LH3 
 
 (^xitmii 21am i'rljool Eibratg 
 
Cornell University Library 
 KD 1845.L43 
 
 A treatise on the law relating to the in 
 
 3 1924 022 377 521 
 
Cornell University 
 Library 
 
 The original of this book is in 
 the Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924022377521 
 
A TREATISE ON THE LAW 
 
 EEIiATING TO THE 
 
 INSURANCE OF FREIGHT 
 
A TREATISE ON THE LAW 
 
 EELATING TO THE 
 
 INSURANCE OF 
 FREIGHT 
 
 BY 
 
 GEORGE MAITLAND LAZARUS 
 
 M.A., LL.B. * * 
 
 OF THE INNBB TEMPLE, BABBISTBB-AT-LAW. 
 
 LONDON : 
 
 BUTTERWORTH & CO., Bell Yabd, Temple Bar. 
 Xaw ipubliebers. 
 
 SYDNEY : BUTTERWOETH & CO. (AUSTEALIA), LTD. 
 
 CALCUTTA : BUTTEEWOETH & CO. (iNDIA), LTD. 
 
 WINNIPEG : BUTTEEWOETH & CO. (CANADA), LTD. 
 
 WELLINGTON (N.Z.) : BUTTEEWOETH & CO. (AUSTEALIA), LTD. 
 
 1915. 
 
f^U/^0 
 
 PRINTED BY 
 
 WILLIAM CLOWES AND SONS, LIMITED, 
 
 LONDON AND BECCLES. 
 

 TO 
 
 DAVID CALDBR LECK 
 
 OP THE MIDDLE TEMPLE 
 ONE OF HIS MAJESTY'S COUNSEL 
 
PREFACE 
 
 A CENTURY ago — according to a report in 2 Dow's Report, page 479 
 — "those who had been most concerned in settling what was the 
 law on the subject of marine insurance had taken great credit to 
 themselves for its certainty, and text- writers had boasted of how 
 little uncertainty there was in this branch of law," but as was 
 pointed out by Lord Eldon, " it might perhaps be found, when the 
 matter came to be examined with the proper degree of impartiality, 
 that there was full as much uncertainty on this subject as in any 
 other branch of the law." Lord Eldon's criticism was fully justified. 
 Even at the present time there are few subjects which present to 
 the lawyer so many difficulties as the law of marine insurance, and 
 particularly that branch of the law of marine insurance which 
 relates to the insurance of freight. 
 
 In this volume I have endeavoured to ascertain and to state the 
 principles of law which govern the insurance of freight. That the 
 conclusions at which I have arrived will in every case be accepted, 
 I do not expect, but I hope that by discussing the difficulties which 
 have arisen, and by collecting the authorities which bear upon 
 them, I may lighten the task of those who in the future have to 
 consider this branch of the law. 
 
 I am greatly indebted to my friend Mr. D. C. Leek, K.C., who 
 
 was good enough to read through the whole of my manuscript, and 
 
 to give me the benefit of his advice and assistance. 
 
 G. M. L. 
 5, Fafeb Buildings, 
 
 Jime, 1915. 
 
CONTENTS 
 
 PAGE 
 
 Table of Cases cited .... . . ^j 
 
 OHAPTEE I. 
 Freight as the Subject of Insdkance . . . . . . j 
 
 CHAPTER II. 
 Insueable Interests in Freight - - jo 
 
 CHAPTER III. 
 The duration of the Risk covered by the Policy 
 
 CHAPTER IV. 
 The designation of the Subject-matter in the Policy 
 
 60 
 
 73 
 
 CHAPTER V. 
 Losses under the Policy . - 105 
 
 CHAPTER VI. 
 Adjustment, Valuation, Abandonment, Subrogation - - 200 
 
 CHAPTER VII. 
 Summary .... 231 
 
 APPENDIX A.— Marine Insurance Act, 1906 . - . 263 
 
 APPENDIX B.— Institute Clauses - - 288 
 
 INDEX ..... - [1-12] 
 
 I.F. 6 
 
TABLE OF OASES 
 
 (The page at which a case is fully referred to is printed in thick type.) 
 
 A. 
 
 PAGE 
 
 Adams v. Warren Insurance Co. (1839), 22 Pick. 163 (Am.) ... 73 
 Adamson v. Newcastle S.S. Freight Insurance Co. (1879), 4 Q. B. D. 462 ; 48 
 
 L. J. (Q. B.) 670 ; 41 L. T. 160 ; 27 W. B. 818 136 
 
 Aitken, lilbum & Co. v. Ernsthausen & Co., [1894] 1 Q, B. 773 ; 63 L. J. 
 
 Q. B. 559; 70 L. T. 822; 7 Asp. M. C 462 3 
 
 Allen V. Mercantile Marine Insurance Co. (1871), 44 N. Y. 437 (Am.) . 136, 138, 
 
 142, 146, 147, 201 
 Allerton SaiHng Ship Co. v. Palk (1888), 6 Asp. M. C. 287 ... 67 
 
 Allison V. Bristol Marine Insurance Co. (1876), L. B. 9 0. P. 559 ; 1 A. C. 
 
 209 ; 34 L. T. 809 ; 24 W. B. 1039 ; 3 Asp. M. C. 178 . 6, 10, 16, 58, 
 
 73, 79, 84, 208, 209 
 Alps, The, [1893] P. 109 ; 62 L. J. (adm.) 59 ; 68 L. T. 624 ; 41 W. B. 527 ; 
 
 7 Asp. M. C. 337 174 
 
 Alston V. CampbeU (1779), 4 Bro. P. C. 476 57 
 
 American Insurance Co. v. Center (1829), 4 Wend. 45 ; 7 Cowen, 564, 
 
 (Am.) 110, 149, 152 
 
 American Insurance Co. v. Griswold (1835), 14 Wend. 399 (Am.) 96, 215, 218 
 Anderson v. Morice (1876), L. B. 10 C. P. 58, 609 ; 1 A. C. 713 ; 46 L. J. 
 
 (o. p.) 11 ; 35 L. T. 566 ; 25 W. B. 14 80 
 
 Anderson v. Wallis (1813), 2 M. & S. 240 ; 3 Camp. 440 ; 14 B. B. 642 . 146 
 
 Amo, The (1895), 72 L. T. 621 ; 8 Asp. M. C. 5 156 
 
 Asfar V. BlundeU, [1895] 2 Q. B. 196 ; [1896] 1 Q. B. 123 ; 65 L. J. (Q. b.) 
 
 138 ; 73 L. T. 648 ; 1 Com. Cas. 71, 185 . . 53, 101, 102, 103, 137, 138 
 Assicurazioni Generah v. S.S. Bessie Morris Co., [1892] 1 Q. B. 571 ; 2 
 
 Q. B. 652 ; 61 L. J. (q. b.) 754 ; 67 L. T. 218 . 106, 135, 136, 148, 149, 
 
 150, 153 
 Attwood V. SeUar (1879), 5 Q. B. D. 286 ; 49 L. J. (Q. b.) 515 ; 42 L. T. 644 ; 
 
 28 W. R. 604 106 
 
 Atty V. Linda (1805), 1 B. & P. N. B. 236 ; 8 B. B. 788 . 9, 23, 25, 68, 73 
 
 B. 
 
 Bahia, The (1864), Br. & L. 38 ; 12 L. T. 145 ; 14 W. R. 411 ; 11 Jur. 
 
 (N.s.)90 106,109,145 
 
 Bainbridge v. Neilson (1808), 1 Camp. 240 ; 10 East, 329 ; 10 B. B. 316 . 157 
 Barber v. Fleming (1869), L. B. 5 Q. B. 59 ; 39 L. J. (Q. b.) 25 ; 10 B. & S. 
 
 879 ; 18 W. B. 254 .. . 13, 30, 32, 34, 35, 60, 74, 87, 162, 170 
 
xii TABLE OF CASES 
 
 PAGE 
 
 Barclay v. StirUng (1816), 5 M. & S. 6 ; 17 R. R. 245 . 94, 95, 97, 161, 190, 
 
 220, 223, 227 
 
 Barnes v. Akers (1795), 2 Peake, 22 61 
 
 Barque Robert S. Bernard Co. v. Murton (1910), 101 L. T. 285 ; 14 Com. 
 
 Cas. 267 ; 53 S. J. 717 ; 11 Asp. M. C. 299 . . . . 114, 220 
 
 Bartlet v. Walter (1816), 13 Mass. R. 267 (Am.) 75 
 
 Bealu. Horlook(1915), 31 T. L. R. 467 154 
 
 Beale v. Thompson (1814), 4 East, 540 ; 3 B. & P. 405 ; 2 M. & S. 249 . 133, 
 
 164, 155 
 Beckett v. West of England Insurance Co. (1872), 25 L. T. 739 ; 1 Asp. M. C. 
 
 185 62, 64, 77, 99 
 
 Bedouin, The, [1894] P. 1 ; 63 L. J. (adm.) 30 ; 6 R. 693 ; 69 L. T. 782 ; 42 
 
 W. R. 292 ; 7 Asp. M. C. 391 54, 98, 103, 175 
 
 Bell V. Bell (1810), 2 Camp. 475 ; 11 R. R. 769 15 
 
 Bensaude v. Thames & Mersey Marine Insurance Co., [1897] A. C. 609; 
 
 66 L. J. (Q. B.) 666 ; 77 L. T. 282 ; 46 W. R. 78 ; 8 Asp. M. C. 315 ; 2 
 
 Com. Cas. 33, 238 135, 182 
 
 Benson v. Chapman (1849), 2 H. L. C. 720 ; 5 C. B. 330 ; 8 C. B. 950 ; 
 
 13 Jur. 969 ; 81 R. R. 346 . 112, 121, 124, 126, 127, 128, 129, 146, 149, 
 
 153, 156, 160, 185, 201, 222 
 
 Blakey v. Dixon (1800), 2 B. & P. 321 10, 16 
 
 Blanks v. Hibernia Insurance Co. (1884), 36 Lou. Ann. 399 (Am.) . . 136 
 
 Blasco V. Fletcher (1863), 32 L. J. (c. p.) 284 ; 14 C. B. (N. s.) 147 ; 9 Jur. 
 
