisdiction by some cir- cumstance which the law of nations can notice. In CucuUu v. La. Ins. Co., 5 Martin (N. S.), 464, it is held that, in an action between the insurer and in- sured, the court may examine whether the tribunal which condemned was rightfully constituted by the law of nations. Donaldson v. Thompson, 1 Campb. 429, decided that the sentence of a court of admiralty, sitting under a commission from a belligerent power, in a neutral country, could not be recog- nized in English courts. Same doc- flrine enforced by Kent, Ch. J., in case of Wheelwright v. Depeyster, 1 Johns. 481-485. In the case of The Henrick & Maria, 4 Kob. 35, the right to in- quire whether the situation of the thing (in a neutral port), the locus in quo, did not take it out of the jurisdiction of the court of the captor of the vessel, was considered as unquestionable. » The Mary, 9 Cranch, 144. Mar- shall, Ch. J., says : " Notice of the con- troversy is necessary in order to become a party, and it is a principle of natural justice, of universal obligation, that, be- fore the rights of an individual be bound by a judicial sentence, he shall have notice, either actual or implied, of the proceedings again^ him. Where these proceedings are against the person, notice is served personally or by pub- lication ; where they are in rem, notice is served upon the thing itself. No reason is discerned why the sentence of a court of admiralty (in this case) should not be re-examinable in a court of admiralty." The case of Buchanan v. Rucker, 9 East, 191, illustrates the same point. It decides that the law will not raise an assumpsit upon a judgment obtained by default, in one of the colonies, against a party who, upon the face of the pro- ceedings, appeared only to have been summoned " by nailing up a copy of the declaration at the court-house door," especially as he was not subject to the jurisdiction of the court at the time the suit commenced or afterwards. In Sawyer v. Me. F. & M. Ins. Co., 1 2 Mass. *291, it was held that a decree of a court of admiralty in the island of Hayti, not founded upon a libel, and in which no trial was had, is not conclusive evidence of the fact of a breach of the blockade, which was the assigned cause of the sentence. Parker, Ch. J., says : " It does not appear that any libel was filed, any monition issued, any hearing had, or that any of those formalities had taken place which are necessary to give 526 THE LAW OF MARINE INSURANCE. [CH. X. parties to it quite uniformly from early ages.^ It has been held that there is no difference in this respect between a foreign and a domestic judgment; it may be, however, that the essentials necessary to give this validity to a foreign judgment would require stricter or fuller proof thau if it were a domestic judgment ; but a conclusive operation to decrees of foreign courts." See also Shumway v. Stillman, 6 Wend. 447; Phillips v. Hunter, 2 H. Bl. 409. ' Blackham's case, 1 Sack. 290, de- cides that the sentence of the Spiritual Court, in a cause within their jurisdic- tion, is conclusive evidence in the point tried. In Duchess of Kingston's case, 20 Howell's St.Tr. 538, Lord Ch. J. Grey states, " that the judgment of a court of concurrent jurisdiction, directly upon the point, is, as a plea, a bar, or as evi- dence conclusive between the same parties, upon the same matter, directly in question in another court ; and that the judgment of a court of exclusive jurisdiction, directly upon the point, is, in like manner, conclusive upon the same matter, between the same parties, coming incidentally in question in an- other court, for a different purpose.'' In Broom's case, 1 Salk. 32, it is de- cided, where admiralty has jurisdiction, its sentence binds the party, and " com- mon-law courts must take it according to its determination, which cannot be gainsaid till it be repealed upon an appeal." In Le Caux v. Eden, Doug. 594, the judgment of a prize court was regarded as conclusive, and it was held that an action could not be maintained at com- mon law for an imprisonment on a cap- ture at sea as prize. In Tarleton v. Tarleton, 4 M. & S. 20, Lord Ellen- horougli held foreign judgments conclu- sive. So in Burrows v. Jemino, Str. 733, the leading and very early case of Green 0. Waller, 2 Ld. Kay. 893, decided that the exemplification of a sentence in the admiralty is conclusive evidence of the point decided by the sentence. In Ever- etji V. Hannam, 6 Taunt.- *375, which was an action on a policy of insur- ance, the sentence of condemnation of the ship was admitted. From the time of these cases to that of The Mary, 9 Cranch, 126, and Eapage v. Amory, 2 Dallas, 51 (both substantiating the same point), we have almost a uniformity of- decision as to the conclusiveness of judg- ments on the parties. In New York, in the case of Ocean Ins. Co. V. Francis, 2 Wend. 64, it is held that the sentence of admiralty courts of a foreign nation, condemning property as good and lawful prize, ac- cording to the law of nations, is conclu- sive to change the property. We will give in brief a few of the more important insurance cases in which this question of the conclusiveness of judgments is considered; In Vandenheuvel v. U. S. Ins. Co., 2 Johns. Ca. 127, it was held that, in an action on a policy of insur- ance, containing a warranty of Ameri- can property, the sentence of a foreign court of admiralty, condemning the prop- erty as lawful prize, was conclusive evidence as to the character of the property, and of the breach of the war- ranty. Precisely the same point was adjudged in the case of Ludlow v. Dale, 1 Johns. Ca. 16. So in Baxter v. N. E. Ins. Co., 6 Mass. *277, it was decided, that, in an action on a policy of insurance, the sen- tence of a foreign court of vice-admi- ralty is conclusive evidence of the fact of CH. X.] EVIDENCE. 527 cases of much authority consider foreign judgments only prima facie evidence, and this of no great weight,' and there has been a similar conflict upon the question, whether, if the judgment itself be established beyond objection,, the grounds upon which it rested can be inferred from the record, or presumed as matter of law, or must be proved.'^ On this last point we should say that the American courts, and perhaps the English courts, make this dis- tinction between a foreign and a domestic judgment, permitting this inference or presumption in the case of a domestic judgment, breach of blockade by the ship in ques- recover for a total loss. In N. Y. Fire- tion, condemned by its order. The court decide, in Calhoun v. Ins. Co. Penn., 1 Bin. 293, which was an action on a policy of insurance, that the decree men's Ins. Co. v. De Wolf, 2 Cowen, 57, it is settled that the sentence of con- demnation of a foreign court of admi- ralty is not conclusive, but only prima of an admiralty binds the property for- facie evidence of the facts upon which ever, and is conclusive upon the war- ranty of neutrality. In Dempsey v. Ins. Co. Penn., 1 Bin. 299, n., it was decided that " the sentence of a foreign court of admiralty, condemning prop- erty as prize, is conclusive, not only as to its direct effects, but also as to the facts directly decided by it." Williams V. Armroyd, 7 Cranch, 423, decides that a sentence of a foreign tribunal at Gua- daloupe, condemning neutral property under an edict (Milan decree) unjust in itself, contrary to the law of nations, and in violation of neutral rights, changes the property of the thing condemned. See also Marshall v. Parker, 2 *Campb. 69; Cheriot v. Foussat, 3 Bin. 220; Pollard V. BeU, 8 T. R. 434 ; Baring v. Clagget, 3 B. & P. 201. ' Kemble v. Rhinelander, 3 Johns. Ca. 130, was an action on a policy of insurance. The vessel was captured and condemned on the ground of a cir- cuitous trade between Surinam and Amsterdam. This case held that, the decision of the Admiralty Court not be- ing conclusive, there was not sufficient evidence to warrant the condemnation, and that the insured were entitled to it purports to have been founded. So in Johnston v. Ludlow, 2 Johns. Ca. 481, and Goix v. Low, lb. 480, it was held that a sentence of a court of ad- miralty is only prima facie evidence of any fact. See also Robinson v. Jones, 8 Mass. 536 ; Smith v. Williams, 2 Caines, Ca. in Error, 117. ' The cases in the affirmative of the proposition that a sentence is conclusive of the grounds have been cited and com- mented on ante, p. 527, n. 1. We may however^ add Dalgleish v. Hodgson, 7 Bing. 495. On the contrary see Fish- er V. Ogle, 1 Campb. 418, where Lord EUenborough held the sentence of a foreign court of admiralty evidence only of what it positively and specifi- cally affirms, and not of what may be inferred from it. Maley v. Shattuck, 3 Cranch, 458. A foreign sentence of condemnation is not conclusive evi- dence that the legal title to the prop- erty was not in a subject of a neutral nation. See also Vasse v. Ball, 2 Dal. 270. It is held in Williamson v- Tunno, 1 Brev. 151, that a sentence of condem- nation by a foreign court of admiralty, which appears on the face of the pro- 628 THE LAW OF MARINE INSURANCE. [CH. X. but refusing it if the judgment be foreign.^ The cases, however, cannot easily be reconciled. We have already said that all documents need authentication by oath, as a general rule, when they are offered by the insured as his evidence. Thus it is the duty of the master to keep a log-book, and to enter into it every material incident of the voyage. And it is regarded by maritime law as a record of much importance.^ So it is his duty to make a protest in due form if an important damage occurs to the ship.^ So it is his duty to ceedings to have been founded on facts which do not warrant the judgment, is not conclusive of the legality of the condemnation in a question between the insured and underwriters. ' Chancellor Walworth, in Wright v. Butler, 6 Wend. 284, says of a domes- tic judgment : " Where a party has no opportunity to plead it as an estoppel, the record may be given in evidence, and is conclusive and binding on the parties, the court, and the jury as to every fact decided." Gardner v. Buck- bee, 3 Cowen, 120, and English cases there cited, and in 6 Wend, supra. ' The log-book of a party is not ad- missible in his own favor as a general rule. Sociedale Feliz, 1 W. Rob. 303, 311. But the log-book of a convoy ship was admitted in D'Israeli v. Jowett, 1 Esp. ■427, to show the time of the fleet's sailing. In Watson v. King, 4 Campb. 272, the log-book of a convoy ship was admitted without objection to prove that the ship parted company during a storm. See also L'Etoile, 2 Dods. 106; The Eleanor, Edw. Adm. 135. ' A protest, though a very important document, was held inadmissible in chief by Lord Kenyan, in Christian v. Coombe, 2 Esp. 489, though his Lord- ship thought it might be read to contra- dict the testimony of those who signed it. Washington, J., in Buan v. Gard- ner, 1 Wash. C. C. 145, allowed the protest of a sailor to be proper for the purpose of showing a compliance with the policy of insurance, which contained a clause that payment was to be made within thirty days after proof made of loss ; but the facts stated in the protest are not evidence to prove the loss. See also Ship Betsey, Haggard, 28 ; Winthrop v. Union Ins. Co., 2 Wash. C. C. 7. So in Senat v. Porter, 7 T. R. 158, the insured's agent showed to the underwriter the captain's protest con- taining an account of the loss of the ship insured; this did not entitle the defendant, the underwriter, to read the protest in evidence in an action on the policy. See, however, Campbell v. Wilkinson, 2 Bays, 239, where it was held that the protest of the master and mariners is good evidence of tempestuous weathet-, and also of the capture of the ship. It maybe discredited by evidence of inconsistent declarations on the part of those who signed it. Church v- Teas- dale, 1 Brev. 255. In Pennsylvania, in an early case, Nixon V. Long, 1 Dall. 6, where an ac- tion of covenant was brought by the owners of a vessel against the charter- ers, a protest was admitted in evidence. It must be completed within twenty- four hours after the ship's arrival. Fleming v. Marine Ins. Co., 3 W. & S. 144. CH. X.J EVIDENCE. 529 cause a survey to be made, and this in the manner which usage prescribes.^ All these things he does as the agent of his owner ; and if the owner offers them in evidence to support his claims, they must be verified under oath. But if the insurers call for them, they must be furnished, or their absence accounted for ; and the insurers may make use of them as they stand in their defence. We believe this to be the general rule on this subject, but our notes will show that there is some diversity of practice as of decision.^ The agreements or admissions of parties are often of great im- portance. If not made by the party himself, he cannot be bound by them unless it is shown that he authorized them.^ But the admissions of those for whose benefit an action is brought by one nominally insured, if they are actually interested in the policy itself, may be shown against them.* It is a common rule that where an assignee of a chose in action brings his action, of necessity, in the name of the assignor, his equities are protected, that is, neither the acts, agreements, nor the admissions of the assignor, made after the assignment, are permitted to affect the assignee. A similar rule is applied to actions on a policy, by a nominally insured, for the benefit of those who are actually in- terested. While their admissions may be used against them, his ' The survey, being an ex •parte pro- the plaintiffs, unless called for by the ceeding, is, of course, not admissible for defendants. It is altogether an exparte the insured ; and it has been held that document." See, on the same topic, Wat- the insurers are not entitled, generally, son v. Ins. Co. of N. A., 2 Wash. C. C. to call for it. Mitchell v. N. E. Marine 480 ; Kobinson v. Clifford, 2 Wash. C. C. Ins. Co., 6 Pick. 117. But in Abbott 1 ; Wright v. Barnard, 2 Esp. 700. V. Sebor, 3 Johns. Ca. 39, a survey, ^ See the four preceding notes, consequent upon proceedings in an ad- ' Dawes v. N. K. Ins. Co., 7 Cowen, miralty court, was held to be inadmissi- 462. Here, by the act of incorpora- ble. In Gordon v. Mass. F. & M. Ins. tion, the president was not clothed with Co., 2 Pick. 249, a survey was held not any power to settle or pay claims, with- conclusive evidence of the necessity of out one third of the directors. An act the sale of a ship. See also Orrok v. done by him outside his authority, in Com. Ins. Co., 21 Pick. 456. If the this particular, was not binding on the survey is called for by the insurers, and company. they put it into the case for a particular * Bell v. Ansley, 16 East, 141. Here purpose, the insured may then make the admission was, that the insurance use of it. The court, in Saltus v. Com. was for all, and not for one, as the pol- Ins. Co., 10 Johns. 487, say : " The sur- icy averred, and the variance was held vey was not evidence, on the part of fatal. VOL. II. 34 530 THE LAW OF MARINE INSURANCE. [CH. X. admissions, generally speaking, cannot be.^ If the insurers are willing to pay a certain amount, they may offer this by way of compromise and not prejudice their defence, as the law encourages efforts " to buy one's peace." If, however, they pay money into court, this is an acknowledgment that so much of the plaintiff's claim is legally due to them.^ Thus it admits that the policy was duly executed for the plaintiff's interest,^ and that it attached to the property insured,* and consequently it admits that all condi- ' Thus, in Skaife v. Jackson, 3 B. & C. 422, two trustees brought an action of assumpsit, for money had and re- ceived to their use. The defendant produced a receipt for the money, but the plaintiffs were allowed to show that it was fraudulent. So of a release. Jones V. Herbert, 7 Taunt. 421. See also Legh v. Legh, 1 B. & P. 447. Frear v. Evartsou, 20 Johns. 142. The court say : " Having assigned his interest in the chose in action, Frear could not impair that interest by any confessions, made by him, to the preju- dice of his assignee." See, to the same effect, Raymond u. Squire, 11 Johns. 47 ; Andrews v. Beecker, 1 Johns. Ca. 411, n. But Lord Ellenhorough, in Bell V. Ansley, 16 East, 141, which was an action on a policy averring the inter- est to be in one,, where, in reality, he was only jointly interested, says : " The parties interested are so far looked upon as parties to the suit, that the declarations of any of them are re- ceived as admissible, in evidence, against the plaintiff; and what would be a de- fence against them is, in many instances, a defence against the plaintiff." Gibson V. Winter, 5 B. & Adol. 96. Where a broker, in whose name a policy was ef- fected, brought an action, and the de- fendants pleaded that they had paid the amount to the broker, by allowing him credit for premiums due to them from him, it was held that, although this was not a good payment as between insurer and insured, yet it was between the plaintiff on the record and the defend- ants. See generally Hackett v. Mar- tin, 8 Greenl. 77, and cases cited. " Stafford v. Clark, 2 Bing. 377. Pay- ment of money into court on several general counts, one of which is appli- cable to the plaintiff's demand, admits a cause of action on that. In Long v. Greville, 2 B. & C. 19, the court say : " In no case has the effect of payment of money into court gone beyond admitting that the sum paid in is due." The rule was originally different, as shown by the statement of Sir James Mansfield, in the case of Rucker v. Pals- grave, 1 Campb. 557 : "I remember the time when paying money into court was not an admission of anything. Lord Mansfield afterwards held that it ad- mitted the contract stated in the counts on which it was paid." In this case, the payment admitted the fact of capture, but not of total loss. Evereth v Bell, 7 Taunt. 450. Here the doctrine was, that the payment admitted every cause of action. In Cox v. Parry, 1 T. R. iSi, Ashurst, J., says: "It admits that the plaintiffs have a right of action in the policy to the amount of that sum." = Bell V. Ansley, 16 East, 141. In this case a decision of Lee, C. J., is cited, where he held that the payment of £50 into court by the insured was proof of his interest to that value. ' In Andrews v. Palsgrave, 9 East, 325, it was held that a payment into CH. X.] EVIDENCE. 531 tions precedent ■were complied mth, as, for example, sea-worthi- ness.^ But it does not admit the totality of the interest asserted, nor of the loss,^ nor of any special facts stated, as stranding,^ which are not necessary to make the claim in part a legal one. If the insured makes a settlement with one insurer, this is not evidence against him in a suit against other insurers, even if they be on the same policy.* Nor will a statement of facts by him, for reference of the court under one policy, operate as an admission by him in a suit upon another.^ Admissions by insurers may affect them by a waiver or estoppel ; as if the insured when applying for insurance,, in describing their vessel, stated accurately a defect, and asked whether this would constitute unseaworthiness, and were answered, certainly not ; we should say that the insurers could not afterwards defend against a claim on the ground that this very defect constituted unseaworthi- ness. The question might be more difficult if the conversation re- ferred to an express warranty, because it would be easy to strike this out ; and, if it were retained, the common rule, that a written con- tract must not be varied by parol testimony, weuld apply. And it has been held that a mere knowledge, on the part of the insurers, court on an action on a policy was an dorsed on the policy, it was held not to admission of the contract stated in the be evidence for the jury. count. ° Elting v. Scott, 2 Johns. 157. It * Harrison u. Douglas, 3 Nott & was here held that a case made between McCord, 180, sustains the admission of the insurers and insured, in an action sea-worthiness. on a policy of insurance, will not be " Kucker u. Palsgrave, 1 Campb. 557, received in evidence in another suit, supra, p. 531, n. 2. ' though it relate to the same subject or " Evereth v. Bell, 7 Taunt. 450. The policy. Kent, Ch. J., in delivering the plaintiff averred that the ship was opinion of the court, remarks : " These stranded, bulged, damaged, and wrecked, cases, often drawn by counsel without Defendant paid money into court gen- any communication with the parties, erally. Held that the plaintiff could not and with a view to bring before the apply the payment as an admission of court some particular point, ought not, total loss, or of the stranding, because perhaps, in any case to be admitted." the loss might accrue by other causes in Am. Ins. Co. v. Insley, 7 Penn. St. 223. the declaration. An affidavit by A, that he had no other * Trenholm v. Alexander, 2 Brev. insurance on his half of the vessel, and 238. In an action on a policy of insur- that B's half was separately insured, ance, where other underwriters had com- was held not to be a disclaimer by A pounded with the same plaintiff, and of his interest under another policy, his award of 67y^ per cent was in- insuring his and B's interest. 532 THE LAW OF MARINE INSURANCE. [CH. X. of a breach of an express warranty, cannot be used as a waiver by them of their right to rest on this breach in their defence.^ The burden of proof is often of great importance ; there may be an almost total absence of evidence on some important points, and then tlie party on whom the law casts the burden of proof must fail. But while the law unquestionably lays upon the plain- tiff the burden of proving all material allegations,^ the law of in- surance helps him by its presumptions on many points. Thus, if a vessel be not heard from for a long time, and beyond this there is no evidence bearing on the time, place, cause, or manner of the loss, the law will presume, after a suflSicient period, that she is lost, and it is said that it further presumes that she was lost by the perils of the seas.^ We should say, however, that this was a question of fact, and that, generally at least, it would be submitted to the jury, under the instructions of the court. If the ship was insured especially against a part only of the perils of the sea, we know not how mere lapse of time could raise a presumption that she was lost by those special perils. Almost always there would be some evidence bearing on the question, as her age, character, and condition, or the weather, if it could be ascertained what that was at the place where she might have been. While no such facts might be decisive, they would be ad- missible as evidence, and should have the influence due to them. The practice undoubtedly is to consider a vessel insured under a common policy, when she has not been heard from for a sufficient time, as lost under that policy. If the policy itself ends at a certain time, or is terminated by ' Kennedy v. St. Lawrence Co. Mu- ' Watson v. King, 1 Stark. 121, Lord tual Ins. Co., 10 Barb. 285. The court EUenborough here held, that if there is say : " The rule which prevails upon proof of a vessel having sailed, and she sales of property — that a warranty does is not heard from for two or three years, not extend to defects which are known it is to be presumed that she is lost, to the purchaser — does not apply to The court say, in Dupeyre v. Western warranties contained in contracts of in- M. & F. Ins. Co., 2 KoB. (La.) 457: surance.'' He cites Jennings v. The " When a vessel is lost in consequence Chenango Co. Mutual Ins.. Co., 2 Denio, of some of the perils insured against, the 75, and other New York and Massa- presumption is in favor of her sea- chusetts cases. worthiness, and it is incumbent on the ° De Bolle v. Penn. Ins. Co., 4 Whart. underwriters to show that this warranty 68 ; Bridges v. Niagara Ins. Co., 1 Hall, has not been complied with." 247. CH. X.] EVIDENCE. 633 deviation or other cause, and goods have been injured by perils of the seas, and may have been so injured either before or after the termination of the risk, this has been held to be a question of fact for the jury.^ Where a vessel, soon after leaving port, founders without stress of weather, or other adequate cause of injury, the presumption is that the loss arose from some latent defect existing before setting sail, which rendered the vessel unsea- worthy.^ The law presumes that all men do their duty, and this rule has been applied to the duty of the master in navigating the vessel.^ So as to concealment, or misrepresentation, if this- be charged it must be proved.* Here, however, the law comes in with some presumption on the evidence ; thus, if the insurers prove that a certain material fact was known to the insured, and that, had the insurers known it, the premium must have been greater, the burden will now shift,, and the insured must prove that he communicated the fact.^ And in one English case the court expressed the opinion that very slender evidence of the non-communication of a material fact is all that can be required of a defendant in such cases.^ Nothing can be more certain than that insurers are always entitled to all the information possessed ' Hare v. Travis, 7 B. & C. 14. In the contrary is established, and there- this case the goods insured received con- fore the burden is on the plaintiff to siderable damage, but it was impossible negative this presumption by appropri- to tell whether on the first voyage ate pooof." from Liverpool to London, or between * It was held in Fiske v. N. E. Ins. the.latter place and Southampton ; Lord Co., 15 Pick. 310, that when the time of Tenterden left it to the jury. sailing is a material fact, and conceal- - Walsh V. Wash. Mar. Ins. Co., 32 ment of an important fact in reference N. Y. 427. thereto is charged, the burden of proof ^ In Robinson v. The Common. Ins. is on the defendants to -show that it was Co., 3 Sumn. 221, Mr. J. Story, says : not communicated. "Now it is a general principle of law, * Livingston v. Delafield, 3 Caines, 49. that every man is presumed to do his A vessel which had been out forty-five duty, untU the contrary is shown ; and, days between Jamaica and New York a fortiori, this doctrine applies to the was insured without notice being given perilous responsibility of a master in of such fact. This would materially ordering the sale of his ship.'' In Am. have changed the risk. Proof must be Ins. Co. V. Bryan, 26 Wend. 582, Ver- given of the notice by the insured. planek, Senator, says : " It is a general " In Elkin v. Janson, ] 3 M. & W. 655, principle of the common law, that every the defendant (an underwriter) alleged man is presumed to do his duty until that a material fact had been concealed 534 THE LAW OF MARINE INSURANCE. [gh. X. by the insured, not only as to making the policy, but afterwards as to the loss, and the interest of the insured and its value. Hence the refusal of the insured to permit an examination, by the insurers, of damaged articles, is evidence from which the jury may infer fraud.^ This has been held under a fire policy, and it must be equally true of a marine policy. We have seen, when speaking of valued policies, that excessive valuation may lead to an inference of fraud.^ It is a rule very frequently applied in prize cases,^that the destruction of papers raises the presumption that they are enemies' property.* The principle which underlies this and some other of the rules of evi- dence is, that if a party has the means of exhibiting facts as they are, and refuses to do so, it is a fair and almost necessary pre- sumption that the truth would be adverse to his claims. Whatever documents are handed to the insurers as preliminary proof they may make use of, but the fact that they receive them, and refuse to pay the loss because of them, does not make them evidence for the plaintiff, on trial, without due authentication.* from him by the insured at the time of insurance. No evidence was given to support it. The court held that "he should have given some evidence of it." ' N. Y. F. Ins. Co. v. Delavan, 8 Paige's Ch. 419. Per Chancellor Wal- wortli : " In case the assured, without any reasonable excuse, refuses to permit a proper scrutiny as to the loss, by an ex- amination of the goods remaining on hand, or otherwise, the insurers will have the full benefit of the presumption of fi-aud and unfairness in his statement of the loss, before the jury which tries the cause." * In Ocean Ins. Co. v. Fields, 2 Story, C. C. 59,Mr. J. Story, p. 77,says : " Over- valuation, I agree, is no necessary proof of fraud ; but there may be very cogent circumstances from which fraud may be inferred, where the cause otherwise labors Under strong suspicions." ' The Pizarro, 2 Wheat. 227. The court in this case, where the papers were thrown overboard and no satisfactory explanation given, say : " Concealment, or even spoliation, of papers is a very awakening circumstance, and calculated to excite the vigilance and justify the suspicions of the court. But it is open to explanation, for it may have arisen from accident, necessity, or superior force. If, on the other hand, the spolia- tion be unexplained, or the explanation appear weak and futile, if the cause labor under heavy suspicions, or there be bad faith, or gross prevarication, condemna- tion ensues from defects in the evidence which the party is not permitted to supply." * Thurston v. Murray, 3 Bin. 326. The agent of the insured in this case, when he demanded payment of the loss, lodged with the broker through whom the insurance was effected sundry docu- ments to prove the loss, and among others a writing purporting to be a copy of a decree of the English Court of Ap. CH. X.] EVIDENCE. 535 The admissibility of witnesses is governed, in actions upon policies, by the same rules which are applicable in other cases. These vary in different States. In those in which interest disqualifies a witness, it must be an interest in the suit on trial, and not merely an interest in the question. We give in our notes the principal cases in which the interest of a witness has been considered in actions on policies, and those also in which questions have arisen concerning the admissibility of depositions.^ Newspapers are sometimes offered in evidence. As a general rule, whatever information a newspaper contains must be brought peals in admiralty cases, and certified another underwriter who disputes the under the seal of the court. It was de- cided that it ought not to have been admitted. Flindt v. Atkins, 3 Campb. 215. It was here held that the copy of a sentence of condemnation of a ship or cargo in a foreign admiralty court is hot made admissible evidence for the under- writers by being handed over to them by the assured, along with other papers, to satisfy them of the loss. ' Kidout V. Johnson, 1 T. R. 303. This case is cited by Buller, J., in the case of Walton v. Shelley, 1 T. K. 296. He says it decided that one under- writer, cannot be a witness for another, in cases on policies of insurance. But in Bent v. Baker, 3 T. R. 27, it is modi- fied so that " a broker who underwrites a policy of insurance, after getting it underwritten by others, is a competent witness for the defendant in an action against any of those who underwrote before him." See also Jourdaine v. Lashbrooke, 7 T. R. 604. Bilbie v. Lumley, 2 East, 469. An underwriter who had paid £100 for a loss by cap- ture to the insured was admitted as a witness in an action to show that it had been paid under a mistake. Forester. B. Pigou, 3 Campb. 380. An under- writer who pays on a promise of repay- ment, if the policy is proved to be in- valid, is not a competent witness for loss. Columbian Ins. Co. v. Lawrence, 10 Pet. 507. Story, J., says: "We know of no principle of law or of equity by which a mortgagee has the right to claim the benefit of a policy under- written for the mortgagor on the mort- gaged property, in case of a loss by fire." The mortgagee was admittejd as a witness. An agent is a competent 'Wit- ness, ex necessitate. Mackay v. Rhine- lander, 1 Johns. Ca. 408, and Bent v. Baker, supra. A stevedore employed by the master of a vessel to stow a cargo is a competent witness to prove that it is properly stowed. Rankin v. Am. Ins. Co., 1 Hall, 619. A pilot is a compe- tent witness in reference to loss, if he was on board at the time. Vairan v. Canal Ins. Co., 10 Ohio, 561. In Hicks V. Fitzsimmons, 1 Wash. C. C. 279, the captain of the vessel insured was ad- mitted to prove the loss by capture. It was held in Bird v. Thompson, 1 Esp. 339, that a master was not a com- petent witness to show that barratry was committed by consent and direction of the owners of the vessel. See also Para- dise V. Sun Mut. Ins. Co., 6 La. An. 596. In Am. Ins. Co. v. Insley, 7 Penn. St. 223, master and mariners were admitted to prove loss. In Robertson v. French, 4 Esp. 246, it was held that, in an action on a policy of insurance on 536 THE LAW OF MAKINE INSURANCE. [CH. X- home to the knowledge of the party who is to be affected by it. It has, however, been held that insurers are presumed to know the marine intelligence contained in newspapers which are taken at their place of business,^ and the presumption would be still stronger of their knowledge of facts written and posted in their of&ce.^ The general rule as to the production of papers is, that a party wishing to use a paper in the hands of the adverse party goods, the supercargo, who was to have had a share in the profits of the adven- ture, is a good witness where the goods are lost before they were sold. In Protheroe v. Elton, cited by Gibhs, Ch. J., in 8 Taunt. 457, the ship-owner was not admitted to prove the sea-worthiness of the vessel insured. It was held in Kuan V. Gardner, 1 Wash. C. C. 145, that one part owner of a vessel not interested in the insurance is a witness to prove loss, &c., in an action on the policy. See also Francis v. Ocean Ins. Co., 6 Cow. 404. As to depositions, see Vandervoort v. Col. Ins. Co., 3 Johns. Ca. 137, where, when a motion was made to examine the Portuguese Secretary of State at Lisbon, in an action on a policy of in- surance, where the loss happened on the coast of Brazil, the court refused a commission, unless the party could show how the evidence would be material. In Winthrop v. Union Ins. Co., 2 Wash. C. C. 7, it was held to be no objection to reading a deposition taken abroad, that the witnesses had previously been examined and cross-examined under a commission in the United States. Wit- nesses must be examined on all the interrogatories. Same case. Also, as to the formality required, see supra. If the questions annexed are made without objection, the answers cannot be ob- jected to, if they are pertinent. Lin- coln V. Bartelle, 6 Wend. 475, decides that the depositions will be received in evidence, although the oaths to the wit- nesses were not administered by the commissioners, if it appears they were prohibited from administering them, and they were administered by the local authorities. See too 2 Wash. 7, supra ; Taylor v. McViccar, 6 Esp. 27. Here the depositions, taken in an action on a policy of insurance, of the captain, who is part owner, where the loss is imputed to his conduct, were not admitted as evidence. ^ Green v. Merchants' Ins. Co., 10 Pick. 402. In an action on a policy of insurance upon a vessel, underwritten by an insurance company, it was proved that a certain newspaper was taken by the defendants ; that in the due course of the mail the particular paper contain- ing information of the time of the ship's sailing, which was material to the risk, would have reached them before the policy was underwritten ; that this num- ber was afterwards found upon their files ; and the president of the com- pany testified that he knew of the intel- ligence contained in it, though he could not recollect the source of his informa- tion. It was held that this number had been rightly admitted in evidence. " Bain v. Case, 3 C. & P. 496 ; Free- man V. Baker, 5 C. & P. 475. In Child V. Sun Mutual Ins. Co., 3 Sandf. S. C. 26. A Honolulu paper, called " The Polynesian,'' was held not admissible to show the condition of a vessel at the time of her sailing from that port. CH. X.] EVIDENCE. 537 gives him notice to produce it on the trial, and, if it be not pro- duced, he may prove the contents. In practice, evidence of the contents which might be considered quite imperfect goes to the jury, and has weight with them, on the ground that it is in the power of the adverse party to rectify any error or supply any deficiency by the production of the paper itself.^ And sometimes the court has ordered the production of the papers required. And the insured has been permitted to prove a letter of abandon- ment, without having given notice to the insurers to produce it.^ In regard to all such questions, and as to the introduction of copies of papers, and of the admissibility of secondary proof in the absence of primary proof, courts sometimes exercise a wide discretion. Experts are more often called in insurance cases than in those of any other class, unless it be patent cases. If the question be of navigation, or deviation, or the proper loading of a ship, or the treatment of goods, or sea-worthiness, experts are very frequently called. Of late years resort to them has become much more common than formerly, and, in the judgment of many persons, it has been carried quite too far. It is certainly a part of the law of evidence that no witnesses should express mere opinions to the jury. And it is believed that when ex- perts were first employed, this rule was adhered to ; that is to say, experts were men who possessed knowledge of a kind, or amount, which it could not be supposed a jury possessed, and which they ought to have to decide correctly the questions sub- mitted to them. This knowledge the experts gave them. It may be very difficult to draw an exact line between a mere statement of peculiar knowledge and one which is in fact a statement of opinion of the question in the case. But this line is now, in prac- tice, almost disregarded. Suppose, for example, the question to be whether the conduct of the master under certain circumstances ' Lawrence v. Ocean Ins. Co., 11 entitled to read the whole correspond- , Johns. 241. In a cause on a policy of ence and papers produced, pursuant to insurance, the court made an order (as the order. See ante, p. 335. is their custom) for the assured to pro- ' Peyton v. Hallett, 1 Caines, 363. duce to the insurers, upon affidavit, all Parol evidence of a letter of abandon- papers, or true copies thereof, relative ment, though in writing, is admissible, to the matters in issue between the and no notice is necessary to produce parties ; and the insurers were held the letter. 538 THE LAW OF MARINE INSURANCE. [CH. X. was judicious or not, as in making or shortening sail, or putting the helm to starboard or port, it is one thing to ask of a witness what a skilful navigator would do under certain supposed circum- stances, and to learn the grounds of his conclusion, and another thing to ask whether in his opinion this master did, at this time, right or wrong. If opinions of this kind are sought, experience has shown that it is easy to get them of any kind and in any num- ber, and the jury are then to choose between the opinions offered them, instead of making use of the information given to them. CH. XI.] JURISDICTION. 539 CHAPTER XI. JURISDICTION. Actions on policies are usually brought in courts of common law, and are actions of assumpsit, or whatever actions the code of practice, in the State in which they are brought, substitutes for assumpsit. Courts of equity have also a wide jurisdiction in cases of insurance. Its power to reform a policy has been repeatedly asserted, both in England and in this country. Our notes will show the leading cases on this subject, and they will illustrate the principles by which equity has been governed in granting this relief We would say, in general, that it cannot be granted unless a previous agreement to which the policy should have conformed and does not conform can be distinctly proved. If the policy be not in positive contradiction of the agreement, but so ambiguously expressed that the common rules of construc- tion fail to make it conform to the agreement, equity may refer to the agreement. But if, by reasonable construction of the policy, it can be made to be in substantial conformity with the agreement, the policy will not be reformed.