 (N. s.) 1105 ; 9 L. T. 169 ; 11 W. R. 997 134 
 
 Boardman v. Boston Marine Insurance Co. (1888), 146 Mass. R. 442 (Am.) . 206, 
 
 2n 
 
 Bradhurst v. Columbia Insurance Co. (1812), 9 Johns. R. 17 (Am.) . 107, 117 
 
 Braithwaite v. Power, 48 N. W. R. 354 (Am.) 136 
 
 Brankelow S.S. Co. v. Canton Insurance Office, [1899] 2 Q. B. 178 ; 68 
 
 L. J. (Q. B.) 811 ; 81 L. T. 6 ; 47 W. R. 611 ; 4 Com. Cas. 239 . . 23 
 
 Brig Mary, The (1842), 1 Sprague, 17 (Am.) . . . . ' 192, 193, 195 
 
 Brigdla, The, [1893] P. 189 ; 62 L. J. (adm.) 81 ; 1 R. 616 ; 69 L. T. 834 ; 
 
 7 Asp. M. C. 337 190 
 
 Brooklebank v. Sughrue (1831), 1 B. & Ad. 88 ; 1 M. & Rob. 102 ; 5 Car. & 
 
 P. 21 ; 8 L. J. (o. s.) (K. B.) 371 95, 184 
 
 Brown v. North (1852), 8 Exoh. 1 ; 22 L. J. (ex.) 49 ; 91 R. R. 348 . . 9 
 
 Browning v. Provincial Insurance Co. of Canada (1873), L. R. 5 P. C. 263; 
 
 28 L. T. 853 ; 21 W. R. 587 82 
 
 Bryant v. Commonwealth Insurance Co. (1828), 6 Pick. 131 (Am.) . . 109 
 
 Buffalo City Bank v. North Western Insurance Co. (1864), 30 N. Y. 251 
 
 (Am.) 113, 114 
 
 C. 
 
 Cargo ex Argos (1872), L. R. 5 P. C. 134; 28 L. T. 745 ; 21 W. R. 707; 
 
 42 L. J. (adm.) 49 .144 
 
 Cargo ex Oalam (1863), 33 L. J. (adm.) 97 ; 9 L. T. 550 ; 12 W. R. 495 ; 2 Moo. 
 
 P. C. (N. s.) 216 ; 10 Jur. (n. s.) 477 134 
 
 Cargo ex Hamburg (1863), 2 Moo. P. C. 320 ; Br. & L. 253 ; 33 L. J. (adm.) 116 166 
 
TABLE OF CASES xiii 
 
 PAGE 
 
 Carisbrook S.S. Co. v. London and Provincial Marine Insurance Co., [1901] 
 
 2 K. B. 861 ; [1902] 2 K. B. 681 ; 71 L. J. (k. b.) 978 ; 50 W. E. 42, 691 ; 
 
 87 L. T. 418 ; 7 Com. Cas. 235 192, 193, 196 
 
 Carruthers v. Shedden (1815), 6 Taunt. 14 ; 1 Marsh, 416 ... 74 
 
 Case V. Davidson (1816), 8 Price, 542 ; 5 Moore, 116 ; 2 Br. & B. 379; 5 
 
 M. & S. 79 ; 17 R. R. 280 131, 158 
 
 Castellain v. Preston (1881), 11 Q. B. D. 380 ; 52 L. J. (q. b.) 366 ; 49 L. T. 
 
 29 ; 31 W. R. 557 55, 56, 57, 78, 81 
 
 Cheriot v. Barker (1807), 2 Johns. R. 346 (Am.) 54 
 
 Chrystal v. Flint (1897), 82 Fed. R. 472 (Am.) 189 
 
 Cito, The (1881), 7 P. D. 5 ; 51 L. J. (adm). 1 ; 45 L. T. 663 ; 30 W. R. 836 ; 
 
 4 Asp. M. C. 468 156 
 
 Clark V. Massachusetts Fire Insurance Co. (1824), 2 Pick. 104 (Am.) 136, 144., 147 
 Clark V. Ocean Insurance Co. (1835), 16 Pick. 289 (Am.) . . 51, 53, 64, 76 
 Coker v. Bolton, [1912] 3 K. B. 315; 82 L. J. (k. b.) 91 ; 107 L. T. 54 ; 17 
 
 Com. Cas. 313 223 
 
 Cologan V. London Assurance Co. (1816), 5 M. & S. 447 ; 17 R. R. 390 . 118 
 Columbian Insurance Co. v. Ashby (1839), 13 Peters, 331 (Am.) . . 188 
 
 Columbian Insurance Co. v. Catlett (1827), 12 Wheaton,383 (Am.) . 96,214 
 
 Conway v. Gray (1809), 10 East, 536 83 
 
 Cook V. Jennings (1797), 7 T. R. 381 106 
 
 Coolidge V. Gloucester Marine Insurance Co. (1819), 15 Mass. R. 341 (Am.) 123, 
 
 206, 221 
 Copernicus, The, [1896] P. 237 ; 65 L. J. (adm.) 108 ; 74 L. T. 757 ; 8 Asp. 
 
 M. C. 166 34, 43, 63 
 
 Cox V. May (1815), 4 M. & S. 159 ; 16 R. R. 422 196 
 
 Crowley v. Cohen (1832), 3 B. & A. 478 ; 1 L. J. (k. b.) 158 ; 37 R. R. 472 74, 
 
 77, 96, 214, 215 
 Curling v. Long (1797), 1 B. & P. 636 ; 4 R. R. 747 . . . 16, 155 
 
 Currie v. Bombay Native Insurance Co. (1869), L. R. 3 P. C. 72 ; 39 
 
 L. J. (p. c.) 1 ; 6 Moo. P. C. (N. S.) 302 ; 22 L. T. 317 ; 18 W. R. 296 . 59, 
 
 106, 112, 134 
 
 D. 
 
 Dahl v. Nelson (1881), 6 A. C. 38 ; 50 L. J. (ch.) 411 ; 44 L. T. 381 ; 29 
 
 W. R. 543 135 
 
 Daniels v. Harris (1874), L. R. 10 C. P. 1 ; 44 L. J. (c. p.) 1 ; 31 L. T. 408 ; 
 
 23 W. R. 86 ; 2 Asp. M. C. 413 69 
 
 Davidson v. Case (1820), 8 Price, 542 ; 5 Moore, 116 ; 5 M. & S. 79 ; 2 Br. & 
 
 B. 379 ; 17 R. R. 280 220, 224 
 
 Davidson v. Willasey (1813), 1 M. & S. 313 ; 14 R. R. 438 9, 14, 17, 23, 27, 73 
 
 Davy V. Hallett (1805), 3 Gaines, 16 (Am.) 89, 216 
 
 Dean v. Hornby (1854), 3 E. & B. 180 ; 2 C. L. R. 1519 ; 18 Jur. 623 ; 23 
 
 L. J. (Q. B.) 129 ; 2 W. R. 156 ; 97 R. R. 439 159 
 
 De Cuadra v. Swann (1864), 16 C. B. {s. s.) 772 106 
 
 De Forrest v. Fulton Fire Insurance Co. (1828), 1 Hall, 84 (Am.) . 55, 77 
 
 Delano v. American Insurance Co. (1864), 42 Barb. 142 (Am.) . . .207 
 De Longuemere v. Phoenix Insurance Co. (1813), 10 Johns. 127 (Am.) . 99 
 
xiv TABLE OP CASES 
 
 PAGE 
 
 Denoon v. Home & Colonial Assurance Co. (1872), L. R. 7 C. P. 341 ; 41 
 
 L. J. (c. p.) 162 ; 26 L. T. 628 ; 20 W. R. 970 ; 1 Asp.- M. C. 309 . 73, 76, 80, 
 
 85, 205, 209, 213 
 Devaux v. I'Anson (1839), 5 Bing. N. C. 519 ; 7 Scott. 507 ; 8 L. J. (c. P.) 
 
 284 ; 2 Am. 82 ; 3 Jur. 678 ; 50 R. R. 786 . . • 5, 46, 66, 67, 73 
 
 Dixon V. Reid (1822), 5 B. & Aid. 697 ; 1 D. & R. 207 ; 24 R. R. 481 . 129 
 Dodge V. Boston Marine Insurance Co. (1892), 85 Maine, 215 (Am.) . . 69 
 Donnally v. Merchants Mutual Marine Insurance Co. (1876), 28 Lou. Ann. 
 
 939 ; 26 Am. Rep. 129 (Am.) 69 
 
 Dorothy Foster, The (1805), 6 C. Rob. 88 .... 193, 196, 199 
 
 Dufourcet & Co. v. Bishop (1886), 18 Q. B. D. 373 ; 57 J. L. (q. b.) 497 ; 
 
 56 L. T. 633 ; 6 Asp. M. C. 109 229 
 
 Dumas v. Jones (1808), 4 Mass. R. 649 (Am.) 210 
 
 Duthie V. Hilton (1868), L. R. 4 C. P. 138 ; 38 L. J. (c p.) 93 ; 19 L. T. 285 ; 
 
 17 W. R. 55 137 
 
 Dyson v. Rowcroft (1803), 3 B. & P. 476 ; 7 R. R. 809 . . . • 163 
 
 E. 
 
 Ebswokth v. Alliance Marine Insurance Co. (1873), L. R. 8 C. P. 596; 
 
 42 L. J. (c. p.) 305 ; 29 L. T. 479 ; 2 Asp. M. C. 125 . . . 55, 56, 77 
 
 Eliza Lines, The (1905), 199 U. S. Rep. 119 ; 102 Fed. R. 184 ; 114 Fed. R. 
 
 307 (Am.) 156 
 
 ElHs V. Lafone (1853), 22 L. J. (ex.) 124 ; 8 Ex. 546 ; 17 Jur. 213 ; 1 W. R. 
 