^ If the defence of the insurers ' In Motteux v. London Ass. Co., 1 from St. Thomas to New York. The Atk. 545, where, by the label or memo- vessel was described as the " Danish brig randum of minutes of agreement, a ship called the Norge," but there were no was to be insured from the time she ar- other words importing any warranty, rived at Fort St. George, and by a mis- In the policy on the cargo there was take the policy was made out, by which a written warranty in these words : the insurance commenced from the de- " Warranted the property of Cassimere parture of the ship from Fort St. George, Delavigne, a citizen of the United it was held that the policy should be States." made to agree with the label. S. C, 4 The Norge was captured during her Vin. Abr. 281, pi. 10; S. C. 3 Eq. Ca. voyage, and the vessel and cargo were Abr. 636 ; Delavigne v. United Ins. Co., condemned in the admiralty court at 1 Johns. Ca. 310. This was an action New Providence as being " French for money had and received to recover property." The plaintiff, insisting that back the premium which had been the cargo was his property, and the ves- paid by plaintiff to the defendants for sel the property of a naturalized Danish insuring the brig Norge and her cargo, burgher, on the Island of St. Thomas, 540 THE LAW OF MARINE INSURANCE. [CH. XI. rests on the fraud of the insured, either in obtaining the policy or otherwise affecting the claim, this defence may be made at com- mon law.^ But courts of equity have exercised the power of tion can be given to it, and when so given it does not plainly appear to be at submitted the case to arbitrators, who decided that the assured could not re- cover for the brig and cargo. Nothing, however, was said by the arbitrators in reference to the premium, for which this action was brought. In this action for the premium, Lewis, J., in delivering the opinion of the court, said : " It is ad- mitted as a general principle, that where the policy never attaches, but is void ab initio, the premium must be re- turned, because the contract is without consideration, and the insurer ought not to retain the premium where no risk has been run. But it is insisted that here is a fraud on the insurer, which enhanced the risk, and that therefore the plaintiflf ought not to be allowed to maintain an action for a return of pre- mium. If the defendants had sought relief in a court of equity against the policy on the ground of fraud, they would have been obliged, according to the course of that court, to have refunded the premium before any aid would have been afforded them. Whether in a suit on the policy in this court they would not have been held to do the same, and to bring the money into court, it is not necessary now to decide." Judgment was entered for the plaintiff. Graves v. Mar. Ins. Co., 2 Caines, 343 ; Hogan v. Del. Ins. Co., Condy's Marshall, 345, n. ; S. C. 1 Wash. C. C. 419. In this case the rule was laid down, that if by mistake a deed is drawn plainly different from the agreement on which it is founded, a court of equity will consider the deed, as if it had conformed to the agreement ; or if the deed be ambigu- ously expressed, it may be explained by the agreement ; and if a deed be so ex- pressed as that a reasonable construc- variance with the agreement, the latter is not to be regarded. Del. Ins. Co. v. Hogan, 2 Wash. C. C. 4 ; Graves v. Bos- ton Mar. Ins. Co., 2 Cranch, 419. This was an appeal from the Circuit Court for the district of Massachusetts, on a decree in chancery dismissing the plaintiff's bill ; the object of which was to charge the defendants upon a policy of insurance, and to obtain relief against a mistake alleged to have been made by inserting only the name of Graves in the policy, whereas the interest of both Graves and Barnewall was intended to be in- sured. Marshall, Ch. J., in delivering the opinion of the court, held, that a policy in the name of one joint owner, " as property may appear " (without the clause stating the insurance to be for the benefit of all concerned), does not cover the interest of another joint owner ; and that the evidence of the knowledge of the underwriters of the intention of the insured, at the time of making the pol- icy, ought to be very clear to justify a court of equity in conforming the policy to that intention. Dow v. Whetten, 8 Wend. 160; Franklin Ins. Co. v. Hew- itt, 3 B. Mon. 239 ; Ewer v. Wash. Ins. Co., 16 Pick. 502. '■ Hoyt V. Gilman, 8 Mass. 336. This was an action on a policy of insurance, and the judge directed a nonsuit, on the ground that there had been a fraud- ulent concealment of material facts at the time of effecting the insurance ; and the court refused to set aside the nonsuit and grant a new trial, observing that, if the jury had found a verdict for the plaintiff, they should have set the verdict aside. CH. XI.] JURISDICTION. 541 compelling the insured to surrender a policy which he had ob- tained by fraud.i Equity has interposed to give relief in many other cases, as our notes will show.^ Admiralty has jurisdiction ' Whittingham v. Thornburgh, 2 Vern. 206, Prac. in Chanc. 20, 3 Eq. Ca. Abr. 635. Here, where the defend- ant procured an underwriter to a poli- cy of life insurance, who stated that he knew the insured, and that he was in good health, and others were induced by this means to underwrite the policy, it appearing on the trial, soon after the death of the insured, that the first un- derwriter had been merely used as a decoy to influence others to sign, and that his statement as to the health of the insured was false, it was held that the policy of insurance should be deliv- ered up and cancelled, and a perpetual injunction was decreed against the ver- dict obtained thereon at law, and the plaintiffs were allowed their full costs, both at law and in equity ; the money received in premium to go in part of their costs. Wilson v. Duckett, 3 Burr". 1361. In Da Costa v. Seandret, 2 P. Wms. 170, 3 Eq. Ca. Abr. 636, where a merchant, having a doubtful account of his ship,, insured her without ac- quainting the insurers of the danger she was in, it was held that the insur- ance was fraudulent ; and the court re- lieved against the . policy. See the remarks of Lord Eldon in the case of Lucena v. Craufurd, 5 B. & P. 322; Atlantic Ins. Co. v. Jose Maria Lunar, 1 Sandf ch. 91 ; French v. Connelly, 2 Anstr. 454. In the case of Fenn v. Craig, 3 Younge & Coll. 216, where a policy on the life of the assured was ob- tained from the plaintiffs by fraudulent representations as to his habits and state of health, the policy was decreed to be delivered tip and cancelled. ^ In the case of Motteux v. London Ass. Co., 1 Atk. Ch. 545, Lord Hard- wicke expressed himself of the opinion that equity would compel a trustee to allow his name to be used in a suit at law, for the benefit of his interested cestui que trust. In Leeds v. Mar. Ins. Co., 6 Wheaton, 565, equity interposed to order a set-off of the agent's premium notes against a judgment for loss which could not be set off at law. Scott V. Basse, 3 Ir. Ch. 170 ; De Ghe- tofl; V. London Ass. Co., Masley, Ch. 83 ; 4 Brown, Pari. Ca. 436 ; Fall v. Chambers, Masley, Ch. 193. See the case of the Indiana Mutual Fire Ins. Co. V. Chamberlain, 8 Blaokf. lud. 150, where a bill in chancery was filed by the plaintiffs against the heirs of C. to subject certain real estate which C. had insured, and which had descended to his heirs, to the payment of the premium note given to the insurance company by C. In The New York Ins. Co. v. Roulet, 24 Wendell, 505, where a cargo of merchandise was insured, was seized, and condemned by the French government, and a compromise was subsequently made between the under- writers and the assured, by which the latter accepted from the former $ 5,000, in satisfaction of their claim against the underwriters, which was for $ 15,000, and surrendered the policy, but did not assign or call the right to claim indemnity from the French government, it was held, on the underwriters subsequently ob- taining $ 5,000 from the French govern- ment, that they held that sum in trust for the assured, and they were decreed to pay over the same. It was also held that, in cases like the above, courts of equity and of law had concurrent juris- 542 THE LAW OP MARINE INSURANCE. [CH. XI. over bottomry and respondentia contracts. There can be no doubt of this when they are actually maritime contracts ; but when they assume this form or character, but do not in their substance be- long to this class, the jurisdiction of admiralty may be doubted. Mr. Justice Story held very decidedly, and intimated repeatedly, that admiralty had direct jurisdiction over actions on policies of instirance. In other cases in the First Circuit of United States, this jurisdiction has been affirmed; and it has been recently asserted, or, if not asserted, implied, by Mr. Justice Curtis, an extract from whose decision, which we give in our notes, will show the state of the law on this subject.^ sured, the surplus over and above the amount of the debt on the policy fall- ing due to be paid to the wife of the assured, it was held, that the adminis- trator of the assignor had no claim on the policy, and the court decreed the apportionment and payment of the sum insured between the creditor and the widow of the assignor. In Chase v. The Washington Mut. Ins. Co., 12 Barb. 595, where a policy of insurance, after having been executed, and sent to an agent of the underwriters, to be de- livered to the assured, was sent back to the general agent of the insurers for correction, and he destroyed the same — so far as to make its legal vitality doubtful — by tearing off the seals and names of the president and secretary of the insurance company ; and when after a loss had occurred, on being re- quested, he refused to return the policy, it was held that this act of the agent au- thorized the insured to come into a court of equity for relief against the insurers. ' In the case of The Gloucester In- surance Company v. Younger, 2 Curtis, C. C. R. 332, Mr. J. Curtis, in giving the opinion, says : " In Delovio v. Boit, 2 Gal. B. 398, decided in 1815, Mr Justice Story, after an elaborate and very learned examination of the sub- ject, held that the admiralty jurisdiction diction. Equity has jurisdiction to effect a distribution of the assets of an insolvent insurance company. Blaneh- ard V. Alleghany Mut. Ins. Co., 1 Penn. 359 ; Caston v. Alleghany County Mut. Ins. Co., lb. 322 ; Rhinehaft v. Alle- ghany County Mutual Ins. Co., lb. 359. Also to order a distribution of profits of a joint-stock insurance com- pany. Scott V. Eagle Fire Company, 7 Paige, Ch. N. Y. 198. Equity has also jurisdiction to prevent the master of a fqreign vessel from selling his cargo, for the purpose of paying his own debts with the proceeds. Morrison v. Noor- man, Benecke (London, ed. 1824, p. 259). In the case of Hallett v. Dow- dall, 18 Ad. & E. 2, 9 Eng. L. & Eq. 347, a court of equity exercised juris- diction where an insurance company was liable to a policy holder in its asso- ciate capacity, and its individual mem- bers were also liable, there being an insuiiiciency of company funds. See also, in relation to the above branch of jurisdiction. Burton, ex parte, 13 Eng. L, & Eq. 435 ; India & London Life Ass. Co. V. Dalby, 4 De Gex & S. Ch. 462, 7 Eng. L. & Eq. 250 ; John- son V. Knight, 16 Sim. Ch. 509. In Harrison v. McConkey, 1 Md. Ch. 34, on a valid assignment of a life-insur- ance policy to a creditor of the as- CH. XI.] JUEISDICTION. 643 Whenever a court of common law tries a case under a policy, as under any contract or any issvie, the court has exclusive juris- of the District Courts of the United States extended to suits on policies of insurance. In Peele v. The Merchants' Ins. Co., 3 Mason, 27, in the year 1822, the question was again before him. He reaffirmed the jurisdiction, and made a decree for the libellant. An appeal was taken, but for some cause was not prosecuted to a hearing before the Su- preme Court. In Hale v. The Washing- ton Ins. Co., 2 Story, 176, in 1842, that learned judge again declared that he adhered to the doctrine of Delovio v. Boit, and he again made a decree, in a suit in the admiralty, founded on a policy of insurance. In numerous cases, in this circuit, the doctrines of Delovio v. Boit have been still further examined and affirmed. Andrews v. The Essex F. & M. Ins. Co., 3 Mason, 6 ; Plummer V. Webb, 4 lb. 380 ; The Tilton, 5 lb. 465 ; The Volunteer, 1 Sum. 551 ; The Tribune, 3 lb. 144; The Spartan, Ware's R. 149 ; Steele v. Thacher, lb. 91 ; The Huntress, 1 Daveis, 93 and note. And, so far as I am informed, the jurisdiction has not been here ques- tioned. On the other hand, it must be admitted that, either from want of con- fidence felt by the bar in the ultimate establishment of the jurisdiction by the Supreme Court of the United States, or from some other cause, the jurisdiction of the admiralty over policies of insur- ance has been very infrequently re- sorted to. It is believed that since Peele's case a libel on a policy of in- surance has not been filed in this dis- trict, where the amount in dispute would allow an appeal. " Though this question has never come before the Supreme Court of the United States, other inquiries concerning the extent of the admiralty jurisdiction con- ferred by the Constitution have there arisen, and given rise to great research and much acute criticism. They have resulted in pretty wide difierences of opinion among the individual judges. Waring V. Clarke, 5 How. 441 ; N. Jer- sey S. N. Co. V. The Merchants' Bank, 6 How. 344; The Genesee Chief, 12 lb. 443. In Cutter v. Rae, 7 How. 729, it was held by a majority of the court that a libel, in personam, would not lie by the owner of a ship, against one of the consignees of cargo, who had re- ceived his goods, to recover a sum of money due by way of contribution to a general - average loss. This decision certainly goes pretty far towards over- ruling the decision in Delovio v. Boit, and is undoubtedly irreconcilable with some of the positions which are report- ed therein. But it does not cover the precise question, whether a policy of insurance is one of those maritime con- tracts which are within this jurisdiction. It rests on the . ground that, after the goods have been surrendered to the consignee, the lien is gone, and there- fore there is not admiralty jurisdiction to enforce a lien ; and that the promise by the consignee to contribute is im- plied, if at all, by the common law ; that it is not a creature of the admiralty law, and is not to be enforced in a court of admiralty. All this may be true, and yet a policy of insurance may be such a maritime contract as comes under the jurisdiction of the admiralty, while an implied promise to contribute in general average does not. Undoubt- edly it would be somewhat remarkable if the admiralty were held not to have jurisdiction over an implied promise to 544 THE LAW OF MARINE INSURANCE. [CH. XI. diction of tlie law, and the jury exclusive jurisdiction of the facts. At the same time it is a common practice for a court to grant a new trial, on the ground that the verdict of the jury is against the evidence. We know no rules which exactly define the degree of difference or opposition between the evidence and the verdict which would induce a court of law to give this relief. Almost every losing party thinks that the verdict is not what it should be ; and if there be a too great readiness in the court to hold the verdict untenable from ks opposition to the evidence, such a court may have to try over again every important case upon its evidence. At the same time, it is certain that where the jury entirely mistake the force or bearing of the evidence, or wil- fully disregard it, the court should exercise that 'power of setting the verdict aside which it unquestionably possesses. When it happens that the jury pay no attention to the direction of the court in matters of law, there is no reason why this usurpation of power on their part should not be rebuked and corrected, how- ever often it may be repeated. But if it be only a question of contribute to a general - average loss, but to have jurisdiction over an express promise to do so; or tlfeit it had not jurisdiction over an express promise to contribute to such a loss, but had juris- diction over an express promise, in a policy of insurance, to indemnify one for what he might be obliged to contrib- ute. Still, an inquiry into the extent of the admiralty jurisdiction, under the Constitution of the United States, is, to some extent at least, an historical ques- tion ; and whether a particular class of contracts is within that jurisdiction is to be determined, not by reasoning a priori, but by examining into the actual ex- tent of that jurisdiction, as exercised in this country prior to the formation of the Constitution. This may lead, as, comparing the cases of New Jersey S. N. Co. V. Merchants' Bank, and Cutter V. Rae, and The Genesee Chief, it may, perhaps, be said it has led, to theoretical anomalies, which can scarcely be recon- ciled, but which may, nevertheless, be sound deductions from correct premises. " The preliminary question which I have to determine is, whether I ought to examine this subject, and pronounce my own individual opinion thereon ; or whether, sitting here, I should allow the question, which has been thus decided by my learned and distinguished pred- ecessor, and which has been so long settled in this circuit, to remain, as he left it, until it shall come before the Supreme Court of the United States. I confess I have felt not a little doubt concerning what my duty requires of me ; but I have come to the conclusion, that, sitting here, I shall best discharge my duty by treating the inquiry as to the jurisdiction as not to be further gone into on the circuit, holding myself free to go into it at large, and with all the aids of more recent investigations, when it shall arise in the Appellate Court." CH. XI.] JURISDICTION. 545 fact, as, for example, it be one of sea-worthiness, the court may yield to the persistent determination of juries, and after repeated verdicts refuse to set one aside. ^ The distinction would seem to be, on this and on other similar questions, that, while the court state to the jury the law of sea-worthiness, and define for them the requisites for sea-worthiness, it belongs to the jury to decide whether that particular ship was sea-worthy.^ So if the question be one of representation or concealment, this would seem to be one of mixed law and fact. It is certain that the court should instruct the jury as to what constitutes the materiality of any fact, and then the jury determine whether a material fact was con- cealed or misrepresented.^ But in practice the jury do frequently decide upon the materiality of a fact, and this may sometimes de- ' In the case of Coffin v. Phoenix Ins. Co., 15 Pick. 291, Shaw, C. J., held that although it is the province of the jury- to decide ultimately on questions of fact, yet it is within the province, and it is sometimes the duty, of the court to set aside a verdict as being contrary to the weight of evidence. There are cases where, by the ordinary forms of pro- ceeding, the issue must go to the jury; but where it depends upon a few facts, which are plainly proved, and stand un- contradicted, and where the rules of law applicable to such facts are plain and well settled, and where, therefore, the verdict must obviously be found one way, or be manifestly wrong, and if in such case the jury persist in finding a wrong verdict, it will be the duty of the court to set it aside, as often as it is returned. " In Prescott v. Union Ins. Co., 1 Wharton, 399, where the question was as to tEe searworthiness of the vessel, in an action by the insured against the insurer, and, there being no contradic- tory testimony as to the facts, the judge charged the jury, that "if the facts are as stated in the protest, that the vessel began to leak as soon as she began to it TOL. ir. 35 sail, or soon after, and continued to leak up to the time of the storm, or any for- tuitous accident, and would, in conse- quence thereof, have required repairs, although there had been no storm, then the law says she was unseaworthy," — the court held that the law was correctly laid down to the jury, and that the court was rigjit in not leaving it to the jury to presume sea-worthiness or other- wise. ' In Flinn v. Headlam, 9 Barn. & C. 693, where the agent of a ship-owner, effecting a policy on a ship, misrepre- sented the nature of the cargo which she was to carry, but this was not in- serted in the policy, and it did not ap- pear that the underwriter Was induced by the misrepresentation to accept the risk, it was held by Lord Tenterden, Ch. J., that the jury were warranted in finding that the misrepresentation was not material, and that it did not vitiate the policy. Lyon u. Commercial Ins. Co., 2 Eob. La. 266 ; Littledale v. Dixon, 4 B. & P. 151 ; Willes v. Glover, lb. 14 ; Livingstone v. Delafield, 1 Johns. N. Y. 523. In Franklin Fire Ins. Co. v. Coates, 14 Md. 285-299, Barlol, J., observed: "It is everywhere conceded that the 546 THE LAW OF MARINE INSURANCE. [CH. XI. pead upon its connection with other facts, the existence of which is disputed and must be determined by the jury. So what degree of necessity authorizes a sale of the ship or of the cargo is matter of law.^ But whether tliat necessity existed in fact is a question for the jury. It is not possible to give any rule on the subject, excepting that already given, that it is the office of the court to state whatever principles of law are applicable to the questions before them, leaving to the jury the application of those principles to the evidence in the case.^ We h|,ve, however, many interesting insurance cases in which the question has arisen as to the bounds whicli divide the province of the court from the province of the jury, and these cases, which we give in our notes, will illustrate better than anything we can say where this dividing line will be found. ^ materiality of the disclosure or conceal- ment is a question of fact whicli must be submitted to the jury." See also Mutual Ins. Co. V. Deale, 18 Md. 26 ; Masters V. Madison Co. Mut. Ins. Co., 11 Barb. 624 ; Cumberland "Valley Mut. Protec- tion Ins. Co. V. Mitchell, 48 Penn. St. 374; Richmondville Union Seminary v. Hamilton Mut. Ins. Co., 1\ Gray, 459 ; Clark V. Union Ins. Co., 40 N. H. 333 ; Hartford Ins. Co. v. Harmer, 2 Ohio St: 452. ' In the case of Bryant v. Common- wealth Ins. Co., 13 Pick. 543, the jury had previously found a verdict, to the effect that where a vessel was stranded on the coast of Virginia, and the master had sold the' cargo, he was justified in so doing. The defendants, however, moved for a new trial, and the verdict was not confirmed. = Abitbol V. Briston, 6 Taunton, 464 ; Merchants' Ins. Co. of Alexandria v. Tucker, 3 Cranch, 357 ; Milles v. Fletch- er, Douglas, 230. ' In the case of Valton v. National Ins. Co., 22 Barb. N. T. 9, the question of whether a policy was a wager or not was held to be a point of law for the court. See WithereU v. Maine Ins. . Co., 49 Me. 200 ; Eaton v. Smith, 20 Pick. 150. Here the court held that when a word is used in a technical or peculiar sense, as applicable to any branch of business, or to any particular class of people, evidence of usage is admissible to explain and illustrate it, and that evidence is to be considered by a jury ; and the province of the court then is to instruct the jury what will be the legal effect of the contract as they shall find the meaning of the word modified or explained by the usage. Huckins v. Peoples' Ins. Co., 11 Foster, N. H. 238. In Carter v. Boehm, 3 Burr. 1905, Lord Mansfield left a question of the general construc- tion to a jury. Simond v. Boydell, Doug. 255. In Ougier v. Jennings, 1 Campb. 505, n., the jury found a ver- dict as' to a usage among underwriters. Eyre w. Marine Ins.Co., 6 Whart.(Penn.) 247 ; S. C. 5 Watts. & S. (Penn.) 116. Whether or not a promissory note, which was given to a mutual-insurance company, was intended as a stock note or as an ordinary premium note, was held to be a question for the jury. Bromver v. Hill, 1 Sandf. 629. See also Neve V. Columbian Ins. Co., 2 M'MuU. CH. XI.] JURISDICTION. 547 There is a difference between the law in England and in this country as to the effect of the statute of limitations on the juris- diction of courts of equity in matters that have been barred at law by the provisions of that statute. In England courts of equity do not hold themselves as absolutely barred by it, but they adopt it merely as a rule to guide the exercise of their discretion. In this country it is different, and equal weight and effect are attached to the statute in courts of equity and in those of law. Even in Eng- land, however, where, as we have said, the statute is more rigidly applied than here, in cases of bills filed for the reform of policies, or contracts of any kind, the courts will not grant relief if the period allowed by the statute has elapsed, between the filing of the bill and the time when the mistake to be corrected was dis- covered, or when, had reasonable care been exercised, it should have been discovered ; and in this country the same doctrine has been enforced in the case of a marine policy.^ C. C. 220; Mutual Fire Ins. Co. v. Marseilles, 6 111. 237. In the case of Dodge Co. Mut. Ins. Co. v. Rogers, 12 Wils. 337, where, in an action on a fire policy, the court had refused to instruct the jury that any increase of the risk after the insurance was effected by means within the control of the assured, rendered the policy void; the policy containing an express provision to that efi'eot, and there being some evidence tending to show a breach of the condi- tion ; it was held' that the instruction should have been given. Daniels v. Hudson River Ins. Co., 12 Cush. 416; Hough V. City Ins. Co., 29 Conn. 10. In the ease of Clifford v. Hunter, Mood. & M. 103, where the question of thp sea-worthiness of a vessel occurred, Lord Tenterden said : " I think it is rather a question for the jury, whether the ship was competent for the voyage, than for me." ' See also Prescott v. Union Ins. Co., 1 Whart. (Penn.) 1399 ; Fuller V. Alexander, 1 Brev. S. C. 149 ; Walsh V. Washinston Ins. Co., 32 N. Y. 427; Columbian Ins. Co. v. Lawrence, 2 Pet. 25, S. C, reaffirmed 10 Pet. 507. Whether or not there was a compliance or a non-compliance with a representa- tioij, or whether or not there was a rep- resentation or concealment, is commonly a question for the jury. See Livingston V. Delafield, 1 Johns. 523 ; Littledale r, Dixon, 4 B. & P. 151 ; Willes v. Glover, 4 B. & P. 14; Walden o. N. Y. Fire- men's Ins. Co., 12 Johns. 128 ; N. Y. Firemen's Ins. Co. .v. Walden, lb. 513 ; Huguenin v. Rayley, 6 Taunton, 186 ; Percival v. Maine Ins. Co., 33 Me. 242 ; Sexton V. Montgomery Ins. Co., 9 Barb. N. Y. 191 ; Ly'on v. Commercial Ins. Co., 2 Rob. La. 266. • Kennedy v. Duncfclee, 1 Gray, 65, 71. 548 THE LAW OF MARINE INSURANCE. [CH. XI. CHAPTER XII, STAMPS. Stamps were required on policies of insurance, for the first time in this country, in 1862. But they have been required in England since the 5th of William and Mary (1693). The practical opera- tion of this requirement has passed repeatedly under adjudication in England. Our stamp acts use similar, although not the same words with the English acts, and are intended to effect the same purposes ; and in the brief time since they have been in force, our own courts have had little occasion or opportunity for passing upon questions arising under their provision as to policies. But as some, at least, of these questions are difficult, and have already, as we understand, given rise to some diversity of practice, we shall, .after some consideration of the words of the statute, refer to English authorities. The following is the clause of the act of the 13th of July, 1866, affecting marine insurance. " On each policy of insurance or other instrument, by whatever name the same shall be called, by which insurance shall be made or renewed upon property of any description, whether against perils of the sea or by fire, or other peril of any kind, made by any insurance company, or its agents, or by any other company . or person, the premium upon which does not exceed ten dollars, ten cents ; exceeding ten, and not exceeding fifty dollars, twenty-five cents ; exceeding fifty dollars, fifty cents." The English statute, 9 Geo. 4, ch. 18, prohibits the insurance against fire of detached buildings, &c., under one sum, because " such collective insurance has been made to effect the purpose of several separate and distinct insurances, to the manifest injury of his Majesty's revenue." And it provides that in any policy covering many buildings, " every such building shall be separately valued, and a distinct and separate sum shall be insui'ed thereon." This statute was made to carry into effect the purpose of an earlier statute, 55 Geo. 3, ch. 184, by which duties "were imposed on policies of insurance against fire, at a certain rate on every CH. XII.] STAMPS. 649 hundred pounds and the fractional parts of every insurance less than a hundred. But all this is confined to fire insurance. Nor do we know why a merchant and his insurer might not, if they saw fit, include many ships or cargoes in one policy, to save the cost of stamps. It can hardly be supposed, however, that so trifling an economy as this would induce such an effort. It would not only he troublesome at first, but would complicate the interests tnd risks in such a way as might cause far greater trouble in the settlement. It must be remembered that this tax is laid on the policy of insurance, and not on the agreement or contract of insurance, and this consideration will help us to answer a question which has already risen in practice. If, by an open or running policy, A B is insured a large sum on shipments to be hereafter made, reported to the insurers, and indorsed on the policy, no one of the shipments being yet made, should that policy now be stamped ? On the one hand, it is said that there is nothing as yet for the policy to attach to, and never may be ; and that, although the policy is subscribed and delivered, it is not yet a contract of insurance, but only a contract for future insurance on a contingency ; and the stamp is imposed by law only " on a policy of insurance .... by which insurance shall be made upon property " ; and as yet.the policy has not this effect. We think, however, this reasoning is too nice for practice- The policy itself is made ; the premium note given ; and in the chapter on Interest we have seen that it is a very common thing to effect insurance on property the title to which is not yet in the insured. Very many policies never attach, because the property to which it is intended and expected that they will attach never comes under the terms of the policy, or is exposed to the risks which the policy is intended to cover. Nor can we see that the above argument against the necessity of a stamp would apply in that case, unless it would apply to all policies until it was certainly known that they had attached to property. We are, therefore, of opinion that the stamp should be afiixed when the policy is made. Here the contract is complete when the policy is delivered ; and, when a shipment which comes within its terms is made and reported, the insured can require that it be indorsed ; and the insurers could not discharge themselves from their liability by refusing to make the indorsement. 550 THE LAW OP MARINE INSURANCE. [CH. XII. But open policies are iiow often made on terms materially differ- ent from tliese. The insurers reserve the right of fixing the rate of premium on each shipment as reported to them. And it seems to have been held by the Circuit Court of the United States for the district of Maryland, that the contract was, in such case, com- pleted when the policy was ma,de, and attached to each shipment when made, leaving the rate of premium to be adjusted by law or evidence if the parties did not agree. But the Supreme Court overruled this decision ; and held that the insurers had reserved the right to complete the contract as. to each shipment by an agreement as to the rate of premium ; and, until this rate was agreed upon, the insurance did not attach to the shipment. ^ It would seem to follow from this ruling, that the policy was not so far completed as to require a stamp until a shipment was made, re- ported, and indorsed. Then a stamp should be affixed. And after- wards the question would arise, whether any successive shipment required a stamp when indorsed. This question is not without its difficulty. The stamp, we repeat, is imposed upon the policy of insurance, and not on the contract of insurance. And it might seem as if this requirement was satisfied and its force exhausted, when a stamp is put on the policy, if it be large enough to cover the whole amount of insurance which can be made under that policy. But this principle must not be carried too far. It cer- tainly would not permit an escape from the Stamp Act in the case of a merchant who, having or expecting occasion to require many insurances, should seek to save all but one of the stamps by getting a policy for twenty years, on some vast sum, the several interests which he wished insured, ships, cargoes, or freights, to be thereatfter reported and indorsed at premiums to be agreed upon as each interest was insured. And, on the whole, we should say, that, if the terms of the policy were such that no stamp was required or proper until a shipment was made, then every new shipment would require a new stamp when the bargain concern- ing it was completed. Another reason for requiring these successive stamps may be found in the fact that the Stamp Act requires a stamp on every policy that shall be " made or renewed." If a policy which 1 Orient Mut. Ins. Co. v. Wright, 23 Howard, 401. For a statement of this case, see ante, vol. 1, p. 321, n. 2. CH. XII.] STAMPS. 551 expires at a certain time is, at that time, renewed by an indorse- ment, there can be no doubt that a new stamp is requisite. Now an indorsement, which not only makes a policy attach to this new shipment, but gives validity to the policy as a contract of insurance in relation to this shipment, may, with no great stretch of construction, be regarded as renewing the contract at each time. Other questions arise as to the slip or agreement. The first of these is this : Is this agreement a policy under the Stamp Act? The English statute, 10 Anne, ch. 26, sect. 68, declares that " all deeds, instruments, and writings for payment of money, upon the loss of any ship or goods, or upon a loss by fire, or for any other purpose, and for which any writing commonly called a policy of assurance or insurance has been usually made, are to be deemed policies of insurance." It will be seen that this definition confines the name to a " writing commonly called a policy of insurance," which this slip certainly is not. Our Stamp Act says : " Policy of insurance, or other instrument, by whatever name the same shall be called, by which insurance shall be made," &c. Now it is true that, on the agreement expressed by the slip, especially if signed by the insurers, the insured may have his remedy in case of loss. But it must be by a bill in equity, requiring the insurers to make and deliver a policy, or by an action for damages for the breach of contract in not making a policy. The reason is, that the slip is considered, not a contract of insurance, but a contract for insurance. And on no ground can it be considered a policy in such a sense that it requires a stamp. The test of this may be found in the question. Would an insurance company, whose actuary or secretary signed such a slip, be liable for the penalty affixed to the offence of delivering a policy without a stamp ? No one would assert this ; although the English statute of 7 Vict. ch. 21, sect. 4 (repeating a pro- vision in the 35 Geo. 3), referring to the practice of the two chartered companies of noting down the terms of intended in- surance on unstamped labels or slips, exempts them from penalties only on condition that they make out the policies from them within three days. But the next question is, If the slip be not stamped, and no policy be made and delivered, has the insured any remedy, or has he lost all remedy by the force of the Stamp Act ? He brings his 552 THE LAW OF MARINE INSURANCE. [CH. XII. proper action at law or in equity, and in support of it produces the slip. The objection is taken that it has no stamp. He answers, It is not a policy. But then it is replied, It is an agreement, and, not having the proper stamp, cannot be produced in court. This objection would seem to be fatal. In the English courts, for reasons which would seem equally applicable to our law, it is held that where a party relies upon an agreement which has been reduced to writing, he must prove it by that writing, and cannot so prove it if the paper* be not stamped. And if an unstamped paper be lost or destroyed, he cannot prove its con- tents.i This rule was applied in one case where the defendant had snatched the paper out of the hands of the plaintiff's attorney before he could get it stamped, and destroyed it.^ ' Kogers v. M'Carthy, Sittings after Hil. Term, 1800, Park on Ins. (8th ed.) 39, S. C. 3 Esp. 106. In this case it appeared to be the custom for under- writers at Lloyd's Coffee-House to put down upon a slip of paper all the risks they had taken in the course of the day, and one of the special jury said that they considered the party as bound by that slip, though he never signed a policy. But Lord Kenyan held that, whatever obligation there might be in honor and good faith, he'certainly would not be bound in law, for, in order to en- force the claim of the assured in a court of justice, he must produce a stamped policy. In King w. Inhabitants of Castle Morton, 3 B. & Aid. 588, it was held, that where an agreement in writing, 'unstamped, for the letting a tenement at a, certain rent had been lost, parol evidence of its contents was not admis- sible for the sake of proving thereby the value of the tenement. See also Mars- den V. Reid, 3 East, 572. " Rippiner v. Wright, 2 B. & Aid. 478. This was an action of assumpsit for a crop of peas sold by the plaintiff to the defendant. At Nisi Prius the defendant proposed to give parol evi- dence of an agreement between him and the plaintiff that the latter should not be paid for the value of the crop, but only for the expense of ploughing and seed sown. It appeared that this agreement had been reduced to writing on unstamped paper, and that after- wards the plaintiff took an opportunity to snatch it from the hands of the de- fendant's attorney and destroy it. The plaintiff objected that no parol evidence of the contents of this paper could be received, inasmuch as the paper itself- could not, if in existence, have been read, owing to the want of a stamp. To this it was replied that the plaintiff, by destroying the paper, had prevented the defendant from getting it stamped, as he might have done on payment of the penalty, and that therefore it was not competent for him to make this ob- jection. The evidence was rejected, and for this reason the defendant moved for a new trial ; but the court said : " The evidence was properly rejected. It is the duty of the parties to an agreement to take care that when it is executed it is properly stamped ; and it is one of the risks attendant- upon an omission to do this, that, if any accident happens to CH. XII.] STAMPS. 