 200 ; 91 R. R. 615 27 
 
 Embiricos v. Reid, [1914] 3 K. B. 45 ; 83 L. J. (k. b.) 1348 ; 19 Com. Gas. 263 ; 
 
 30 T. L. R. 451 133, 136, 145, 154 
 
 Etches V. Aldan (1827), 6 L. J. (o. s.) (k. b.) 65 ; 1 M. & R. 157 ; 31 R. R. 
 
 309 73 
 
 Everth v. Smith (1814), 2 M. & S. 278 ; 5 M. & S. 6 ; 15 R. R. 246 . 92, 93, 96, 
 
 146, 161, 173 
 
 F. 
 
 212 
 209 
 
 136 
 127 
 153 
 
 Fay v. AlUanoe Insurance Co. (1860), 16 Gray, 455 (Am.) 
 
 Feise v. Aguilar (1811), 3 Taunt, 506 ; 12 R. R. 695 
 
 Field V. Citizens Insurance Co., 11 Mo. 50 (Am.) 
 
 Fiedler v. New York Insurance Co. (1857), 6 Duer. 282 (Am.) 
 
 Fleming v. Smith (1848), 1 H. L. C. 513 ; 73 R. R. 139 . 
 
 FUnt V. Flemyng (1830), 8 L. J. (o. s.) (k. b.) 350 ; 1 B. & Ad. 45 ; LI. & 
 
 W^ls. 257 ; 35 R. R. 205 4, 5, 8, 40, 49, 66, 73 
 
 Florence, The (1852), 16 Jur. 572 156 
 
 Foley V. United Fire & Marine Insurance Co. of Sydney (1870), L. R. 5 C. P. 
 
 155 ; 39 L. J. (o. p.) 206 ; 22 L. T. 108 ; 18 W. R. 437 . . 30, 35 
 
 Forbes v. AspinaU (1811), 13 East, 323 ; 12 R. R. 352 12, 43, 48, 80, 184, 205 
 
 Forbes v. Oowie (1808), 1 Camp. 520 12, 43, 184 
 
 Frayes v. Worms (1865), 34 L. J. (c. p.) 274 ; 19 C. B. (n. s.) 177 ; 11 Jur. 
 
 (N. s.) 639 ; 12 L. T. 547 ; 13 W. R. 898 .... 11, 58, 196 
 Friends, The (1801), 4 C. Rob. 143 155 
 
TABLE OP OASES xv 
 
 G. 
 
 PAGE 
 
 Gabston Co. v. Hickie Borman & Oo. (1886), 18 Q. B. D. 17 ; 56 L. J. (q. b.) 
 
 38 ; 55 L. T. 879 ; 35 W. R. 33 ; 6 Asp. M. C. 71 ... .9 
 
 Gaynor v. Sunderland Joint Stock Premium Association (1884), Cab. & EU. 
 
 293 160, 162, 227 
 
 Geipel v. Smith (1872), L. R. 7 Q. B. 404 ; 41 L. J. (q. b.) 153 ; 26 L. T. 361 ; 
 
 20 W. R. 332 ; 1 Asp. M. C. 268 154 
 
 Glasgow Provident Investment Society v. Westminster I'ire Office (1887), 
 
 13 A. C. 699 ; 4 T. L. R. 779 ; 24 Sc. L. R. 691 ; 15 R. 89 . . 55 
 
 Gordon v. American Insurance Co. of New York (1847), 4 Denio,360'(Am.) 22. 
 
 61 
 Goss V. Withers (1758), 2 Burr. 683 ; 2 Ld. Ken. 325 ... . 155 
 Grant v. Coverdale (1884), 9 A. 0. 470 ; 53 L. J. (q. b.) 462 ; 51 L. T. 472 ; 32 
 
 W. R. 831 ; 5 Asp. M. C. 353 67 
 
 Grant v. Delacour (1809), 1 Taunt. 463 .' 96 
 
 Gratitudine, The (1801), 3 C. Rob. 240 106 
 
 Green v. Royal Exchange Assurance Co. (1815), 1 Marsh, 447 ; 6 Taunt. 68 ; 
 
 16 R. R. 571 91, 105, 111, 145, 160, 173 
 
 Griffiths V. Bramley Moore (1878), 4 Q. B. D. 70 ; 40 L. T. 149 ; 48 L. J. 
 
 (Q. B.) 201 ; 27 W. R. 480 ; 4 Asp. M. C. 66 . . . . 9 
 
 Griswold v. New York Insurance Co. (1806), 1 Johns. R. 205 ; (1808), 3 Johns. 
 
 R. 321 (Am.) 136, 139, 143, 145 
 
 Gumm V. Tyrie (1864), 34 L. J. (q. b.) 124 ; 6 B. & S. 299 . . 9 
 
 Guthrie v. North China Insurance Co. (1902), 6 Com. Cas. 25 ; 7 Com. 
 
 Gas. 130 . . .' 107, 116, 126, 156 
 
 H. 
 
 Hadlby v. Clarke (1799), 8 T. R. 259 154 
 
 HaU V. Janson (1855), 4 E. & B. 600 ; 24 L. J. (q. b.) 97 ; 1 Jur. (n. s.) 
 
 571 ; 2 C. L. R. 737 58, 73 
 
 Hansen v. Dunn (1906), 11 Com. Cas. 100 ; 22 T. L. R. 458 . 106, 109, 135, 
 
 136, 145 
 Harrowing S.S. Oo. v. Thomas (1915), A. C. 58; 111 L. T. 653; 83 L. J. 
 
 (K. B.) 1662; 30 T. L. R. 611; 19 Com. Cas. 454 . . . 173,174 
 Hart V. The Delaware Insurance Co. (1809), 2 Wash. C. 0. 341 (Am.) . . 21 
 
 Haven v. Gray (1815), 12 Mass. R. (Am.). 71 214 
 
 Herbert v. HaRett (1802), 3 Johns. Cas. 93 (Am.) . . . 136, 138, 147 
 Hicki). Tweedy (1890), 63 L.T. 765; 7 T.L.R. 144 .... 67 
 Hicks V. Shield (1857), 26 L. J. (q. b.) 205 ; 7 E. & B. 633 ; 3 Jur. (n. s.) 
 
 715 ; 5 W. R. 536 58 
 
 Hickie v. Rodooanaohi (1859), 4 H. & N. 455 ; 28 L. J. (ex.) 273 ; 5 Jur. 
 
 (n. s.) 550 ; 7 W. R. 545 131, 153, 220 
 
 Hill V. Patten (1807), 8 East, 373 ; 1 Camp, 72 ; 9 R. R. 469 . . . 96 
 Hill V. Wilson (1879) ; 4 0. P. D. 329 ; 48 L. J. (c. p.) 764 ; 41 L. T. 412 ; 4 
 
 Asp. M. C. 198 106, 163 
 
xvi TABLE OF CASES 
 
 PAGE 
 
 Hodgson V. Mississippi Insurance Co. (1831), 2 Lou. Kep. 341 (Am.) . . 102 
 Holdsworth v. Wise (1828), 1 M. & Ry. 673 ; 7 B. & C. 794 ; 6 L. J. (o. s.) 
 
 (K. B.) 134 ; 31 R. R. 299 118, 159 
 
 Home Insurance Co. v. Baltimore Insurance Co. (1876), 93 U. S. 627 (Am.) 82 
 Hopper V. Wear Marine Insurance Co. (1882), 46 L. T. 107 ; 4 Asp. M. C. 
 
 482 63,99 
 
 Homoastle v. Suart (1806), 7 East, 400 ; 8 R. R. 649 . . . .27 
 Hough V. Head (1885), 55 L. J. (Q. b.) 43 ; 53 L. T. 809 ; 34 W. R. 160; 
 
 5 Asp. M. C. 505 71 
 
 HoweU V. Coupland (1876), 1 Q. B. D. 258 ; 46 L. J. (Q. B.) 147 ; 33 L. T. 
 
 832; 24W. R. 470 42 
 
 Hubbellu. Great Western Insurance Co. (1878), 74 N.Y. 248 (Am.) 108, 113, 115, 
 
 118 
 Hudson V. Ede (1868), L. R. 3 Q. B. 412 ; 37 L. J. (q. b.) 166 ; 18 L. T. 764 ; 
 
 16 W. R. 490 ; 8 B. & S. 640 67 
 
 Hudson V. Hill (1874), 43 L. J. (c. p.) 273 ; 30 L. T. 555 . . . 137, 144 
 
 Hugg V. Augusta Insurance Co. (1849), 7 How. 395 ; 1 Taney. 159 (Am.) 
 
 90, 140, 143, 163 
 Hughes V. Union Insurance Co. (1823), 8 Wheaton, 294 (Am.) ... 96 
 Hunter v. Leathley (1831), 9 L. J. (o. s.) (ex.) 118 ; 10 B. & C. 858 ; 5 M. 
 
 6 P. 457 ; 7 Bing. 517 ; 1 C. & J. 423 ; 1 Tyr. 355 ; LI. & Wels. 125 ; 
 
 53 R. R. 179 96 
 
 Hunter v. Prinsep (1806), 1 Marsh, 323 ; 10 East, 378 ; 10 R. R. 328 . 106 
 Huth V. New York Mutual Insurance Co. (1861), 8 Bosworth, 538 (Am.) 76 
 Hydames S.S. Co. v. Indemnity Mutual Marine Insurance Co., [1896] 1 
 
 Q. B. 500 ; 64 L. J. (Q. b.) 353 ; 14 R. 216 ; 72 L. T. 103 ; 7 Asp. 
 
 M. C. 553 64, 65, 99 
 
 I. 
 