553 This question of the effect of an unstamped slip is not, however, without its difficulty. We have already seen that there is much reason for holding that a merely oral contract of insurance may be binding. Then, if, in an action on such a contract, the defendant proved that the agreement was written on a slip, and required its production, and when produced it was found to be inadmissible for want of a stamp, would the rules above stated be held applicable, and sufficient to exclude all evidence of the contract, or would the slip be considered a nullity, and the evidence received, as in the English case, where, an unstamped note from Jamaica being in suit. Lord Kenyon declared it inadmissible, but said the plaintiff might sue on a quantum meruit ? ^ With all the severity of the English courts when the stamp acts come before them, there the agreement before the stamp is affixed, there is no remedy upon it what- soever. It is not possible now to say whether or not the commissioners of stamps, in the exercise of their discre- tion, would have permitted this agree- ment, if it had remained in existence, to be stamped on payment of the penalty." » In Aloes v. Hodgson, 7 T. K. 241, the note was given by the master of a ship to a seaman, and was in this form : "Jamaica, 25th July, 1796. Three days after the arrival of the ship Neill Malcolm at London, I promise to pay to W. Aloes fifty guineas, if he does his duty as an able seaman. John Hodg- son." There was no stamp on the paper, and the defendant gave in evi- dence a law of Jamaica, whereby a cer- tain stamp was imposed on all inland bills of exchange and promissory and other notes, and contended that the paper in question, being void by that law, and not evidence in the country where it was made, could not be re- ceived in evidence in England. In behalf of the plaintiff, it was contended that the writing could not be declared on as a promissory note because not negotiable, being a promise to pay on a contingency, but that it might be de- clared on as a special agreement ; that the defendant should not be allowed to avail himself of an objection which was merely founded on a revenue law of a foreign country, and did not enter into the merits of the transaction between the parties. The plaintiff also relied upon a count on a quantum meruit. Lord Kenyon, Ch. J., decided the question as follows : " This is a promissory note, though not negotiable ; and, as it is not stamped, it cannot be received in evi- dence. Then it is said that we cannot take notice of the revenue laws of a foreign country ; but I think we must resort to the laws of the country in which the note was made ; and, unless it be good there, it is not obligatory in a court of law here. . But as there is a count on a quantum meruit, which was not considered at the trial, and as the instrument could not be given in evi- dence for want of the stamp, there must be a new trial, in order to give the plaintiff an opportunity of recovering on the general count ; therefore let there be a new trial." 554 THE LAW OF MARINE INSUEANCE. [CH. XII. are cases where unstamped agreements are received or their con- tents proved, which it would not he easy to separate from an ac- tion on an agreement to insure, by any very obvious line of distinction : as to prove usury ; ^ to. recover back a wager ; ^ to prove fraud in the holder of the unstamped note ; ^ to rebut, by an unstamped bill, evidence of payment of a bill ; * to show an agreed statement of amounts as set forth in the unstamped agreement ; ^ to prove the receipt of money by means of an unstamped check ; ® to prove partnership by an unstamped agreement of dissolution ; "^ to show to whom goods were sold (or rather, were not sold) by an unstamped receipted bill of parcels.^ Still, however, we are of opinion, that where the slip or written agreement was signed, and set forth the terms of the contract, and had no stamp, it would be very difficult for the insured to find an adequate remedy. Section I.^ Of Alterations or Additions. Our stamp acts contain no special provisions as to alterations of, or additions to, policies of insurance ; whereas these provisions in ' Nash V. Duncomb, 1 Mood & Rob. 104. ' Holmes v. Sixsmith, 7 Exoh. 802. In this case the plaintiff entered into a ■written agreement with a third party to race their horses upon certain terms, and he deposited the amount of his stake with the defendant. The race was run, and the plaintiff's horse was beaten ; but he afterwards discovered that the whole transaction was a concocted fraud. In an action to recover back the stake, after notice given not to pay the amount over, it was held that the written instru- ment, although unstamped, was properly admitted in evidence in proof of the fraud. Pollock, C. B., said: "I think that an agreement does not require a stamp, unless it is used as and for an agreement. If it is used merely as part of the machinery of a fraud, and to show that the person paying money has been imposed upon, no stamp is necessary. In civil cases, if a document is used as an agreement, it must be stamped, but not so if it is used for any collateral pur- pose, — if, for example, it be used as a piece of paper merely to identify some person by its having been found in his possession, or to connect one person with another, or to connect two pieces of paper together. And in criminal cases, although an instrument might, as such, unquestionably require a stamp, and be in itself free from fraud, still, if used to establish crime, it does not require a stamp : as, where a prisoner is indicted for forgery, the forged instrument is re- ceivable in evidence, though it has either no stamp or a wrong stamp." ' Gregory v. Eraser, 3 Campb. 454. * Smart v. Nokes, 7 Scott, N. E. 786. ' Matheson v. Koss, 2 H. of L. 286. " Blair V. Bromley, 5 Hare, 542 ; S. C. 2 Phillips, 354. ' Wheldon v. Matthews, 2 Chitty, 399. « Millen v. Dent, 10 Ad. & El., N. S. (Q. B.) 845. CH. xn.] STAMPS. 555 • the English acts are quite minute. But they all proceed, and are construed in the cases arising under them, upon a principle which must have force here without special enactment. It is, that au alteration or addition which makes a substantially new bargain makes a new policy. It is obvious that no parties would be per- mitted to use an old and exhausted policy over and over again without restamping, by merely changing the descriptions of the interests assured, or the parties or voyage. Where, then, can the line be drawn ? Nowhere, unless, as we have already said, be- tween those alterations and additions which do, and those which do not, make a bargain which is in substance a new one. , Thus, an instrument may be altered, by consent of parties, where it is only to correct a mistake ; ^ or where it has not yet exhausted its work or discharged its functions, and the alteration is not in- tended to vary them ; ^ or where, say the courts, the matter is still in fieri. -^ and in these cases no new stamp is required. It would seem to be clear that the character or effect of any addition or alteration, and whether it was material in the sense and to the extent of requiring a new stamp, must be a question of law for the court. The general question, whether alterations in an instrument (without reference to the Stamp Act) are material, is certainly one of law.* As the want of a stamp, when an alteration seeming to require it is made, will be supplied by evidence that the alteration was made before the instrument was delivered, and while it was yet in fieri, ' Kershaw v. Cox, 3 Esp. 246. In 552, 560. Where the admissibility of a this case a bill of exchange was put into bill of exchange, purporting to be a circulation by indorsement, though it foreign bill, and stamped accordingly, wanted the words " or order." These was objected to on the ground that, al- words were afterwards inserted by the though it purported to be drawn abroad, drawer with the consent of the parties, it was in fact an inland bill, drawn in and this weis held not to vitiate the in- London, and evidence was offered to strument, nor to make a new stamp prove 'that fact, it was held that the necessary, as it did not make it a new judge ought to have received the evi- instrument, but was merely the correc- dence in that stage of the cause, and de- tion of a mistake, and in furtherance of eided upon the admissibility of the in- the original intention of the parties. strument, and not to have received the ' Callow V. Lawrence, 3 M. & S. 95. evidence afterwards, as part of the de- ' Webber v. Maddocks, 3 Campb. 1 ; fendant's case, and submitted it to the Brutt V. Pickard, Ry. & M. 37. jury. Bartlett v. Smith, 11 M. & W. * Steele's Lessee v. Spencer, 1 Pet. . 483. 656 THE LAW OP MARINE INSURANCE. [CH. XII. the burden of proof that it was then made would seem to rest on the party who must make use of the instrument.-' In one case Lord Bllenborough held, that an alteration extend- ing the time of sailing did not require a new stamp.^ And a memorandum cancelling a warranty of the time of sailing did not require a new stamp.^ But in another case, at very nearly the same time, the same judge held that an alteration of " on ship and outfit " into " on ship and goods " required a new stamp.* Where ' Where an alteration appears upon the face of a bill, the party producing it must»show that the alteration was made with consent of parties, or before the issuing of the bill. Henman v. Dickin- son, 5 Bing. 183. In this case, Park, J., said : " Where the plaintiff sues on an instrument which has manifestly been altered, it is for him to show that the ■ alteration was not improperly made. I am sure this has been decided, and good sense points out that it ought to be so, because the defendant can have no means of knowing the circumstances of a subsequent alteration.'' In Knight v. Clements, 8 Ad. & El. 215, a bill was drawn upon a two months' stamp, and had begun with the words, " Three months after date," but the word " three" had been obliterated (as if blotted while the ink was wet), and "two" writtten upon it, and " two " written again under- neath, and the plaintiff, who put in the bill at nisi prius, offered no evidence to account for these alterations. It was held that the document, by itself, was no evidence to go to the jury of the alterations having been made at the original writing of the bill, and, issue having been joined on a plea of non accepit, that the plaintiff must be non- suited. Lord Denman, Ch. J., said: " The plaintiff was bound to prove a bill accepted payable at two months: that which he produced was accepted, payable either at two or three months, with no evidence whether it was the one or the other. The mode of obliteration might have furnished arguments in favor of one or the other supposition, and material confirmation to any proof ad- duced as to that fact. But, standing by itself, it was obviously no better than a conjecture; for the alteration might have been too late, and accompanied with a fresh marking by wet ink rubbed over on the instant." See also Clifford V. Parker, 2 Man. & G. 909. ^ Kensington v. Inglis, 8 East, '273. Here, goods and specie, to a certain amount, were insured by a policy on ship, or ships, which should sail on the voyage insured between October 1, 1799, and June 1, 1800. A memorandum was writ- ten, on the policy, on the 11th of June, extending the time of sailing to the 1st of August, 1800. It was held, by Lord Ellenhorough, that this did not require a stamp, being within the thirteenth section of the statute 35 Geo. 3, ch. 63, which provides that the act imposing the stamp shall not extend to prohibit the making of any lawful alteration in the terms or conditions of any policy, &c. " Kidsdale v. Shedden, 4 Campb. 107. * Hill V. Patten, 8 East, 373. The policy was upon " ship and outfit," On a voyage upon the southern whale fishery out and home, and the alteration was made by consent of the underwriters after the ship had sailed upon the voy- CH. XII.] STAMPS. 557 the port to which the vessel was to go was altered, this required no new stamp.^ And a memorandum rectifying the declaration by a broker of a ship in an open policy required no new stamp.^ age insured, and after the policy had fully attached to what was, at the time of such sailing, the subject insured. It was held that, outfit being essentially different in such a voyage from goods, 'the alteration was therefore not within the exception of the statute 35 Geo. 3, ch. 63, sect. 13, which enables altera- tions to be made in the terms or condi- tions of a policy, without having a new stamp, so that the thing insured remains the property of the same person, &c. ' Eamstrom v. Bell, 5 M. & S. 267. The policy was on goods at and from Stockholm to Swinemunde. The ship being driven by stress of weather into Misby, on the 30th of May, and de- tained there till the 9th of October, the assured, on the 1st of July, wrote to their agents in London, " that the cap- tain had been ordered to proceed to Konigsberg, as they were not certain whether the enemy might be at Swine- munde or not, and that the passage to Konigsberg was nearly the same, but rather the shortest and safest ; and they desired the agents to arrange the mat- ter with the underwriters " ; which let- ter the agents receiving, on the 12th of Jiily, applied to the underwriters for their consent to alter the policy by add- ing the words " Konigsberg or Memel " after " Swinemunde," which consent was obtained ; and the ship and goods .were afterwards lost in their voyage to Konigsberg. Lord Elleriborougli, Ch. J., said : " The assured had a purpose of change arising ex justa causa, and while it was in contemplation the pro- posal was made to the underwriter, and assented to by him, that Konigsberg should be the ship's destination. If the underwriter had not assented, the as- sured might have thrown the risk upon him by going to Swinemunde ; instead of which, the application is made for the underwriter's benefit. The act [35 Geo. 3, ch. 63, sect. 13, as to altera- tions not requiring a new stamp] says : ' So that the alteration be made before notice of the determination of the risk.' This alteration was made while there was only an intention to determine the risk." In Brockelbank v. Sugrue, 1 B. & Ad. 81, a policy duly stamped was effected on a ship on a voyage at and from Liverpool to Quebec. The ship being detained beyond the intended time of sailing, the following memorandum was indorsed on the policy : " The Hebe being unavoidably detained beyond the intended time of sailing to Quebec, the voyage is changed, and the vessel pro- ceeds from Liverpool to St. John's, New Brunswick, at and from thence back to London ; and, in consideration of one guinea per cent additional, the under- writers agree to continue on the risk until the vessel should be arrived back in London, or her port of discharge in the United Kingdom." It was held that the change of destination of the ship provided for by the memorandum was an alteration in the terms and con- ditions of the policy within the meaning of the 35 Geo; 3, ch. 63, sect. 13, and therefore that the policy so altered by the memorandum did not require a new stamp. * Robinson v. Touray, 3 Campb. 158, S. C. 1 M. & S. 217. Here there was a policy on goods by ship or ships to be thereafter declared. The broker by mistake made a written declaration upon goods by wrong ships, the Tweende 558 THE LAW OF MARINE INSURANCE. [CH. XII. And an alteration from " on ship " to " goods as interest may appear," was held to require no new stamp.^ But it is not very easy to see clearly why the stamp should be excused where this mistake was corrected, and required where the mistake of "outfits" for "goods" was corrected.^ In this last case, as the action could not be maintained on the policy as altered for want of a stamp, another action was brought on the policy as unaltered. But the court held that the alteration • was eifectual to defeat an action on^the policy as unaltered.^ Venner and the Neptunus, to which the underwriters put their initials. It was held that he might afterwards, in compliance with the orders of the in- sured, declare upon goods by the right ship, the America, without the assent of the underwriters and without a fresh stamp. Lord Ellenhorough said : " There was here a blunder in the names of the ships first declared. If this was without fraud and without prejudice to the underwriters, I think it might be cor- rected without the assent of the de- fendant, and without a fresh stamp. It is the same as if a verbal message had been sent by a porter who misdelivered it. The first declaration did not form any part of the contract. It was a cor- rigible mistake, and it was corrected. The policy therefore attached upon the cargo of the America in the same man- ner as if no prior declaration had been made." ' Sawtell V. Loudon, 5 Taunt. 359. The broker was directed to effect a policy upon goods by a certain ship. By mistake, he effected it upon the ship, his principal having no interest therein. The error was discovered after the sailing of the ship, and, on application to the insurers, was rectified by a memorandum in the margin stating the terms. It was held that no new stamp was required, as the first policy upon the goods was a mistake. ^ Hill V. Patten, 8 East, 373, supra, p. 558, n. 2. ' French v. Patton, 9 East, 351. Speaking of the change, in the policy, from "ship and outfit" to "ship and goods," Lord Ellenborough said : " The new agreement was complete, as far as the will of the parties could make it so ; and it only wanted a circumstance which the law requires to give it its full legal effect. But though ineffectual as an instrument to sue on, it seems effectual to do away the former agree- ment, which was thereby abandoned. If this were otherwise, would it not operate ae a fraud on the revenue ? I am glad, however, that this case comes before us on a nonsuit, because the plaintiff will not be concluded by our present opinion. I have turned the question in my mind again and again, with great anxiety. In the first action, the plaintiff insisted on the alteration as made, agreeably to the real inten- tions of the parties ; and that the pol- icy, as it was first subscribed, was con- trary to the instructions of the broker, and by mistake. But now he desires us to consider that it was not altered, because it was not effectually altered, for want of a new stamp to the memo- randum. But is it not made a different policy by the memorandum, by which a different contract is substituted by the act of the parties in lieu of the former CH. XII.] STAMPS. 559 In- one English case, turning on the question whether more than one stamp was required because tlie instrument included parties with distinct and separable interests, all the underwriters of a marine policy having agreed, by an instrument having but one stamp, to refer a disputed question to arbitrators, it was held, but apparently with some difficulty, that the single stamp was suffi- cient.^ one, which they abandon? Is it less effectual to show the intention of the parties, because it is a fraud, in law, against the revenue ? The plaintiff's own act has made, as far as he can make, the policy speak a different lan- guage from what he now insists that it does, and he must take the conse- quences. I cannot, therefore, say that the policy is not so altered as to have lost its original identity, though the cir- cumstance of a stamp be wanting to give full effect to the instrument so altered ; and I do not think that the plaintiff can recur to it again in its original state. If, however, he shall be advised to question our opinion, 1 am glad that the opportunity will still be open to him." Le Blanc, J., added : " We must give.the rule of law, in this case, as far as we are compelled to do it, with reluctance, because it is against a' party who, perhaps, meant to do no wrong at the time; but can the court enforce an agreement, after the parties themselves have, upon the very face of the same instrument, declared that it is not their agreement, and have actually written another and a different agree- ment in the place of it ? " ' Goodson V. Forbes, 6 Taunt. 171, S. C. 1 Marsh. 525. Here there were two actions on a policy of insurance, and the declarations contained also a count upon an award made under a reference by the plaintiff on the one hand, and all the underwriters on the policy on the other. Upon the trial at nisi prius, it appeared that the agree- ment to refer and the award were each written on one stamp. To this the de- fendant objected, that as many stamps were requisite as there were under- writers. The evidence, however, was admitted, and a verdict was rendered for the plaintiff, subject to the point reserved. Upon the point in question, Gibbs, C. J., in giving the opinion of the court, said : " We think' it impos- sible to decide that, in the present case, more stamps than one were necessary, without disturbing decided cases." It was admitted by the counsel for the defendant that, in a case of composi- tion by an insolvent debtor with his creditors, only one stamp is necessary. There the different creditors have each a separate remedy against the insolvent debtor. They have no joint legal interest; yet it has been always con- sidered that upon such a deed one stamp is sufficient. Such deeds have always been received in evidence. INDEX. A. ABANDONMENT. See CoNSTRTJCTiTE Total Loss, § ii. et seq. ii. Ill -200 ACCEPTANCE, of contract of insurance by letter . . . . i. 34 - 43 must conform to ofiFer i. 88 - 41 of abandonment. See Constructive Total Loss, § vii. ii. 177-179 ACKNOWLEDGMENT, in policy of receipt of premium . . . . i. 502 - 503 ACTION, ii. 441-502 L Form of ii. 441, 442 modified by codes in many States .... ii. 441 if policy is under seal, action, covenant, or debt . . ii. 441 but policies not now generally sealed in England . . ii. 441 seldom, if ever, in America ii. 441 when not under seal, assumpsit the proper form . . ii. 441 rights and remedies in action on policy same as in any other action ii. 442 IL Who can bring an Action . . . . ii. 442-468 any one insured by name can bring . . . . ii. 442 but many policies cover interest of several persons . . ii. 442 then any person named in policy may sue for benefit of all whom it may concern ii. 442 or party actually insured, though not named, may'sue in his own name . . ii. 443, 444 but not, by technical rules of common law, if policy is under seal . . ii. 445 but this allowed in a recent case in England . . ii. 446 n. though generally held that the action, being covenant, must be in name used in policy ...... ii. 446 generally brought in America in name of person procuring insurance ii. 447 VOL. II. 36 562 INDEX. ACTION, — Gontinued. unless other persons interested are also named . . . ii. 447 if one party is mentioned as insured, with loss payable to an- other, designated payee may sue in his own name . . ii. 448 if indorsement on policy states it to be for benefit of person named, and others, all may bring an action jointly . ii. 449 assent of persons named as payees sometimes held .necessary to enable insured to sue in his own name . . . ii. 449 persons jointly insured must join in action . . . ii. 450 if two persons are jointly insured, 'being so interested, and one conveys his interest to another, joint action not maintain- able ii. 451 this held in fire policy ii. 451 but applicable to marine ii. 451 when assignee must bring action in his own name . . ii. 451 where two persons are insured for the benefit of a third party, policy declaring that " themselves and their, and every one of them was insured," held that third person might sue in .his own name ii. 451 cannot sue unless actually interested in property insured ii. 452 and also in policy itself ii. 452 ground for holding that interest at time of loss alone is suf- ficient, though none existed at beginning of risk , ii. 453 when weight of authority requires interest at both times . ii. 453 policy may be made to cover interests of successive owners of property insured ii. 453 " for whom it may concern" has this effect . . , ii. 453 declaration, in action on such policy, need not aver plaintiff's interest at beginning of risk ii. 453 but only at time of loss ii. 453 evidence proving interest may be offered under this clause ii. 453 plaintiff in action on policy may recover for all interests in- tended to be insured, though differing in character . . ii. 454 policy " for " means the same as " for whom it may concern " ii. 455 if, after joint action is begun, one or more of parties with- draw, action may be carried on for benefit of remaining persons interested ii. 456 so, if one party interested in joint policy refuses to sue, others interested may maintain action . . . . ii. 456 Bights of Mortgagor and Mortgagee to bring . . ii. 457, 458 either may insure for his own benefit . i. 226 - 229 ; ii. 457 INDEX. 563 ACTION, — Continued. if mortgagor insures for own benefit, mortgagee has no interest, and cannot sue ii. 457 but policy may be made for his benefit, and if mort- gagee adopts he may sue ii. 457 general principles of agency, authority, and ratification would be applied ii. 457 mortgagee cannot insure at expense of mortgagor . ii. 458 unless expressly authorized to do so . . . ii. 458 if policy be in name of two or more, and one only is inter- ested, he may sue alone ..... ii. 458, 466 but policy must be worded so as to cover his interest . ii. 458 plaintiffs in joint action may prove separate interests of each ii. 458, 466 Eights of Assignee to bring ..... ii. 459 - 462 when action must be brought in name of assignor . ii. 459 even though assignment is made with consent of insured ii. 459 otherwise in Louisiana . . . . . . . ii. 460 and so authorized by statute in some States . . ii. 460 but in such case, assignor subject to equities of defence ■ applicable if action was in name of assignee . ii. 460 consent to assignment by insured sometimes held suffi- cient to enable assignee to sue . . . ii. 460, n. 3 some policies give this permission, if assignment is with » consent of insured ...... ii. 462 and during continuance of risk . . . . , ii. 462 assignment generally prohibited . . . . ii. 462 but this may be waived by indorsement of consent . ii. 462 if part owner insures in his own name, construed to be insur- ance of his interest only ii. 463, 465 unless the contrary appears . . . • . . . ii. 463 other part owner must ratify as to his interest . . ii. 464 otherwise not chargeable with premium . . . . ii. 464 and one part owner insured not liable to other for any part of amount recovered ....... ii. 464 nor can the other bring any action . . . . ii. 464 separate interests of two or more, if distinctly defined in pol- icy authorizes separate actions ..... ii. 464 in policies under seal only person named can sue, though in- terests of others are expressed ..... ii. 465 but plaintiff recovering in covenant recovers for benefit of aU interested ii. 465 564 INDEX. ACTION, — Oontinued. in America policy under seal in name of one person expressly for benefit of another party named may be sued by payee in his own name ........ ii. 465 trustee may sue in his own name ii. 465 but liable to cestui que trust for amount received . . ii. 466 when party to whom loss is payable may bring action in his own name ......... ii. 466 otherwise if receipt of amount of demand, to secure which policy was made, is indorsed thereon . . . . ii. 466 so if payee directs loss to be paid to insured . . . ii. 466 claim for loss goes to personal representatives of deceased in- sured ii. 467 not usual to mention executors, administrators, or sissigns in policy . . ii. 468 nor would these words make any diflference . . . ii. 468 any party who may sue for loss may sue for return of pre- mium ii. 468 member of insolvent mutual company cannot set oflF against premiums due a loss owing him by company . . . ii. 468 III. Against whom an Action mat be brought bt the . Insured ii. 468-488 insured may sue all insurers on same property separately . ii. 468 insurer paying whole of, or more than his share may demand contribution ........ ii.«468 so if several insurers on same policy . . . . ii. 469 but this now unusual ....... ii. 469 this eflFected in England by consolidation rule . . ii. 470 effect of _ . . . ii. 470 action may be brought on agreement to make policy . ii. 470 if policy is not delivered, though made out, assumpsit on con- tract will lie ii. 471, 472 and trover will lie for policy not delivered . . . ii. 472 declaration of agent that policy was made held to support trover ii. 473 but this doubtful ii. 473 Proof of Loss ii. 473 - 477 policies may stipulate that payment shall not be due till specified time after ii. 473 less than legal proof sufficient to begin the time . ii. 473 clause variously adjudicated ii. 474 INDEX. . 565 ACTION, — Continued. construed to require only best evidence possessed at time ii. 474 but this not literally true ii. 474 insurer entitled to all evidence possessed by insured ii. 474, 476 when a document not legally admissible on a trial must be given to insurers ...... ii. 474 papers usually given ii. 475 necessary proof depends on circumstances of case . ii. 476 requirement of, may be waived or qualified . . ii. 476 and this expressly or by implication . . ii. 476, 477 and suflScient if insurer received proofs . . . ii. 477 though not given by insured ..... ii. 477 notice with proof may be sufficient in one case, and not in another . . ii. 477 when absence of proof of survey held fatal in policy contain- ing rotten clause ........ ii. 477 preliminary proof sufficient without, if insured can show good reason for want of ....... ii. 478 good faith on part of insured requisite in preliminary proof ii. 478 if refusal to pay is not grounded on want of, held a waiver ii. 478 payment of money into court sufficient evidence of accepts ance of ......... ii. 479 if insurers are liable to pay after certain act of their own, refusal to perform this gives right of action . . ii. 479 whether if insurers have certain time in which to perform their act, the right of action begins on refusal, or on ex- piration of time ....... ii. 480, 481 held that the right of action accrues at once . . . ii. 481 clause requiring action to be brought within specified time valid ii. 481 though company does business in another State . . ii. 481 but sometimes held inoperative ..... ii. 481 clause as to place of bringing, held inoperative . . . ii. 482 cases discussed ii. 482 agreement to submit to arbitration does not prevent suit . ii. 483 expressly so held in England, though matters were already referred to arbitrators ....... ii. 483 and courts of equity refuse to compel performance of such agreement . . ii. 484 or to order arbitrators to proceed . . . . * . ii. 484 but this recently changed in England by statute ii. 485 - 487 now not settled in this country ii. 487 56Q INDEX. ACTION, — Continued. agreement to bring suit only in courts of State incorporating policy held void on grounds of public policy . . . ii. 488 IV. Eights of, acquired bt Insurers . . ii. 488-491 if insurers pay loss under mistake of material fact, rules of. common law apply ii. 488 if their own fault, cannot recover back . . . . ii. 488 but lately held that they are not barred from recovering back, if payment was caused by want of inquiries . ii. 488 if new fact is discovered, after payment, which would have prevented payment, if known, insurers may maintain as- sumpsit for amount paid ii. 489 so held, when policy had been defeated by breach of war- ranty . .' ii. 489 and when insurance made to cover mortgagee's interest was paid to mortgagor ii. 489 insurer may recover back money paid, if induced to pay by fraudulent deception . ii. 490 this rule extended to cases of fraud in making of policy ii. 490 but if money so paid was recovered in action by insured, no remedy, even though fraud should be afterwards discovered ii. 490 but remedy in equity may be found in such case . . ii. 491 "V. Of the Rights of Insurers as Assignees bt Aban-. DONMENT. (See Table of Contents.) . . . ii. 492 - 499 insurers, by accepting abandonment, acquire all rights of the insured ......... ii. 492 holding as assignees ii. 492 when law requires action to be brought in name of assignor, insurers must bring in name of insured . . . ii. 493 and insured obliged to concur in action of insurers . ii. 494 insurers may use his name ...... ii. 494 and may claim any compensations due him on account of property insured ii. 494 and have actions and remedies against insured for torts com- mitted after abandonment ...... ii. 495 insured's claims pass to insurers ii. 496 goods transferred to insurers by abandonment carry all claims for damages thereto ii. 497, 498 so of actions of owners against pilots, for misconduct . ii. 499 or agawist captors for unlawful capture . . . . ii. 499 but insurers must accept abandonment . . . ii. 499 otherwise, their rights those only of any creditor . . ii. 499 INDEX. 667 ACTION, — Continued. VI. Of, by One okdeking ok effecting Insdhance through AN Agent ii. 500 - 502 one thus insuring or ordering has a claim against agent for negligence, if injured thereby ii. 500 insured may bring, against officer of insurance company for false representations ....... ii. 501 but part owner undertaking gratuitously to procure, not liable for neglect ii. 502 this doubtful . ii. 502 if agent enters upon performance of duties, bound to pursue instructions ii. 502 and liable for any damage from failures to do . . ii. 502 ACTUAL TOTAL LOSS, ii. 68 - 106 " destruction " often used as equivalent to loss . . . ii. 68 but inaccurately ii. 68 property lost as to insurance, when lost as to the thing in- sured ii. 68 although it may continue to e^ist in specie . . . ii. 68 - 74 this condition referred to in insurance law . . . ii. 68 to constitute, hope of restoration must be destroyed . . ii. 69 illustrations of this . . . . . . . ii. 69 if submerged in shallow water, no actual total loss, until all . hope of raising is gone ii. 70 if damaged by fire, none, if capable of repair . . ii. 70 such cases depend on their peculiar circumstances . . ii. 71 stranding may or may not be ii. 71, 72 what constitutes ii. 71, n. 1 important to determine what is a loss . . . . ii. 73 various definitions of ii. 73, 74 capture and condemnation . . . . . . ii. 74, n. 4 so, if ship is unheard from sufficient time . . . ii. 74 in such case, method of loss immaterial . . . ii. 74, 75 goods saved from wreck, and afterwards stolen, held to be, as to owners ii. 75 n. so, when goods are confiscated by foreign government . ii. 75 action for actual total loss, in such case, must be brought be- fore restoration of any portion ii. 75, 76 difiference of opinion as to this . . . . . ii. 77 n. Whether Sale hy Master under justifying Oircumstanees is ii. 78 - 90 master as such has no authority to sell . . . ii. 78 but may gain such from necessity of case . . ii. 79 568 INDEX. ACTUAL TOTAL LOSS, — Continued. What Circumstances justify ii. 79 - 86 may sell in case of famine ii. 80 formerly held valid, if in exercise of honest discretion ii. 80 and for benefit of all concerned . . . . ii. 80 this not sustained at present day • . . ii. 80 n., 582 difficult to determine, when necessity is sufficient . ii. 83, 84 " moral necessity " said to be, in England . . . ii. 84 this approved in America, but questionable . . ii. 84 may sell when ship is wrecked ■. . . . ii. 84 n., 5 this rule modified ii. 84 n., 6 distinction, as between former owner and purchaser, add insurer and insured ii. 85 final event to be considered in judging as to . . ii. 85 a question of fact ii. 86 how far a presumption that master was justified . ii. 86 burden of proof on purchaser to show necessity, if be- tween him and original owner . . . . ii. 86 on insured, if between him and insurer ... ii. 86 whether necessity springing from peril insured against is ii. 86 sufficient ii. 87 different opinion in England ii. 87 this question discussed ii. 87 - 90 whether, if possible to repair at greater cost than ship is worth ii. 90 abandonment usually practised in such case . . . ii. 91 and question does not arise ii. 91 unless abandonment is ineffectual ii. 91 insured may claim for, though there is hope of recovery of subject insured ii. 92 illustration of this ii. 92 ii. 93 - 95 ii. 93 . ii. 93 ii. 93 . ii. 93 ii. 94 . ii. 94 ii. 95 On Cargo . principles applicable to total loss, ship apply to with differences required by circumstances of case total loss of ship does not imply . nor of cargo, total loss of ship .... difficulty in regard to memorandum articles . meaning of ...... . custom in regard to, variable usual to provide that they shall be free from average unless general ii. 95 meaning of this clause .... ii. 95 INDEX. 569 ACTUAL TOTAL 1.0SS, — Continued. Mtglish Doctrine of Loss at Port of Destination . ii. 96 - 98 formerly if goods arrived in specie, insurers not liable . ii. 96- though they were utterly worthless for. purpose intended . ii. 96 this law discussed ii. 96, 97 now goods must be of some value on arrival . . ii. 98 this not expressly decided . . . . . . ii. 98 but seems to be implied ...... ii. 98 English Doctrine of Loss at intermediate Port . . ii. 99 - 101 duty of master to forward memorandum articles to port of destination ii. 99 so if insurers are not liable if goods arrive in specie . ii. 100 but if they must be of some value, expense of forwarding to be considered ii. 100 while rule as to existence in specie prevailed, insurers not liable merely because goods were not worth forwarding ii. 100 recently overruled in England . . . . . ii. 100 duty of master to send forward only when goods will be of value on arrival ....... ii. 100 master not obliged to incur every expense, however great, for this purpose . ■ ii. 100 and, if goods could be sent at reasonable time and with rea- sonable expense ii. 101 inconvenience of this rule ...... ii. 101 now, if expenses at intermediate port and extra freight exceed value of goods on arrival, loss total . . . . ii. 101 American Doctrine of Loss at Port of Destination . ii. 102, 103 early established ....... ii. 102 insurers not liable if goods arrive in specie . . . ii. 102 though of no value ....... ii. 102 meaning of " specie " . ii. 102 applied to memorandum articles means appearance . ii.. 102 value of articles has nothing to do with specie . . ii. 103 " putrid fish," " spoiled corn," " roasted pork " . . ii. 103 American Doctrine of Loss at intermediate Port . . ii. 103- 106 rule in New York, if goods exist in specie, insurers not liable ii. 103 but this not founded on principle . . . . . ii. 104 if goods cannot be forwarded consistently with health of crew and safety of vessel, loss total . . . . ii. 105, 106 whether loss is total if cost of unloading and drying and extra freight exceed value on arrival • , • • • . ii. 106 this not directly decided . . . . . . ii. 106 670 INDEX. ACTUAL TOTAL LOSS — Continued. whether insured may abandon, if goods would arrive in specie, though of no value ii. 106 ADJUSTMENT, OF GENERAL AVERAGE . . ii. 284-371 process of deciding amount of contribution, so called . ii. 294 L What Losses are adjusted as General Average ii. 294-301 all interested shall suffer proportionately . . . . ii. 294 property sacrificed considered a part of the whole property in adjustment ii. 295 and valued in accordance with v^ue of that saved . . ii. 295 if nothing is saved, no contribution . . . . ii. 295 if goods are sold in foreign port to raise funds, to be con- tributed for ii. 296 so if, to raise ransom . . . . . . . ii. 296 whether, if expenses are ineffectual . . . . ii. 296 not well settled in England and America . . . ii. 296 on the Continent, reimbursement by ship-owner held neces- sary ii. 296 this rule adopted in one English case . . . . ii. 296 but text-writers hold differently . . . . . ii. 297 this question discussed ii. 297-301 IL When Loss of Ship is adjusted as . . ii. 301-306 entire loss of, only in case of voluntary stranding . . ii. 301 but partial injury to be contributed for . . . . ii. 301 term " ship " includes appurtenances . . . . ii. 301 and all necessaries for voyage ...... ii. 301 and, if lost, adjusted on same ground as goods . . ii. 302 difficulty of distinguishing between voluntary loss and one by perils of navigation ....... ii. 302 if anchors are shipped or cable cut to avoid losing convoy, loss general average on Continent of Europe . . ii. 302 not so in England ii. 302 no case in America under this head . . . . ii. 302 whether loss of sails set to draw ship away from danger is to be adjusted as general average depends on circumstances of case ii. 302, 303 anchors cut away for purpose of putting to sea to escape lee shore in storm held to be contributed for . . . ii. 303 so if anchor is lost by impossibility of weighing in unusual place resorted to as a haven ii. 303 if any part of ship qt appurtenances are applied to purpose different from ordinary, part is destroyed or rendered use- less, this is to be adjusted as general-average loss . . ii. 304 INDEX. 571 ADJUSTMENT OF GENEKAL AYERAG'E, — Continued. damage done to ship by fighting, if ship is armed, is not . ii. 305 opinion of text-writers that this should be Umited to ships of war , . ii. 306 these opinions dissented from ii. 306 damage to ship while extinguishing fire to be contributed for ii. 306 III. When Loss of Cargo should be adjusted as ii. 306-309 when jettisoned ii. 306 or when sold to raise funds ii. 306 if injured by water used to extinguish fire . . . ii. 307 whether, if goods themselves are on fire, and water is used to extinguish, ship should contribute for damage by . . ii. 307 this question discussed ..... ii. 307, 308 cargo may claim by consequential damages . . . ii. 308 case illustrative of this ii. 309 IV. When Loss of Freight should be adjusted as ii. 309, 310 if goods are jettisoned ii. 309 in adjusting value is gross freight at port of contribution' taken, ii. 310 only net freight saved contributes . . . . ii. 310 usage determines ii. 310 deduction one half in New York, Virginia, Alabama, Georgia, ' Texas, and California ...... ii. 310 same in Havre . ii. 310 one third in Massachusetts, Maine, Pennsylvania, Maryland, and Louisiana ii. 310 in England from gross freight including primages, — wages, and port charges, are deducted, and remainder contributes ii. 310 V. When Loss op Profits should be adjusted as ii. 311 if entering into valuation of goods, a loss of which is ad- justed ii. 311 never on ground of expectancy . . . . . ii. 811 VI. What Expenses should be adjusted as . ii. 311-325 Powers and Duties of Master . . . . ii. 311-317 these relate mainly to navigation of vessel . . ii. 311 . control of all on board ii. 311 care of ship and property ii. 311 cannot, by virtue of general powers, borrow money on responsibility of ship-owner, or sell ship or cargo . ii. 311 but may, if justified by sufficient necessity . . ii. 311 and, if justified, may bind ship-owner or shipper by his acts ii. 311 may sell the vessel ii. 312 572 INDEX. ADJUSTMENT OF GENERAL AVERAGE,— Cowfowwetf. but such' loss will not be adjusted as general average ii. 313 may sell goods if perishable ..... ii. 313 may borrow money on ship or cargo in such way as to make general-average claim ii. 313 or may sell a part of cargo in the same way . . ii. 313 and adjuster will cast a loss by expenses on parties bene- fited, if loss is necessary and justifiable . . ii. 313 if not, on wrong-doer ii. 313 necessity difficult to determine . . . . ii. 313 different degrees of necessity justify different acts . ii. 313 as repairs may be made and owner bound for expenses thereof, if desirable ...... ii. 313 but large and expensive ones must be justified by great expediency ii. 314 and unquestioned necessity only justifies borrowing on bottomry and respondentia ii. 314 ahd necessity justifying sale must be certain and stringent ii. 315 with no alternative ...... ii. 315 necessity said to be sufficient to justify if owner, if pres- « ent, would have done the same thing . . . ii. 316 this not strictly true ii. 316 if master sells part of cargo without authority, ship-owner liable ii. 317 insurers against barratry, only responsible to ship-owner . ii. 317 distinction made by text-writers between claims arising from sacrifices and those from expenses . . . . ii. 317 this distinction unreal ....... ii. 31.7 voluntariness, necessity, and effectiveness required in all general-average claims ...... ii. 317 only that part of property benefited by expenses liable there- for ii. 317 expenses of any act founding claim for general-average loss to be adjusted as part of ii. 318 if ship puts in for repairs under such circumstances, expenses of pilotage, towage, and watchmen to be adjusted . ii. 318 so of men hired to assist in pumping ship . . . . ii. 319 or cutting a way for ship through ice . . . . ii. 319 so far as such expenses are for common benefit . . ii. 319 if ship could be repaired without unloading, and cargo is un- loaded for its own benefit, expenses thereof charged to cargo only ii. 320 INDEX. 573 ADJUSTMENT OF GENERAL AVERAGE, — CoreSee Description or Property insured . i. 518-531 586 INDEX. CAEGO, — Continued. abandonment of. iSee Constructive Total Loss. . 151-160 CAEKIERS, may insure their interest ....... i. 200 interest need not be specified ...... i. 200 " CATCHINGS," meaning of, in fishing voyage i. 521, n. 3 CAUSA PEOXIMA, . . . . i. 534, n. 1, 549, 553, 621, 622 CHANGE OF EISK. &e Deviation i. 1-42 CHAETEEER, may insure earnings i. 172-185 advances, when i. 186-189 whether interest should be specified . . . i. 174, 185-191 CHAETS, included under term " ship " . . . . . . i. 525 CHEONOMETERS, included under term " ship " i. 525 CLOTHES, how to be insured ...... i. 521, n. 3 COIN, how to be insured ....... i. 521, n. 3 COLLATEEAL SECUEITY, holder of, may insure i. 230-236 COLLISION, when and how far a peril of the sea. See EiSKS. i. 549 - 550 for what eflfects of, insurers liable . . . . i. 550 - 558 COMMENCEMENT OF EISK. ^See Tekmini. . . ii. 43-52 COMMISSIONS, abandonment of. See Constructive Total Loss, § v. ii. 160-175 expected, may be insured ...... i. 195 of supercargo, may be insured i. 196 COMPASSES, included under term " ship " i. 525 COMPENSATION IN SALVAGE. See Eisks, § ix. i. 609 - 612 CONCEALMENT, i. 467 - 501 any, either fraudulent or material, avoids policy . . i. 467 question, whether it must not always be material . . i. 467 will be considered fraudulent if intentional . . . i. 467 will avoid, if arising from mistake or inadvertence, if material i. 468 not necessary to prove that the facts were known to insured i. 469 sufficient, if he should have known them . . . i. 469 insurable interest in. &e Interest, § v. . . i. 195-201 INDEX. 587 CON CE ALMENT, — Continued. must impart all information insurer ought to have . . i. 469 and which it would be reasonable to believe insured pos- sessed ......... i. 469 degree of diligence. See Representation. . . . i. 438 bound to use such degree, in obtaining inforination, as a reasonable man would exert ..... i. 470 effect of concealment by agent same as by principal . i. 471 if agent is igaorant by design, policy avoided . i. 471, n. 1 if insured withholds information, policy avoided . . i. 471 though information withheld proves untrue . . . i. 471 if specific question is asked by insurer without reply, insured is estopped from denying materiality . . . . i. 472 this applies to sea-worthiness and matters covered by warranty i. 472 necessity for full information exists when policy is changed i. 473 so too in reinsurance ....... i. 474 though obtained since making of original policy . . i. 474 reinsurer bound to communicate as to character of original insured ........ i. 474, 475 no concealment, if facts are known to insurers . . . i. 476 or they may reasonably be presumed to know them . i. 477 whether such intelligence withheld was known to insurers, a question of fact ........ i. 478 what knowledge may be considered known to insurers by pre- sumption of law ....... i. 478 information in Lloyd's list prima facie known . . . i. _478 this presumption open to rebuttal . . . . i. 478 newspaper statements must be brought home to knowledge of interested parties ........ i. 479 proof varied by cases ....... i. 479 held that if material fact be not communicated to insurer, which, though known to him once, is not present in his mind when insurance is made, policy avoided . i. 479, 480 n. this rule doubted ........ i. 480 facts, if known to officer, held to be known to company . i. 481 matters of general notoriety need not be told . . . i. 482 prohibitions and restrictions on commerce need not be com- municated i. 482, 483 unless very recent and not generally known . . . i. 484 insurer need not declare conformity to usages of trade . i. 484 carrying fictitious clearances, if customary, need not be com- municated i. 484 588 INDEX. CONCEALMENT, — Continued. insured violating controlling usage avoids policy . . i- 484 otherwise, if he declares intention when policy is made . i. 484 need not declare intention in respect to subjects provided for in policy ......... i- 485. so held in New York i. 485 n. this true in regard to express warranties . . . . i- 485 and held to include implied warranties . . . . i. 486 intention to deviate need not be communicated . . i. 486, 487 insurers bound to know usages of' ports . . . .. i. 488 and insured need not state concerning . . . . i. 489 doctrine, that insured need communicate events occurring pre- vious to last intelligence, if he communicates that truly i. 489 this doctrine discussed . i. 490 facts prior to last intelligence, if material, should be communi- cated i. 490 concealment relating to storm held not material . . . i. 492 this case doubted ........ i. 493 distinction between rumors and conjectures . . . i. 494 rumors to be communicated ...... i. 494 otherwise as to conjectures ...... i. 494 materiality the test i. 495 insured need not disclose that other underwriters have refused the risk i. 495 this doctrine examined . .• . . . . i. 495 policy usually provides what shall be told . . . . i. 496 necessity of communication exists, if otherwise . i. 496-499 time of sailing should be communicated, if material . i. 498, n. 2 so of rate of sailing ...... i. 498, n. 3 CONCDREENCE OF DIFFERENT EISKS . . i. 619-623 CONDEMNATION, partnership property in enemy's country liable to . . i. 32 CONDITIONS, that policy shall be void on alienation of sea-worthiness. See "Warranty, § ii. . Representation Concealment Deviation CONSEQUENTIAL DAMAGE .... CONSIGNEE, insuring goods on trust, may recover full damage . with power to sell, insurable interest of . i. 60 -63 367- 401 402- 466 167- 501 ii. 1 -42 i. 622, 623 i. 50 i. 201 INDEX. 589 CONSIGNEE, — Oontinued. sending own lighter, goods landed . . . . . ii. 61 not, if lighter is merely hired . . . . . ii. 61 n. may insure without specifying interest . . . . i. 195 neutrality of ....... . i. 345 named in bill of lading, when held to be owner of goods ii. 516 CONSOLIDATION EULE, explanation and effect of . ii. 469, 470 CONSTRUCTION OF POLICIES OF INSURANCE, i. 64-154 I. What is Subject to Construction . . . i. 64-67 difficulty in construing . . . . . . . i. 64 policies not technically written effect of repeated adjudication .... Words printed or written ..... printed words belong to all policies written words control printed, and reason for it written parts originate questions of . construction not reverted to, unless words are obscure general rules applicable in . . . II. Which Paety shall be favored in Lord Mansfield's doctrine .... remarks thereon ...... disposition to treat insurance like other contracts insurer to be protected against technical defences contra proferentem, rule of ... . remarks on ....... objections to . confined to exceptional words .... true rule of ...... . III. Intention of Parties the controlling principle ..... danger of pressing intent too far inquiry to be as to expressed intention discussion of this principle .... Paley's remarks on ..... . examination of ..... . modification of . other remedy for insured .... force of words used ...... IV. Technical or Peculiar Words reason of use assists in determining meaning of . difference between evidence of meaning and of usage 1. 1. 67- 1. . 1. i. 64 . i. 64 65-67 . i. 65 i. 65 i. 66 66 67 71 67 . i. 67 , i. 68 n. . i. 69 i. 69 n. i. 69, 70 i. 70 n. . i. 71 i. 71 i. 71-76 i. 71, n. 3 . i. 72 , i. 72 n. i. 74 . i. 74 i. 75 . i. 76 i. 76 i. 76 n. i. 77-81 . i. 77 i. 77n 590 INDEX. CONSTEUCTION OF POLICIES OF INSURANCE, — (7owfo"wM INDEX. 597 CONSTRUCTIVE TOTAL LOSS, &c., — Continued. insured may always withhold abandonment . . . ii. 110 ii. 110 . ii. 110 insured may . ii. 110 ii. 110 . ii. 110 this does not bar his claim . if loss is total, abandonment unnecessary . if abandonment is necessary to make it total claim partial loss .... insured may always abandon insurers not bound to accept . ■when, if not accepted, abandonment of no effect . . ii. Ill but if accepted, abandonment valid . . . . . ii. Ill IL Of Abandonment ii. Ill - 120 parties may stipulate that there shall be no' abandonment ii. Ill intent of this to prevent partial loss from becoming construc- tive total . . . . . . . . . ii. Ill not to change nature of actual total . . . . ii. Ill " total loss," " free from average," " free from particular aver- age," " not liable for partial loss," " partial loss excepted," all mean the same thing . . . . . . ii. Ill cases containing these phrases very conflicting . . ii. 1 1 1 rule that " total loss " means actual total loss departed from in Massachusetts . ii. 112-114 there held that insured may abandon, if damage exceeds fifty per cent ... .^ ..... ii. 115 if subject insured is not perishable . . . . ii. 115 this rule will not sanction action under policy containing words of restriction ii. 116, 117 ship, cargo, and freight seldom insured in same policy ii. 118 if they are, abandonment of each necessary . . . ii. 1 18 if one sum is insured on different kinds of goods, no abandon- ment of part only possible . . . . . . ii. 118 otherwise if kinds are severally valued . . . ii. 118 where cargo consists of bales of same kind of goods i. 637, 638 ; ii. 118 none can abandon, without power to make legal transfer of interest . . . . . . . . . ii. 119 so, if policy passes by voluntary act, or peril not insured, be- fore insured can get possession otherwise if sale is necessary by peril insured provided it was not caused by fault of insurer as to sale to pay salvage .... sale under bottomry bond .... sale by master . ii. 119 ii. 119 ii. 119 ii. 119, n. 2 ii. 119, n. 1 ii. 119, 145 598 INDEX. CONSTRUCTIVE TOTAL LOSS, &.c., — Goniinmd. if facts at time of abandonment show loss to be total, sale does not affect rights of insured . . . ' . . . ii. 119 when, if insured refuses to give instrument of cession to in- surer, he may still claim for total loss . . . . ii. 120 but such instrument may be essential . . . . ii. 120 IIL Abandonment of the Ship ii. 120-151 usual if ship is wrecked ...... ii. 120 though perhaps not necessary ii. 120 so if unheard from for sufficient length of time . i. 547 ; ii. 120 here insurers, by paying total loss, entitled to whatever prop- erty may be saved . . . . . . ii. 120 whether a sale in any case takes, the place of an abandon- ment ii. 120, 145 cases on this question irreconcilable . . . ii. 120, 121 n. better rule that sale by necessity passes property completely from insured ii. 121 and he may recover without abandonment . . . ii. 122 but if he abandons, salvage belongs at once to the insurer ii. 123 if not, salvage at risk of insured ii. 124 constructive total loss cannot be claimed for sale of vessel at port of distress, unless made by master if in charge . ii. 125 amount of injury to be considered ..... ii. 125 formerly abandonment converted partial into total loss only when ship was incapable of repair or recovery . . ii. 125 or, if repaired, would not be worth the cost of repair . ii. 125 such the English rule now . . . . . . ii. 125 but much modified in America ..... ii. 126 abandonment has this effect, if loss by peril insured amounts to more than half the value . . . . . . ii. 126 this rule applies to ship and goods . . . . . ii. 127 not to freight . ii. 127 all cases where loss does not amount to half not excluded . ii. 127 as where repairs are impossible for want of funds . . ii. 127 this rule not applicable, if ship is in home port . . . ii. 127 if vessel reaches terminus, needing repairs, from perils insured against, costing more than half her value, perhaps an ex- ception to this rule ii. 128 computation of this fifty per cent ii. 129 allowance of one third new for old . . . . . ii. 129 rule arose from difiiculty of estimating facts in each case so as to apply principles of indemnity . . . . ii. 129 INDEX. 599 CONSTRUCTIVE TOTAL LOSS, &g., — Continued. custom of deducting one third from cost of new materials ii. 129 whether deduction should be made when loss becomes partial if it is made ii. 129 better opinion that it should not ii. 129 or if deducted from repairs, to be deducted from value of the snip ii. 129 new clause in relation to copper . . . . ii. 130 — 132 diminution in value of, to be measured by age of . ii. 130 clause varies in different policies . . . . ii. 131 specimen of . . . . . . . . ii. 131 case under ....... ii. 131, 132 another new clause on the same subject . . . ii. 131 - 133 insurers not to be liable for expense of putting on new ii. 131-133 but for loss and expenses afterwards . . ii. 131 - 133 case under ii. 131-133 whether, if cost of raising rests on ship and other interests so as to create general average, ship's portion shall be included in cost of recovery ii. 133 held affirmatively in England . . . • . . ii. 133 whether valuation in policy determines whether amount of damage will justify abandonment . . . . ii. 134 or whether actual value . . . . . . . ii. 134 authorities irreconcilable thereon ii. 134 premium not to be included . . . . . . ii. 135 nor wages and provisions of crew during detention . ii. 136 not if crew are employed to make repairs . . . . ii. 136 nor surveyor's fees, nor expenses in ascertaining cause of loss ii. 136 salvage due from ship included . . . . . . ii. 136 so loss from payment of general-average contribution . ii. 136 and loss giving rise to such claim ii. 136 expenses of repairs to be estimated at place where made . ii. 137 or where they would have been made . . . . ii. 137 if ship can be partially repaired at port of distress, and taken to port where she can be fully repaired at less expense, master bound so to do ii. 137 and insurer only liable for less expense . . . . ii. 137 cost of navigating from port to port to be added . . ii. 137 if ship would have gone there in proper course of voyage, insured entitled to have thorough repairs of an injury from a peril insured against ii. 138 600 INDEX. CONSTEUCTIVE TOTAL LOSS, &c., — Continued. no allowance to be made for replacing unsound materials with sound . ii. 138 value of ship as affected by place of building to be considered ii. 139 and also national character ii. 139 vessel sold under bottomry bond for repairs costing less than half, loss total •. . ii. 139 unless owner' had opportunity to discharge it . . . ii. 139 whether neglect by insurer to discharge, after notice, gives insured right to abandon . «. . . . ii. 139, 140 insurers liable for marine interest on bottomry, if properly made ii. 140 abandonment invalid, if at time of making it master began to repair ......... ii. 140 and insured only recovers for expenses incurred . . ii. 140 though exceeding half her value ii. 140 whether insurer has right to offer to repair, and escape liabil- ity for more than actual cost . . . . ii. 140, 141 n. and whether, after abandonment, he may repair and tender her to insured, if repairs do not exceed half her value ii. 142, n. 1 if insurer accepts, he is estopped from declaring the loss partial . ii. 142, n. 1 so if he refuses, but does act inconsistent with want of owner- ship ii. 142, n. 1 whether repairing is such an act . . . . ii. 142, n. 1 insurer must repair within reasonable time . . . ii. 143 and must tender ship in as good condition as before accident ii. 144 or supply or pay for any deficiencies . . . . . ii. 144 total loss by sale of ship by master . . ii. 120, n. 4, 144 only arises from necessity . . . . . . . ii. 145 necessity to be judged by existing facts, not by results . ii. 146 notice to owner, unless danger of greater loss exists, neces- sary . ii. 146 or, if impossible, to insurer . . . . . . ii. 146 no abandonment for sale by master, to prevent forced sale by process of law, in port where insured should have funds ii. 146 none, if negligence of resident agent of owner prevents re- pairs ii. 146 if master sells, he cannot buy ..... ii. 146 purchase by surveyor or port-warden suspicious . . ii. 147 or by any person officially promoting sale . . . ii. 147 this of itself not sufficient to avoid it . . . . ii. 147 INDEX. 601 CONSTRUCTIVE TOTAL LOSS, &c.,— Continued. rule that sale is justified only by stringent necessity . . ii. 147 or if prudent owner, under same circumstances would have made it ii. 147 sale must be made in good faith . . . . . ii. 148 liability of insurer or insured for mistake of master depends upon whether master was agent of owner or of the insurer at the time ii. 149, 150 question of sufficient necessity for the jury . . . ii. 150 surveyor's report of much weight in determining . . ii. 150 but not conclusive evidence ...... ii. 150 decree of court of admiralty generally conclusive . . ii. 150 but open to inquiry as to fraud . . . . . ii. 150 if vessel is sold to pay salvage, loss total . . . ii. 150 but not if owner has opportunity to pay it . . . ii. 150 if sold under decree of condemnation as prize, and bought by owner or master, the prize and costs are the measure of loss ......... ii. 151 so in compromise with, or ransom from captors . . ii. 151 IV. Abandonment of Cargo .... ii. 151-160 goods totally lost, if destroyed by peril insured against . ii. 151 or if injured so as to be of little value for purpose intended ii. 151 or if voyage insured is wholly broken up . . . . ii. 151 but not if broken up merely for the season . . . ii. 151 or if saved, but ship is lost, and delay in forwarding occurs ii. 151 fifty-per-cent rule applies . . . » . . . ii. 152 remaining interest must be transferred to insurer . . ii. 152 general abandonment has eflFect of universal transfer . ii, 152 total loss of ship and not of cargo possible . . . ii. 152 the converse possible . . . . . . . ii. 152 Duty of Master to forward Cargo _ . . . ii. 152-156 rights of master in this respect well settled . . ii. 153 to carry to port of destination . . . ii. 153 to send them from intermediate port . . ii. 153 weight of authority in favor of considering it his duty to transship ........ ii. 153 cases illustrative of this . . . . . . ii. 154 to transship the goods . . . . . . ii. 155 to send ihem on by land carriage' if he can by reasonable endeavors . . . . . . . . ii. 155 total loss by neglect to transship, a loss by misconduct of master . . . . . . . . ii. 155 602 INDEX. CONSTRUCTIVE TOTAL LOSS, &C.,— Continued,.. and claim of shipper on owner therefor passes by aban- donment to insurer ...... ii. 155 genei-ally shipper cannot abandon because master neg- lected to transship ii. 155 to forward part, where part is lost . . . ii. 155 this dependent upon quantity and value of part saved ii. 155 also on facility for forwarding, and chance of deteriora- tion while on the way ii. 155^ in divers shipments for divers ports, one may be aban- doned ii. 155 though the rest are delivered safely . . . ii. 156 expenses of transporting to market, and of sale, if valid, deducted from gross proceeds to determine whether loss exceeds one half . . . . . ii. 156 to sell if forwarding is impossible . . . . ii. 156 and the proceeds go to the insurer on. abandonment ii. 156 this applies, whatever the cause of injury if peril is in- sured against ' . . . . ' . . . ii. 156 but not if goods perish by intrinsic defects . . ii. 156 if goods are jettisoned, shipper may demand contribution and claim balance . . . . . . . . ii. 156 or demand whole loss and transfer claims to insurers . ii. 156 if jettison amounts to sixty per cent, he may claim total loss ii. 156 although transferring claim of twenty per cent for contribu- tion . . ' ii. 166 otherwise if he receives twenty per cent from contributing parties ii. 156 claim against insurers same as if goods had been lost from peril from which jettison saves remainder . . ii. 156 abandonment possible in case of capture, or other detention insured against, and restoration . . . . ii. 157 provided delay works damage of more than fifty per cent . ii. 157 or breaks up voyage ....... ii. 157 capture gives right of immediate abandonment . . . ii. 157 detention, expected to last a short time, not . . . ii. 157 otherwise, if it appears permanent ii. 157 release from capture by compromise for more than half the value of the goods, ground for constructive total loss . ii. 157 rule in sale of cargo by master same as in sale of ship . ii. 157 sale must be strictly necessary ii, 157 and owner may abandon ii. 157 INDEX. . 603 CONSTRUCTIVE TOTAL LOSS, &c., — Continued. but the necessity for sale must spring from the peril in- sured against ........ ii. 157 abandonment not affected by investing the proceeds of cargo, by agent of owner, for purpose of remittance . . ii. 157 but insurers of cargo not liable, if cargo is sold to pay repairs of ship ii. 158 master may hypothecate ...... ii. 158 and should do so, if possible, rather than sell . . . ii. 158 lender must use reasonable precaution to satisfy himself of necessity ......... ii. 158 such loan on hypothecation does not make total loss . . ii. 158 but if goods are sold to pay the debt, it may be . . ii. 159 unless shipper had a chance to liberate him . . . ii. 169 fifty-per-cent rale not applicable, if substantial part of goods arrive safely at port of destination . . . . ii. 159 loss of part at port of destination cannot be made total by abandonment ii. 152, n. 1, 159 if goods are part memorandum articles and part not, no aban- donment for deterioration possible, unless the goods not within the memorandum exceed half the value of all . ii. 160 V. Abandonment of Fkeight, Profits, and Commis- sions ii. 160-172 Of Freight ii. 160 - 170 total loss if ship and cargo are totally lost . . . ii. 160 or vessel becomes unnavigable . . . . ii. 1 60 or is detained so that the voyage is broken up . . ii. 160 if loss of ship is constructively total, freight may be abandoned ii. 160 but if master can forward goods by reasonable endeav- ors, and at reasonable cost, he is bound to do so . ii. 1 60 and if he neglects, insurers only liable as if this had been done . . . . . . . . . ii. 160 and loss will be total or partial, according to amount so adjusted ii. 160 master has a right to forward goods if he can . . ii. 1 61 and shipper must pay him full freight . . . ii. 161 or let him forward them, and on arrival pay him freight ii. 161 if vessel is lost, and goods cannot be forwarded at less than original freight, loss held to be total . ii. 161, 162 but this doubted ii. 162 604 INDEX. CONSTRUCTIVE TOTAL LOSS, &o., — Continued. yet if master forwarded them, ship-owner could not claim freight from insured . . . . . . ii. 162 and if master acted reasonably and in good faith, shipper must pay extra cost . . . . . . ii. 163 if ship can be repaired, and then take goods, shipper may require them to wait ii. 163 ■ but may forward them at once, and then pay full freight ii. 163 and in such case, no loss of freight . . . . ii. 163 though delay is long, an(f ex|»ense of drying goods prop- erly great . . . . . . . . ii. 163 same rule applies to ship compelled to put back to port of departure ii. 163 if goods could arrive in specie, master not obliged to part with them except on payment of full .freight . . ii. 163 this said to be inapplicable to our Western waters ii. 163, n. 6 protraction of voyage gives no right to abandon, if ship arrives and earns freight . . . . . ii, 164 in England, master bound to repair ship, if it can be done at less expense than value of ship when repaired ii. 164 though expense exceeds value of freight . . ii. 164 if master repairs at greater expense than value of ship and freight, hypothecates both, delivers goods, and ship and freight are seized by bondholders, no loss of freight . . . . . . . . ii. 164 and he cannot recover for that interest . . . ii. 164 total loss of ship, and the passing of freight by abandon- ment to insurers of ship, do not make insurers of freight liable, if they would not have been had owner not insured ship . . . . . . . ii. 164 no diiJerence here, if insurers of ship and of freight are same person . . . . . . . ii. 165 fifty-per-cent rule held to apply to insurance on freight ii. 165 but this doubtful ii. 165 difference as to application to freight, and to ship and cargo ii. 165 actual loss of cargo a total loss of freight, though ship is not lost ........ ii. 166. so if cargo cannot be forwarded consistently with safety of ship i. 166 or lives of crew ....... ii. 166 as to loss of cargo by capture or detention ' . . ii. 166 INDEX. 605 CONSTRUCTIVE TOTAL LOSS, 8cc.,— Continued. if insurers accept abandonment of ship, repair, and offer to carry cargo of charterer who insured freight, no loss of freight to him . . . . . . . ii. 166 if ship need repair requiring considerable delay, master may retain cargo for freight . . . . . ii. 166 and if he delivers it without payment, no loss for which insurers are liable. . . . . . . ii. 166 freight may be demanded for goods existing in specie, and delivered to consignee ii. 166 and it is not lost, however goods may be deteriorated or diminished in value ...... ii. 166 but they must remain what they originally were . ii. 166 insurers liable, if contents of boxes are washed out by peril of the sea . . . . . . . ii. 167 though boxes arrive in safety . . . . ii. 1 67 if freight is lost, new freight for remainder of voyage belongs to insurers . . . . . . ii. 167 but not if vessel pursues another voyage . . ii. 167 abandonment of ship transfers to insurers power to earn subsequent freight . . . . • . . ii. 167 and if ship is insured in one ofiice, and freight in an- other, insurers of ship entitled to freight earned sub- sequent to abandonment . . . . . ii. 167 ii. 167 ii. 168 ii. 168 ii. 169 ii. 169 ii. 169 ii. 169 ii. 169 insurers of freight entitled to previous freight in America, freight may be apportioned otherwise in England ...... cases illustrating English rule .... demurrage may be treated like salvage on freight . freight may be valued ..... valuation binds parties held, only as to the interest valued . but this doubted ii. 169 if insured on valued freight abandons, and part of goods on which valuation was made arrive safely, freight on this part to be accounted for according to valuation ii. 169 but not as to goods of other shippers . . . ii. 169 terms of charter-party may determine whether freight is lost ii. 170 if risk is entire, and voyage is broken up after a per- formance of a part, a loss of whole freight . . ii. 170 606 IKDEX. CONSTRU.CTIVE TOTAL LOSS, &cc., — Continued. even if under ordinary contract of shipment, a ratable freight would be due ii. 170 Of Profits ii. 170, 171 there may be several abandonments of profits and cargo ii. 170 difiiculty of anything passing by . . . . ii. 170 and of any abandonment ..... ii. 170 and whether partial loss can be made constructively total ii. 170 partial loss of goods on which profits are insured a partial loss of profits . . • ii. 171 fifty-per-cent rule not applicable . . . . ii. 171 unless insured waive right to abandon goods . . ii. 171 and abandon profit separately . . . . ii. 171 Of Commissions ....... ii. 171, 172 no transfer, by abandonment, of right to earn . ii. 171 if peril has prevented this right, nothing to abandon . ii. 171 difficulty in making effectual abandonment . . ii. 171 but if earned, and the funds from which thSy are earned are partly destroyed, remaining interest may be sub- ject to abandonment ...... ii. 171 but this not likely to take place. . . . . ii. 172 VI. Form and Manner of Abandonment . . ii. 172 - 176 no form prescribed by law or usage . . . . ii. 172 the word " abandon " should be used .... ii. 172 but other phrases of precisely same meaning sufficient . ii. 172 may be by parol ii. 172 or in more than one written instrument . . . ii. 172 implied by presenting consular certificate of loss and aban- donment by master ii. 172 even though he had no authority to abandon . . . ii. 172 must be distinct and purport absolute transfer of salvage ii. 172 should state grounds ii. 172 and cause stated must be peril within the policy . . ii. 172 demand for total loss not necessarily evidence of abandon- ment ii. 173 but this has been held . . . . . . . ii. 174 and should be, if terms of demand and circumstances show intent to make by it a transfer of salvage . . . ii. 174 when insured's parol statement that total loss has occurred held sufficient evidence of abandonment . . . ii. 175 abandonment on account of "irreparable" loss held good ii. 175 INDEX. 607 % CONSTRUCTIVE TOTAL LOSS, &c., — Continued. claiming for total loss, with evidence of previous abandon- ment, held sufficient ....... ii. 175 letter of abandonment without showing amount of loss held sufficient ii. 176 if total loss without abandonment is paid, insurers entitled to salvage ......... ii. 176 insurers may waive objection for want of formality . ii. 176 calling for proof a waiver ...... ii. 176 so, acting as if abandonment was sufficient . . . ii. 176 VIL Acceptance op Abandonment . . . . ii. 177 - 179 never necessary to full effect thereof . . . . ii. 177 if formally made by those having authority, insurers bound ii. 177 admits abandonment, and valid claim for total loss . . ii. 177 and supplies all want of formality in instrument . . ii. 177 insurers not bound to accept or declare refusal . . ii. 177 nothing said or done presumes refusal . . . . ii. 177 no especial form of acceptance necessary . . . ii. 177 anything distinctly indicating intent to accept sufficient . ii. 177 acts of insurer inconsistent with words of refusal control latter ii. 177 payment of total loss not conclusive of abandonment and acceptance ii. 178 but strong presumption thereof ii. 178 and if made with knowledge of circumstances, bars insurers from availing themselves of want thereof . . . ii. 178 purchase by insurers from vendee of ship sold by master without necessity not equivalent to acceptance . . ii. 179 and not an admission of liability for total loss . . ii. 179 VIIL When Abandonment should be made . . ii. 179-189 when ship for purposes of voyage is taken from master's con- trol by peril insured against . ..... ii. 179 and in uncertainty of getting control to renew voyage . . ii. 179 or cost of putting her in condition is disproportionate to her value . ii. 170 abandonment justified by present and apparent facts, what- ever the final result ii. 179 abandonment for capture, with prior restoration, void . ii. 179 otherwise if existing circumstances would justify it . . ii. 179 though later events show peril to be less than supposed . ii. 180 stranding and submersion of themselves do not necessarily give right to abandon . . . . . . ii. 181 608 INDEX. CONSTRUCTIVE TOTAL LOSS, &.c., — Oontinued. duty of master to use all means for recovery . . . ii. 182 no right to abandon till these are used . . . . ii. 182 or nature of loss, and circumstances leave no hope of success ii. 182 capture, while ship is in captor's hands constructive total loss ii. 182 but liable to become partial if restored prior to abandon- ment ii. 182 ship restored may still be abandoned . . . . ii. 182 provided costs, charges, and liens from loss are sufficient to make loss total . . . " ii. 182 but not otherwise . . • . . . . . ii. 182 whether capture deprived insurer of right to abandon, a ques- tion for the jury ....... ii. 182 in wager policies, any loss of voyage may give right to aban- don ii. 183 this not true as to interest policy ii. 183 if ship is insured for a certain voyage, to be performed within a certain time, and prevented, abandonment may be made ii. 184 but not if released within sufficient time to perform voyage ii. 184 fear of loss by peril insured against no ground for abandon- ment ii. 184 still less, if peril is not insured against . . i. 585 ; ii. 184 desertion of crew, if another can be had, no cause for aban- donment ii. 184 no excuse if ship had no provisions to feed them . . ii. 184 insured must abandon on receiving proper intelligence . ii. 185 whether made within reasonable time a question for the court ii. 185 or rather a mixed question of law and fact . . . ii. 185 cases in which various points of time have been considered on this point ....... ii. 185, n. 4 each case to be determined on its own merits . . ii. 185 if abandonment is not made within reasonable time, insurers not liable for total loss ...... ii. 185 though delay causes them no damage . . . . ii. 186 proof of delay must be clear and positive . . . ii. 186 reasons for requiring immediate abandonment . . ii. 186 insured may abandon at once ...... ii. 186 though it is stipulated that he shall not till after a certain time ii. 186 this valid, though payment cannot be claimed sooner than if . delay took place ii. 186 but if property is restored before expiration of time, right to abandon gone ii. 186 INDEX. 609 CONSTKUCTIVE TOTAL LOSS, &c., — Continued. may be on any actual information worthy of credit . . ii. 187 sometimes on general rumor and belief . . . . ii. 187 not on mere conjecture and possibility . . . . ii. 187 insured may wait for more certain intelligence, if that first received is not sufficiently authentic . . . . ii. 187 danger of carrying this delay too far . . . . ii. 188 if effects of peril are not known, there may be delay . ii. 188 so, if efforts are making for recovery of ship . . . ii. 188 may be at any time, so long as loss continues total . ii. 188 but loss must then be actually total . . . . . ii. 189 there must be no delay impairing rights of insurers to indem- nification by salvage . . . . . . ii. 189 insured may recover the right, if lost, in case of new, inde- pendent, and injurious effect of peril insured against . ii. 189 IX. Revocation of Abandonment . . . ii. 190-194 acceptance of, by insurer, makes it irrevocable . . ii. 190, 191 insurers may waive this right . . . . . ii. 191 this may be done by expressly or impliedly consenting to rev- ocation ......... ii. 191 same rule applicable to insured . . . . . ii. 191 purchase of ship by master, at sale by court of admiralty of proper jurisdiction, does not affect right of insured to claim for total loss . ii. 191 otherwise, if master is vendor .... ii. 192, 419 or if court has no jurisdiction . ..... ii.l92 or if master instigated sale . . . . . . ii. 192 or if he bought for benefit of owners, and they afterwards exercise acts of ownership ...... ii. 192 sale by owner, justified by circumstances, to save property for insurers, does not affect right of abandonment . . ii. 193 though he acted and gave title in his own name . . ii. 193 but owner and insured must consult insurers . . . ii. 193 unless in a situation rendering this impossible . . . ii. 193 and where property can be saved by no other means . ii. 193 owner may buy at public sale by agent of insurer after aban- donment ii. 193 if owner, after abandonment, retains ship, and repairs her, a waiver of abandonment . . . . . . ii. 194 if policy in the name of A, for the benefit of whom it may concern, A may abandon ii. 194 but his principal may disavow this . . . . ii. 194 VOL. II. 39 610 I^fDEX. CONSTRUCTIVE TOTAL LOSS, &g., — Continued. possession and sale by the mortgagee, under this clause, a re- pudiation of abandonment by mortgagor . . . ii. 194 X. Effect of Abandonment . . . . ii. 194-200 all rights connected with subject belong to insurers to extent of their interest . . . . . . . . ii. 194 all rights to contribution for general average . . . ii. 194 claims for negligence ....... ii. 195 or for misconduct injuring it . . . . . ii. 195 or for indemnity from foreign government . . . ii. 195 or for collision, and injury to goods . . .■ . ii. 195 insurers entitled to fund from reprisal for illegal capture, if they paid for losses by such capture . . . . ii. 195 and to pending freight ...... ii. 196 but not if owner of ship is owner of cargo, except so far as it is benefited by the ship after abandonment is made . ii. 196 if loss is settled by compromise, after refusal to accept aban- donment, insurers can claim no benefit derived from the ad- venture ii. 196 , mortgagee should transfer so much of debt due as is paid by insurers . . . ... . . . . ii. 196 action at law where insurers are subrogated should be brought in name of party whose place insurers take . . . ii. 196 salvage belongs to insurers ii. 196 and they are liable for lien or charges on it by peril in- sured against . . ii. 196 otherwise for perils not insured against . . . . ii. 196 and in such case insured must pay . . . . ii. 196 when ship free from lien for wages before abandonment . ii. 196 not for subsequent wages . . . . . . ii. 196 insurers bound, if expenses of saving exceed salvage . ii. 197 provided the insured incurred them in good faith . . ii. 197 and with reasonable discretion ii. 197 insured cannot incur expense on salvage at risk of insurers, after refusal by insurers to accept salvage . . . ii. 197 but prohibition must not be wanton . . . . ii. 197 and must be in good faith, with show of reason . . ii. 197 property after valid abandonment at risk of insurers . ii. 198 master and crew become their agents . . . . ii. 198 how far owner also becomes their agent . ■ . ii. 199 and must exercise all reasonable care in preservation of the property ii. 199 * INDEX. 611 CONSTRUCTIVE TOTAL LOSS, k.c., — Continued. and for its safe arrival into the hands of the insurers . ii. 199 but insurers not liable for his mistake or wrongful act . ii. 199 abandonment relates back to time of loss . . . ii. 200 but insured not liable for fraudulent acts of master, till aban- donment takes effect . ii. 200 CONSUL, certificate of, inadmissible in evidence. See Evidence. . ii. 520 domicile of . . i. 33 CONTRABAND TRADE, loss arising from. See Riks, § ii. . . . i. 541 - 544 CONTRACT OP INSURANCE. &e Insurance. . i. 14-154 CONTRIBUTION, right of. See Prior Insurance i. 294 insurer paying whole loss, or more than share, may demand. See Action ii. 468 CONVOY. See Warranty i. 356, 357 " CORN," meaning of. See Risks, § xii i. 627 though spoiled, if it exists in specie, is corn . . . ii. 2 transshipment of goods from one vessel to another discharges insurers . • . . ii. 3 slight change, not increasing risk, does not constitute . ii. 3 whether deviation proceeded from sufficient cause not to be judged by event . . . . . . . . ii. 3 INDEX. 