 Idle v. Royal Exchange Assurance Co. (1819), 3 Br. & B. 161 ; 3 Moore, 115 ; 
 
 8 Taunt. 755 ; 21 R. R. 538 Ill, 130, 133, 14S 
 
 Inman Steamship Co. v. Bisohoff (1882), 7 A. C. 670 ; 52 L. J. (q. b.) 169 ; 
 
 47 L. T. 581 ; 31 W. R. 141 ; 5 Asp. M. C. 6 . . . 7, 8, 176, 179 
 
 Insurance Co. of North America v. Jones & Clark (1807), 2 Binn. 547 
 
 (Am.) 146,201 
 
 Insurance Co. of the Valley of Virginia v. Mordeoai (1869), 22 How. Ill 
 
 (Am.) 90 
 
 Iredale v. China Traders Insurance Co., [1900] 2 Q. B. 515 ; 69 L. J. (q. b.) 
 
 783 ; 83 L. T. 299 ; 49 W. R. 107 ; 8 Asp. M. C. 580 ; 5 Com. Cas. 
 
 337 163, 188 
 
 Irving V. Manning (1846), 1 C. B. 168 ; 2 C. B. 784 ; 6 C. B. 391 ; 1 H. L. C. 
 
 287 ; 73 R. R. 73 • . . . .209 
 
 Irving V. Richardson (1831), 2 B. & Ad. 193; 1 M. & Rob. 153; 9 L. J. 
 
 (o.s.)(K. B.)225; 36R. R. 541 55,74 
 
 Isabella, The (1801), 4 C. Rob. 77 136, 138 
 
TABLE OP CASES xvii 
 
 J. 
 
 PAGE 
 
 Jackson v. Union Marine Insurance Co. (1874), L. R. 10 C. P. 125 ; 44 
 
 L. J.{c. p.)27; 31L.T.789; 23W. R. 169; 2Asp.M. 0.435 135,161,172 
 Jamieson & Newcastle S.S. Freight Insurance Association, In re, [1895] 
 
 2 Q. B. 90 ; 64 L. J. (q. b.) 560 ; 14 R. 444 ; 72 L. T. 648 ; 43 W. R. 
 
 530 ; 7 Asp. M. C. 593 ; 1 Com. Cas. 395 ... 135, 172, 181 
 
 Janson v. Poole (1915), 31 T. L. R. 336 78, 84, 87, 88 
 
 Johnston v. Charles Abresch Go. (1901), 107 Am. St. Rep. 995 (Am.) . . 82 
 Jones V. The Neptune Marine Insurance Go. (1872), L. R. 7 Q. B. 702 ; ■ 
 
 41 L. J. (Q. B.) 370 ; 27 L. T. 308 ; 1 Asp. M. C. 416 . . 62, 99 
 
 .Jordan v. Warren Insurance Co. (1840), 1 Story, 342 (Am.) 136, 144, 146, 161, 
 
 162, 167, 168, 201 
 
 K. 
 
 Kaffir Prince, The (1915), 31 T. L. R. 296 193 
 
 Karnak, The (1869), L. R. 2 P. C. 505 ; 6 Moo. P. 0. (n. s.) 136 ; 38 L. J. 
 
 (ADM.)57; 21 L. T. 159; 17 W. R. 1028. . . .^ . .58 
 
 Kathleen, The (1874), L. R. 4 A. & E. 269 ; 43 L. J. (adm.) 39 ; 31 L. T. 
 
 204 ; 23 W. R. 350 156 
 
 Keith V. Burrows (1877), 2 A. C. 636 ; 46 L. J. (o. P.) 801 ; 37 L. T. 291 ; 
 
 25 W. R. 831 ; 3 Asp. M. C. 481 4, 9, 73, 158 
 
 Kemp V. Halhday (1866), L. R. 1 Q. B. 520 ; 6 B. & S. 723 ; 35 L. J. (q. b.) 
 
 156 ; 12 Jur. (n. s.) 582 ; 14 L. T. 762 ; 14 W. R. 697 . . . 149 
 
 Ker V. Osborne (1808), 9 East, 378 224 
 
 Kidston v. Empire Marine Insurance Co. (1867), L. R. 2 C. P. 357 ; 36 
 
 L. J. (c. p.) 156 ; 12 Jur. (N. S.) 665 ; 16 L. T. 286 ; 15 W. R. 769 . 106, 
 
 109, 115, 117, 118, 120, 185, 202 
 Kirchner v. Venus (1859), 12 Moo. P. C. 361 ; 7 W. R. 455; 5 Jur. (n.s.) 
 
 395 10 
 
 Knight of St. Michael, The, [1898] P. 30 ; 67 L. J. (p.) 19 ; 78 L. T. 90 ; 
 
 48 W. R. 396 ; 8 Asp. M. 0. 360 ; 3 Com. Gas. 62 . . . . 163 
 Knight V. Faith (1850), 15 Q. B. 649 ; 19 L. J. (Q. b.) 509 ; 14 Jur. 1114 ; 81 
 
 R. R. 725 , • • ■ • 69, 71 
 
 Kung V. Methuen (1907), 24 T. L. R. 145 54 
 
 Kynance S.S. Co. v. Young (1911), 104 L. T. 397 ; 16 Com. Cas. 125 ; 27 
 
 T. L. R. 306 ; 11 Asp. M. C. 596 79 
 
 Ladbbokb v. Lee (1850), 4 De G. & S. 106 ; 87 R. R. 306 .. . 57 
 
 Lawther v. Black (1900), 6 Com. Cas. 5, 196 ; 17 T. L. R. 8 . . . 13 
 
 Leatham v. Terry (1803), 3 B. & P. 479 224 
 
 Lee i;. Adsit (1867), 37 N. Y. 78 (Am.) 82 
 
 Lee V. GrinneU (1856), 5 Duer. 400 (Am.) 188 
 
 Lee V. Southern Insurance Co. (1870), L. R. 5 C. P. 397; 22 L. T 443; 
 
 39L. J. P. 218; 18W. R. 863 116,202 
 
xviii TABLE OP CASES 
 
 PAGE 
 
 LeUrim, The, [1902] P. 256 ; 71 L. J. (p.) 108 ; 87 L. T. 240 ; 51 W. R. 158 ; 
 
 9 Asp. M. C. 317 ; 8 Com. Cas. 6 193, 194, 198 
 
 Lemont u. Lord (1864), 52 Maine, 365 (Am.) 1^ 
 
 Leonis S.S. Co. v. Bank, Ltd., [1908] 1 K. B. 499 ; 77 L. J. (k. b.) 224 ; 13 
 
 Com. Cas. 136 ; 24 T. L. R. 128 ^8 
 
 Leptir, The (1885), 52 L. T. 768 ; 6 Asp. M. C. 411 156 
 
 Levy V. Merchants Marine Insurance Co. (1885), 1 Cab. & E. 474; 52 
 
 L. T. 263 ; 1 T. L. R. 228 ; 5 Asp. M. C. 407 . . • • 57, 145 
 Lidgett V. Secretan (1871). L. R. 6 C. P. 616 ; 40 L. J. (c. p.) 257 ; 24 L. T. 
 
 942 ; 19 W. R. 1088 ; 1 Asp. M. C. 96 203 
 
 Lidgett u. Williams (1845), 4 Hare, 456 8 
 
 Lincohi v. Boston Marine Insurance Co. (1893), 169 Mass. R. 337 (Am.) 91, 
 
 218, 219 
 
 Lindsay v. Gibbs (1856), 28 L. J. (CH.) 692 ; 22 Beav. 622 ; 4 Jur. (N. s.) ' 
 
 779 54 
 
 Lockhart v. Cooper (1882), 42 Am. Rep. 514 (Am.) 82 
 
 London & N. W. Ry. Co. v. Glyn (1859), 28 L. J. (q. b.) 188 ; 1 E. & E. 
 
 652 ; 5 Jur. (n. s.) 1004 ; 33 L. T. 199 ; 7 W. R. 238 . . 55, 77, 82 
 
 London Assurance Corporation v. Williams (1892), 9 T. L. R. 96 ; 257 . 230 
 Lord V. Neptune Insurance Co. (1857), 10 Gray, 109 (Am.) . 92, 105, 111, 138, 
 
 143, 145, 161, 167, 168, 186 
 Lozano v. Janson (1859), 28 L. J. (Q. B.) 337 ; 2 E. & E. 160 ; 6 Jur. (n. s.) 
 
 1401 ; 7 W. R. 654 118, 159 
 
 Lucas V. Insurance Co. (1883), 48 Am. Rep. 383 (Am.) .... 82 
 Lucena v. Craufurd (1806), 2 B. & P. N. R. 269 ; 1 Taunt. 325 ; 6 R. R. 
 
 623 12,43,66 
 
 Luke V. Lyde (1759), 2 Burr. 883 ; 1 W. Bl. 190 . . . . 134, 220 
 
 M. 
 
 M' Andrew v. Adams (1834), 1 Bing. N. C. 29 ; 3 L. J. (c. p.) 236 . . 136 
 M'Carthy v. Abel (1804), 6 East, 388 ; 1 Smith, 524 ; 6 R. R. 724 . 132, 133, 
 
 158, 221, 224 
 M'Gaw V. Ocean Insurance Co. (1839), 23 Pick. 406 (Am.). 92, 105, 134, 136, 
 
 138, 140, 143, 147 
 Mclver u. Henderson (1816), 4 M. & S. 576 ; 16 R. R. 550 . . .118 
 
 Mackenzie v. Shedden (1810), 2 Camp. 431 ; 11 R. R. 759 . 18. 22, 27, 73 
 
 Mackenzie v. Whitworth (1875), I'Ex. D. 36 ; 45 L. J. (ex.) 233 ; 33 L. T. 
 