615 DEVIATION, — Continued. necessity of change to be determined by circumstances, as at the very time coming before the consideration of the insured ii. 3 may be while ship is in port . . . . . . ii. 4 and if insurance is on time, without designation of voyage ii. 4 applicable to internal navigation . . . . . . ii. 4 II. Effect of ii. 5 discharges insurers from further liability . . . . ii. 5 .but not from prior liability . . . . . . ii. 5 if change of risk is merely temporary . . . . . ii. 5 may only suspend liability . . . . . . ii. 5 III. What is, from proper Course of Voyage . ii. 6 - 15 proper course the usual course . . . . . ii. 6 this a question of fact . . . . . . . ii. 6 usage will justify departure . . . . . . ii. 6 if there is no usual course, the most direct and safe way to be taken . . . . . . . . . . ii. 6 if usage requires master, on reaching a certain point, to decide on the best of two routes therefrom, and in compliance with sailing orders, without so deciding, he takes one, this is a deviation . . . . . . . . . ii. 7 none if master honestly mistakes usual course . . . ii. 7 touching at port not in course of voyage . . . . ii. 8 and intermediate voyage . . . . . . . ii. 8 but usage may justify . . . . . . . . ii. 8 case illustrating this . . . . . . . ii. 8, 9 slight deviation may discharge insurers . . . . ii. 9 but actual substantial change of risk necessary . . . ii. 9 unnecessary delay in commencing voyage . . . . ii. 9 unnecessary delay in port . . . . . . ii. 9 unnecessary protraction of voyage . . . . ii. 9, 10 unnecessary delay in discharging cargo . . . . ii. 11 but mere lapse of time no proof of . . . . . ii. 11 something equivalent to necessity necessary to justify . ii. 11 entering a port out of usual order . . . . ii. 12, 13 cases illustrating this . . . . . . ii. 13, 14 ■ if driven into port by stress of weather no deviation to pro- ceed to neighboring port for repairs . . . . ii. 15 although repairs could have been made at first port . . ii. 15 IV. Liberty Policies ii. 16-28 meaning of . . . . . . . . . ii. 16 to be construed strictly . . . . . . . ii. 16 616 INDEX. DEVIATION, — Continued. " to enter" or " to touch at " does not include " to stay '' . ii. 16 " to stay " does not include " to trade " . . . . ii. 1 6 and vessel's hatches not to be opened in port . . . ii. 16 " to discharge cargo " gives no right to take in new . . ii. 1 6 no precise construction as a rule of law . . . . ii. 16 circumstances to be considered ii. 16 ship lawfully in port may do anything not materially varying risk ii. 17 " to touch at " gives liberty to touch, to take on board goods insured ii. 18 no entrance into any port unconnected with voyage justifi- able ii. 19, 20 liberty to touch at ports not named to be interpreted reasonably ii. 20 stopping at a port not named, though no farther than port named, a deviation ii. 21 not being able to enter port named, by municipal regulation, does not justify .entering another not named . . . ii. 22 " to cruise six months " means six successive from commence- ment ii. 22 " to go backwards and forwards '' . . . . . ii. 22 " to touch and return " ii. 22 " to a port and a market " ii. 23, 24 case in illustration ii. 25 order in which ports are to be visited . . . .' ii. 25 all need not be visited . . . . . . . ii. 25 voyage may be shortened by omitting terminus ad quern . ii. 26 not by omitting terminus a quo . . . . . . ii. 26 if all the ports are to be visited, they must be in proper order ii. 26 if ports are named, to be visited in order set forth . . ii. 26 unless order appears accidental ii. 27 or not intended to prescribe course of voyage . . . ii. 27 if not enumerated, geographical order necessary . . . ii. 27 meaning of geographical order ii. 27 commercial usage controls . . . . . . . ii. 27 proper progress of vessel to destination to be considered . ii. 27 where ultimate destination is not designated . . . ii. 27 v. Deviation must be voluntary . . . . ii. 28 - 35 and not necessary . . . . . . . . ii. 28 vessel may deviate for repairs, provisions, &c. . . . ii. 29 and to obtain a crew . . . . . . . . ii. 29 but if carried beyond necessity, otherwise . . . ii. 30 INDEX. 617 DEVIATION, — Continued. unnecessary delay, whatever be reason, a deviation . . ii. 30 if vessel is driven by necessity into a port, proof that master intended to enter without necessity immaterial . . . ii. 30 change of risk to avoid peril justifiable . . . . ii. 30,31 so if vessel leave port before properly loaded, to avoid seizure ii. 31 if port is obstructed by ice, ship may enter neighboring port ii. 31 danger must be real and immediate ii. 31 and departure no greater than reasonably necessary to make escape effectual . . . . . . . . ii. 31 how far immaterial whether the peril is insured against . ii. 32 this somewhat unsettled . . . . . . . ii. 32 and though not so warranted ii. 32 deviation on voyage to join convoy justifiable . . . ii. 33 and delay in port for same cause . . . . . ii. 33 no deviation, for vessel warranted to depart with convoy to sail to rendezvous . . . . . . . . ii. 33 if reasonably necessary for this purpose . . . . ii. 33 insured not bound to join convoy if only such liberty is given ii. 33 delay, or departure to save life, no deviation . . . ii. 33 but this must be no greater than actually required . . ii. 33 whether to save life on board vessel insured . . . ii. 33 not if necessity arises from not having proper means of cure on board, if vessel ought to have them . . . . ii. 34 departure to save property, a deviation . . . . ii. 35 delay to tow a vessel . . . . . . . . ii. 35 change of voyage a deviation . . . . . . ii. 35 VI. Intended Deviation . . . . . . ii. 36-42 if. a different voyage is substituted, policy never attaches i. 505 ; ii. 36, 39 so if an entirely different voyage is intended from the begin- ning . . . ii. 36 but no merely intended change amounts to deviation . ii. 36 otherwise if effected . . . . . . . . ii. 36 act of taking letters of marque does not discharge insurers ii. 36 but becomes deviation if vessel lays to, to take a prize . . ii. 37 no deviation if voyage insured never begins . . ii. 38, 39 if vessel sails, intending to deviate, no deviation till change of course begins . . . . . . . . ii. 40 and insurers liable till such beginning . . . . ii. 40 but not thereafter ii. 40 difficulty of determining whether a different voyage or a de- viation was intended .... . ii. 40, 41 618 INDEX. DEVIATION, — Oontinued. a question of mixed law and fact . . . . . ii. 41 change must be sufiicient to make a change from beginning of voyage . . . . . . . . . ii. 41 if not so sufficient, regarded as intention to deviate . . ii. 41 if ship sails on voyage intended, the fact of her having cleared for different voyage does not discharge insurers . ii. 41, 42 forfeiture incurred by deviation may be waived . . ii. 42 DOLLARS, how to be insured . . . * . . . . i. 521, n. 3 DOMICILE. See Insurance i. 23 - 34 DOUBLE INSURANCE. See Prior Insurance. . . . 285 DURATION OF RISK. See Termini ii. 44, 45 E. EAST INDIA TRADE, usage in, as to deviation ii. 8, n. 2 EMBARGO ii. 61 EMBEZZLEMENT, an act of barratry ........ i. 574 a bar to salvage . . i. 607 ENTIRETY OF CONTRACT i. 338, n. 2 ENTRY, in log-book ......... ii. 520 EQUITY, effect in, of mistakes in policy. See Construction, § xiv. . . •. i. 150 - 154 EVIDENCE, ii. 503-538 general rules of, apply to insurance cases . . . . ii. 503 but peculiar questions and decisions arisen under . . ii. 503 evidence from without, not admissible to vary contract . ii. 503 otherwise if to explain it . . . . . . ii. 504 case illustrating this rule . . . . . . ii. 504, 505 words written in policy control words printed . . ii. 506 date of policy implies delivery on day of . . . . ii. 507 but this may be rebutted by proof ..... ii. 508 I. Or THE Making of the Contract . . . ii. 508, 509 letter directing insurance sufficient proof of agency . ii. 508 and postmarks, unless contradicted, evidence of date of posting ii. 508 receipt of letter properly directed and mailed, a prima facie presumption of law . . . . . . . ii. 509 INDEX. 619 EVIDENCE, — Continued. subscription to policy proved in ordinary way . . ii. 509 evidence that principal has sanctioned previous acts of agent sufficient proof of authority ..... ii. 509 but proof of payment of loss under policy so sanctioned sometimes required ....... ii. 509 admissibility of such evidence a question, of law . . ii. 509 sufficiency of, a question of fact ii. 509 II. Compliance with Warranties and Conditions 510, 511 policy does not attach unless express warranties are com- plied with . . ii. 510 proof of compliance varies with warranty or condition . ii. 510 law requires only reasonable proof . . . . . ii. 610 best evidence always required . . . . . ii. 510 and secondary only admitted when the best cannot be obtained ii. 510 instances of proof accepted. . . . . . . ii. 510 warranty negative in terms need not be proved unless evi- dence of breach is offered by other party . . . ii. 511 evidence of compliance with implied warranties need only be offered in rebuttal ii. 511 this the general rule ii. 511 III. Proof op Interest ii. 511-517 documents of title best evidence in insurance on ship . . ii. 511 actual possession a strong indication of interest . . ii. 511 possession held sufficient without production of bill of sale ii. 512 n. register of ship important evidence . . . . ii. 512 but sometimes held no proof of ownership . . . ii. 512 but this very doubtful . ii. 512 register rebuttable evidence . . . . . . ii. 512 whether registration is necessary . . . . ii. 512 - 515 question of transfer of ship without writings involved in this ........ ii. 512 transfer by writing the usual and ancient method . ii. 512 doubtful if writings are necessary in United States ii. 512 statute of 1850 implies validity of oral transfer as against grantor ii. 512-614 effijct of registry on rights of insured very uncertain ii. 514, n. 2 registry not conclusive as to ownership of person named therein ......... ii. 515 otherwise as to claims of person not named . . ii. 515 insurance not defeated in England because insured has not complied with registry laws of his own country ii. 515 620 INDEX. EVIDENCE,— Objiimwee?. this rule of weight in United States . . . . ii. 515 interest in freight proved by evidence of interest in ship suffi- cient to found claim for ii. 515 and performance of any acts sufficient to give insured an in- surable interest in freight . . . . . . ii. 515 interest in goods proved by evidence of purchase . . ii. 515 or document showing transfer of title . . . . ii. 516 or showing possession and control of goods . . . ii. 516 or act of ownership . . *■ ii. 516 but these facts rebuttable . . . . . . ii. 516 bill of lading the usual evidence ii. 516 consignee the owner by presumption of law . . . ii. 516 unless otherwise stated in bill of lading . . . . ii. 516 English rule that bill of lading proves shipment and existence of goods only ........ ii. 516 no such rule in United States . . . . . ii. 517 interest in profits follows interest in goods . . . . ii. 117 value of interest must be proved in open policy . . ii. 517 proportion at risk must be proved in valued policy . . ii. 517 IV. Proof as to sufficient Description . . ii. 517, 518 insured must prove that subject-matter of insurance on which loss is claimed is included in policy . . . . ii. 517 meaning of word " cargo " an instance of this . . . ii. 517 circumstantial evidence admitted to prove sailing of ship, un- der voyage policy ii. 518 V. Proof of Loss ii.'^18-538 insured must prove peril insured against, and loss thereby ii. 518 burden of proof on insured ...... ii. 518 evidence admissible to show similar damage to have been caused by other means ...... ii. 518 insured need not prove in defence anything beyond conditions in policy . . . ii. 519 insured can only prove loss to have been caused as stated in abandonment ii. 519 protest and survey, if any, must be shown by insured w . ii. 520 and consular and other certificates, and log-book . . ii. 520 but these documents inadmissible as evidence, if objected to, unless authenticated by oath . . . . . ii. 520 exception to this rule in case of American consul . . ii. 520 seal of great force as instrument of authentication . . ii. 521 great seal of State requires no proof within that State . ii. 521 INDEX. 621 EVIDENCE, — Continued. other seals must generally be proved . . . . ii. 521 authentication by seal held necessary on foreign judgment if offered in evidence ...... ii. 522 n. proof aliunde always required . . . . . ii. 522 n. court by giving judgment to be considered as asserting juris- diction ii. 524 regulations of foreign country if supporting this assertion give it great weight ii. 524 unless in question of international law .... ii. 524 judgment rendered by court of competent jurisdiction, in due form and after proper hearing, held conclusive upon the parties to it ii. 525 little difference in this respect between foreign and domestic courts ii. 526 though essentials require fuller proof in case of foreign judg- ment ii. 526 whether, if judgment is established, the grounds thereof can be inferred, or require proof ii. 527 presumption generally allowed in domestic judgments . ii. 527 refused in foreign ones ....... ii. 528 but cases not reconcilable ...... ii. 528 duty of master to keep log-book . . . . . ii. 528 and to make protest in due form if damage occurs to ship ii. 528 and to cause purvey to be made in usual manner . . ii. 529 evidence of these, if offered by insured, must be verified by *oath '. . ii. 529 if called for by insurers, insurers may make use of them as they stand ii. 529, 534 agreements or admissions of parties very important . ii. 529 party not bound by admissions not made or authorized by him ii. 529 admissions of persons actually interested may be shown against them ii. 529 though they are not named in policy as interested . ii. 539 offer on part of insurers to pay money does not prejudice their defence ii. 530 payment of money into court acknowledgment of plaintiff's claim to that amount ...... ii. 530 admits due execution of policy ii. 530 and plaintiff's interest therein . . . . ii. 580 and due attachment to property insured . . . ii. 530 and compliance with all conditions precedent . . ii. 531 622 INDEX. EVIDENCE, — Continued. rfewie* totality of interest asserted . . . . ii. 531 and loss ii. 531 and special facts stated in claim . . . . ii. 531 settlement by insured with one insurer no evidence against him in suit against other insurers . . . . ii. 531 even though they insured in same policy . . . ii. 531 statement of facts by insured for reference to court under one policy does not operate as admission against him in suit upon another . . . * ii. 531 admission by insurers may act as waiver or estoppel . ii. 531 illustration of this ....... ii. 531 but knowledge by insurers of a breach of express warranty no waiver ........ ii. 532 law presumes loss of vessel insured under common policy, if unheard from for great length of time . . . ii. 532 this generally submitted to jury, under instructions from the court ii. 532 and loss will be presumed to be by perils of the sea . ii. 532 otherwise if vessel is insured especially against particular perils only ......... ii. 532 evidence as to condition, weather, &c., admissible in such case .......... ii. 532 whether loss occurred before or after expiration of time policy a question for the jury . . . ^ . . ii. 533 so if risk is terminated by deviation or other cause . . ii. 533 unseaworthiness presumed, if vessel founders without adeqiftite cause soon after leaving port . . . . . ii. 533 presumption of law that master .and crew will do their duty ......... ii. 533 and negative of this must be proved . . . . ii. 533 concealment and misrepresentation, if charged, must be proved ii. 533 , insured must prove communication of material fact to insurers, if his knowledge of it is shown . . . . ii. 533 slender evidence of such non-communication only required of insurer ii. 533 fraud may be inferred by jury from refusal of insured to allow insurer to examine goods alleged to be damaged . ii. 534 so of excessive valuation in valued policy . . . ii. 534 admissibility of witnespes governed by ordinary rules of evidence ii. 536 INDEX. 623 EVIDENCE, — Continued. information contained in newspapers must be brought home to party to be affected by it . . . . . . ii. 536 insurers presumed to know facts contaiaejJ in newspapers taken at place of business ii- 536 presumption of knowledge of facts posted in insurer's office very strong . . ii. 536 party wishing to use paper in hands of adversary must give him notice to produce it . . . . . . ii. 536 if not produced, contents may be proved . . . ii. 537 and imperfect evidence of contents held sufficient in such case ii. 537 courts will sometimes order the production of such papers ii. 537 this within discretion of court ii. 537 experts frequently called in insurance cases . . . ii. 537 discussion as to evidence generally offered by experts ii. 537, 538 EVIDENCE, PAKOL. &e CoNSTEUCTiON, § vi i. 107-114 EXCEPTED LOSSES. &e Risks, § xi. . . . i. 614-627 EXCHANGE, rate of i. 249 EXPECTATION, or mere contingent probability, not insurable . . . i. 163 EXPENSE. See Gejseeal Aveeage. incurred in arresting or preventing fire . . i. 560-562 of repairs, where to be estimated . . . . . ii. 137 incurred in determining cause of loss are not compensated for ii. 136 at intermediate port, to enable cargo to be brought on ii. 101, 106 EXPERTS. &e Evidence, § V ii. 537, 538 EXPRESS WARRANTIES. See Waeeanties, § i. . i. 337 - 367 F. FACTOR. See Agent. FEAR OF LOSS, no ground for abandonment . . . i. 585, n. 5 ; ii. 1 84 FIRE, loss by. 5ee Risks, § iv. . ... . . i. 558-563 FIFTY-PER-CENT RULE ii. 125-129 applies to cargo ii. 152, FISH, though putrid, if they exist in specie, are fish . . . ii. 103 624 INDEX. FISHING-TACKLE, covered by insurance on outfits . . . . . i. 521, n. 3 FISHING VOYAGE, insurance on . • . . . . . . . . ii. 58 FLAG, neutral, no protection to belligerent property - . i» 351, n. 4 belligerent, does not forfeit neutral goods . . . i. 351, n. 4 FLAX-SEED, constructive total loss on ..... ii. 189, n. 1 FOKEIGN ADJUSTMENT, when binding ii. 360-370 FOREIGN JUDGMENTS, how authenticated ....... ii. 522 - 528 FOREIGN LAWS, insurers liable for breach of, when ... i. 541 - 544 FOREIGN MINISTER, domicile of . . i. 33 FORFEITURE, whether it changes property until actual seizure i. 239, 240 ; ii. 67 how it may be waived i. 42, n. 1 "FOR WHOM IT MAY CONCERN," meaning of phrase . . . . . . . . i. 45 who may sue under ....... ii. 442 FRACTIONS OF DAY, not regarded. See Prior Insurance i. 286 FRAUD, in valuation, vitiates policy ...... i. 261 excessive over-valuation a presumption of . . . . i. 262 insurer may recover back money paid, if induced to pay by ii. 490 "FREE FROM AVERAGE," meaning of . . . . . . . . . ii. 1 1 1 See Risks i. 629 - 634 FREIGHT, insurable interest in. See Interest, § iii. . . i. 166-191 meaning of. iSee Interest, § iii i. 166 valuation of. See Valued Policies. . . i. 256 - 284 See Description . ♦. i. 526-529 abandonment of. See Constructive Total Loss, § v. ii. 160-172 « FROM," meaning of. See Termini ii. 44 - 52 « FRUIT," meaning of i. 628 INDEX. 625 FURNITUEE OF SHIPS, how covered ........ i. 524, 525 " FURS," meaning of . . . i. 628 G. Gazette, whether intelligence in, need to be communicated to under- writers i. 478 GENERAL AVERAGE ii. 201-293 I. Meaning of ii. 201 - 210 means loss of part of property averaged upon the whole ii. 201 origin of, and early meaning not certain . . . ii. 201 n. " partial loss " and " particular average " understood to mean the same thing in United States . . . . ii. 201 n. one of the most ancient rules now in force . . . ii. 202 in force a thousand years before the Christian era . . ii. 202 right to claim average compensation purely maritime . ii. 202 and similar circumstances land contracts in, held not to give the right to average . . • . . . ii. 202, 203 held not to be enforced at common law. . . ii. 202 - 205 nor over lake navigation . ii. 205 but since held otherwise ...... ii. 205 and admiralty jurisdiction extended by statute . . ii. 206, n. 1 law of, now applied to all cases occurring on Western waters . , ii. 206 has been held applicable in case arising under fire policy ii. 206, n. 2 law merchant a part of common law . . . ii. 207, n. 2 insurers bound to indemnify for loss by contribution for gen- eral average . . ii. 208 rules of founded on justice and expediency . . . ii. 208 this illustrated ii. 208, 209 owner of goods lost not to be repaid full value . . ii. 209 but only in proportion ii. 209 this ascertained by adding together value of all property saved, and that of all lost, and finding proportion one bears to the other ii. 209, 210 principles somefyhat obscure . . . . . ii. 210 and adjudications on some points uncertain . . . ii. 210 II. Sacrifice must be Voluntary . . . ii. 210-216 voluntariness of loss foundation to claim for compensation ii. 210 VOL. II. 40 626 INDEX. GENERAL AY W&AGiE, — Continued. jettison to lighten ship most ancient form of voluntary sacri- fice . . . ii. 211 so if jettison is made to get at leak . . . . ii. 211 must be intended as means of saving property . . . ii. 211 if otherwise, no claim for compensation . . . ii. 212 and master should enter in log-book all facts and circumstances of ... ■ .ii. 213 and a distinct statement of property jettisoned . . ii. 213 but neglect so to do will not afffict rights of interested par- ties . ii. 213 not necessary that property should be intentionally de- stroyed ii. 213 . enough, if voluntarily exposed to danger for purpose of pro- moting safety of ship .or cargo, and so destroyed ii. 213, 214 if part of cargo with this purpose is put in boats, and lost while on way. to shore, claim good . . . . ii. 214 although it was hoped goods would reach shore in safety ii. 214 so if damaged, having been put on beach after stranding of vessel . ii. 214 otherwise, if put in boats only to save goods so laden . ii. 214 even though ship was thereby relieved . . . . ii. 214 but in practice supposition would generally be that goods were imperilled to save ship ...... ii. 214 unless otherwise distinctly apparent . * . . . ii. 215 jettison usually applied to cargo only . . . . ii. 215 but there may be jettison of parts of ship . . . ii. 215 if masts are cut away, or sails and rigging cast off, loss must be averaged ........ ii. 215 so, if cables or anchors are thrown over . . . ii. 215 or provisions . . . ii. 215 but this must be done to save ship . . . . ii. 216 III. Sacrifice must not be bt Fault op Owner ii. 217 - 227 ancient rule, that goods must not be carried on deck . ii. 217 reasons for this rule . . . . . . ii. 217, 218 if so carried, and jettisoned, no claim for contribution ii. 218, n. 2 otherwise, if proper so to carry goods . . . . ii. 219 this to be determined by custom . . . . ii. 219 n. steam vessels excepted from working of this rule . . ii. 220 because cal'rying goods on deck does not increase difficulty of navigating so much ii. 220 and law in regard to, must be relaxed . . . . ii. 220 n. INDEX. 627 GENERAL AVERAGE, — Contmued. if custom so to carry is well known to insurers, they are liable for jettison to save ship and cargo . . . . ii. 221 not necessary to prove that insurers habitually pay for such loss ii. 221 insurers may agree to insure goods so carried . . . ii. 221 if so carried, in accordance with custom, general description of goods in policy sufficient ..... ii. 222 whether owners of other parts of cargo should contribute for jettison of goods so carried ...... ii. 223 American authority against claim for . . . . ii. 223 otherwise in England ....... ii. 223 this question discussed ..... ii. 223, 224 owner of ship knows that goods are so carried . . . ii. 224 master's knowledge his knowledge . . . . ii. 224 if goods thus jettisoned were put on deck against knowledge and consent of shipper, ship should pay him, not as contri- bution, but compensation ...... ii. 224 and- insurers not liable < . . . . . . ii. 225 local custom sometimes determines . . . . ii. 225, n. 1 no claim allowed for cutting away of boat . . . ii. 225 whether insurers are liable for such loss . . . ii. 225, 226 practice of, variable . . . . . . . ii. 226 if underwriters refuse to pay, burden of proof on them to show that boat was improperly so carried . . . ii. 227 so held in Massachusetts ...... ii. 227 IV. Loss MUST NOT BE CAUSED BT PeEIL OF THE SeA ii. 227-231 difficulty of determining whether exposure to risk was volun- tary or a peril of the sea ...... ii. 227 illustration of this ii. 227 loss of spars and sails while endeavoring to escape from dan- ger of wreck ........ ii. 227 held to be contributed for on Continent of Europe . . ii. 227 so if goods are given as ransom ii. 228 not to be contributed for, if forcibly taken by captor ii. 228 - 230 if jettisoned to prevent capture, not a general-average loss ii. 230 and not to be contributed for .... . ii. 231 salvage paid for recapture is to be contributed for . . ii. 231 V. Consequences of Sacrifice . . . . *" . ii. 232 - 240 loss to be contributed for extends to consequential damages ii. 232 but not unless caused by voluntary act . . . . ii. 232 628 INDEX. GENERAL AYEUAG^, — Continued. if valuable goods brought on deck, to enable less valuable to be jettisoned, and these are lost, contribution Can be claimed ii. 233, 234 so, if water, thrown into ship's hold to extinguish Are, dam- ages goods ii. 234 rule of causa proxima non remota spectatur to be applied ii. 234 and this often very difficult ii. 234 the meaning of this rule examined . . . . ii. 234, 235 cause considered proximate as to*general average, though intermediate cause produces loss . . . . . ii. 235 if this comes in naturally ...... ii. 235 if cargo of ice is wasted by opening of hold to put in new mast, this to be contributed for . . . ii. 235, 236 n. whether cable, cut by dangerous bottom while endeavoring to avoid wreck, should be . . . . . . ii. 236 not a general-average loss ...... ii. 237 though usually paid for ii. 237 loss of cable may or may not be _ . . . . . ii. 238 depending on circumstances ..... ii. 238 master must do all in his power to facilitate recovery of . ii. 238 difficulty of deciding, when boats, anchors, or canvas are lost ii. 238 only to be contributed for when voluntarily cut away . ii. 238 illustrations of this ii. 239, 240 loss by ship in beating off enemy not to be contributed for ii. 239 but if vessel lowers boat, with intent of deceiving enemy, and boat is lost, this must be . . . . ii. 240 expenses of convoy not a general-average loss . . . ii. 240 unless made necessary by extraordinary circumstances . ii. 240 so if masts are blown overboard, and are cut away from side of ship ii. 240 no sufficient reason for this ...... ii. 240 VI. VoLUNTAKT Stranding ii. 241-246 conflict of authorities in regard to ii. 241 if vessel is stranded by force of winds and tide, no general- average loss ii. 241 whether, if in danger of going on rocks, vessel is by act of master forced on smooth beach, and can only be got off at great cost, is this general-average loss . . . ii. 241 held to be, if got off ii. 241 INDEX. 629 GENERAL AVERAGE, — Continued. otherwise in a later case . . . • . ii. 241, 242 later decision that loss or recovery do not affect owner's obli- gation to contribute ....... ii- 242 this now the law . . . . . . . •■ ii. 242 though held otherwise in New York . . . . ii. 242 the principle discussed . . . . . . ii. 243-246 amount of contribution to be made, that only of ship when captain endeavors to choose place ... ii. 243, 244 if master had chance to save ship, and threw this away to save cargo, cargo should contribute . . . . ii. 244 American cases hold differently ..... ii. 244 but these not reconcilable ...... ii. 244 cases stated ii. 244 - 246 VII. Sale BT Master ii 247-252 can only sell when obliged by strictest necessity . . ii. 247 See CoNSTEUCTivE Total Loss . . ii. 119, 145 if necessary to raise funds, must exhaust all other means be- fore selling ......... ii. 248 if he can raise funds on owner's credit, must do so t ii. 248 so if bottomry or respondentia are possible . . . ii. 248 or both ii. 248 if these can be done only at excessive cost, part of cargo may be sold ii. 248 may sell part cargo if interests of ship and cargo absolutely require it ........ ii. 248 but must exercise due care in so doing . . . . ii. 248 whether this loss should be contributed for . . ii. 248, 249 when it should be considered a general-average loss . . ii. 249 if raised only for benefit of ship, cargo should not con- tribute ii. 250 so ship should not, if raised only for benefit of cargo . ii. 250 and is no general-average loss, if cargo was sold because per- ishable ii. 250 or for any other cause except extraordinary peril . . ii. 250 assertion that the power of selling cannot extend to the whole cargo ii. 250 this doubted, if sale is for benefit of ship . . . ii. 250 as it would be obliged to make compensation . . . ii. 250 if cargo sold at port of distress realizes full value, no contri- bution to be made ii. 251 this not the same as jettison . . . . ii. 251, 252 252- ■276 252 11. 252 253 ■ 11. 253 253 11. 254 254 630 INDEX. GENERAL AVERAGE, — ObnimMed VIII. Expenses included in extraordinary expenses are to be contributed for . law and practice as to what are, somewhat uncertain consequential expenses are to be . and also direct expenses ...... and sometimes expenses by themselves*. as expenses of ransom and repair .... expenses relating to sea-worthiness of ship are not unless repair made necessary byian extraordinary peril is required for general benefit . . . . . . ii. 254 so expenses of pilotage ...... ii. 254 or to guard property ....... ii. 254 or to remove obstructions by ice or otherwise . . ii. 254 or expenses of port of distress . . . . . ii. 255 unless ship was driven in by extraordinary peril . . ii. 255 where steam vessel driven into port of distress bought coal to proceed to port of iinal repair, held that this was not a general-average charge ii. 255, 256 expanses of crew in port of distress are . . . ii. 256 if occasioned by general-average loss . . . . ii. 256 whether when cause of loss was not general average . . ii. 257 held not to be, in England ...... ii. 267 held to be in America, if repairs are necessary for safety of ship and cargo ....... ii. 257 difficulty of distinguishing between cases where repairs are duty of master and crew, and where extraordinary ii. 258, 259 expenses incurred in efforts to recover captured vessel are a general-average charge ii. 259, 273 whether, if crew are detained during such proceedings, their expenses are ii. 260, 261 held that they are general-average ii. 261 whether, if master could have discharged crew and obtained another ii. 262 this within master's discretion ii. 262 which must be exercised honestly ii. 262 wasteful expenditures are not to be contributed for . ii. 262 cases illustrating this ....... ii. 262 if ship be stranded by peril, unsuccessful efforts to get her off paid by ship alone ii. 263 so if rigging is blown away ii. 263 INDEX. 631 GENERAL AM EB.AG,Y., — Continued. whether cost of getting vessel off and carrying goods to des- tination is loss of ship-owner only . . . . ii. 263 held to be general average in America . . . . ii. 263 otherwise in England ii. 263 cost of repairs rests on ship . . . . . . ii. 264 unless made for benefit of cargo . . . . . ii. 264 if expenses are for benefit of particular portion of common property, this alone liable . . . . . . ii. 265 if goods liable to contribution are landed, and expenses are afterwards incurred, these not liable therefor . . . ii. 266 but otherwise held . ii. 266 expenses of floating vessel after cargo landed charged to gen- eral average ii. 267 - 269 whether expenses of detention for causes other than repair are ii. 270 voluntariness a test in such case ii. 271 detention by embargo gives no claim . . . . ii. 271 so of quarantine . . ii. 271 or while vraiting for convoy ...... ii. 271 expenses of detention before voyage begins give no claim . ii. 272 unless occasioned by extraordinary exigency . . . ii. 272 and not incurred for the exclusive benefit of one of the in- terests . ii. 272 incidental expenses of raising funds which are general-average loss must be contributed for . . . . . . ii. 273 as brokerage, premiums, and extra interest . . . ii. 273 so maritime interest on bottomry and respondentia . . ii. 273 owner of hypothecated goods which are lost has no claim for contribution ii. 273 if cargo is hypothecated in respondentia for benefit of ship and cargo, and ship is lost, owner has no claim . . ii. 274 if goods only are hypothecated for benefit of both ship and cargo, this general average ii. 274 expense of transshipment is not . . . . ii. 274, 275 Gases to he compensated for which are not General Average 275, 276 when necessary to destroy another ship to save one in question ii. 275 if injury of this nature is inflicted on ship, expenses of obtaining indemnity chargeable to all interested . ii. 276 IX. Sacrifice must be Successful . . . ii. 276-282 reason of this obvious . . . . . . . ii. 276 and rule never questioned ii. 276 632 INDEX. GENERAL AVERAGE, — (7OT lighten ship, claim for contribution good ii. 288 X. Claim on Insurers ii. 289 - 293 insurers pay to owners of property what they paid as contri- bution ii. 289 if goods insured are jettisoned, giving claim for contribution, insurers have benefit of . . . . . . ii. 289 whether insured can claim his whole loss, transferring con- tributory claim to insurers ...... ii. 289 or, deducting contribution, claim for-balance . . . ii. 289 difference between the two methods . . . . . ii. 289 the questions discussed ...... ii. 289 weight of authority in favor of allowing insured to claim for whole amount ........ ii. 290 even if this gives the insured power to make loss partial or total at pleasure . . . • *, ■ • . ii. 291 this rule objected to on ground of inequality . . ii. 293 but now well established . . . . . . . ii. 293 GENERAL CLAUSES, meaning and application of. See Termini. . . ii. 43 - 67 respecting perils, in salvage. See Risks, § x. i. 612-614 " GEOGRAPHICAL ORDER," meaning of . ii. 26, 27 GOODS AND MERCHANDISE. See Cargo. what is covered by these terms ..... i. 521 GOVERNMENT, ■ indemnity paid by, is salvage for insurers . . . ii. 195 GUNPOWDER, explosion of, a loss by fire . . . . . . i. 560 H. HIDES, insurance on ....... . i. 628 HYPOTHECATION, power of the master to make ...... ii. 158 634 INDEX. I. ICE, a memorandum article . . . . ■ • ii. 106 n. if port of destination is obstructed by, ship may enter neigh- boring poi't •. . . . • • • • u. 31 ILLICIT TRADE i- 617, n. 1 IMPLIED WARRANTIES. &« "Warranties, § ii ii. 367-401 INHERENT DEFECT . . . ■ . . ■ • i- 541, 558 INQUIRIES. &e Representation .... i. 402-466 See Concealment i. 467 - 501 INSOLVENCY, assignment of policy in . . . . • • . i. 60 of insurer does not dissolve contract . ii. 428 n. INSURE, who may. See Insurance, § ii i. 17-34 INSURANCE, history, nature, purpose, and effect of . . . • i. 1 - 1 3 supposed to have been known to Romans and Grecians . i. 1 Mr. Duer's argument stated . . . . . . i. 1 reply . . . . . . . . • . i. 1 — 3 fundamental idea of . . .' . . . • . i. 4 principles of . . . . . . . . . i- 5 average, the foundation of . . . * . . . . i. 5 early case of marine . i. 6-10 companies, when first incorporated . . . . . i. 1 1 ZZo^(i's, meaning of the word . . . . . . i. 12 amount of business done at . . . . . i. 13 MANNER OF i. 14-51 I. Who are Insurers i. 14-17 manner of effecting, when the business of insurance began origin of this method ..... stock companies, introduction of . mutual companies, introduction of . . . stock and mutual companies, difference between II. Contract of, how and by -whom made definition of . insurers not obliged to make with all who offer . Parties to ...... . may be any competent to make any contract except alien enemy .... 3gan • . 14 . 15 .15 . 16 . 17 i 17 -48 i. 17, 505 i..l8. 60, 341 i 18 -34 . 18 i. 18, 626 INDEX. 635 mSV'RA'NC'E.,— Continued. formerly held otherwise . . . . • i. 18 n. illegal, by temporary acts of Parliament . . . i. 18 n. illegal at common law . . . . • i. 18 n. subsequent war suspends, perhaps avoids . . i. 18 n. there may be exceptions . . . . ■ i. 18 n. war, after loss, suspends remedy of . . • . i. 18 n. as to ransom -bills . . . . • • i. 18 n. Alien jEnemies, who are ..... i. 18-23, 34 exclusive right of every government to determine i. 18,23 necessai-y transactions with, not illegal . . . i. 20 and insurances of, not always void . . . . i. 20 n. flag determines nationality of hull . . . . i. 20 not of cargo ........ i- 2.0 License to trade with alien Enemy . . . . i. 21 - 23 enemy's property protected by . . . . i. 20 n. and insurable under ...... i. 23, 24 may be made transferable . . . . • i- 21 if not made transferable, personal . . . . i. 21 construction of, liberal . . . . . . i. 21 n. alteration of, invalidates . . . . . . i. 22 wrong description invalidates . . . . . i. 22 all facts negativing right of alien to sue must appear on record . i. 22, 23 alien friends may be . . . . . . . i. 23 Aliens, who are . . . . . . . . i. 23 - 34 definition of i. 23 depends on domicile . ..... i. 24 right of citizen to expatriate himself during war . . i. 24 domicile depends both on facts and intention i. 25, 26, 27, 29 residence implies intention prima facie . . .1.25 every case to be judged by itself . . . . i. 25 Domicile, what constitutes . . . . . . i. 25 - 33 definition of . . . . . . . . i. 25 that of party's origin where nothing appears to the con- trary . . . . . . . . . i. 25 mere intent to change does not change . . . i. 25, 26 nor change in fact, without intent . . . . i. 26 once acquired, presumed to continue . . . i. 26 residence sufficient to give not determined by fixed rules i.[^26 causes and character of to be considered . . . i. 26 i. 27 i. 27 i. 27 27 1, 27 1. 28 1. 28 1, 29 i- 30 i. 30 i. 30 i. 30 3( 3n. 30 n. 636 INDEX. INSURANCE, — Continued. citizens of one country may have in another and may trade with enemy of native country . and may insure in native country .... short residence in foreign country, with intent to return, not sufficient to give, there ..... nor residence by constraint ..... long-continued residence gives ..... so if time of residence is uncertain .... declarations of party may affect ..... native nationality easily reverts .... mere revisit to native country for short time does not alter ......... mere intent to return does not alter .... party's starting to return, to new home after declaration of war by native against adopted country, alters . and his property is protected thereby . . . i. but not if in trade illegal by native citizen . . i. right of citizen to reasonable time to withdraw prop- erty i. 30 n. 3 property may be hostile although residence of owner neutral ........ i. 31 but must be without fraudulent intent . . . i. 31 . partnership, in general, has none . . . . i. 32 partner in one country domiciled in another belongs to latter i. 32 partnership property in enemy's country liable to con- demnation . . . . . . . . i. 32 separate property of neutral partners not affected by partnership connections with foreign country . . i. 32 but liability to seizure depends on whose account and risk the goods were shipped . . . . . i. 32 domicile of corporation in that country by which it is established . . . . . . . . i. 32 party residing in colony or factory although free from the government of the country has nationality of colony i. 33 but not when government of country has control . i. 33 foreign minister retains native domicile . . . i. 33 but as to trade in foreign country loses . . . i. 33 domicile of mariner that of birth . . . . i. 83 engaging in hostile trade, an alien enemy . . i. 33, 34 and if neutral may sue and be sued for contracts . i. 34 INDEX. 637 INSUEANCE, — Continued. contract of insurance in violation of foreign law not void i. 34 III. Insurance vtithotjT a Policy . . . . i. 34-43 usually by policy in use where insurance is effected . . i. 34 may be in other forms . . . . . . . i. 34 may be oral ......... i. 34 Agreement to insure . . . . . . . i. 35 - 37 by parol .' i. 35 if charter requires to be in writing, not binding . . i. 35 formalities required by law affect evidence of, not con- tract itself . . . . . . . . i. 36 different rules in different States . . . . i. 36 entered in insurer's books, a valid contract . . . i. 36 meaning of . . . . . . . .1. 36, 37 made by agent authorized to make it but not the policy, binding . . . . . . •. . i. 37 Proposals to insure . . . . . . . . i. 37 by letter and accepted, a valid contract from the mailing of the acceptance . . . . . . . i. 37 not, if property is destroyed before such mailing . i. 37 Rescission of . . . . . . . . i. 37 - 41 by insured, if received by insurers before acceptance, valid i. 38 by insurers, if received by insured before mailing of ac- ceptance, valid . i. 38 but if received after mailing, not valid . . . i. 38 whether revocation mailed before acceptance, though acceptance is made before revocation reaches the ac- ceptor, is i. 38 n. acceptance must conform exactly with proposal . i. 39, 41 Policies, void by breach of condition, not revived by mere waiver i. 42 issue of, waiver of things to be done before completion of contract . . . . . . . . i. 43 Policies of Insurance, Forms and essentials of. See Policies op Insurance, i. 43- 51 Assignment and negotiability of. See Policies of Insur- ance. . . . i. 52-63 construction of. See Construction. • • . i. 64-154 INSURANCE AGENT. See Agents. INSURERS, who are. /S«« Insurance, § i i. 14-17 638 INDEX. INSURERS, — Continued. liability of, clause limiting. See Risks, § xii. . i. 635 - 638 responsibility of. See Risks, § i. . . . i. 632 - 541 INTELLIGENCE, what should be communicated to insurers. See Representation i. 402 - 466 See Concealment i. 467 - 501 INTEREST, OF INSURABLE i. 165 - 241 I. "Wager Policies, so called when insured has no ilTterest in subject-matter . i. 155 formerly valid in England . . . . . . i. 155 aleatory contracts of the civil law . . . . . i. 155 derivation of word . . -■ . . . . . i. 155 lottery an aleatory contract . . . . . . i. 155 common contract of insurance of this kind . . . i. 156 life insurance another kind . . . . . . i. 156 in what sense every contract of insurance a wager . i. 156 n. obvious difference between wager, and insurance, where in- sured has interest . . . . . . . i. 156 no longer valid ........ i. 156 n. prohibition well founded . . . . . . i. 156, 157 wagers on arrival of ship against 'public policy . i. 166, n. 3 act prohibiting . . . - . . . . i. 157 adjudication on i. 167, 158 first held legal to insure foreign vessels by . . . i. 158 this decision reversed ....... i. 168 n. citation of language of court .... i. 168, n. 159 especially prohibited in some States . . . i.l60, n. 2 difference between English and American law . i. 159, 160 n. considered illegal in other States . . . . . i. 1 60 definition of insurable interest . . . . . i. 161 n. must be such as will make loss a pecuniary damage to in- sured i. 161 absolute ownership most common- form of interest . . i. 162 but insured need not be owner . . . . . i. 162 if liable to suffer loss by destruction of subject-matter . i. 162 interest must be pecuniary . . . . . . i. 162 need not be vested . . . . . . . . i. 1 63 expectancy sufficient . . . . . . . i. 163 if connected with definite obligatory contract, the execution of which will give title . i. 1 63 ship-owner cannot insure freight, unless goods are on board i. 163 INDEX. 639 INTEEEST, OF INSURABLE, — Continued. or definite conti-act has been made to put them on . . i. 163 inchoate rights sufficient . . . . i. 163, 168 if founded on positive contracts . . . . . i. 163 bottomry and respondentia . . . . . . i. 163 will be considered separately, see post, § vii. . i. 208 - 225 II. In the Ship i. 164-166 mortgagor of, has . . . . . . . . i. 164 mortgagee has also . . . . . . . i. 165 ship-owner has, though ship is let to charterer . . . i. 165 charterer has also . . . . . . i. 165, n. 3 vendee has . . . . . . . . . i. 166 • if ship is at his risk before contract is completed . . i. 166 n. III. In Freight . ^ . . . . . . i. 166-191 freight means sometimes cargo, and sometimes money earned i. 166 both meanings ancient . . . . . . . i. 166 much restricted in law to latter meaning . . . . i. 166 somewhat wider signification in policies and law of insurance i. 166 benefit derived by ship-owner from employment of ship i. 166, 167 n. including freight, strictly speaking . . . . i. 166 and price which hirer agrees to pay for use of ship is insur- . 167 167 . 168 168 . 168 168 able as freight ........ possessed when an owner of ship to any extent . may be legal ........ or equitable ........ as of mortgagor ........ or mortgagee . . . . . . ' . if ship-owner is insured, must either have purchased goods i. 168, n. 2 or made contract for, with intent to load . . . i. 168, n. 2 and cannot recover unless intention was defeated by loss in- sured against i. 1 68, n. 3 order to agent having funds to purchase not sufficient . i. 168 nor if agent had begun negotiation . . . . .1.169 nor if terms had been agreed upon . . . . i. 169 but sufficient, if goods are purchased by . . . . i. 169 owner has, if goods have been contracted for by master, to be put on board for carriage . . . . . i. 169 definition sometimes requires goods to be ready to go on board i. 1 69 necessity of this doubted i. 169 n. if goods are at distance, owner of ship may still have . i. 1 69 or if something needs to be done to put them in condition to go on board . . . . . . . . i. 169 i. 172, n. 2 . 172- -174 i. 172 n. 173 1. 173 174 . i. 174 . i. 174 i. 175 640 INDEX. INTEREST, OF INSURABLE, — Continued. if vessel sails in ballast to port where freight is ready to go on board, begins with voyage . . . . i. 169, n. 2 limitation if destination of voyage is contingent . i. 170 n. though expectancy exists, cannot insure unless there is con- tract . . . ' i. 170 n. if ship is ready, begins ...... may be insured for part of voyage . When Ship is chartered ...... ship-owner has, when ship begins voyage . if charter-party on time, from beginning of charterer has, if whole ship or definite part is hired weight of authority against contrary decisions and he may insure under word " freight " . part owner hiring whole vessel may insure without speci- fying interest ..... charterer recovers only amount lost how determined whether at any period owner or charterer has, such interest i. 175 mere hope, or possibility, does not give . . i. 170 n., 175 expectancy may i. 176, n. 2 definition of i. 176-181 if ship is chartered on voyage to several definite ports, begins with first voyage . . . . . . . i. 182 if charter pays one freight for round voyage . . i. 183, 184 ■ whether goods are on board or not . . . . i. 185 or ship sails in ballast to port where charter begins . . i. 185 charter of whole or definite part has, of same kind as owner . . ■ i. 185, n. 2 if perils are divided between owner and charterer, each has, only for risks assumed ....... i. 186 if owner sells ship, reserving use for certain time, he has i. 186 though held differently i. 186 n. if charterer advances money, he hap, to amount advanced i. 186 if intended as an advance of freight . . . . . i. 186 not, if mere loan ........ i. 186 if freight is advanced on bill of lading by which shipper is not bound to pay freight unless goods arrive, and ship is lost, he may recover advance . . . . i. 187-189 money lent to master, payable out of freight, gives no . i. 190 unless payable only out of freight . . . . . i. 191 lender's interest then like that of mortgagee . i. 191 INDEX. 641 INTEEEST, OF INSURABLE, — Com^mMei. IV. In Profits i. 191-195 settled to be an i. 191 may be created by executory contract . . . . i. 192 none on goods "to arrive," none on goods as such . i. 192 but is, in profits as such i. 193 n. necessity of proving that goods if arrived wouid sell at profit i. 194 different adjudication in England and America . . i. 194 necessity of proving this in England . . . . i. 194, n. 2 a conclusive presumption in America . . . . i. 195 n. V. In Commissions i. 195 - 201 similarity between freight, profits, and . . . , . i. 195 first arising from freight, others from goods . . . i. 195 commission merchant has, if goods are consigned to him and i. 195 i. 196 i. 196 i. 196 i. 196 are on the voyage .... bailees having lien have .... consignees who have made advances have . factors, having advanced, have agents, having advanced, have . supercargo, having contracted with any one interested in cargo by which he is to be compensated, has . . i. 196, n. 2 cases relating to, often turn on lien . . . . . i. 197 debt arising in consequence of article insured, giving lien, gives i. 197 commissioners appointed to take charge of prizes have i. 197, 205 trustees having possession or right of have . . . i. 199 assignee, having proper documents, has . . . . i. 200 master has not ........ i. 200 but contra, if he makes advances on cargo or freight . i. 200 owner or master who is liable for safety of goods has, against all risks for which he is liable ..... i. 200 material-men have, if holding lien by State law . . i. 200 mechanics have ........ i. 201 any person having interest may insure to whole value . i. 201 but can recover only to extent of loss - . . , i. 201 n. commission merchant may insure to full value . . i. 201 but balance, after indemnifying him for loss of commissions, payable to owner of goods i. 201 if he intends to insure for them . . . . . i. 201 and terms of policy cover their interest . . . . i. 201 and he has previous authority to insure . . . . i. 201 or there is subsequent ratification of his acts . . . i. 201 VOL. II. 41 642 INDEX. INTEREST, OP INSURABLE, — Oowfonwerf. VI. Or Captors i. 202 - 208 no right to capture unless authorized by government . i. 202 captors have no other interest than given by law, if thing cap- tured is condemned and sold ...... i. 202 in the share or proportion then given them captors have i. 202 captors oblig^ to take certain care of property . . . i. 203 and have an insurable interest to the amount of their respon- sibility i. 203 has been often adjudicated .* . . . . : i. 203 principles of great weight determined . . . . i. 203 whether captors have, in prizes when no statutory provision exists, but reason to expect grant . . . . . i. 203 held sufficient ........ i. 203 doubted, but not set aside . . . ■ . . i. 203 n., 204 would give, if practice of making grants could be shown i. 204 suggested to be on ground of possession . . . i. 204 this principle applied ...... i. 204, n. 2 case of Dutch Commissioners .... i. 204, 205 inchoate interest, imperfect till given contingency takes place, gives i. 205 adverse doctrine ........ i. 205 n. held valid i. 206, 207 n. not, in United States, unless law gives share, or grant is shown i. 208 n. VII. In Bottomry and Respondentia . . . i. 208-226 maritime loans strictly ....... i. 208 on bottomry, loan on security of ship . . . i. 208, n. 2 on respondentia, on security of cargo . . . i. 208, n. 3 essence in both cases, that debt is not recoverable if ship or cargo be lost i. 209 n. difference between, and pledge, that lender on never takes possession ......... i. 209 lender on, has . i. 209 but if contract be invalid, not ...... i. 210 Brief Statement of Rides governing Loans on . i. 210 - 225 may be made in home port . . . . . i. 210 before ship has sailed i. 210 without necessity i. 210 lender receive any interest agreed upon . . . i. 210 unless exorbitancy indicates fraud or oppression . i. 211 held not a loan on, if only legal interest is charged i. 211, n. 2 this denied ;. 211 n. 3 INDEX. 643 INTEKEST, OF INSVIIABLY., — Continued. if a mere contract to get usurious interest, treated as any other contract on usury ..... i. 212 this a question for jury . . . . . . i. 212 bond should always describe risk . . . . i. 212 which only gives . . . . . . . i. 212 debt survives if ship is lost through misconduct of mas- ter i. 212 risk generally assumed that of perils of sea . . i. 212 any words indicating this sufficient to constitute a . i. 212 the risk lender runs of having bond discharged is an insurable interest ....... i. 212 insurers on bond would not be held if vessel be lost i. 212 otherwise, if voyage is terminated voluntarily without necessity i. 212 or if there is an unjustifiable deviation . . i. 212, n. 3 or sale i. 212, n. 4 or if ship be intentionally lost . . . . i. 213 if lender is entitled to recover if ship be lost or not, not a bottomry loan . i. 213 when if master borrow money abroad, giving no instru- ment of bottomry, the lender has lien on ship . i. 213 in addition to remedy at common law . . . i. 213 but this is not bottomry . . . . . . i. 214 but lender has insurable interest in ship . . . i. 214 question of validity springs from whether it be invalid by fault of master or lender, or both . . . i. 214 As to the Master i. 214-218 can make, only abroad . . . . . . i. 214 " abroad " means so far distant from owner as to prevent communication without injurious delay . . i. 214 necessity must be real i. 215 but not so absolute as would justify sale . ' . i. 216 sufficient if owner would have hypothecated . . i. 216 cannot give, for money borrowed for own wants . i. 216 nor for exclusive benefit of cargo . . . . i. 216 nor if he have funds of owner . . . . i. 216 nor if he can borrow on personal credit of owner . i. 216 or consignee or agent of owner will lend . . i. 216 is not obliged to use private funds . . . . i. 217 is not bound to use money on board belonging to ship- pers i. ^17 644 INDEX. INTEREST, OF INSUB. AB1,E,—Oontmued. may give, to, consul in foreign port for services ren- dered i. 218 n. power to give belongs to any lawful master . i. 218, n. 2 As to the Lender i. 218-220 must ascertain existence of necessity . . . i. 218 enough if due inquiry, and reasonable grounds . . i. 219 applies to necessity of ship alone . . . . i. 219 avoided as to, if master be fraudulent, to his knowledge i. 219 not bound to see that master applies funds to necessities of ship i. 219, n. 3 cannot take, if owing owner . . . . . i. 219, n. 4 if connives with master to send ship on unauthorized voyage, no interest . . . . . . i. 220 WTiat Purposes make valid ..... i. 220, n. 2 if given for supplies rendered . . . . i. 220, n. 2 or repairs made ...... i. 220, n. 2 if advances are made without direct evidence of credit given to owner ..... i. 220, n. 2 when given for expenses consequent on a mutiny i. 220, n. 2 when given to liberate ship from arrest . . i. 221, n. 2 not, if attaching creditor is obligee . . . i. 221, n. 2 no salvage or general average upon . . . i. 221 unless expressly provided ...... i. 222 this now common . ... . . . . i. 222 if such, obligee contributes in proportion to amount of hypothecation, without maritime interest . . i. 223 no abandonment as to holder of bond . . . i. 223 security additional to bond, may be given . . i. 223 if conforniing to bond i. 223 if otherwise, and not a mortgage, no insurable interest i. 223 does not necessarily hypothecate freight . . . i. 224 circumstances justifying bottomry justify respondentia i. 224 common to hypothecate both in one bond . . . i. 224 general respondentia bond covers freight for whole voy- age i. 224 whether earned or not i. 224 provided only it has not been paid to master or owner i. 224 may include freight for subsequent voyage . . i. 224 if charterers sub-let, freight is bound for payment of bond i. 225 . lender on, has insurable interest in maritime interest . i. 225 INDEX. 645 INTEREST, OF INSURABLE, — CoMimwerf. contract may divide risks ...... i. 226 each party has then . . . . . . . . i. 226 if lender on, assume risks of perils of sea, owner has none i. 226 unless not hypothecated for whole value . . . i. 226 so held expressly in England . . . . . . i. 226 and provided there by statute . . . . i. 226, n. 2 VIII. Of Mortgagee i. 226 - 229 has two distinct resources ...... i. 226 personal claim on mortgagor ...... i. 226 security of property mortgaged . . . . . i. 226 if interest is insured, and property lost, debtor remaining sol- vent may be doubly paid i. 226 cannot insure and charge premium to mortgagor . . i. 226 unless he is privy to insurance ..... i. 227 insurers by paying loss become subrogated to mortgagee's right .' i. 228 not brought into question in marine insurance . . i. 228 different doctrine held in Massachusetts in fire policies i. 228 n. examination of this doctrine . . . . . i. 228, 229 cases bearing thereon ....... i. 229 n. IX. Op OTHER Kinds i. 230-231 vendor has, while he has a lien ..... i. 231 and while in transitu ....... i. 232 not defeated by a stoppage in transitu . . . . i. 233 purchaser in good faith has, though title is doubtful . . i. 234 no defence that defeasibility can be shown . . . i. 234 but a good defence, that title is wholly void . . . i. 234 may exist in that not itself insurable . * . . . i. 235 as seamen's wages ....... i. 235 n. or share in prospective catchings . . . . i. 235 n. an interest retained in thing sold is an . . . i. 235, n. 2 and extends to full value of thing . . . . . i. 236 if goods are shipped, proceeds payable to creditor, he has i. 236 but not, unless some actual bargain to that effect is made . i. 236 X. Desfeasance of . . ' . . . . i. 237-241 to be, must be a complete divesting of interest . . . i. 237 assignment to trustees for benefit of creditors is not . i. 237 nor attachment for debt . . . . . . . i. 237 nor seizure on execution ...... i. 237 nor if contract to convey, till conveyance is actually exe- cuted .......... i. 237 646 INDEX. INTEEEST, OF IN SVUABIjE,— Continued. if mortgagor of vessel sells remaining interest, and stipulates to pay off the mortgagor, and receives property back for non-fulfilment, policy issued before agrieement still valid after reconveyance i. 238, n. 2 nor if vessel is captured, until condemned . . . . i. 239 quare, if interest ceases when vessel liable to forfeiture is seized, or retrospectively at time of breach of law i. 239 n. 2 question discussed . • i. 240 n. INTEREST, amount of insurable. See Amount of Insurable Interest. i. 242, 253 INTERMEDIATE PORT, loss at, in England ii. 99 - 101 loss at, in this country ii. 102, 103 implied warranty of sea-worthiness at . . . i. 377-381 deviation by visiting . . . . ii. 9, 23, 26, 27, 28 INTERMEDIATE VOYAGE, liberty to make ii. 22 - 24 usage to make . . . . . . . . ii. 6 - 9 INTENTION TO INDORSE, when sufficient to bind insurers. See Running Poltoies. i. 328 INTENTION, of parties. iSise Construction, § iii. . . . i. 71-76 determines parties when phrase is general . . . i. 47 INTERNAL NAVIGATION, deviation applicable to . . . . . . ii. 4 INVOICE, value of goods presumed that of i. 274 IRON WORK, deduction of " one third new for old " from . . ii. 384 n. 2 J. JETTISON. See Constructive Total Loss, § iv. . . . ii. 156, 157 JURISDICTION .... ... ii. 539-647 actions on policies usually brought in courts of common law ii. 539 form of, generally assumpsit ii. 539 or substitute therefor adopted by State codes . . . ii. 539 courts of equity have also jurisdiction . . . . ii. 449 power of, to reform policy frequently asserted . . . ii. 539 INDEX. 647 JUEISDICTION, —Continued. but will not be exercised unless non-conformity of policy to previous agreement is clearly shown . . . . ii. 539 courts of equity will refer to previous agreement if policy is ambiguous . ii. 539 otherwise, if reasonable construction will make it con- form to agreement ...... ii. 539 fraud a defence, as at common law . . . . ii. 540 equity will compel surrender of policy obtained by fraud ........ ii. 541 and will order set-off of premium notes against judg- ment for loss ii. 541 n. 2 though set-off could not be obtained at common law ii. 541 n. 2 will order distribution of assets of insolvent company ii. 541 n. 2 will prevent master from selling cargo to pay private debts ii. 541 n. 2 and will compel surrender of policy to insured, if ille- gally retained by agent of insurers . . . ii. 541 n. 2 admiralty has jurisdiction over bottomry and respondentia contracts ii. 541, 542 this undoubted, if actually maritime contracts . . ii. 542 whether, if in form, but not in substance . . ii. 542 jurisdiction of admiralty over policies of insurance re- peatedly asserted ...... ii. 542 but unfrequently resorted to . . . . ii. 542 n. in trials at common law, court has exclusive jurisdiction of matters of law ii. 543, 544 and jury of matters of fact ...... ii. 544 but courts will grant new trial, if verdict is against evidence ii. 544 rules governing the court in such case not clearly defined . ii. 544 discussion of the question. ..... ii. 544 - 546 question as to nature of policy held to be for the court ........ ii. 546 n. meaning of technical words for the jury . . ii. 546 n. so of questions of general construction of policy . ii. 546 n. so as to nature of note given to company by insured ii. 546 n. and as to compliance with representation . . ii. 546 n. 3 and as to sea-worthiness of ship . ... ii. 546 n. 3 statute of limitations held not to control court of equity in England ii. 547 but adopted as guide to exercise of discretion . . ii. 547 otherwise in United States ii. 547 648 INDEX. JURISDICTION, —Coraimwec?. equal weight given to statute in courts of equity and of com- mon law in United States ...... ii. 547 if bills for reform of policies are not filed within period re- quired by law, courts will not give relief . . . ii. 547 unless reasonable care and diligence are shown to have been exercised . . ' ii. 547 law on this point the same in England and the United States ii..547 L. LAND, carriers by, may commit barratry i. 570 LANDED, insurance on goods till landed. See Tekmini, § iii. ii. 53 - 64 LAW, effect in, of mistakes in policy. See Construction, § xiv. i. 150-154 LAW MERCHANT, a part of common law. See General Average, § i. ii. 207, n. 2 LAW OF NATIONS, i. 349 LAW OF PLACE, See Construction, § xi i. 132 - 135 LAWFUL GOODS, includes contraband . . . . . . . i. 364 LEAK, presumption of unseaworthiness . . . . .1. 379 LEAKAGE, insurers not liable for ordinary i. 540 LENDER, on bottomry, should specify interest in policy . . i. 626, n. 2 LETTER, construction of, proposing insurance' .... i. 135 contract by i. 37 - 39 LETTERS OF MARQUE, whether taking constitutes a deviation . . . ii. 36 - 42 LIABILITY OF INSURERS, clause limiting. See Risk, § xii i. 635 - 638 LICENSE, to trade with alien enemy . . . . . .i. 21-22 INDEX. ^ 649 LICENSE, — Continued: to enter blockaded port ...... i. 353 LIGHTERS, when goods put on board, are safely landed . . . ii. 61 stranding of, is not a stranding within the policy . . i. 632 LIGHTNING, loss by, not loss by fire . . . ■ . . . i. 560n. LIMITATION, of time of bringing action. See Action, § iii. . ii. 480, 481 of place where it shall be brought. See Action, § iii. . ■ ii. 481 LLOYD'S, intelligence posted up at, presumed to be known to subscrib- ers i. 471 LOG-BOOK, of party, inadmissible as evidence in his favor . . . ii. 520 LOSS, &« Risks i. 541-614 at port of destination. See AcTvxi, Total Loss. ii. 96-106 English doctrine . . . . . . . ii. 96-98 American doctrine ii. 102, 103 at intermediate port English doctrine ii. 97 - 101 American doctrine ...... ii. 103-106 "LOST OR NOT LOST," meaning of . . . . . . . . . ii. 44 M. MARINE RAILWAY, damage to vessel while being hauled upon for repairs i. 612, n. 4 MARINER, domicile of . . . . . . . . . i. 33 MARKET, insurance to a . . . . . . . . ii. 23 MASTER, insurable interest of ...... . i. 200 power of, to sell cargo ' ii. 157 to sell ship ii. 145, 146 competent, necessary to seaworthiness . . . . i. 374 loss by negligence of ...... . i. 381 See Risks . . . . i. 532 - 638 650 ,- INDEX. MASTER, — Continued. sailing vessel on shares, cannot insure owner's interest in freight i- 49 MATE, should take command, on death or incompetency of master i. 382 n. . MATERIALS, how proceeds of old, should be deducted . . . ii. 388 MEANING AND EXTENT OF PERILS OF THE SEA, ,See Risks, § iii i. 544-558 MEANING OF WORDS, See Construction, § ix i- 125 - 131 MEMORANDUM ARTICLES, the term defined. See Actual Total Loss. . . ii. 94 MEMORANDUM, of articles named in. See Risks, § xii. A. . . i. 627 - 629 of clause respecting stranding in. See Risks, § xii. B. i. 629 - 634 MISTAKE OF LAW AND FACT, . . . . ii. 488, 489 MISTAKES IN POLICY, their effect. (See Construction, § xiv. . . i. 150-154 MISTAKE, by insurers in paying loss. See Action. . . . ii. 488 MISREPRESENTATION, See Representation i. 402-467 MISSING SHIP, when presumed to be lost i- 547 MOB, loss by i- 573, n. 3 "MOORED TWENTY-FOUR HOURS IN SAFETY," meaning of . • ii. 59 - 61 "MORTALITY, FREE FROM," meaning of ......... i- 623 MORTGAGE, assignment of . . . . . . . . i. 53 - 54 MORTGAGEE, insurable interest of. »See Interest, § viii. . . .i. 226-230 MORTGAGOR AND MORTGAGEE, insurable interest of. See Interest, § viii. . . i. 226 - 230 right of, to sue. See Action. . . . . ii. 457, 458 MUTINY, when barratry i. 573, n. 4 INDEX. 651 N. NATIONALITY, easily reverts . . . . . . . . . i. 30 of hull determined by flag, not by cargo . . . . i. 20 of party residing in foreign colony . . . . i. 33 of corporation . . . . . . . . i. 32 of foreign minister . .. . . . . . i. 33 of mariner . . . . . . . . . i. 33 of prisoner of war . i. 34 NEGLIGENCE OF MASTER AND CREW, loss caused by i. 381 NEGOTIABILITY OF POLICY. See Policies i. 52 - 63 NEUTRALITY, See Warranties. .... . . i. 342-356 NEW FOR OLD, ii. 129-134, 385-393 NEWFOUNDLAND TRADE, usage in as to deviation . . . . . . ii. 8, n. 2 NEWSPAPERS, whether' news in, need be communicated to insurers i. 479, ii. 536 NOTICE OF ASSIGNMENT OF POLICY. See Policies. . . . . . . . . i. 52 O. OLD MATERIALS, how proceeds of, should be deducted . . . . ii. 388 « ON ACCOUNT OF OWNERS," meaning of . . . . . . . . . i. 47 "ON A PASSAGE," meaning of ii. 55 "ONE THIRD NEW FOR OLD," . ii. 125-134, 385-393 OPEN POLICIES. See Running Policies i. 317, 336 " ORDINARY DILIGENCE," meaning of . . . . . . . . . ii. 424 OUTFITS OF WHALING VOYAGE, . . . . i. 525 OVERINSURANCE. See Prior Insurance i 285 - 296 OWNERSHIP, warranty of ... . . 341, 342 652 INDEX. p. PAPERS, when false ones may be carried ..... i. 548 concealment of, a breach of warranty .... i. 549 PAROL AGREEMENT, to assign policy, with delivery, valid .... PARTIAL LOSS ii. 377-415 sometimes called particular average .... ii. 377 partial loss the better term .' . . . . . ii. 377 when a loss is not averaged, either generally or particularly ii. 378 may be of either ship, cargo, or freight . . . ii. 378 and may be caused by destruction ii. 378 or expenses incurred to secure safety '. . . . ii. 378 if vessel is towed into port for repairs, expenses of towage a partial loss . ii. 378 and to be met by that interest for which it was incurred ii. 378 so of expenses of navigating vessel from one port to another for similar purpose ....... ii. 378 or of launching stranded ship . . . . . ii. 378 if insurance is specifically on " ship while being launched," expenses then incurred in preventing injury would be ii. 378 unless made necessary by fault of those employed . ii. 378 so expenses of raising sunken vessel . . . . ii. 378 and damage of delay in port made necessary by pestilence there ii. 378 if stranded ship is got off", expenses of survey not a partial loss ... ii. 878 insurers not liable for commissions on disbursements for repairs made by owners ...... ii. 879 all necessary incidental charges generally allowed, if expenses themselves are adjusted as partial loss . . . ii. 379 I. Of Ship ii. 379 - 898 may be destruction of, or injury to, any part of anything included in term " ship " . . . . . . ii. 379 ship retains identity, however extensive or repeated repairs on her are ii. 380 if injury occurs through weakness of any appurtenance of ship, insured must satisfy jury of her sea-worthiness at time of sailing . . ... . . . . ii. 380 subsequent decay or weakness does not take away liability of insurers, though not caused by peril insured against . ii. 380 INDEX. 653 PARTIAL JjOSS, — Continued. unless decay has brought ship below standai-d of sea- worthi- ness, and ship has neglected to repair when opportunity afforded ii. 880 insurers not liable for injury unless caused by perils insured against ......... ii. 380 all losses for which insurers are liable, not caused by total loss or general average, belong to partial loss . . ii. 380 expenses of raising funds for partial loss to be paid for by insurer in proportion of liability for loss itself . . ii. 380 whether insurers are liable for expenses of crew during delay, when loss is not general average . . ii. 381, 382 practice not to hold them responsible . . . . ii. 383 indemnity determines portion of cost of repairs for which insurers are liable ....... ii. 383 and age or wear of ship does not relieve them . . . ii. 383 if not amounting to unseaworthiness . . . . ii. 383 if old materials are removed during repair, insurers cannot replace with those of similar character and value . . ii. 383 in such cases, deduction of one third new for old . . ii. 384 one Mth. for each year formerly deducted for copper sheathing ii. 384 no deduction of one third new for old made in England if vessel was new ....... ii. 385 or materials sacrificed were new . . . . . ii. 385 ship considered new if on first voyage . . . . ii. 385 difficulty of determining what is a first voyage in this sense ii. 385, n. 3 considered a question of fact . . . . . ii. 386 rule as to copper lately readopted . . . . . ii. 386 two and a half per cent deducted for each month . . ii. 386 in America, no deduction for new ship or materials . . ii. 386 no universal rule as to incidental expenses of repairs . ii. 386 local usage decides . . ii. 386 one third deducted in Boston ..... ii. 387 but this held unreasonable by Judge Story . . . ii. 387 whether similar deduction is to be made from expenses of raising submerged vessel ...... ii. 387 held not to be deducted, in Massachusetts . . . ii. 387 if old materials are replaced by new, they should belong to insurers ......... ii. 387 whether value of, shall be deducted from expenses of repair, and one third from residue ...... ii. 388 654 . INDEX. PARTIAL LOSS, — Oontinued. or one third from gross expenses, and value of materials from remaining two thirds ...... ii. 388 illustration of difference between ... . . ii. 388 depends upon question of ownership of old materials . ii. 388 these held in New York to belong to insured . . . ii. 388 and he deducts their value from cost of repair . . ii. 389 so held in Massachusetts ii. 389 practice now in conformity with these decisions . . ii. 389 the one-third rule adopted in one case of navigation on inland waters, and denied in another ii. 390 but now generally applied to Western steamers . . ii. 391 whether insurers are liable for expenses of a bottomry bond, and maritime interest thereon . . . . . ii. 392 if insurers order repairs, and bond is given for expenses thereof, they must pay the bond . - . . ii. 393 or be liable to insured for damages consequent on refusal ii. 393 deduction of one third not made from expenses of temporary repairs . . . ii. 394 if extraordinary expenses are incurred by fault of owner in raising funds for repairs, insurers not liable therefor . ii. 394 otherwise, for expenses necessarily incurred . . . ii. 394 repairs must conform to original construction of ship . ii. 394 and not sufficient if ship is merely rendered sea-worthy ii. 394 but need not be better than original character . . . ii. 394 if temporary repairs can be made in an expensive port, and ship carried to a cheaper one where permanent repairs can be made, master can do so . . . . . ii. 394 and he must exercise reasonable discretion . . . ii. 394 and in such case insurers liable for both . . . ii. 394 and one third to be deducted from whole . . . . ii. 394 temporary repairs made from necessity and for the general benefit belong to general average . but if for convenience of vessel, to partial loss difficulty of distinguishing .... sea-worthiness a useful test ... though not yet applied by courts as to expenses of collision .... insurers only liable for definite damages . this clear in itself ..... but adjudications somewhat complex illustrations of this ..... . i 395 ii 395 . ii. 395 ii. 395 . ii. 395 ii. 396 ii. 396 ii. 396 . ii. 396 ii. 396- 398 INDEX. 655 PAETIAL JjOSS, — Continued. master bound to regard interest of owners in question of ex- pense of repairs . ii. 398 and not of insurers . ii. 398 but must exercise reasonable discretion . . . ii. 398 cannot choose an expensive place because he knows ship to be insured ........ ii. 398 and if he does, insurers may found a partial defence thereon ii. 398 but they cannot require him to do otherwise than he would if ship were not insured ....... ii. 398 nor to delay repairs till ship reaches home . . . ii. 398 II. Of Goods 399-402 simplest case of, when goods are lost by peril insured against ii. 399 amount of loss ascertained by value of similar goods at port of destination ii. 399 but different cases may arise ..... ii. 399 expenses of ascertaining damage in such, if reasonable and proper, to be allowed ii. 399 so of expenses of truckage, storage, &e. . . . . ii. 399 duty of court to determine necessity of such extra charges ii. 400 but in English case, left to jury . . . . . ii. 400 if goods arrive damaged by sea peril, calculation of partial loss founded on their gross value . . . . . ii. 400 reason of this ........ ii. 400 reason illustrated ii. 400 if definite part of cargo is lost by peril insured against, not exceeding one half, this paid for by insurers as partial loss ii. 401 so if value is diminished ....... ii. 401 in such case valuation determined by valuation in policy ii. 401 or by invoice, in open policy ...... ii. 401 sale usual way of ascertaining damage ii. 401 and determines proportion of value lost by peril insured against ......... ii. 401 sale properly made at intermediate port on account of deteri- oration of goods presumed to be with consent of shipper ii. 401 though they might have arrived in specie at port of destina- tion ii. 401 and he is bound for payment of freight which might have been earned ......... ii. 402 if sale is on account of spontaneous combustion, or fermenta- tion, ship-owner has claim against insurer for loss of freight, if p,eril is insured against . . . . . . ii. 402 656 INDEX. PARTIAL LOSS, — ( or against shipper, if damage was not caused by peril of the sea ii. 402 shipper not bound to pay full freight fo^ sea-damaged goods ii. 402 but insurer not liable for loss . . . . . ■ . ii. 402 in. Op Freight ii. 402-404 duty of master to transship ...... ii. 402 if he fails to do so and freight is lost, insurers not liable ii. 403 not liable if he might send on, but sells, and so earns only pro rata freight . . .« . . . . . ii. 403 otherwise as to such part of goods as are damaged and cannot be sent on . . . . . . . . • ii. 403 if ship-owner is compelled to transship at a cost equal to whole amount of his freight, this a total loss of freight . . ii. 403 and insurers liable ....... ii. 403 if cost of transshipment exceeds whole freight, insurers liable for amount insured ....... ii. 404 and shippers of goods for excess ..... ii. 404 but this not settled . . ii. 404 IV. Adjustment of ii. 405 - 415 usually adjusted at port of destination . . . . ii. 405 facts necessary for, more easily ascertained there than else- where , . ii. 405 but not unfrequently delayed till return home . . ii. 405 especially if insurance was affected there . . . . ii. 405 difference between marine and fire policy . . . ii. 405 in fire policy, insurers held for whole amount insured . ii. 405 in marine, insurance covers only part . . . . ii. 405 insurers liable proportionally in partial loss . . . ii. 405 whether in open or valued policy ..... ii. 406 A. Adjustment of, on Ship . . . . . , . ii. 406, 407 if policy is not valued, actual worth to owner at port of beginning of voyage the basis of adjustment . ii. 406 including outfit, stores, wages, premiums, and cost of in- surance ii. 406 where ship suffers partial and then total loss, without first repairing partial, the claim for total loss exhausts lia- bility of insurer ...;... ii. 407 but if partial loss is repaired, and total loss then takes place, insured may recover for both . . . . ii. 407 unless this is forbidden in policy . . . . ii. 407 if ship is valued in two different policies, at different INDEX. 667 PARTIAL LOSS, — Continued. sums, insured claiming under one policy is not limited by valuation in other policy . . . . . ii. 407 B. Adjustment of , on Goods ii. 408-415 basis of, prime cost, adding expenses of getting on board at port of lading ....... ii. 408 and selling price at port of destination covers freight ii. 409 but this applies only to open policies . . . ii. 409 if valuation of goods includes expected profits, and is known to be so intended, insured bound by it . ii. 409 proportion of value lost by sea damage ascertained in England by comparing gross sales of sound with gross sales of damaged goods ii- 409 similar practice in America ii. 410 if articles several in their nature are damaged, and loss determined by sale, adjustment on each must be sep- arate ii. 410 this sometimes provided for in policy . . . ii. 410 if not, law so provides ...... ii. 410 insurers not liable for damages occasioned by manner of ' sale . ii. 411 expenses of sale, brokerage, &c. added to loss, and ap- portioned by adjuster . . . . . . ii. 411 ship may sell at intermediate port goods so damaged as to be unfit to carry on . . . . . . ii. 411 this a loss with salvage ..... ii. 411 amount of loss difference between prime cost and pro- ceeds of sale . . . . . . . ii. 411 deducting charges and freight due . . . ii. 411 if pro rata freight is earned, partial loss estimated by deducting it from whole freight .... ii. 412 amount paid for transshipment, amount of partial loss ii. 412' if goods are not transshipped, estimated cost of is de- ducted from whole freight and charges . . . ii. 412 this may be estimated by geographical proportion of dis- tance . ii. 412 commercial method, that of payment by shipper for benefit actually received . . . . . ii. 412 this the method in this country . . . . ii. 412 adjustment effected by fraud void . . . . ii. 413 so if founded on material mistake of fact . . ii. 414 but in last case may be opened for correction . . ii. 414 VOL. II. 42 658 INDEX. PARTIAL LOSS, — Continued. courts reluctant to admit local usages, as in force against accepted principles of law merchant . . . ii. 414 compromise, instead of adjustment, good . . . ii. 414 when if one part owner, authorized to insure, com- promises loss, the other may elect to consider com- promise made for benefit of both . . . ii. 414 or he may deny authority of compromising party, and recover from him the amount he could have claimed from insurers had no compromise been made . . ii. 414 PAROL EVIDENCE. ,S«e Construction, § vi. . i. 107-114 PARTICULAR AVERAGE. See Partial Loss. . ii. 377 - 415 PARTIES TO CONTRACT OF INSURANCE. See Insurance, § ii •. . i. 18-34 PARTIES, intention of. See Construction, § iii. . . . i. 71 - 76 PARTNERSHIP, domicile of . . . . . . . . . i. 32 PART OWNER, insurance of, presumed of separate interest . . ii. 463, 465 of ship bound by character of, as to neutrality . " . i. 344 PARTY, which shall be favored. /Sfee Construction, § ii. . i. 67-71 " PEAS," included within the term " corn " . . . . i. 627 PECULIAR WORDS. /S'ee Construction, § iv i. 77-81 " PEOPLE," meaning of phrase ....... j. 584 PERIL OF THE SEA, meaning and extent of. See Risks, § iii. . . i. 544 - 558 PLACE, law of. (See Construction, § xi. . . . i. 132-135 of bringing action on policy. See Action. . . . ii. 482 PILOTAGE, necessity of i. 384-385 PIRATES, loss from. iSee Risks, § v i. 563-566 POLICIES OF INSURANCE i. 43-63 void by breach of condition, not revived by mere waiver i. 42 issue of, waiver of things to be done before completion of con- tract i. 42 INDEX. 