 655 ; 24 W. R. 287 ; 2 Asp. M. C. 490 77 
 
 M'Swiney v. Royal Exchange Assurance Co. (1849), 19 L. J. (q. b.) 222 ; 
 
 14 Q. B. 634 ; 14 Jur. 998 ; 80 R. R. 345 . . . . 80 
 
 Main, The, [1894] P. 320 ; 63 L. J. (adm.) 69 ; 6 R. 775 ; 70 L. T. 247 ; 
 
 7Asp. M. C. 424 211 
 
 Manchester Liners v. British & Eoreign Marine Insurance Co. (1901), 86 
 
 L. T. 148 ; 9 Asp. M. C. 266 ; 7 Com. Cas. 26 . . . 13, 16, 177, 179 
 Manfield v. Maitland (1821), 4 B. & Aid. 582 ; 23 R. R. 402 . . 58 
 
 Marine Insurance Co. v. United Insurance Co. (1812), 9 Johns. B. 186 
 
 (Am.) 225 
 
 Martin v. Fishing Insurance Co. (1838), 20 Pick. 389 (Am.) ... 83 
 
TABLE OP CASES xix 
 
 PAGE 
 
 Mashiter v. BuUer (1807), 1 Camp. 84 10 
 
 Mason v. Marine Insurance Co. (1901), 110 Fed. R. 452 (Am.) . . 225, 229 
 Mayo V. Maine Insurance Co. (1808), 4 Mass. R. 374 (Am.) . . 146, 201 
 Meade, King & Co. v. Jacobs & Co., [1914] 3 K. B. 156 ; 83 L. J. (k. b.) 
 
 1219 ; 30 T. L. R. 549 174 
 
 Meloher v. Ocean Insurance Co. (1871), 59 Maine, 217 ; 60 Maine, 77 (Am.) 86 
 Mellen v. National Insurance Co. (1829), 1 Hall. 452 (Am.) . . 51, 53, 75 
 Melville v. De WoK (1855), 4 E. & B. 844 ; 24 L. J. Q. B. 200 ; 3 C. L. R. 
 
 960 ; 1 Jur. N. S. 758 154 
 
 Mercantile S.S. Co., Ltd. v. Tyser (1881), 7 Q. B. D. 72 ; 29 W. R. 790 ; 
 
 6 Asp. M. 0. 6, n. 32, 102, 179, 180 
 
 Merchants Marine Insurance Co. v. Rumsey (1884), 9 S. C. R. 577 (Can.) . 96 
 Merchant Shipphig Co. v. Armitage (1873), L. R. 9 Q. B. 99 ; 43 L. J. (Q. b.) 
 
 24 ; 29 L. T. 809 ; 2 Asp. M. C. 185 173 
 
 Mestaer v. Gillespie (1806), 11 Ves. 625 54 
 
 Metcalfe v. Britannia Ironworks Co. (1877), 2 Q. B. D. 423 ; 46 L. J. (q. b.) 
 
 443 ; 36 L. T. 451 ; 25 W. R. 720 ; 3 Asp. M. C. 407 . . .137 
 
 Michael v. GiUespy (1857), 26 L. J. (o. p.) 306 ; 2 C. B. (n. s.) 627 ; 3 Jur. 
 
 (N. s.) 1219 70, 163, 164 
 
 MiUar u. Taylor (1915), 31 T. L. R. 272 154 
 
 Miller v. Woodfall (1857), 27 L. J. (q. b.) 120 ; 8 E. & B. 493 ; 4 Jur. (n. s.) 
 
 302 9, 226, 227 
 
 Mitcheson v. Niool (1852), 21 L. J. (ex.) 323 ; 7 Ex. 929 . . . . 9 
 Montgomery v. Egginton (1789), 3 T. R. 362 ; 1 R. R. 718 . 45, 46, 66 
 
 Moran v. Jones (1857), 26 L. J. (Q. B.) 187 ; 7 E. & B. 623 ; 3 Jur. (n. s.) 
 
 663 ; 5 W. R. 503 195 
 
 Mordy v. Jones (1825), 3 L. J. (o. s.) (k. b.) 250 ; 4 B. & C. 394 ; 6 D. & Ry. 
 
 479 ; 28 R. R. 305 73, 167 185 
 
 Moses V. Pratt (1815), 4 Camp. 297 ; 16 R. R. 794 . . . . 18, 73 
 
 Moss V. Smith (1845), 19 L. J. (C. P.) 225 ; 9 C. B. 94 ; 14 Jur. 1003 ; 82 
 
 R. R. 307 76, 120, 148, 149, 150, 151, 153, 185 
 
 Mount V. Harrison (1827), 6 L. J. (o. S.) (o. P.) 6 ; 4 Bing. 338 ; 1 M. & P. 
 
 14 ; 29 R. R. 580 Ill, 124, 145 
 
 Munich Insurance Co. v. Dodwell (1904), 128 Fed. R. 410 (Am.) . 77, 82 
 
 Murdock v. Potts (1795), 2 Park. Ins. 634 15 
 
 Murray v. iEtna Insurance Co. (1864), 4 Biss. 417 (Am.) . . . 136, 142 
 
 Miirray v. Columbian Insurance Co. (1814), 11 Johns. R. 302 (Am.) . . 210 
 Musgrave v. Mannheim Insurance Co. (1899), 32 Nova Scotia R. 405 (Can.) 
 
 136, 137 
 
 N. 
 
 Nathaniel Hooper, The (1839), 3 Sumner, 549 (Am.) . . . 155, 186 
 
 Nelson v. Beaumont (1856), 5 Duer. 310 (Am.) 188 
 
 Nelson v. Nelson Line, Ltd., [1908] A. C. 16 ; 77 L. J. (k. b.) 82 ; 97 L. T. 
 
 812 ; 13 Com. Cas. 104 ; 24 T. L. R. 114 ; 10 Asp. M. C. 581 . . 7, 41 
 New York & Cuba Mail Steamship Co. ii. Royal Exchange Assurance Co. 
 
 (1907), 154 Fed. R. 315 (Am.) 50, 207 
 
 Nichols & Co. V. Scottish Union Insurance Co. (1885), 2 T. L. R. 190; 14 
 
 Rettie, 1094 55 
 
XX TABLE OP CASES 
 
 PAGE 
 
 NickoU V. Ashton, [1901] 2 K. B. 126 ; 70 L. J. (k. b.) 600 ; 84 L. T. 804 ; 
 
 6 Com. Gas. 150 ; 29 W. R. 513 ; 9 Asp. M. G. 209 . . . 42, 135 
 North Atlantic S.S. Go. v. Burr (1904), 9 Com. Gas. 164 ; 20 T. L. R. 266 . 150 
 North British & Mercantile Insurance Go. v. London Liverpool & Globe 
 
 Insurance Co. (1877), 5 Ch. D. 569 ; 46 L. J. (oh.) 537 ; 36 L. T. 629. 55 
 North British Insurance Go. v. Moffatt (1871), L. R. 7 G. P. 25; 41 L. J. 
 
 (0. p.) 1; 25L. T. 662; 20W. R. 114 82 
 
 Norway, The (1865), Br. & Lush. 377 ; 3 Moo. P. C. (n. s.) 246 ; 11 Jur. 
 
 (N. s.) 892 ; 13 L. T. 50 ; 13 W. R. 1085 . . . . • . 174 
 Notara v. Henderson (1872), L. R. 7 Q. B. 225 ; 41 L. J. (Q. b.) 158 ; 26 L. T. 
 
 442 ; 20 W. R. 442 ; 1 Asp. M. G. 278 . . . 106, 138, 166, 167 
 
 0. 
 
 Ocean Insurance Go. v. Sun Insurance Go. (1882), 107 U. S. Rep. 485 ; 15 
 
 Blatch. 249 (Am.) 87 
 
 Ogden V. General Mutual Insurance Go. (1853), 2 Duer. 204 (Am.) . 136, 138, 
 
 141, 143, 146, 161, 186, 201 
 
 Oliver v. Greene (1807), 3 Mass. R. 133 (Am.) 75 
 
 Oriental S.S. Co., Ltd. v. Tylor, [1893] 2 Q. B. 518 ; 63 L. J. (Q. b.) 128 ; 
 
 69L. T. 577 105 
 
 Owen V. Outerbridge (1896), 26 Sup. Can. R. 272 (Can.) . . 109, 136, 137 
 
 P. 
 
 Palmer v. Blackburn (1882), 1 L. J. (o. s.) (c. p.) 1 ; 1 Bing. 61 ; 7 Moore, 
 
 339 ; 25 R. R. 599 200 
 
 Paradise v. Sun Mutual Insurance Co. (1851), 6 Lou. Ann. 596 (Am.) . 54, 76 
 
 Parke v. Hebson (1820), cited 2 B. & B. 326 ; 23 R. R. 451 . 8, 40, 66, 73 
 
 Parmeter v. Todhunter (1808), 1 Gamp. 541, 591 119 
 
 Parry v. Aberdem (1829), 4 Man. & Ry. 343; 7 L. J. (o. s.) (k. b.) 260 ; 
 
 9 B. & G. 411 ; Dan. & LI. 228 ; 33 R. R. 221 . . . .118 
 
 Parsons v. Manufacturers Insurance Co. (1860), 16 Gray, 463 (Am.) . . 161 
 Patapsco Insurance Co. v. Biscoe (1836), 7 Gill. & Johns. 293 ; 28 Amer. 
 
 Dec. 219 (Am.) 89 
 
 Patrick v. Eames (1813), 3 Gamp. 441 . . . .8, 40, 44, 205, 206 
 
 Philhps V. Campion (1805), 6 Taunt. 3 ; 1 Marsh, 402 . . . .69 
 
 Philpott V. Swann (1861), 30 L. J. (C. P.) 358 ; 11 C. B. (sr. s.) 270 ; 7 Jur. 
 
 (N. s.) 1291 ; 5 L. T. 183 150, 151, 185 
 
 Pirie v. Middle Dock Go. (1881), 44 L. T. 426 ; 4 Asp. M. C. 388 . . 187 
 
 Pollurrian S.S. Co. v. Young, [1915] 1 K. B. 922 ; 109 L. T. 901 ; 19 Com. 
 
 Gas. 143 155 
 
 Post V. Phoenix Insurance Co. (1813), 10 Johns. R. 79 (Am.) . . . 210 
 Potter V. New Zealand Shipping Co. (1896), 1 Com. Gas. 114 ; 64 L. J. (q. b.) 
 
 689 . . . " 7, 41 
 
 Price V. A.I Ships' Small Damage Insurance Association (1889), 22 Q. B. D. 
 
 580 ; 58 L. J. (Q. B.) 269 ; 61 L. T. 278 ; 37 W. R. 566 ; 6 Asp. M. c'. 
 
 435 217 
 
TABLE OF CASES xxi 
 
 PAGE 
 
 Progress, The (1810), Edwards Adm. R. 210 23, 193 
 
 Puller V. Glover (1810), 12 East, 124 64 
 
 Puller?;. HalUday (1810), 12 East, 494; 11 E.R. 464 .... 54 
 Puller V. Staniforth (1809), 11 East, 232 ; 10 R. R. 486 . . . . 54 
 
 K. 
 
 Rankin v. Potter (1873), L. R. 6 H. L. 83 ; 42 L. J. (c. p.) 169 ; 29 L. T. 
 
 142 ; 22 W. R. 1 ; 2 Asp. M. C. 65 . 13, 14, 35, 71, 96, 105, 107, 108, 
 
 117, 119, 120, 122, 123, 131, 148, 149, 150, 153, 160, 161, 170, 171, 185, 195 
 Ralli V. Janson (1856), 25 L. J. (Q. B.) 300 ; 6 E. & B. 422 . . . 184 
 
 Red R. S.S. Co. v. Allatini (1909), 100 L. T. 268 ; 14 Com. Gas. 82 ; 101 
 
 L. T. 510 ; 14 Com. Cas. 303 ; 25 T. L. R. 791 . . . . 9 
 
 Re-d Sea, The, [1896] P. 20 ; 65 L. J. (adm.) 9 ; 73 L. T. 462 ; 44 W. R. 306 ; 
 
 8 Asp. M. C. 102 58, 225, 226 
 
 Reed v. Cole (1764), 3 Burr. 1512 83 
 
 Regina v. Judge of City of London Court (1883), 12 Q. B. D. 115 ; 53 L. J. 
 
 (Q. B.) 128 ; 51 L. T. 197 ; 32 W. R. 291 40 
 
 Reliance Marine Insurance Co. v. Duder, [1913] 1 K. B. 266 ; 81 L. J. (k. b.) 
 
 870 ; 106 L. T. 936 ; 17 Com. Cas. 227 ; 28 T. L. R. 469 . . . 78 
 
 Riokman v. Carstairs (1853), 3 L. J. (k. b.) 28 ; 2 N. & M. 562 ; 6 B. & Ad. 
 
 651 ; 39 R. R. 603 96 
 
 RUey V. Delafield (1811), 7 Johns. R. 522 (Am.) . . . .57, 75, 76 
 
 Riley V. Hartford Insurance Co. (1817), 2 Conn. 373 (Am.) . . 14,23 
 
 Rising V. Burnett (1798), 2 Marsh. Ins. 738 74 
 
 Robbins v. New Yorls Insurance Co. (1828), 1 Hall. 363 (Am.) . . 73 
 
 Robertson v. Atlantic Mutual Insurance Co. (1877), 68 N. Y. 192 (Am.) . 125 
 Robertson v. Marjoribanks (1819), 2 Starkie, 573 ; 20 R. R. 740 . 84, 184 
 Robinson v. Knights (1873), L. R. 8 C. P. 465; 42 L. J. (o. p.) 362; 33 
 
 L. T. 644 173 
 
 Robinson v. Manufacturers Insurance Co. (1840), 1 Mete. 143 (Am.) . . 97 
 Rodocanachi v. ElUott (1874), L. R. 9 C. P. 518 ; 43 L. J. (c. P.) 255 ; 31 
 
 L. T. 239 ; 2 Asp. M. C. 399 135 
 
 Roe w. Crescent Mutual Insurance Co. (1856), 11 Lou. Ann. 408 (Am.) . 136 
 Rogers v. NashviUe Marine Insurance Co. (1854), 9 Lou. Ann. 637 (Am.) . 126 
 Rosetto V. Gumey (1851), 20 L. J. (c. p.) 257 ; 11 C. B. 176 ; 15 Jur. 1177 ; 
 
 17 L. T. (o. S.) 242 ; 87 R. R. 629 . . . 106, 106, 163, 166, 166 
 
 Ruger V. Firemen's Fund Insurance Co. (1898), 90 Fed. R. 310 (Am.) . 102 
 
 179, 180 
 
 s. 
 
 Sailing Ship Blairmore Co. v. Macredie, [1898] A. C. 593 ; 67 L. J. (p. c.) 
 
 96 ; 24 R. 893 ; 79 L. T. 217 ; 8 Asp. M. C. 429 ; 3 Com. Cas. 241 . 131, 
 
 149* 
 
 Saltus V. Ocean Insurance Co. (1817), 12 Johns. R. 107 ; 14 Johns. R. 138 
 
 (Am.) 109, 117, 136, 139, 145 
 
xxii TABLE OF CASES 
 
 PAGE 
 
 Sanday v. British Marine Insurance Co. (1915), 31 T. L. R. 374 . . 154 
 
 Savom, The, [1900] P. 252 ; 69 L. J. (P.) 95 145, 154 
 
 Schuster v. McKellar (1857), 7 E. & B. 704 ; 26 L. J. Q. B. 281 ; 3 Jur. 
 
 (N.S.) 1320 40 
 
 Scottish Marine Insurance Co. v. Turner (1853), 4 H. L. C. 312 ; 1 Macq. 
 
 H. L. 334 ; 17 Jur. 631 ; 1 W. R. 527 . . 113, 126, 129, 131, 221 
 
 Scottish Shire Line, Ltd. v. London & Provincial Marine & General Insur- 
 ance Co., [1912] 3 K. B. 51 ; 107 L. T. 46 ; 81 L. J. (k. b.) 1066 ; 17 Com. 
 
 Cas. 240 ; 56 S. J. 551 . . . 39, 42, 74, 98, 99, 104, 161, 173, 183 
 Sea Insurance Co. v. Hadden (1884), 13 Q. B. D. 706 ; 53 L. J. (q. b.) 262 ; 
 
 50 L. T. 657 ; 32 W. R. 841 ; 5 Asp. M. C. 230 . 131, 135, 153, 199, 220, 228 
 SeUar v. M'Vicar (1804), 1 B. & P. N. R. 23 ; 8 R. R. 744 . . . . 69 
 Sharp V. Gladstone (1805), 7 East, 32 ; 3 Smith, 39 ; 8 R. R. 583 . 161, 222, 
 
 224 
 
 Shawe v. Eelton (1801), 2 East, 113 ; 6 R. R. 394 209 
 
 Shepherd v. Henderson (1881), 7 A. C. 49 ; 9 Ct. of Sess. Cas., 4th Ser. 1 . 71 
 
 118, 148 
 Shipton V. Thornton (1838), 8 L. J. (Q. B.) 73 ; 9 A. & E. 314 ; 1 P. & D. 316 ; 
 
 48 R. R. 507 106, ] 16 
 
 Simmes v. Marine Insurance Co. (1825), 2 Cranch. C. C. 618 (Am.) . . 76' 
 
 Simpson v. Thomson (1877), 3 A. C. 279 ; 4 Sc. Cas., 4th Ser. 177 ; 38 
 
 L. T. 1 ; 3 Asp. M. C. 567 158, 220 
 
 Smith V. LasceUes (1788), 2 T. R. 188 ; 1 R. R. 457 54 
 
 Smith V. Rosario Nitrate Co. (1894), 1 Q. B. 174; 70L. T. 68; 7 Asp. 
 
 M. C. 417 . . 67 
 
 Sdblomsten, The (1866), L. R. 1 A. & E. 293 ; 36 L. J. (adm.) 5 ; 15 L. T. 
 
 393 ; 15 W. R. 591 106, 109, 135 
 
 Southampton Steam Colliery Co. v. Clark (1870), L. R. 6 Ex. 53 ; 40 L. J. (ex.) 
 
 8 ; 19 W. R. 214 . . . . 9 
 
 Spafford u.' Dodge (1817), 14 Mass. R. 74 (Am.) 193 
 
 Stetson V. Massachusetts Mutual Insurance Co. (1808), 4 Mass. R. 330 
 
 (Am.) 83 
 
 Stevens v. Columbia Insurance Co. (1805), 3 Caines. 43 (Am.) . . . 201 
 
 Stewart v. Greenock Marine Insurance Co. (1848), 2 H. L. C. 159 ; 1 Macq. 
 
 H. L. 328 ; 81 R. R. 91 126, 158, 220 
 
 Stevirart v. Merchants Marine Insurance Co. (1885), 16 Q. B. D. 619 ; 55 
 
 L. J. (Q. B.) 81 ; 53 L. T. 892 ; 34 W. R. 208 ; 5 Asp. M. C. 506 186, 217 
 Stewart v. Steele (1842), 11 L. J. (c. p.) 155 ; 5 Scott. N. R. 927 . . 203 
 
 Stone V. Marine Insurance Co. of Gothenburg (1876), L. R. 1 Ex. D. 81 ; 
 
 45L. J. (Bx.)361; 34L. T. 490; 24W. R;55; 3Asp. M. C. 152 . 68 
 Stringer v. EngUsh Insurance Co. (1869), L. R. 5 Q. B. 599 ; 39 L. J. (q. b.) 
 
 214 ; 10 B. & S. 770 ; 22 L. T. 802 ; 18 W. R. 1201 . . . .117 
 
 Svendsen v. Wallace (1885), 10 A. C. 404; 54 L. J. (q. b.) 497 ; 52 L. T. 
 
 901 ; 34 W. R. 369 ; 5 Asp. M. C. 453 . • . 105, 106, 115, 166, 198 
 
 Swan V. Barber (1879), 5 Ex. D. 130 ; 49 L. J. Ex. 253 ; 42 L. T. 490 • 28 
 
 W. R. 563; 4Asp. M. C. 264. 9 
 
 Swan V. Maritime Insurance Co., [1907] 1 K. B. 117 ; 76 L. J. (k. b.) 
 