659 POLICIES OP mSUUANCE,— Continued. I. Form and Essentials op 43-51 . i. 43 i. 43 . i. 43 i. 43 . i. 44 i. 44 . i. 44 i. 44 vary in different States ..... general English form retained inconvenience of change inaccurate phraseology of ... . subscribed by insurers only . . . , evidence of contract binding both parties binds insured from inception of the risk but not until such inception .... binds insurers, though premium has not been paid . . i. 44 and though policy provides that there shall be no insurance till payment . i. 44 delivered after date, takes effect from date if so intended . i. 44 General Glauses, Meaning and Application of . . i. 45 - 48 without such, interest of person named alone covered i. 45 no other can show intent to cover his interest . . i. 45 " aU whom it may concern," meaning of . . . . i. 45 party not named may prove interest under . . i. 45 determined by intent of party named . . . . i. 46 though he had no authority to insure . . . i. 47 to be valid must be for benefit of party ratifying . . i. 47 payment of loss to him exonerates insurers . . i. 46 application of, to mutual insurance companies . . i. 46 any party may sue under, as on independent policy . i. 48 unless policy shows a joint contract . . . . i. 48 extends to insuring A " for " if blank were in- tended to be filled . . . . . . . i. 48 and so where party named is described as " agent " i. 48 assignment under, subjects assignee to existing claims against assignor . . . . . . . i. 56 " on account of owners," meaning of . . . . . i. 47 " on account of whom it may concern at time of loss," mean- ing of i. 47 covers assignees of property insured . . . . i. 47 extends to any kind of interest in the property . i. 47 independent of intent . . . . . . . i. 47 " A, as agent for B," covers B's interest alone . . i. 48 suit may sometimes be brought in name of party named i. 49 but not if disavowed before suit by party in interest, ex- cept for lien • . . . . . . . i. 49 660 INDEX. POLICIES OF INSURANCE,— ObKiiwMec?. but no defence inapplicable to party in interest can be made i- 49 Agent effecting Insurance i- 49 must have full power . . . • • • !• 49 authority of, may be derived from circumstances . . i. 49 or usage ........ i- 49 general authority insufficient . . . . . i. 49 ship's husband, without authority of owner, cannot in- sure for them . • • . • • • • i- 49 nor master sailing on shares, owner's interest in freight i. 49 liability of, for premium i- 503, 504 Ratification of Acts of i. 49, 50 same principles apply as in other contracts . . . i. 49 by principal, valid, even after loss . . . . i- 49 suit brought in name of principal a ratification . . i. 50 if none appear, agent's interest alone recoverable . i. 50 consignee and warehouse-man, describing property in- sured as goods in trust, may recover full value . . i. 50 II. Assignment and Negotiability of . . . i. 52 - 63 . i. 52 i. 52 . i. 53 i. 53 - 63 . i. 52 i. 52 i. 52,n. 3 i. 53 . i. 53 i. 54 same rules apply as in other choses in action policy not negotiable ..... parol agreement and delivery an assignment Rights of Assignee ..... to sue in name of assignor .... interest equitable, without notice to insurer action to be brought in name of assignor enforced, at law ..... equity will not interfere, without special reason subject to existing claims against assignor even under clause " for whom it may concern " . . i. 56 assignor, after assent of insurers, cannot prejudice the rights of assignee i. 53 except in insurance by mortgagor in his own name, with loss payable to mortgagee i. 53 new obligations imposed by insurers ou transferee may make new contract . i. 54 then mortgagor cannot prejudice his rights as trans- feree ■ i. 54 notice to be given to insurer . . . . . i. 54 no notice of claims by insurers on assignor a waiver thereof i. 55 INDEX. 661 POLICIES OF mSVRA'NCE, — Continued. Where Subject of Insurance is assigned . . . i. 55 - 63 under clause "loss payable to owner at time of loss" i. 56 assignee takes subject to rights between assignor and in- surers • . . . i. 56 when assignment or sale discharges insurer . . i. 56 policy does not pass as incident to property assigned . i. 56 otherwise in France i. 56 whether assignee may bring action in name of assignor i. 56-58 the question discussed i. 56-58 reassignment before loss may revive assignor's righis . i. 58 but not for loss while property was in hands of as- signee i. 58 assignor may retain property as trustee . . . i. 59 and as such may hold policy i. 59 but must, by agreement, retain insurable interest . i. 59 seller, under conditional sale, may retain policy . . i. 59 if he remain in possession i. 59 clause that assignment without consent shall avoid policy valid i. 60 but hot applicable to assignments in insolvency . i. 60 applicable to assignments by one partner to another, on principle i. 61 but not settled on authority . . . . . i. 61 not applicable to assignment after loss . . . . i. 61 whether parties may stipulate otherwise, doubtful . i. 63 on death of insured, policy goes to administrator . . i. 63 policy may provide for notice of change of master . i. 63 then on loss without such notice, although without negli- gence, insured cannot recover i. 63 PORTS, situation of, need not be named i. 489 intermediate loss at. See Intermediate Port. . ii. 99 - 103 warranties as to. *See Warranties. . . . i. 363-401 insurance to ....... ii. 53-55, 58 liberty to touch at ii. 16-28 order in which they should be visited ii. 25 PRELIMINARY PROOF, ii. 473-477 PREMIUM i. 502-517 presumed to be included in valuation . . . . i. 243 I. What it is, and who are liable therefor . . i. 502 662 INDEX. PREMIUM, — Continued. definition of i. 502 due on delivery of policy i. 502 usually in form of promissory note . . . . . i. 502 policies acknowledge receipt of i. 502 this not conclusive . . . i. 502 and parol evidence admissible to controvert . . . i. 502 but not to avoid the policy . . . . . . i. 502 if payment of, is by policy condition precedent, this may be waived . . i. 502 if credit for can be inferred, policy valid . . .. i. 503 Who is liable i. 503-504 in England, the broker ...... i. 503 who can recover amount of insured, as money paid . i. 503 even before actual payment ..... i. 503 in America, the actual owner . . . . . i. 503 even if note of agent or broker is taken . i. 503, 504 unless the insurers knew the agent was not acting for himself i. 504 right of insurers to elect to hold owner or agent . . i. 504 but this may be waived ..... i. 504 clause in American policies gives insurers right to deduct premium in case of loss ..... i. 504 but insurers have the same right without this clause . i. 504 II. Return op necessary if risk never attached or no part thereof ..... even for breach of warranty . but otherwise if breach occur after attaching of Agreement that Insurers shall retain Part . usual in foreign policies .... reason therefor .... not usual in America without stipulation usual at Lloyd's .... Proportional Return .... Not allowable ..... if policy is on time, at entire premium . though loss occurs after expiration of small part if a gross sum is to be paid at once though at a specified rate per month . in an insurance " at and from," though the risk " from " never attached i. 507 i. 505 .505; 1. risk -517 ii. 36 505 . i. 506 . 506, n. 2 . i. 506 i. 506 . 506, n. 4 . 506, n. 4 , 506, n. 4 506-512 506-508 i. 507 . i. 507 i. 507 . i. 507 INDEX. 663 PREMIUM, — Continued. if a ship becomes unseaworthy after the risk begins . i. 507 in short, if interest to extent insured was at any time covered i. 507, 512 if the premium is entire ..... i. 508, 512 though the voyage consists of distinct passages . i. 508 Allowable i. 507 by usage i. 507, n. 6, 512 if the voyage consist of severable passages for which the risk is severable i. 508 . by intent of parties i. 508, n. 1, 512 in insurance on ship and cargo, if vessel sails without cargo ......... i. 508 if part only of the goods are shipped . . . i. 508 so in valued policy i. 508, n. 3 rules applicable to, unsettled i. 511 parties may agree beforehand as to conditions for . . i. 512 if premium is entire, risk presumed not severable . i. 508, 512 but rebutted by clauses showing different intent . . i. 512 or by usage . i. 508, 512 in simultaneous insurances on same subject . . . i. 512 same rules applicable if insurances not simultaneous . i. 512. except when later ones were not made till earlier ones had attached i. 512 then no return from earlier policies in over-insurance . i. 512 in the later a proportional return . . . . . i. 512 if subject is so erroneously described that policy does not attach . . i. 509 and if policy was issued by one without authority . . i. 509 if company vote to cancel, giving notice to the insured, and insured take no part in cancellation, insured liable for pre- mium ......... i. 510 insurers entitled to premium if insured could, by confirmation, have entitled himself to a claim for loss . . . i. 510 but this confined to those cases in which there is some ap- pearance of authority to agent i. 511 in agreement to insure all shipments for a certain time, in- sured bound to pay for each shipment . . . i. 511 clause for return of, on, so much interest as insurer shall be discharged from by prior insurance . . . . i. 513 this not applicable to excess by simultaneous policies . . i. 513 664 INDEX. PREMIUM, — Continued. formerly held that first insurers in over-insurance in same policy were liable for the whole i. 513 and subsequent insurers discharged . . . . i. 514 but otherwise now i. 514 evidence of oral bargain to reduce premium not admissible i. 514 clauses for return of, on certain contingencies . . . i. 514 " if vessel sails with convoy and arrives " . . . i. 514 insurers liable if part of cargo is lost . . . . i. 514 fraud of insurer makes return necessary . . . i. 515 otherwise where both parties are fraudulent . . . i. 515 premium returnable if fraud is known to neither . . i. 516 if policy is avoided from beginning, premium returnable . i. 51 6 unless insured were fraudulent . . . '. . i. 516 if premium is unpaid, right to return becomes defence against claim i. 516 if paid by negotiable note, premium to be returned as if paid in cash .;...... i. 516 if policy is assigned, return of premium does not pass . i. 517 PEINCIPAL. fe Agent ii. 416-440 PRIOR INSURANCE i. 285-296 danger of fraud, if same property were insured by different insurers against same risks ..... i. 285 policies usually contain provision that insurers are liable only for so much as is uninsured ...... i. 285 intention of this ........ i. 285 priority not of beginning of risk .... . i. 285 but in effecting insurance i. 285 determined by time of contract . . . . . i. 285 date only pnma facie evidence ..... i. 285 and may be contradicted by proof . . . . . i. 285 when fractions of day not regarded . . . . i. 286 two or more policies being made on same day, time of day determines i. 287 n. if first policy covers whole property, second is suspended . i. 287 and attaches, if first ends before second . . . i. 287, n. 2 prior policy defined i. 288 owner may insure different articles in separate policies against different risks ........ i. 288 if possessed of different interest in same property, may insure i. 288 policies attach as long as property sufficient in amount remains on board i. 288 INDEX. 665 PEIOE INSURANCE,— CoMiiwMerf. if property is diminished to less than amount of all policies, effect not determined ....... i. 288 one rule, that last is first discharged, and so on . . i. 288 another, that joro rata diminution takes place . . . i. 288 depends on determination of " American clause " . . i. 289 form of this clause ........ i. 290 discussion of ...*..... i. 291 policies not containing, regarded, if for same parties, on same property, and against same risks, as one . . i. 292, 293 and insurer may recover from any one . . . . i. 294 but cannot, from all, more than amount of loss . . . i. 294 this rule founded on the principle of guaranty . . i. 294 different insurers have among themselves right of contribu- tion i. 294 if whole amount of property is less than amount insured, insurers contribute ratably to return of premium . i. 295 different English rule . . ' . . . . i. 295 n. American clause does not apply to simultaneous policies . i. 295 rule as to, same as of successive, not containing clause . i. 295 to apply this rule, policies frequently declared to be simul- taneous ......... i. 295 if so declared, will be so held though differently dated . i. 295 if of same date, with nothing said, presumption that they were simultaneous ....... i. 295 but rebuttable by proof . . . . . . i. 296 if made on same day, and proof that one was signed before the other is shown, further proof of intention of simultane- ousness admissible ....... i. 296 PROFITS, abandonment of. jSfee Constructive Total Loss. ii. 160-172 valuation of . ........ i. 280 how insured ......... i. 280 insurable interest in. See Interest, § iv. . . i. 191 - Wo PROHIBITED TRADE, loss from. See Risks, § xi i. 541 - 544 PROPOSALS TO INSURE. See Insurance. . . . i. 37 PROTEST, when admissible in evidence . . . . . . ii 520 PROVISIONS, covered by insurance on " ship " . . . . . ' i. 524 666 INDEX. Q- QUADRANTS, included under term " ship " V 525 QUARANTINE, as affecting policy ....... . ii. 59 QUESTIONS OF CONSTRUCTION, what are for court, and whSit for jury. See Construction. § xii i. 135 - 137 R. RANSOM BILLS . i. 18, n. 3 RATIFICATION OF INSURANCE, how it should be made ...... i. 49, 50 RATS, loss by, whether peril of the sea . . . . i. 545, n. 4 " REASONABLE CARE," meaning of . . . . . . ._ . ii. 424, n. 2 RECOVERY BACK, of money paid under mistake of fact . . . . ii. 488 none if paid under mistake of law .... ii. 488 REINSURANCE, OF i. 297-303 insurer has interest to amount of risk .... i. 297 and may reinsure ........ i. 297 often done in closing up business ..... i. 297 or to lessen responsibility ...... i. 298 or because danger of loss is increased .... i. 298 or to divide risks ........ i. 298 reinsured stands in same relations to reinsurer, as insured does to him i. 299 and reinsurer may make same defences as original insurer i. 299 and may have others which insurer had not . . . i. 299 * if insurer withholds information as to character of insured, in effecting reinsurance, policy is avoided . . . i. 299 n. so held in fire policy ...... i. 299 n. and applicable to marine ...... i. 300 other defences ........ 1. 300 reinsured not bound to pay his insured, before calling on rein- surer i. 300 reinsured has claim, though insolvent .... i. 300 amount being measured by premium paid . . . i. 300 INDEX. 667 KEINSUEANCE, 0¥, — Continued, * • original insured has no interest in policy of reinsurance . i. 301 reinsurer may include amount of premium paid for reinsur- ance in the policy ....... i. 301 qucBre, whether original premium paid to him can be in- cluded i. 301 discussion of this question i. 301 prohibited in England, except in case of insolvency or death i. 301 origin of prohibition i. 301 all reinsurances made in England void, notwithstanding sub- ject or nationality of reinsurer ..... i. 302 sometimes effected, though not under name of . . . i. 302 as carrier, insures against risks he incurs . . . i. 802 and owners of vessels answerable for faults of employees, against those risks . . . . . . . i. 302 owner who has sold vessel stipulating to bear certain risks may insure ......... i. 303 when insurance is not on property of insured, but against risk he bears, this is in nature of ..... i. 303 REMOTE LOSS i. 534, 553, 554, 555, 621 EEMOVAL OF CARGO ii. 63 REPRESENTATION i. 402 - 467 law relating to, somewhat difficult .... i. 402 what constitutes a . ... . . . . . i. 402 may be oral ........ i. 402 or in writing ......... i. 402 or by exhibition of any written or or printed paper . i. 402 if representation is false, policy avoided . . . . i. 402 this well established i. 402 ground of rule uncertain ....... i. 403 discussion as to . . . . . . . i. 403 - 407 differ from warranties ....... i. 407 whether statements in policy are warranties or stipulations i. 407,' 408 differ from warranties in respect to materiality . . i. 408 false representation ineffectual, unless material . . i. 408 if false representation could influence insurer, held to be material . i. 409 whether it actually did or not i. 410 insurers discharged, if able to show false representations to have influenced them . . . . . . i. 411 if previous policy is used as decoy, subsequent policy void i. 411 668 INDEX. REPRESENTATION, — Gmiinued. misrepresentation may be made without words . . i. 411 if insured falsely states insurance on property to have been effected elsewhere at same rates, subsequent policy avoided i. 411 whether material or not . . . . . . i. 412 misrepresentation avoids, whether statement were necessary or not i. 413 if made in reply to specific inquiry, question of materialness excluded . . i. 413 all intelligence must be communic'Sted to insurers . . i. 414 and rumors concerning property ..... i. 414 though wholly erroneous i. 414 this rule limited to cases wherein is something of fraud . i. 415 whether insured should communicate rumors if honestly be- lieving them false ....... i. 415 J^isrepresentations may he classified . . . . i. 415 positive affirmation of material fact . . . . i. 415 statement of belief or opinion . . . . i. 415 intelligence or rumors . . . ... . i. 415 materiality a test in all cases . . . . . i. 415 when actual fraud may not defeat policy, unless insurers are injured i. 415, 416 whether insured is estopped from denying materiality of mis- representation if made with intent to deceive insurers i. 417 representation may be implied by policy . . i. 417, n. 2 must be construed according to reasonable meaning of words i. 418 rules in regard to, difficult to dettrmine . . . i, 418 - 420 this question discussed i. 420, 421 enough if representation is substantially complied with . i. 421 difficult to say what is compliance i. 422 literal compliance not sufficient if not substantial . . i. 423 illustration of this ........ i. 424 insurers cannot take advantage of misrepresentation unless making their risk greater i. 425 whether, if representation is ambiguous . . . . i. 425 effect of ambiguous representation if honestly made by in- sured, and understood in different sense by insurers i. 426, 427 n. ambiguity would be held apparent . . . . i. 428 and insurers obliged to question further . . . . i. 428 so held by Supreme Court of United States . . . i. 428 representation of future fact may be promise or expectation i. 429 INDEX. 669 « EEPRESENTATION, — Continued. if promise, binds insured ..... i. 429, n. 2 distinction in such case, between party who can make words good and one who cannot ..... i. 429 if party who cannot, uses words meaning promise, still held i. 430 representation of future fact may vary from stipulations of policy i. 430 policy in such case governs i. 430 words of representation construed with those of policy . i. 430 except as modified in oral representation . . . i. 431 usage governs in such cases . . . . . . i. 431- but positive representation controls usage . . . i. 432 established usage to be taken as part of contract . . i. 433 and in such case governs representation . . i. 434, 435 this rule doubted ........ i. 435 the question discussed . i. 436 Representations respecting Time . . •. . i. 436-444 refer to time of subscribing contract . . . i. 436 if made for purpose of obtaining insurance previous to - making of policy in question, held to be repeated only i. 437 insured may withdraw, or qualify it when policy is made i. 437 and must make it conform to his knowledge at that time i. 437 force of this obligation not fully determined . . i. 438 if insured, after requesting insurance, learns new facts of importance, he must communicate the same at once i. 438 but is not bound to make extraordinary effort . . i. 438 if possible to send by mail in time, must do so . i. 438 but need not use an express . . . . . i. 438 must use telegraph if possible . . . . i. 439 n. representation that vessel will not sail till certain time, means that pohcy shall not attach till that time . i. 439 till then policy does not attach . . . . i. 440 if representation is, " at certain place at certain time," insurers not liable for injuries previously undergone i. 440 even though policy contains " lost or not lost " . . i. 440 how it is when policy is dependent on loading of goods i. 441 the question discussed i. 442 - 444 statement of opinion as to construction of words of policy does not defeat, though erroneous i. 444 stipulation tp return part of premium " for convoy," held to be representation of probability of convoy . . i. 445, n. 1 670 INDEX. REPRESENTATION, —Cbwimwerf. whether a statement looking to the 'future is to be regarded as expectation only ....... i. 446 so held in Massachusetts i. 446 promissory representations, obscurity as to . . i. 446, 447 policy defeated if promissory representation is not carried out i. 448 warranties, discussion as to i. 449 " same as warranty," meaning of . . . . i. 449, 451 whether refusal of warranty is equivalent to representa- tion , . . . . i. 452, n. 2 if insured makes representation giving insurer his reasons ■ therefor, incorrectness of, does not avoid policy . i. 453, 454 otherwise if statement is made without showing authority . i. 453 if insured gives insurers letter from agent, a virtual adoption of statement therein contained ..... i. 454 modifications of this rule i. 454-459 what is substantial compliance with innocent representation i. 459 representation loses effect if revoked before policy is signed i. 460 may be made by subsequent statement controlUng prior one i. 460 may be severable i. 461 if partial misrepresentation affects whole risk, policy is avoided ......... i. 461 if true when made, and afterwards becomes untrue, no retro- active effect . . i. 462 insurers liable for losses previously occurring . . i. 462 whether materiality is a question of law or fact . . i. 463 in America, one of fact ....... i. 464 What Degree of Falsity avoids Policy . . . i. 465, 466 test of i. 465 if falsified by third party, effect doubtful . . . i. 465 not avoided by representation in futuro, unless in the nature of proviso ....... i. 465 non-performance discharges underwriters, if beyond con- trol of insured i. 466 RESCISSION OF PROPOSAL TO INSURE , . i 37-41, 42 RESCUE i. 350, n. 3 RESPONDENTIA, BOTTOMRY AND, insurable interest of a lender on. See Interest, § vji. i. 208 - 226 RESPONSIBILITY OF INSURERS. &e Risks, § i. i. 532-541 RESTRAINT, loss from. See Risks, § vii i. 575 - 589 RETURN OF PREMIUM. &e Premium, § ii. . . i. 505-517 INDEX. 671 34 ■194 . i. 532- 638 . ii. 43 -67 . i. 532 - -541 i. 532 . i. 532 i. 533 - 536 • i* 533 533 533 REVENUE LAWS, contract of insurance in violation of foreign, not void REVOCATION OF ABANDONMENT. See Constructive Total Loss, § ix. . . i. 190 - RICE, not included within term " corn " . . . . . i. 628 RIGGING, covered by " ship " i. 524 RISKS COVERED BY POLICY .... Commencement and End of. See Termini . I. General Responsibility of Insurers insured never indemnified against his own act nor for loss caused directly by his own misconduct Application of Principle to Misconduct of Agents hable for acts of agents acting as such and not insured against loss thence arising unless insurer intended to insure such risks master, officers, and crew, agents of owner . . i and insurer not liable for loss caused directly by their neglect, ignorance, or fault . . . . i. where unseaworthiness is caused by negligence of mas- ter and crew ....... i. when insurers of cargo liable, although fault of servants of ship-owner subjects him to claim by shipper . i. 535 but shipper must transfer claim to insurers . . i. 535 loss not attributed to fault of crew which can as well be accounted for by perils insured . . . . i. 535 insurers liable for loss by crime of crew . . i. 535 unless the owner can be connected with it . . . i. 535 and the mere act of employing them not sufficient for this i. 535 owner liable for acts and neglect of agents appointed by him while representing him . . . . . i. 535 but owner must employ them voluntarily . i. 535, 536 and therefore not responsible for loss by pilot required by law i. 536 nor by pilot exhibiting evidence of legal commission . i. 536 limited to extraordinary risks .... i. 537, 545 not responsible for loss from common weather, waves, or winds i. 539 but only for extraordinary consequences . . . . i. 539 nor for effects of time or wear i. 540 533 533 534 672 INDEX. RISKS COVERED BY -POJACY, — Continued. right of insured to have ship put in same condition as before accident i. 540 insurers not liable for effects of ordinary leakage . . i. 540 or for common breakage or like deterioration . . . i. 540 nature and circumstances of the loss to be considered . i. 540 not liable for indefinite deterioration of the ship . . i. 541 nor for loss caused by qualities of thing lost . . . i. 541 nor by inherent defects or tendencies . . . . i. 541 this not applicable to such tendencies when excited by perils insured pgainst i. 541 II. Losses from Pkohibited ob Contraband Trade i. 541-544 contract violating foreign revenue laws not void . i. 34, 541 insurers assume contraband risk, if contraband articles are named in policy ........ i. 542 even with warranty against prohibited trade, if goods are known to be prohibited at port of destination . . i. 542 insurers not liable for, if excepted by policy, unless something in policy controls exception i. 542 if such trade is intended, and nothing equivalent to notice, insurers not liable i. 542 insurers liable for, without intent and knowledge of insured i. 543 when liable for losses by war after making policy for violation of regulations unknown to insured when policy was made i. 543 when liable for loss by capture for violation of blockade not actually made . . . . . . . i. 543, 544 III. Perils op the Sea i. 544-558 A. Perils generally ....... i. 544-549 " all other perils " embraces only such as are similar to those enumerated ...... i. 544 " perils of the sea " covers those from extraordinary action of the wind and sea ... . . . i. 544 and from inevitable accidents of navigation . . i. 545 does not cover loss by worms . . . . . i. 545 ' nor loss by rats i. 545 unless insured had made all reasonable efforts to extir- pate them ........ i. 545 whether, if rats eat holes in ship . . . i. 545, n. 4 insurers liable if goods are damaged by contact with sea-water ........ i. 546 whether, if other goods are damaged by vapor arising from them i. 546 INDEX. ■ 673 RISKS COVERED BY FOJACY ^—Co7ttinued. covers loss by stranding i. 546 unless happening in usual course of navigation . . i. 546 and then if a heavy swell causes injury . . . i. 547 vrhether, if ship is injured while hove down . . i. 547 ship unheard from after reasonable time presumed to have perished . . . . . . . i. 547 and by peril of the sea . . . . . . i. 548 length of time necessary to raise presumption depends on circumstances of case ..... i. 548 ship deviating to repair damages from peril insured against, at expense of insurers . . . . i. 548 cost of delay by wind and ice to be borne by owner i. 549 if voyage is afterwards performed . . . . i. 549 B. Wlien and how far Collision is a Peril of the Sea . i. 549, 650 caused by wind, waves, or tide . . . . i. 649 where caused by wind in part and negligence of the crew in part i. 549 insurers liable for loss by peril of the sea put in opera- tion by negligence of the crew . . . . i. 549 so if caused by wilful act of master, unless it is barratry i. 550 whether such act is barratrous i. 560 C. For what Effects of Collision Insurers are answerable i. 550 - 558 for damage without fault or with mutual fault . i. 550 deducting one third new for old i. 550 loss by fault of vessel injuring . . . i. 550, 551 insurers subrogated to rights of insured . . . i. 651 loss by her own fault i. 561 whether for compensation to a third vessel by the same collision . i. 551 conflicting decisions . . . . . . i. 551 insurers liable only for damage to vessel insured . i. 562 not liable for compensation due from it to the other vessel for injury inflicted by the vessel insured . . i. 652 proximate cause to be regarded . i. 534, 653, 554, 555, 621 causa proxima, non remota spectatur, discussion of the rule i. 653 - 557 a loss of this kind now usually provided for in policy . i. 567 IV. Losses feom Fire i. 658 - 563 whether a peril of the sea i. 558 now specifically insured against in most policies . . i. 568 insurers not liable, if caused by an inherent defect of subject i. 658 VOL. II. 43 674 INDEX. RISKS COVERED BY FOLICY, — Continued. liable if ship is burned by authorities through fear of con- tagion . . . . . . ■ . . . . i- 558 and if burned by master to prevent capture . . . i. 558 whether, in such case, if loss by capture is excepted . . i. 558 not liable for extraordinary effeets of ordinary fire without ignition i. 559 nor by explosion of boiler i. 559, n. 1 insurers how far liable for expenses in arresting fire . i. 560 and for injuries sustained during such endeavors . i. 561, 562 risk does not cease on ship and furniture, if part is taken on shore in usual course of events . . . . . i. 563 this not applicable to cargo landed for barter . . . i. 563 V. Loss BY Pirates, Robbers, or Thieves. . i. 563-566 insurers usually held liable for loss by acts amounting to piracy and robbery . . . . . . . i. 563 even if committed by crew i. 563 provided due care is used to prevent . . . . i, 563 whether loss by theft "without violence is within clause as to i. 564 insurers liable for loss by larceny, in insurance against theft i. 564 " assailing thieves " covers only theft from without with vio- . lence . . i. 565 wrongful sale by consul in foreign port not a loss within policy i. 566 if loss occurs by robbery in consequence of shipwreck, insur- ers liable i. 566 though loss by theft was not insured against . . . i. 566 VI. Loss BY Barratry i. 566-575 dispute as to meaning . . . . . . . i. 566 any wrongful act of master, officers, or crew against owner i. 566 any one having interest in ship, cargo, or freight may insure against i. 567 act must be wrongful and wrongfully intended . . i. 567 when intention adverse to owner not necessary . . . i. 567 violation of law by master without instructions, believing it for owner's advantage i. 567 not if an act is done for his benefit through mistaken idea i. 567, 568 if master unnecessarily undergoes extraordinary peril . i. 368 where if act is done by master for his own benefit . . i. 568 gross negligence alone may be i. 568 mere nonfeasance may be ...... i. 568 IND-KX. 675 RISKS COVERED BY FOJACY,— Continued. sale of tackle, apparel, or furniture. by master of whaling ship held to be i. 569 so conversion of money furnished by owners to purchase sup- plies .......... i. 569 applies to carriers by land . ' . . . . . i. 570 deviation generally not barratrous . . . . . i. 570 insurers responsible for seizure occasioned by barratry . i. 570 though not for illegal trade, or seizure occasioned by . i. 570 if owners do not prevent an act which would be barratrous, if in their power, this equivalent to assent , . i. 571 master, if sole owner of ship, cannot commit, against other parties in interest ....... i. 571 but master who is part owner may . . . i. 571, n. 4 if master has equitable title to ship he cannot commit barra- try i. 572 but fraudulent title will not prevent act from being barratrous i. 572 master's act as supercargo, consignee, or factor is not . i. 572 if owner and master fail to guard against misconduct of crew, insurers not liable for loss caused thereby . . . i. 573 otherwise if proper care and diligence are used . i. 573 insurance against, by master and crew, includes larcenies and embezzlements by them . . . . . i. 574 but not petty thefts i. 57*4 if barratrous acts are committed while person 'committing them is insane, insurers -not liable . . . . . i. 574 even though insanity was produced by use of intoxicating liquors ......... i. 574 otherwise if committed during ordinary intoxication . . i. 574 VII. Loss BY Capture, Arrest, Detention, or Restraint i. 575-589 " against captures at sea, arrests, restraints, detentions of kings, princes, and peoples " ..... i. 575 covers all, by public enemies, belligerents! or government of insured, if not for breach of law i. 575 " capture," discussion as to meaning of . . . i. 675 - 584 sometimes limited to taking of ships as belligerents . i. 575 or to forcible seizure by act of government . . i. 575 sometimes held to mean seizure by any person whatever i. 575 whether this last the proper ruling . . . i. 576, 578 Massachusetts doctrine .... i. 578, n. 6-580 this doctrine discussed . . . . .1.580-534 " capture" and " seizure " i. 594 676 INDEX. EISKS COVERED BY POLICY, — Continued. " arrest " and " detention " i. 584 whether master has a right to abandon, on receiving notice of blockade of port of destination . . . . i. 585, 586 restraint must be actual and operative . . . . i. 587 insurers not liable if seizure is caused by unlawful act of master i. 588 otherwise, if master had the right and acted in good faith i. 588 though the seizure might have been avoided . . . i. 588 where the legality of seizure depends upon right to exercise jurisdiction ......... i. 588 insurers not liable for detention by suit of government against master ........ i. 588 YIII. Loss BY Payment of Salvage . . . i. 590 - 609 meant originally in law-merchant property saved in case of wreck i. 590 in mercantile usage means also so much of property as courts give to salvors ........ i, 590 insurers liable for amount decreed as payable to salvors i. 590 defence in such suit for their benefit . . . . . i. 590 a subject of admiralty jurisdiction i. 590 A. Rules of Practice i. 590-592 may be successive salvors i. 590 but all must join in one libel . . . . . i. 591 . this strongly insisted upon . . . . . i. 591 ad verge claimants may file separate libels . . i.-591, n. 2 but court may then consolidate them . . . i. 592 claims for freight must be in separate . . . i. 592 or for general average i. 592 or on proceeds of property saved . . . . i. 592 B, Who may be Salvors i. 592 - 600 no one can claim as, for act it was his duty to do . i. 592 services without obligation the essence of salvage clainj i. 593 objects of this rule i. 593, 594 sailors on board cannot claim . . . . . i. 594 but courts will act equitably towards . . . i. 595 and towards pilots i. 595 fact of master's refusal to receive assistance always con- sidered, in determining salvage claim . . . i. 596 if assistance was needed, refusal of no effect . . .i. 596 n. oiRcers and crews of national vessels may claim as . i. 597 but not for suppressing mutiny . . . . i. 597 but courts will award salvage for extraordinary perils or efforts i. 597 n. INDEX. 677 EISKS COVERED BY TOLICY, — Continued. claim of steara vessels as, favorably considered . . i. 598 if part of crew stay behind, and part carry vessel in, both entitled to claim as . . . . . i. 599 claim of those staying behind not always allowed . i. 599 owners of saving ship may claim as . . . . i. 600 vessel sent by insurers to aid insured ship cannot claim i. 600 C. What is Salvage Service ..... i. 601 - 603 peril avoided by, must be extraordinary . . . i. 601 and one exposing property to destruction . . i. 601 if ordinary means within master's reach would save ship, generally no salvage claim by assisting parties . i. 601 but they may claim for time and labor . . . i. 601 if ordinary means are not available, salvors have claim i. 601 insurers are not liable for claim of salvors, if ship-owner does not provide proper means of safety . i. 601 if master has means and does not use them, salvors may claim ......... i. C02 insurer's liability depends on circumstances of each case i. 602 so if master wilfully imperils property . . . i. 602 knowledge of salvors of captain's fraud, with no partici- pation in, does not defeat claim . . . . i. 602 otherwise, if they could have prevented danger, and did not i. 602 danger must be real and certain . . . . i. 602 line of distinction difficult to draw . . . . i. 602 admiralty determines each case . . . . i. 602 so, too, when question of services rendered is doubtful i. 603 D. On what Property Salvage is allowed . . i. 604 - 609 on all maritime property and interest . . i. 604, 605 on public property ...... i. 605 but question as to mails ...... i. 605 and as to ship of war ...... i. 605 court will enforce claim wherever it has jurisdiction . i. 605 if ship and cargo are exposed together to common peril, and saved by one salvage, considered as one . . i. 605 and percentage of whole valuation awarded . . i. 605 if goods of one person only saved, claim attaches to that alone ......... i. 606 whether agreement between master and salvors bars salvage claim . . . . . . . i. 606 gross misconduct of salvors bar claim . . . i. 607 678 INDEX. EISKS COVERED BY POLICY, — Oontinued. especially if cargo is embezzled i. 607 this does not affect innocent co-salvors . . . i. 608 master embezzling, being also part owner, forfeits both, claims i. 608 only parties actually guilty forfeit . . . . i. 608 salvor's share diminished because of carelessness . i. 608 attempts at extoi-tion forfeit claim . . . . i. 608 salvors witnesses in their own cases . . . . i. 608 but not, if facts can be proved by other disinterested wit- nesses i. 609 IX. Amount of Salvage decreed . . . i. 609 - 612 609 . 609 609 609 609 609 610 610 610 610 610 611 611 612 612 i. 612-614 i. 612 always within discretion of court .... not regarded as compensation for time and labor _ . but as reward courts reward largely courage in encountering danger impossible to state rules governing .... each case determined on its merits less on Western waters than elsewhere because perils generally less .... usages govern ....... variableness of as to property derelict amount may vary from one half to less . percentage affected by amount of property saved distance from home port to be considered whether salvage may be decreed for saving life . X. Genekal Clause kbspecting other Perils enlarges scope of policy but little . means other perils similar to those enumerated . . i. 612, 613 whether " against all risks " covers everything but fraud of insured . . i. 614 construction of, may depend on intention of parties . i. 614 XL Excepted Risks and Losses . . . . i. 614-627 that of prohibited trade most usual . . . . i. 614 See Section IL this is not the same as contraband . . . . . i. 614 meaning of illicit trade . . . . . . . i. 615 insurers not liable therefor if excepted . . . . i. 615 exception relates only to property in same policy . . i. 615 , not to other goods in same ship i. 615 INDEX. 679 RISKS COVERED BY TOIACY, — Continued. insurers not liable for attempt at such trade, not effected, but followed by seizure . . . . . . . i. 615 but seizure must be justifiable for attempt to do the thing ex- cepted i. 615 liable for seizure for alleged violation not justified in fact i. 616 same principle applies to exception for breach of blockade . i. 616 actual seizure necessary . . . . . . i. 617 seizure and illicit trade must concur .... i. 617 n. illicit trade not proved by mere fact of seizure . . i. 617 n. where insurers do not assume risk while vessel is at port of discharge. ........ i. 618 what " port of discharge " means i. 619 n. Where mingled with those insured against . . i. 619-623 principal cause of loss to be considered . . . i. 620 burden of proof on insured to show amount of loss by peril insured against ...... i. 620 if fire is insured against, and theft not, insurers not lia- ble for theft after removal of goods from fire . . i. 621 proximate cause to be considered i. 534, 553, 554, 555, 621 insurer has nothing to do with results consequent upon protraction of voyage i. 622 liable for all direct results of peril insured against . i. 623 exceptions construed according to intent of parties . . i. 623 and so as to effect, not to defeat it . . . . . i. 623 " free from mortality " excludes violent death . . i. 623 " French risks " means loss by Frenchmen . . i. 623 n. 1 if, in policy on steamer, with clause exempting liability for breakage of machinery unless occasioned by stranding, if vessel is injured, insured, to avail of this exemption, must prove amount of, done by stranding . . . i. 624, 625 "any loss" includes all expenses necessary from occurrence of injury insured against . . . . . . i. 625 as to bottomry and respondentia interests . . i. 208, 626 insurable interest therein commensurate with value of prop- erty. ......... i. 626 no policy enures to benefit of party who cannot be legally insured i. 18, 626 nor attaches to subject-matter which is illegal . . . i. 627 XII. Memorandum . . . . . . . i. 627 - 638 A. Articles enumerated in i. 627 - 629 those especially liable to damage . . i. 627 680 INDEX. EISKS COVERED BY YOLICY, — Continued. in England usually in note ...... i. 627 in America in body of policy ..... i. 627 vary in different States ....... i. 627 various terms used to express limitation of liability . i. 627 5ee Total Loss ii. 68-107 Where Mimes are Ambiguous . . . . . i- 627 - 629 meaning of " corn " . . . . . . . i. 627 of "furs," "skins," "hides," "salt," "roots," "fruit," "rice" i. 628 one species may exclude another . . . . i. 629 n. articles perishable in their own nature depend on usage of trade i. 629 B. Clause respecting Stranding . . . . . i. 629 - 634 reason for introducing . . . . . . . i. 629 original intention of. . . . . . . . i. 629 but a different meaning adopted i. 629 means goods to be free, etc., unless ship is stranded . . i. 630 insurers held liable for partial loss, if there once is a stranding i. 630 reason for such construction ...... i. 630 and though a partial loss happens at different time and place, from different cause i. 631 whether construction in America is the same . . i. 631 no stranding, except of ship itself . . . . . i. 631 " stranding " originally used in sense of wrecked . . i. 632 now sufficient if ship is literally stranded . . . . i. 632 motion of vessel must cease . . . . . . i. 632 ship stranded if resting on artificial structure . . . i. 632 ship forced ashore by collision not stranded . . . i. 633 nor if she takes ground in harbor by effect of tides merely i. 633 otherwise if extraordinary circumstances mingle with natural events .......... i. 633 where vessel is stranded voluntarily . . . . i. 634 meaning of " bilging " . . . . . . . i. 634 C. Clause limiting Liability of Insurers by percentage . i. 635 - 638 purpose similar to that of stranding . . . . . i. 635 reasons for introducing ....... i. 635 whether successive losses may be added to make required percentage ........ i. 635 distinction as to ship and cargo ..... i. 635 n. 1 if different articles are insured in same policy, under one val- uation, free from average under a certain per cent, loss equal to percentage on whole valuation necessary i. 636, 637 INDEX. 681 EISKS COVERED BY VOUCY, — Continued. otherwise if articles are separately valued . . . i. 637 if packages are separately valued, insurers liable only for those totally lost i. 637 whether rule is same in America ..... i. 638 how such average should be adjusted . . . . i. 638 EOADSTEAD ii. 61 EOBBERS, loss from. See Risks, § v. . . . . . . i. 563 -566 " ROOTS," meaning of ........ . i. 628 ROTTEN CLAUSE, See Action ii. 477 absence of proof of survey, in policy containing, held fatal ii. 477 RULE OF 1756, i. 343 fifty per cent ........ ii. 127 RUNNING POLICIES i. 317-336 so called when insurance is made on goods to be afterwards specified ......... i. 817 sometimes called open policies ...... i. 317 called "floating policies " in England . . . . i. 317 phraseology of, differs . . . . . . . i. 317 but always means that merchandise shall be afterwards declared i. 317 and generally, be indorsed on policy . ." . . . i. 317 voyage and ship sometimes specified . . . . i. 317 sometimes on time ........ i. 317 often used ......... i. 318 policy sometimes requires each indorsement to be assented to by insurer ......... i. 318 in others, indorsement binding without . . . . i. 318 indorsement must be made on insurer's policy . . . i. 318 or communication made to him ..... i. 318 if policy gives insured right to specify, and insurers refuse to indorse accordingly, refusal of no effect . . i. 318, 319, 321 of ancient use in England . . . . . . i. 318 n. Accepf.ance of Indorsement hy Insurers . . . i. 319, 321 insurer's initials to indorsement held not sufficient i. 319, n. 2 if countersigned by agent in accordance with provisions, suflicient ........ i. 319 though merchandise was not actually shipped . i. 319, n. 3 Obligation of Insurers to indorse ..... i. 321 682 INDEX. EUNNING TOLJCmS,—Oonimued. uncertain adjudication in regard to . . . i. 321 if merchandise accords with description, insurers held i. 321, 325 if special premium is to be paid, insurers may fix i. 321, n. 2 if goods are indorsed subsequently, each indorsement a special contract ........ i. 326, n. 1 if goods are shipped in peculiar manner, this must be com- municated . . ^ . . . . . . i. 328 indorsement need not be made unless required by policy . i. 328 nor declared . . i. 328 courts liberally construe requirement . . . . i. 328 when intention to indorse held sufficient to bind insurers i. 328 this question discussed . . . . . . i. 328 - 334 whether stamp should be affixed to, when policy is made. See Stamps. . ' ii. 549 S. « SAFETY," meaning of . . . . . . . . . ii. 59 SAILING, warranty of time of. /See Wakeantt. . . . i. 357-363 " SALT," meaning of ......... i. 628 " SALTPETEE," meaning of ......... i. 628 SALVAGE, loss by payment of. See Eisks, § viii. . . i. 590 - 609 amount of. See EiSKS, § ix i. 609 - 612 excepted losses in. »See Eisks, § xi. . . . i. 614-627 excepted risks in. (See Eisks, § xi. . . . i. 614-627 general clause respecting perils in. See EiSKS, § x. i. 612 - 614 rules of practice of. See Eisks, § viii. A. . . i. 590 - 592 what is a. See Eisks, § viii. C i. 601 - 603 on what property allowed. See Eisks, § viii. D. i. 604 - 609 SALVOES, who may be. See Eisks, § viii. B. . . . i. 592 - 600 SEAL, of foreign records as evidence ...... ii. 522 SEA LETTER i. 347 INDEX. 683 SEARCH, resistance to ... i. 350 SEA-WORTHINESS. See Warranties. . . . i. 367-401 implied warranty of, in time policies . . . i. 389-393 SEIZURE, before condemnation, vests property in government i. 239, n. 2 ; ii. 67 SHEATHING, clauses relating to . . . _ . . . . ii. 130-133 SHIP, * description of. ^fee Description i. 524, 525 abandonment of. See Constkuctive Total Loss. ii. 120-151 sale of, by master. See Constructive Total Loss. ii. 120-144 insurable interest in. /See Interest, § ii. . . i. 164-166 SHIPMENTS, successive. (See Running Policies " . . . i. 317-336 SHIP'S HUSBAND, has no authority to insure for the part owners . . . i. 49 SHIPWRECK. &e Constructive Total Loss. . ii. 120-151 SIMULATED PAPERS. See Papers i. 548 SIMULTANEOUS POLICIES. See Prior Insurance. i. 295 " SKINS," meaning of . . i. 628 SLIP, OR WRITTEN APPLICATION, OF. ,S'ee Con- struction, § vii i. 114-119 whether a policy under the Stamp Act. ^ee Stamps . ii. 551 SMUGGLING, a barratrous act ....... i. 568, n. 3 SPECIE, meaning of existence in ..... . ii. 102 STAMPS ii. 548-559 when first required in United States .... ii. 548 when first used in England ...... ii. 548 similarity between English and American Stamp acts . ii. 548 clause in American law respecting policies of insurance . ii. 548 prohibition of collective insurances in one policy in England ii. 548 no such, in United States ...... ii. 549 policy only taxed, not agreement ii. 549 whether stamp should be affixed to running policy when made ii. 549 the question discussed ...... ii. 549 conclusion that it should be . . . . . . ii. 549 otherwise on open policies . . . . ^ . . ii. 550 684 INDEX. STAMP S, — Continued. policy to be stamped when indorsement is made . . ii. 550 and new stamp at each successive indorsement . . ii. 550 whether the Slip is a policy under the act . . ii. 551 - 554 I. Op Alterations or Additions .... ii! 554-559 act contains no special provision as to, in policies of insurance ii. 554 but it is a general principle that alteration or addition making substantially a new bargain requires stamp . . . ii. 555 no new stamp required, if alteration is to correct mistake ii. 555 or where policy has not discharged its functions . . ii. 555 whether alteration requires new stamp a question of law ii. 555 securing requirement of stamp on account of alteration, ob- viated by proof that alteration was made before delivery of policy ......... ii. 555 and burden of proof .on party relying on instrument as evi- dence ii. 556 alteration extending time of sailing held not to require stamp ii. 556 so of memorandum cancelling a warranty . . . ii. 556 but alteration of " on ship and outfit " to " on ship and goods," held to require new stamp . . . . . ii. 556 alteration of port of destination held to require none . ii. 557 so of memorandum rectifying declaration by broker . ii. 557 so on alteration of " on ship " to " goods as interest may appear "......... ii. 558 one stamp held sufficient on policy covering distinct and sep- arable interests ....... ii. 559 STATEMENTS, when amounting to warranty ...... i. 339 STEAMER, bursting boiler of ....... i. 614 n. racing of ......... i. 624 n. STIPULATIONS, as to warranty. See Warranty i. 363 - 367 STOPPAGE IN TRANSITU. -See Intfrest, § ix. . . i. 233 STOWAGE OF CARGO i. 374 STRAIN, liability of insurers for . . . . . . . i. 539 STRANDING, loss by, a peril of the sea. See Risks i. 546 clause respecting. See Risks, § xii. B. . . . i. 629 - 634 SUBMERSION, no cause foP abandonment ...... ii. 181 INDEX. 685 SUBEOGATION OF INSURER, to rights of insured mortgagee ...... i. 228 in collision . ........ i. 551 SUBSEQUENT POLICY, suspended until prior ones are exhausted . . . i. 285-296 SURVEY, absence of proof of, in policy containing rotten clause, held fatal ii. 477 by agent of insurer no waiver of warranty of unseaworthi- ness . . i. 368, n. 3 of damaged goods, not necessary to charge insurers . i. 86 n. SURVEYORS, fees of, not included in amount to justify abandonment . ii. 136 report of, as evidence of necessity of sale by master . ii. 150 admissible but not conclusive ...... ii. 529 T. TACKLE, covered by insurance on ship ...... i. 524 TECHNICAL TOTAL LOSS, synonymous with constructive total . . . . ii. 110 TERMINI, of voyaM and risk . . . . . . . ii. 43 - 67 deviation depending on ..... ii. 26, 40, 41 I. Must be distinctly stated in Policy . . . ii. 43 importance of ascertaining in reference to deviation . ii. 43 and to decide whether loss happened before, after, or during voyage insured . . ii. 43 a policy from " to A," or from " A to ," never at- taches ii. 43 so if termini are so named as to have no meaning . . ii. 43 or to leave a substantial doubt as to meaning . . . ii. 43 II. Commencement op Risk ii. 43-52 date of policy important ii. 43 " lost or not lost," meaning of ii. 44 may be made retrospective . . . . . ii. 44 existing loss need not be wholly unknown to both parties . ii. 44 if neither amount nor circumstances determining it are known, insurers may assume risk ii. 44 insurers liable for partial loss before insured acquired interest ii. 44 if policy is to attach on a certain event, this event may fake place before date . . . . . . . ii. 44 686 INDEX. TEBMJNI, — Continued. but subject insured must be in condition described at time of date ii. 44 " on a certain day " covers all parts of it . . . ii. 44 " from a day " excludes it ii. 44 unless controlled by admissible evidence . . . ii. 45 distinction between " from date " and " day of date " . . ii. 45 " date," meaning of ..... . ii. 45, n. 3 policy attaches to goods where it would to vessel, if insured ii. 45 " at " a certain place ....... ii., 45 " at and from " a certain port . . . . . ii. 46 - 52 vessel must be in safe condition . . . . . ii. 46 but not necessarily there in safety . . . . ii. 46 if on a homeward voyage stated to be continuation of outward, takes effect at end of outward . . . ii. 46 attaches in harbor ii. 47 n. may include roadstead ii. 47 or other places usually included within port named . ii. 47 whether a place is within a " port " difficult to deter- mine . . . . . . . . . ii. 47 a mixed question of law and fact . . . . . ii. 47 and controlled by usage and circumstances . . ii. 47 intended to cover ship in port . . . • . . ii. 48 there may be a deviation in port . . . . ii. 48 policy may never attach for want of preparations there ii. 48 or be delayed by delay in same . . . . . ii. 48 if ship has been there long, risk does not commence till preparations are begun for voyage insured . . ii. 48 on goods, does not begin till they come under marine, or ratljer water risk ii. 49 this applicable to river and lake risks . . . ii. 49 " to begin from loading of goods on board " . . . ii. 49 and if no loading at designated place, no insurance . ii. 49 so if other words of similar meaning are used . . ii. 50 but this depends on intent of parties . . . . ii. 50 valuation of cargo no evidence that risk is to attach on outward cargo . . . . . . . . ii. 50 covers goods loaded at another place . . . ii. 5 1 and those subsequently loaded if such was intent . ii. 51 "from a certain port " . . . . . . . ii. 48 does not begin till vessel leaves . . . . ii. 48 or starts with intent to sail . . i. 357 - 363, ii. 48 INDEX. 687 TERMINI, — Continued. more extended meaning when applied to intermediate port . . . . . . . . . . ii. 49 " at a certain place'' . . . . . . ii. 51, 52 may apply to an island or coast . . . . ii. 52 so as to cover a ship sailing from port to port . . ii. 52 or from place to place within district ... ii. 52 this dependent upon usage, contract, and fact . ; ii. 52 " on a certain voyage " . . . . . . . ii. 52 applies to next voyage coming under description * . ii. 52 but may be delayed by necessity . . . . ii. 52 or by voyage permitted by usage . . . . ii. 52 III. Termination of Risk ii. 53 - 64 "to a place" terminates at first place answering descrip- tion . . . . . . . . . . ii. 53 but vessel may put into a port to inquire as to market . ii. 53 " final ports " or " ports of discharge " covers goods remaining till the last port . . . . . . . . ii. 53 port where cargo is actually unladen the port of discharge ii. 54 a time policy to continue at pro rata premium after expira- tion, if vessel is at sea, terminates on first arrival at any , place to take cargo . ii. 55 though not a port by law ii. 55 and not final destination . . . . . . . ii. 55 " at sea '' meaning of . . . . . . . ii. 55 - 57 covers all places from beginning to termination of voyage ii. 55 though vessel may be in port . . . • . ii. 55 "on a passage" equivalent to . . . . ii. 55 especially if ship is insured " if at sea " . . . ii. 56 this means " not at home " . . , . . ii. 56 in time policy, at end of time, the risk generally contin- ues under a clause until arrival at port of destina- tion ii. 56 and if a vessel has broken ground for a voyage she is ." at sea " . . ii. 57 so if in port of necessity ii. 57 and vessel covered till arrival ii. 57 unless master, without necessity, delays . . . ii. 57 " to a port," " to two ports or more," meaning of . . ii. 58 - 59 insured may elect any within district ... ii. 58 risk terminates when vessel is moored twenty-four hours in safety at first port ii. 58 688 • INDEX. TERMINI, — Continued. in fishing voyage, risk not terminated by sending home part of damaged cargo, if it would injure the rest, if remaining on board ii. 58 policy on time terminates according to time at place of contract . . . . . . . . ii. 58 unless otherwise mentioned in policy ... ii. 58 when, under the clause " until ship- shall have ended voyage," ship covered till unladen . . . . ii. 59 "until ship is moored twenty-foui* hours in safety^' or on goods " till safely landed" meaning of . . . ii. 59 means safety from perils insured against . • . ii. 59 not from those of mere local character . . . ii. 59 ship must, be moored as safely as harbor perinits, in usual course of navigation . . . . . . ii. 59 policy continues if, before twenty-four hours, vessel is ordered into quarantine . . . . . . ii. 59 if anchored safely for twenty-four hours, policy expires ii. 59 though a storm begins before or during this time . ii. 59 " arrival " means the usual place of unloading . ii. 59 " safety " means moored, in fact, uninjured . ii. 59, 60 if vessel arrives a wreck, she is not in safety . . ii. 61 nor if embargo is laid on all vessels previous to her arrival ii. 61 though vessel is not arrested till next day . . ii. 61 open roadstead, if usual place of loading is a " port " . ii. 61 policy still attaches, if goods are in lighters . . . ii. 61 provided this is the usual way of taking them from ship to port ii. 61 same applicable to any conveyance by water, if necessary . ii. 61 otherwise, if consignee sends his own lighter . . ii. 61 but not, if he merely hires it ii. 61, n. 6 policy ends, if "goods are landed at usual place of discharge ii. 62 though consignee may not get them at once ... ii. 62 whether risk continues till whole cargo is delivered . . ii. 62 or is severable ii.' 62 risk terminates as soon as voyage is abandoned . . . ii. 63 or broken up by peril not insured against ... ii. 63 risk on goods insured to a port, and thence on another ship to final port, continues during removal . . . . ii. 63 where vessel is wrecked, and goods forwarded in another ves- sel, risk continues ii. 63 INDEX. 689 TERMINI, — Continued. parties may agree that risk shall termiuate at option of insured, on part of the property or interest . - ii. 64 either by express terms, or language fairly susceptible of this meaning . . . . . . . ii. 64 if time policy provides that risk shall continue, if vessel, at end of time, is on her way to port of destination, it terminates after arrival in any port for twenty-four hours, without notice from insured to go farther . ii. 64 IV. Loss AFTER Expiration of Eisk . . . . ii. 65 - 67 insurers may be liable for loss after end of risk but only when peril insured was the cause thereof and became injurious to property while covered ultimate loss must be direct effect of injury so that injury must be the proximate and only cause whether if vessel receives death-blow during policy, and dies, after end of it . cases not easily reconciled ...... insurers liable for direct consequences of peril insured wlienever or wherever occurring ..... whether any distinction between time and voyage policies forfeiture without actual seizure does not change property or right and liabilities of owners and insurers insurers not liable, if no seizure happens before termination of policy ......... ii. 67 THEFT, when insurers are liable for, after removal ot goods from fir« i. 620 THIEVES, loss from. See EiSKS, § v i. 663 - 566 "THIRD NEW FOR OLD," technical or peculiar words. See Constrdction, § iv. i. 77-81 TIME, when policy goes into eifect. See Construction, § x. i. 131-134 of suing on policy. &e Action. . . . . . ii. 481 TIME POLICIES, i. 304-316 insures ship or cargo during a period of time . . . i. 304 sometimes expressed by " whenever ship may be " . . i. 304 but this a conclusion of law in respect to a . . . i. 304 time, at place where contract is made, governs in . . i. 304 policy ends without reference to place of ship . . . i. 304 VOL. II. 44 ii. 65 ii. 65 ii. 65 ii. 65 ii. 65 ii. 65 ii. 65 ii. 65 ii. 65 ii. 66 Ii. 67 ii. 87 690 INDEX. TIME 'POLICIES, — Continued. and disregards object or completion of voyage . . i. 305 if loss occurs within time, liability of insurer complete . i. 306 and insurance is not suspended by putting, into or remaining in port ......... i. 306 law of deviation does not apply in . . . . i. 306 goods insured in, may be disposed of at any place . . i.-306 policy attaches if goods are sold and others purchased .with proceeds 307 n. 1 if policy is intended to cover any other than original cargo, generally so stated in i. 307 may be retrospective, if containing " lost or not lost " . i. 307 equally in reference to cargo or to ship . . . . i. 307 generally state day and hour ..... i. 308 time begins at beginning of hour . . . . . i. 308 and ends at beginning of hour i. 308 if at " beginning of day," covers whole day . . . i. 308 " from the day " probably equivalent to " on a day " . i. 308 but never adjudicated . i. 308 " from and after " excludes the day . . . . i. 308 insurers not liable for any loss except during time . . i. 308 quaere, if injury is received during time, but vessel is kept afloat till after expiration i. 308 insurers held not liable in England . . . . . i. 309 otherwise in United States i. 309 n. 2. the question discussed ...... i. 310, 311 time may be determined by ports or voyages indicated . i. 311 or voyages may be expressly provided in . . . • . i. 312 such policies to be construed according to stipulations . i. 312 cases discussed arising under such policies . . i. 312 - 315 implied warranties in. &e Waeeanties, § ii. . i. 389-398 terminates according to time of place where contract is made i. 304 TOUCH, liberty to, meaning of ; . ii. 18 TOUCHING, is not stranding i. 632 TRANSLATIONS, in evidence ......... ii. 536 U. UNDERWRITER, liable for what risks. See Risks . . . . i. 532 - 638 INDEX. 691 UNDEEWRITEE, — Continued: right of, to repair. See Constructive Total Loss, § iii. ii. 120-151 USAGE. See Construction, § v i. 82 - 107 V. VALUED POLICIES . . . ■. . . i. 256-284 valuation often agreed upon to determine interest . . i. 256 policies generally contain valuation clause . . . i. 256 this clause how filled in . . . . . . . i. 256 blank in open policies . . . . . . . i. 256 in body of instrument in England . . . . . i. 256 in margin in America . < . . . . . i. 256 " valued at " expresses valuation i. 256 any other words expressing same eflfectual . . . i. 256 presumption against other words, if used . . . . i. 256 word " worth " held to constitute in fire insurance . . i. 256 " no proof of property required in case of loss " not a i. 257 n. valuation in, almost conclusive ...... i. 258 not in wager policy ....... i. 258 if any interest is shown, without fraud, courts will generally support valuation in . . . . . . i. 258 n. insurer may cover anticipated profits in . . . i. 258 diversity of authorities as to what constitutes over-valuation of property or interest i. 258, 260 whether fraudulent valuation avoids policy in toto, or only as toamount of over-valuation over actual value . . i. 261 over-valuation not proof of fraud i. 262 but tends to prove it i. 262 insured may cover part of property by . . . . i. 263 if article insured is covered by, and also by open policy, each independent of the other ..... i. 263, n. 2 quaere, when the same interest is insured in several . . i. 264 in England, each insurer pays proportion of loss . . . i. 265 in America, first insurer pays whole amount of, and othfer policies attach only if any interest remains . . . i. 265 the question discussed i. 265 - 268 if insured values property, owning part only, and loss occurs, amount to be paid a question of construction . . i. 268 if goods are insured in, and part only are shipped, attaches ■pro rata , . i. 269 692 INDEX. VALUED POLICIES, — Continued. valuation of whole subject-matter in, presumed a valuation 'of insured's whole interest i. 27} effect of, in total loss certain i. 272 in partial loss otherwise i. 272 formerly held to be disregarded in latter case . . . i. 272 to be disregarded only when questioned and disputable . i. 272 the question discussed i. 272, 274 freight covered by, to be construed as in other insurances . i. 275 the question discussed ...... i. 276-279 profits most frequently covered in, by valuation of goods . i. 280 seldom insured in open policy . . . ' . . i. 280 if in, and loss occurs, must prove loading of goods . . i. 281 law presumes profit i. 281, n. 2 otherwise in England ....... i. 281 if in partial loss goods saved do not sell at profit, whether American rule would govern, not decided . . . i. 282 valuation would stand if profit was made . . . . i. 282 if whole amount insured in is not at risk, valuation diminished pro rata ......... i. 283 valuation in, void if covering illegal risk . . . . i. 284 VAPOR, whether insurers liable for damage by, arising from goods injured by salt water . . . . . . . i. 546 VOLUNTARY STRANDING. See Risks, § xii. B. . i. 629 -634 W. WAGER POLICIES, fe Interest, § i. . . . .1.155-164 WAIVER, does not revive policy void by breach of conditions . i. 42 issue of policy a waiver of things to be done before comple- tion of contract . . . •. . . . . i. 42 as to assignment . i. 55 of warranty of sea-worthiness i. 368, n. 3 of, abandonment ii. 176, 191 of lien by agent ii. 432 - 433 WAREHOUSEMAN, insuring goods in his possession may recover full value . i. 50 INDEX. 693 WARRANTIES i. 337 - 401 I. Express i. 337-367 meaning of . . i. 337 binding, whether material or not i. 337 no excuse for breach, that it was not fault of insured . * i. 337 acts of employees or any person violating, a breach of war- ranty .......... i. 337 breach of, avoids contract ...... i. 337 must be sti-ictly complied with ...... i. 337 construed according to usage and intent of parties . . i. 337 a condition precedent . . . . . . i. 337, n. 3 purpose of inserting immaterial . . . . i. 337, n. 3 whether in policy insuring different subjects, a false warranty as to one avoids the whole ...... i. 338 must be part of policy - ...... i. 339 and not written on other paper ...... i. 339 unless referred to as warranties ..... i. 339 ' papers fastened to policy, not referred to, do not consti- tute . . . ■ i. 123 nor if folded up in policy . . . . . . i. 121 explicit allegations may amount to . . . . . i. 339 when statements amount to ...... i. 339 statements must be direct ...... i. 339 and in relation to risk . i. 340 non-compliance with, at commencement of risk, avoids policy i. 340 though they are complied with before loss . . . i. 341 even if breach is caused by peril insured against . . i. 341 no breach to discharge insurers, if warranty is of a fact not to occur till after commencement of risk, and loss occurs be- fore compliance ........ i. 341 nor if compliance has become illegal . . . . i. 341 A. Of Ownership i. 341, 342 insurers have right of personal selection . . i. 341 but to secure this, ownership must be warranted . i. 342 owners need not be named ..... i. 342 but cannot be changed by assignment without consent i. 342 B. Of Neutrality ^342-355 that property is French means owned by Frenchmen i. 342 and that it has proper evidence of such ownership . i. 342 regard to be had to domicile i- 342 colony has nationality of parent country . . . i. 342 694 INDEX. WARRANTIES, — Continued. when produce of estate of neutral therein, belligerent 1. 342 but not, if imported into neutral country, and there re- moved to another vessel for exportation . . .1. 342 ' otherwise, if importation is only colorable . . i. 342 rvh of 1756 i. 343 established in England i. 343 repudiated in America i. 343 reasons for i. 343, n. 2 objections to ..*.... \. 343, n. 2 property warranted of country known at time to be at peace equivalent to i. 344 meaning of ........ i. 344 war after policy is made does not avoid it . . . i. 344 assertions amounting to warranty implying neutrality cdhstitute warranty thereof . . . . . i. 344 part owner of ship bound by its character . . i. 344 broken, if one part owner is belligerent . . . i. 344 but different rule as to goods ..... i. 345 extend only to interest of insured . . . . i. 345 not broken, if part uninsured is not neutral . . i. 345 otherwise, if interest of insured covers the whole . i. 345 in insurance of part with warranty of neutrality of whole, if part is not neutral, a breach of . . i. 345 property in trust for belligerent, belligerent . . i. 345 goods sold to belligerent to be delivered in his country, belligerent during transit i. 345 but property must be at risk of belUgerent . . i. 345 neutral goods shipped during peace to a consignee, with- out order, the property of the consignor . . . i. 345 otherwise if shipped during war, under contract during peace i. 346 property belligerent, if belligerent retains control over it i. 346 belligerent property cannot change character during transit i. 346 right of belligerent to stop goods in transit, on insolvency of vendee, does not make goods belligerent . . i. 346 neutral shipper becoming belligerent cannot protect goods by transfer to neutral for that purpose . . . i. 347 transfer of part of goods to belligerent a breach of, as to whole i. 347 INDEX. 695 WARKANTIES, — Continued. bill of lading of neutral property, shipped in belligerent vessel before wai-, need not state for whose account and risk it was shipped . . . . . i. 347, n. 3 otherwise, if shipped after war . . . . i. 347 all documents usually stating nationality, and still more flag, must conform to . . . . . . i. 347 if vessel show false papers, a breach of neutrality of goods to be proved by proper and usual documents i. 348 false papers may be carried by consent, or under usage which insurers know, or ought to know . . . i. 348 concealment of papers a breach of . . i. 349 papers on board written in sympathetic ink . . i. 349 assuming false character in peace does not prevent show- ing true character of goods in case of subsequent war i. 349 sufficient if vessel is neutral by law of nations . i. 349 and if captured contrary thereto, insurers liable . i. 349 where ship forfeited by master's disguising belligerent goods as neutral ....... i. 349 neutral goods of others not affected thereby . . i. 349 neutral property undistinguishably mixed with belliger- ent becomes belligerent ..... i. 350 resistance of search, rightfully demanded, a breach of i. 350, n. 2 so attempt at rescue . . . . . . i. 350, n. 3 and seeking or receiving belligerent protection . i. 350, n. 4 but if necessary, through illegal conduct of belligerent, justifiable i. 350, n. 5 master not bound to carry captured vessel to port of adjudication . . . . . . . . i. 351 and if he pursues original voyage, no illegal rescue . i. 351 otherwise, if he promise to carry her to port of adjudica- tion ......... i. 351 unneutral conduct of insured, a breach of . . i. 350 neutral goods may be put in belligerent ship . . i. 351 neutral ship may carry belligerent goods . . i. 351 law of nations as to neutral property controlled by treaties ........ i. 351 terms of treaties to be strictly complied with . . i. 351 hlockade '. i. 352 - 355 formal notice of, to foreign government, notice to all subjects, as against blockading power . . i. 352 but between parties to insurance a question of fact as to actual notice i. 352 696 INDEX. WARRANTIES, — Continued. blockading squadron driven off by wind no discon- tinuance of ...... i. 352 uniformity in maintaining, necessary . . . i. 353 relaxation in favor of belligerents, excluding neu- trals, illegal . . . . . . i. 353 permission to enter by commander, obtained by fraud, void ....... i. 353 otherwise, if not fraudulent . . . . i. 353 whether, if commander violated order of sovereign i. 353 notice, by vessel of blockading power, to vessel bound for blockaded port, of opening thereof, jus- tifies master in proceeding . . . . i. 353 licenses to be favorably regarded . . . i. 353 cargo presumed liable for breach of by ship . i. 354 but not if belonging to third parties ignorant of in- tended breach ...... i. 354 otherwise, ifshipper gave master discretionary power i. 354 or if cargo is loaded after notice to shipper . . i. 354 or if shipper is also owner of ship . . . i. 354 may be broken by egress and ingress . . . i. 354 vessel may leave in ballast . . . . i. 354 or with cargo shipped previous to . . . i. 354 but not if shipped after ..... i. 354 right to leave construed strictly . . . . i. 354 cargo sent in previous to, may be withdrawn . i. 355 vessel may be chartered by neutral minister to take home distressed seamen . . . . i. 355' but must not take cargo . . . . . i. 355 continuing to ship cargo after notice, a breach of i. 355 so if master enters voluntarily, and is compelled to sell cargo . . . . . * . . i. 855 purchase of enemy's ship by neutral, a breach of i. 355 except where originally the property of the buyer i. 355 neutral may purchase ship of another neutral . i. 355 vessel escapingfrom, may be captured on voyage i. 355 goods may be removed by land and then shipped i. 355 or may be carried in by land . . . . i. 355 but not if port is invested by land . . . i. 355 C. Of Convoy i. 356, 357 unusual in American policies ..... i. 356 convoy must be for whole voyage . . . . i. 356 INDEX. 697 WARRANTIES, — Continued. under control of government ..... i. 356 size of convoy immaterial . . . . . . i. 356 not necessary that it should go to vessel's port of desti- nation ........ i. 356 vessel may sail for general rendezvous without con- voy ......... i. 356 if convoy sails before arrival of ship, she cannot try to overtake it . . . . . . . . i. 356 vessel must not sail under protection of man-of-war not belonging to convoy . . . . . i. 356 nor with convoy appointed for another voyage . i. 357 vessel must obtain sailing orders . . . . i^ 357 but this is not a condition precedent . . . i. 357 vessel neglecting to obey orders in starting a breach of i. 357 and must start as soon as possible . . . . i. 397 if fleet is dispersed by storm, vessel may sail for port i. 357 if vessel is separated from convoy and lost, insurers liable, unless separation was by fault of master . . i. 357 D. Of time of Sailing i. 357-363 this warranty of frequent occurrence . . . i. 357 ship sails if she gets under way with intent of proceed- ing directly to sea ...... i. 358 ship must be entirely ready for sea . . . i. 359 if thip moves, intended for sea, but accidentally arrested, a sailing ........ i. 358 whether, if ready, but prevented from moving . i. 360, 361 sailing with intent to go finally away necessary . i. 361 whether warranty " to depart " means more than " to sail" i. SGI " final sailing " means more than " sailing " . . i. 362 " despatched from " means more than " sailing " . i. 362 E; Particular Warranties and Stipulations . . i. 363-367 " where the ship now is " means at date of policy . i. 363 and that ship, at time of insurance, is at vi'arranted place- i. 363 "warranted in port" means at prort of insurance . i. 363 unless the contrary appear in the policy . . . i. 363 " safe on a certain day " covers the whole day . i. 363 " lawful goods " may cover contraband . . . i. 364 " ^hall have no contraband goods on board " refers to contraband of war ...... i. 364 " rotten clanse,'' meaning of ..... i. 364 69'8 INDEX. WARRANTIES, — Continued. survey must find rottenness to be sole cause of unsea- worthiness . i. 364 this may be implied from facts stated . . . i. 364 insurers discharged, if vessel is rotten at time of survey i. "364 survey need not conform exactly to expressions in policy i. 364 sufficient if survey is made within reasonable time after end of voyage ....... i. 364 survey by surveyors appointed by American consul at foreign port a regular survey . . . . i. 365 so if surveyors are appointed by State law . . i. 365 survey at instigation of master conclusive on owners . i. 365 " orders will be given that the ship will not cruise '' re- quire explicit orders to captain . . . . i. 365 that the insured shall have a passport from a particular person means for the whole voyage . . . i. 365 " to claim, as neutral, in case of capture, of a belligerent vessel sailing with neutral papers," valid . . i. 365 against liens void if ship is mortgaged . . i. 365, 366 as to assignments . . . . . . . i. 59 as to prior and subsequent insurances . . . i. 285 against " average, unless general," means that insurance is not against partial loss . . . . . i. 367 II. Implied Wakeanties ...... i. 367-401 Sea-worthiness ., . . . . . . i. 367 — 384 applies to every voyage policy . . . . i. 368 strictly a condition precedent . . . . . i. 368 not ail absolute requirement of law . . i. 368 may be waived or modified by agreement . . . i. 368 what constitutes a waiver of . . . . i. 368, 369 " at and from a port " no condition precedent that vessel shall be sea-worthy on leaving . . . . i. 369 but only that she was in a state fit for the policy to attach when risk began . . . . . . i. 369 this question discussed ..... i. 369, 370 if insurance is at and from two ports, no implied war- ranty of sea-worthiness on sailing from second i. 371, 372 though both ports are in the same country . . . i. 372 and ship takes cargo at each . . . . . i. 372 how far it extends not settled by rules of law . . i. 372 sufiSciency of food, water, fuel, and lights necessary i. 372 INDEX. 699 WARRANTIES, — Continued. how far non-compliance with statutory requirements con- stitutes unseaworthiness . . . . i. 372, 373 . i. 372, 376, 384, 386 . i. 372, 386 . i. 374, 376, 384, 386 . i. 374 to fulfil duties of i. 375 n. i. 376 . i. 376 usage affects .... and kind of ship and nature of voyage . extends to officers and crew necessity of having officers competent superior station ship must be properly built . and adapted to risk . and properly loaded i. 376 whether warranty extends to lighters in which cargo is. carried to shore ....... i. 377 this question discussed i. 377 if policy once attaches, character of condition precedent lost i. 377 said that policy may attach as soon as ship becomes sea- worthy, if deficiency is temporary and easily remedied i. 378 but this doubtful i. 379 burden of proof upon insurers to establish breach of . i. 379 rule different in different States . . . . i. 379 but affected'by usage ...... i. 379 vessel springing a leak, without meeting peril, presumed unsea worthy . . . . . . . i. 379 this may be rebutted ...... i. 380 but if she leaks after peril, insurer must show prior unsea- worthiness ........ i. 380 and so if vessel sailed, and was never heard from . i. 380 if vessel becomes unseaworthy by accident, policy may continue to attach ....... i. 380 all reasonable efforts to restore her must be made . i. 380 duty of master to prevent unseaworthiness, and to restore ship i. 380 and to make for port of repair without delay . . i. 380 and to repair at sea, by help of other vessels . . i. 380 ■whether insurers are discharged by nonfulfilraent of such duties i. 380 duty of master to repair in first port . . . i. 381 disregard of this a breach of warranty . . . i. 381 if master neglects to repair, insurers not liable i. 381, 382 but this may only suspend liabihty . . . . i. 383 700 INDEX. WARRANTIES, — Continued. distinction as to neglect of master at sea and on land i. 383 insurers discharged in loss by unseaworthiness during suspension . . ' . . . . . . i. 383 but not in loss for other causes . . . . i. 383 necessity for shipping crew for whole voyage . . i. 384 but dependent on usage and kind of voyage . . i. 384 Necessity of Pilotage ...... i. 384, 385 dependent on usage . ' . . . . . i. 384 not always possible to obtain a, pilot, and insurers not dis- charged, if master makes reasonable efforts . . i. 385 if person falsely represents himself to be pilot, and is received as such in good faith, no breach of war- ranty ......... i. 385 nor if in the absence of a pilot some person on board is competent to fulfil duties . . . . . j. 385 but insured must prove his competency . . . i. 385 neglect to receive pilot required by law not necessarily unseaworthiness ....... i. 385 standard of sea-worthiness at place where vessel belongs to be taken ' i. 386 kind of vessel, voyage, and service to be considered . i. 386 fhip may be sea-worthy in port, and not for sea . . . i. 386 insurance may be for temporary purposes . . . i. 387 and sufficient, if vessel is fit for this purpose . . . i. 887 policy on ship and goods in port may attach to one, and not to the other ........ i. 387 but not settled by authorities i. 387, n. 4 qualifications in voyage policy on vessel at sea, or in port where repairs cannot be made . . . . . i. 387 this difficult to determine on authority . . . . i. 388 ship must have been sea-worthy at beginning of voyage . i. 388 present sea-worthiness depends upon place . . . i. 388 and circumstances of the case ...... i. 388 i. 388' . i. 388 i. 389-398 . i. 399 and means of repair within reach . if ship is a wreck, policy does not attach As to Continuance of, in Time Policies . authorities irreconcilable . English opinion, that there is no implied warranty in time policies ........ i. 389 not fully supported in America . . . . i. 389 but approved in New York . . • . . i. 389 INDEX. 701 WARRANTIES, — Continued. discussion of English view ..... i. 389 reply to i. 390-392 when implied warranty exists in insurance from one port to another ....... i. 393 discussion of this question . . . . i. 394 - 398 parties may expressly agree that vessel insured on time or for a voyage shall be sea-worthy . . . i. 399 non-compliance with these agreements- avoids policy i. 400 Other Implied Warranties . . . . . . i. 401 that insured make honest statements of all material cir- cumstances attending risk . . . . . i. 401 that ship shall pursue voyage in usual manner . i. 401 that policy shall attach within reasonable time . . i. 401 WEAR AND TEAR, insurers not liable for . . , . . . . i. 540 WEARING APPAREL, not generally covered, unless specifically insured . . i. 521 WET, damage by ......... i. 546 WHALING VOYAGES, usage in ........ . ii. 22 WORDS, meaning of. See Constetjction, § ix. . . . i. 125 - 131 technical or peculiar. See Construction, § iv. . . i. 77 - 81 WORMS, loss by, not a peril of the sea ...... i. 545 WRECK, policy does not attach to a . . . . . . i. 388 sale of by master ii. 120-144 WRITINGS, added to policy. .See Construction, § viii. . i. 119 - 125 WRITTEN CLAUSE, when it controls printed . . . . . . . i. 65 Cambridge ; Printtid by Welch, Bigelow, and Company. Date Due Library Burea iCat. No. 1137 KF 1135 P27 2 Author Vol. Parsons, Theophilus 1 Titled. Treatise on the law of mariaae insurance and general . . . Date Borrower's Name