 160 ; 96 L. T. 839 ; 12 Com. Cas. 73 ; 10 Asp. M. C. 450 ; 23 
 
 T. L. R. 101 57 
 
TABLE OF CASES xxiii 
 
 T. 
 
 PAGE 
 
 Taskee V. Cunningham (1819), 1 Bli. 87, 102 ; 20 R. R. 33 . . . 51 
 Taylor v. Wilson (1812), 15 East, 324 ; 13 R. R. 488 .. . 14, 15 
 
 Thames & Mersey Marine Insurance Co. v. British & Chilian Steamship Co. 
 
 (1915), 31 T. L. R. 275 229 
 
 Thames & Mersey Marine Irisurance Co. v. Gunford Ship Co., Ltd., [1911] 
 A. 0. 529 ; 80 L. J. (p. c.) 146 ; 105 L. T. 312 ; 16 Com. Cas. 270 ; 55 
 
 S. J. 631 ; 27 T. L. R. 518 201 
 
 Thompson v. Roworoft (1803), 4 East, 34 ... . 220, 224, 226 
 Thompson v. Taylor (1795), 6 T. R. 478 ; 3 R. R. 233 . . 17, 22, 23, 24, 
 
 30, 41, 60, 73 
 Thwing V. Washington Insurance Co. (1858), 10 Gray, 443 (Am.) . 91, 92, 
 
 105, 107, 111, 120, 123, 125 
 Thyatira, The (1883), 8 P. D. 155 ; 52 L. J. (adm.) 85 ; 49 L. T. 406 ; 32 
 
 W. R. 276 4, 73, 228 
 
 Tindall v. Taylor (1854), 24 L. J. (q. b.) 12 ; 3 C. L. R. 199 ; 1 Jur. (n. s.) 
 
 112 ; 4 E. & B. 219 16 
 
 Tobin V. Harford (1864), 34 L. J. (C. P.) 37 ; 17 C. B. (n. s.) 528 ; 10 Jur. (sf. s.) 
 
 869 ; 10 L. T. 817 ; 12 W. R. 1062 .... 96, 204, 214 
 
 Tonge V. Watts (1746), 2 Str. 1251 45, 66 
 
 Toppan V. Atkinson (1807), 2 Mass. R. 356 (Am.) . . . . .83 
 
 Tornado, The (1882), 108 U. S. Rep. 342 (Am.) 16 
 
 Touteng v. Hubbard (1802), 3 B. & P. 291 ; 6 R. R. 791 . . . 154 
 
 Trayes v. Worms. See Ekayes v. Woems. 
 
 TreadweU v. Union Insurance Co. (1826), 6 Cow. 270 (Am.) . . .109 
 Trinder, Anderson & Co. v. Thames & Mersey Marine Insurance Co., [1898] 
 2 Q. B. 114 ; 67 L. J. (q. b.) 666 ; 78 L. T. 485 ; 46 W. R. 561 ; 8 Asp. 
 
 M. C. 373 ; 3 Com. Cas. 123 108, 120 
 
 Tronson v. Dent (1853), 8 Moo. P. C. 419 . . . . 106, 136, 138 
 
 Troop V. Merchants Marine Insurance Co. (1886), 1? Sup. Can. R. 506 
 
 (Can.) 124,221 
 
 Truscott V. Christie (1820), 5 Moore, 33 ; 2 Br. & B. 320 ; 23 R. R. 446 . 8, 
 
 18, 23, 24, 40, 43, 60, 66, 73 
 TumbuU, Martin & Co. v. Hull Underwriters' Association, [1900] 2 Q. B. 402 ; 
 
 69 L. J. (Q. B.) 588 ; 82 L. T. 818 ; 5 Com. Cas. 248 ; 9 Asp. M. C. 93 . 38, 
 
 42, 99, 181, 183 
 Turner v. Trustees of Liverpool Docks (1851), 20 L. J. (ex.) 393 ; 6 Exch. 
 
 543 ; 17 L. T. (o. s.) 212 ; 86 R. R. 377 9 
 
 u. 
 
 United Insurance Co. v. Lenox (1802), 2 Johns. R. 443 (Am.) . . 225 
 
 United Kingdom Mutual S.S. Assurance Association v. Boulton (1898), 
 
 3 Com. Cas. 330 224 
 
 United States Shipping Co. v. Empress Assurance Co., [1907] 1 K. B. 259 ; 
 
 [1908] 1 K. B. 115 ; 77 L. J. (k. b.) 120 ; 13 Com. Cas. 90 ; 24 T. L. R. 
 
 45 51, 74, 76, 201 
 
 Ursula Bright S.S. Co. v. Ripley (1903), 8 Com. Cas. 171 . ... 9 
 
xxiv TABLE OF CASES 
 
 w. 
 
 PAGE 
 
 Waed V. Beok (1863), 32 L. J. (c. p.) 113 ; 13 C. B. (n. s.) 668 ; 9 Jur. (n. s.) 
 
 912 57 
 
 Ward V. Weir (1899), 4 Com. Cas. 222 39 
 
 Waring v. Indemnity Mre Insurance Co. (1871), 45 N. Y. 606 (Am.) . . 82 
 Warre v. Miller (1824), 4 L. J. (o. S.) (k. b.) 8 ; 4 B. & C. 538 ; 7 D. & E. 
 
 1 ; 1 Car. & P. 237 ; 28 R. R. 382 . . . . 8, 31, 40, 66, 67, 73 
 
 Waters v. Monarch Life Insurance Co. (1856), 25 L. J. (q. b.) 102 ; 6 E. & B. 
 
 870 ; 26 L. T. (o. s.) 217 ; 4 W. R. 245 ; 2 Jur. (n. s.) 375 . . 55, 77, 82 
 
 Waugh V. Morris (1873), L. R. 8 Q. B. 202 ; 28 L. T. 266 ; 42 L. J. (Q. b.) 
 
 57 ; 21 W. R. 438 ; 1 Asp. M. C. 573 144 
 
 Weir V. Girvin, [1900] 1 K. B. 45 ; 69 L. J. (q. b.) 168 ; 81 L. T. 687 ; 48 
 
 W. R. 179 ; 9 Asp. M. C. 7 ; 5 Com. Cas. 40 . . . . 10, 58, 160 
 
 Whitney v. New York Firemen's Insurance Co. (1820), 18 Johns. R. 208 
 
 (Am.) 109, 117, 163 
 
 Wiggin V. Mercantile Assurance Co. (1828), 7 Pick. 271 (Am.) ... 9 
 WiUiams v. Canton Insurance Office, [1901] A. C. 462 ; 70 L. J. (k. b.) 962 ; 
 
 85 L. T. 317 ; 6 Com. Cas. 256 . . . 3, 8, 54, 100, 101, 173, 174 
 Williams v. London Assurance Co. (1813), 1 M. & S 318 ; 14 R. R. 441 . 191 
 WiUiams v. North China Insurance Co. (1876), 1 C. P. D. 757; 35 L. T. 
 
 884 ; 3 Asp. M. C. 342 208 
 
 Williamson v. Innes (1831), 8 Bing. 81 ; 1 Moo. & R. 88 ; 34 E. R. 629 n. ; 
 
 42 E. E. 765 29 
 
 Wilson V. Martin (1856), 25 L. J. (ex.) 217 ; 11 Exch. 684 . . 54, 58 
 
 WinkfleU, The, [1902] P. 42 ; 71 L. J. (p.) 21 ; 86 L. T. 668 ; 50 W. E, 
 
 246 77 
 
 Winter v. Haldimand (1831), 9 L. J. (o. s.) (k. b.) 313 ; 2 B. & Ad. 649 ; 
 
 36 R. R. 693 . ' .10 
 
 Wolcutt V. Eagle Insurance Co. (1827), 4 Pick. 429 (Am.) . . 73, 206 
 
LAW EELATING TO THE 
 mSUEANCE OF FEEIGHT 
 
 CHAPTEK I. 
 
 Feeight as the Subject of Insurance. 
 
 Ships are built for the purpose of earning money by the carriage 
 of goods. Merchants require ships to carry their merchandise. For 
 this service they are willing to pay, and the remuneration thus 
 payable is termed freight. 
 
 In days gone by, when ships were small and commerce but slightly 
 developed, shipowners were willing to send their vessels to a port 
 and take the risk of iinding there merchants who would provide a 
 cargo. Merchants, too, who had no definite engagements to fulfil 
 and merely sought a favourable market for their wares, were willing 
 to await the arrival of a ship. But the day of the seeking ship is 
 passing away. The enormous growth in the size of vessels, and the 
 consequent increase in their carrying capacity and in the cost of their 
 maintenance has made it imperative for the shipowner to be assured 
 of employment for his vessel. On the other hand, the development 
 and organization of international commerce has made it imperative 
 for the merchant to be assured of a vessel to carry his goods. Neither 
 side can afford to trust to chance. Definite employment and definite 
 engagements are essential. 
 
 The conditions of employment differ widely, but speaking generally 
 shipowners offer the services of their vessels in two ways. Either 
 the ship is put up for a defined voyage as a general ship and takes 
 the goods of any person willing to ship in her, or the shipowner 
 seeks for some one who will employ the vessel upon some voyage or 
 during some period of time, for purposes and upon terms to be agreed 
 with him. On those routes where trade is regular and constant, 
 i.p. ^ 
 
2 LAW EELATING TO THE INSURANCE OP FREIGHT 
 
 ships are run as general ships at more or less regular intervals. The 
 shipowner is able to gauge with comparative accuracy the amount 
 of tonnage that will be required, and can rely on obtaining ample 
 cargoes for his vessels. The merchant under normal circumstances 
 experiences no difSculty in obtaining space, and if he wants to ensure 
 that his goods will not be shut out, he can definitely engage in advance 
 room for the goods he proposes to ship. Except in those cases where 
 ships are run as general ships in connection with a regular line, the 
 shipowner usually prefers to leave to others the risk and task of 
 collecting together a cargo. He charters his ship, generally the 
 whole ship, but the charterparty may relate to a smaller portion of 
 the ship's carrying capacity, it may be to a merchant who proposes 
 to load his own goods ; it may be to a person who hires the ship 
 for a specified sum or rate to make a particular voyage, intending 
 himself to put her up as a general ship, and hoping to make a profit 
 by the difference between the rate of freight he pays to the shipowner 
 and the rate he receives from the merchant ; it may be to a charterer, 
 who hires the vessel for a voyage or succession of voyages or for a 
 period of time and proposes to work her for his own profit as the 
 owner. 
 
 In whatever way a vessel may be employed, the remuneration 
 payable is described comprehensively as freight. In the strict signi- 
 ficance of the term freight is the remuneration payable for the carriage 
 and safe delivery of goods. In practice it has a more extended 
 application and designates, in addition to the remuneration payable 
 for the carriage and delivery of goods that have been put on board 
 a vessel, the remuneration agreed to be paid under a contract of 
 affreightment relating to the use of a vessel or of space in a vessel, 
 or to the carriage of goods in a vessel which the shipowner undertakes 
 to provide. 
 
 In the case of a general ship the freight will be usually remunera- 
 tion for the carriage of goods. In those cases, however, where a 
 merchant engages in advance space for the goods he proposes to 
 ship, the shipowner may be entitled to remuneration whether any 
 use is made of the space or not. If the space is utilised and the 
 goods are put on board, the shipowner will receive his remuneration 
 in the form of the freight payable in respect of those goods. On 
 the other hand, if the goods are not put on board and the space 
 
FREIGHT AS THE SUBJECT OF INSURANCE 3 
 
 is not utilised, the shipowner naay be entitled to recover an equi- 
 valent amount as being the value of the space which the merchant 
 was entitled to use (a). In the case of a chartered vessel the 
 remuneration payable to the shipowner is primarily payable for the 
 right to make use of a vessel or of space in a vessel or to have goods 
 carried in a vessel. The remuneration may take the form of a 
 lump sum payment, but by the terms of most charter parties the 
 charterer undertakes to load goods for the carriage of which 
 remuneration will be payable. The right of the shipowner to 
 remuneration is independent of the amount of cargo which may 
 be shipped. If the full contemplated cargo is put on board, the 
 shipowner will look to that cargo for the payment of his freight. 
 If, however, the cargo is not loaded, then the shipowner will be 
 entitled, subject to his duty to minimise the damages as much as 
 possible, to receive from the charterer the difference between the 
 freight which is payable in respect of the cargo actually shipped 
 and the freight which would have been payable if the agreed cargo 
 had been put on board. 
 
 In the case of a chartered ship freight may be of a twofold 
 character, namely, the remuneration agreed to be paid under the 
 contract of affreightment for the right to make use of a vessel or 
 of space in a vessel or to have goods carried in a vessel, and the 
 remuneration payable under bills of lading for the carriage of goods 
 that have been put on board. In some cases the shipowner may 
 agree to accept the remuneration payable for the carriage of the 
 goods put on board in satisfaction of the remuneration agreed to 
 be paid under the contract. In other cases he has no interest in 
 the remuneration payable in respect of the carriage of the goods. 
 He has transferred to the charterer the right to make use of the 
 vessel. For this he is entitled to receive remuneration from the 
 charterer, but with the benefit which may be derived by the charterer 
 from the use of the vessel he has no concern. In such cases the 
 two freights are totally distinct, (&) and in the compUcated trans- 
 actions which arise, there may be several distinct freights subsisting 
 at the same time in respect of the same vessel. 
 
 (a) See per Kay, L.J., in Aiiken Lilhurn <5s Co. v. ErnstJiausen & Co. (1894), 
 1 Q. B., p. 777. 
 
 (6) See per Lord Lindlby in Williams v. Canton Insurance Office (1901), 
 
 A. C, p. 472. 
 
4 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 In the previous outline freight has been treated as a remuneration 
 payable by some one in return for the services of the ship, but in 
 insurance law it is not so limited. A shipowner (and in some cases 
 the following remarks will apply also to a charterer) may employ 
 his ship to carry his own goods. Freight will not be directly payable, 
 but the shipowner will receive in the increased value of the goods 
 due to the carriage a benefit equivalent to the benefit he would have 
 received if he had been carrying the goods of another. Where 
 goods are shipped on board of a vessel on behalf of the owners of the 
 vessel, " they derive an additional value by being carried ; and 
 although no freight is reserved by the bill of lading, yet when the 
 goods arrive, the shipowner receives in the increased value of the 
 goods something which to him represents precisely the same thing 
 as if he had been carrying somebody else's goods, and he had been 
 paid a definite sum for the carriage of them. There is no doubt 
 that that is in the abstract a state of things in which the ship is 
 earning something," (c) and this, " though not strictly freight, is so 
 like it that it has been held that it may be insured under that 
 name." {d) 
 
 This was decided in the case of Flint v. Flemyng, (e) where Lord 
 Tentbbden said : 
 
 " If it be a necessary ingredient in the composition of freight that 
 there should be a money compensation paid by one person to 
 another, the benefit accruing to a shipowner from using his own 
 ship to carry his own goods is not freight. But if the term 
 freight, as used in the pohcy of insurance, import the benefit 
 derived from the employment of the ship, then there has been 
 a loss of freight. It is the same thing to the shipowner whether 
 he receives that benefit of the use of his ship by a money 
 payment from one person who charters the whole ship, or from 
 various persons who put specific quantities of goods on board, 
 or from persons who pay him the value of his own goods at the 
 port of delivery, increased by their carriage in his own ship. 
 The assured may fairly consider that additional value as freight, 
 and so term it in a policy." 
 
 (c) Per Lord Penzance in Keith v. Burrows (1877), L. R. 2 A. C, p. 650. 
 
 (d) Per Hannen, J., in the Thyatira (1883), 8 P. D., p. 157. 
 
 (e) (1830), 1 B. & Ad. 46 ; 8 L. J. (o.s.) K. B. 350 ; LI. & Wels. 257. 
 
FEEIGHT AS THE SUBJECT OF INSUEANCE 5 
 
 Nine years later the point was again raised in the case of 
 Devaux v. F Anson (/), but the Court considered " the question to 
 be set at rest by the decision of the Court of King's Bench in the 
 case of Flint v. Flemyng, and held it to be now estabHshed law, 
 that the assured under an insurance upon freight may recover the 
 profits expected to be made by carrying their own goods in their 
 own ship upon the voyage insured." 
 
 Flint V. Flemyng (1830), 1 B. & Ad. 45 ; LI. & Wels. 257 ; 
 8 L. J. (o. s.) K. B. 350 ; 35 E. E. 205, 
 
 was an action on an open policy on freight by the ship Hope 
 at and from Madras to London. 
 
 Pacts. — The vessel on arrival at Madras proceeded to discharge her 
 outward cargo and to prepare to receive her homeward cargo. 
 Before any of the homeward cargo was loaded, the vessel was 
 lost. The captain had bought 25 tons of red wood on account 
 of the plaintiff, who was the owner of the vessel. The agents 
 of the plaintiff had bought for him by his directions 122 tons 
 of saltpetre, and a Mr. Webster had engaged to ship about 
 90 tons of light goods. There was no written contract as to 
 these last-mentioned goods, and the captain expressed the 
 opinion that Mr. Webster was not bound to ship them except 
 in honour. 
 
 Held that the assured could recover in respect of the red wood 
 and the saltpetre, but in respect of the light goods it was re- 
 ferred to a barrister to ascertain whether there was any 
 binding contract for their shipment. 
 
 Devaux v. F Anson (1839), 5 Bing. N. C. 519 ; 7 Scott, 807 ; 
 8 L. J. C. P. 284 ; 2 Am. 82 ; 3 Jur. 678 ; 30 E. E. 786, 
 
 was an action on a policy of insurance on freight valued at 
 £1000 by the ship La France, at and from Calcutta or any 
 port on the Coromandel coast to any port or ports in Bourbon. 
 
 (/) (1839), 5 Bing. N.C. 519; 7Scott,807; 2Arn.82; 3Jur.678; 8L. J.C.P. 
 284; 30R. R. 786. 
 
6 LAW EELATING TO THE INSUEANCE OP PEEIGHT 
 
 Pacts.— The vessel arrived at Coringa, a port on the Coromandel 
 coast, and put into dock for repairs. After the repairs had 
 been completed, and while preparations were being made for 
 bringing the vessel out of dock, she was seriously damaged, 
 and had to be broken up and sold. The plaintiff, the owner 
 of the vessel, had purchased on his own account a quantity 
 of goods for the return cargo, and these goods were lying 
 ready for shipment, but owing to the accident they had to be 
 brought back in another vessel. 
 
 Held that the plaintiff could recover for the loss of freight. 
 
 The term freight, then, as used in insurance law may be described 
 as the benefit derivable from the use or employment of a ship or a 
 part thereof by the shipowner or other person entitled to such use 
 or employment ; it does not include passage-money. According to 
 the Marine Insurance Act {g) " the term freight includes the profit 
 derivable by a shipowner from the employment of his ship to carry 
 his own goods or moveables, as well as freight payable by a third 
 party, but does not include passage-money." {h) 
 
 Except in a case where a shipowner uses his vessel to carry his 
 own goods, freight results from some contract. The contract defines 
 the amount of the remuneration, and the conditions upon which it 
 is payable. The assured wants to be indemnified against the loss 
 of the remuneration to which he may be entitled under the contract 
 by the operation of any of the perils insured against. It becomes 
 necessary, therefore, in every case to consider the terms of the 
 contract in order to ascertain the extent to which the right to freight 
 has been affected. A loss of goods may entail a loss of freight, but 
 by the terms of the contract it may be that freight is nevertheless 
 payable. Similarly an accident to a vessel may result in a loss of 
 freight, but it does not necessarily do so. " An insurance on freight 
 
 (g) Saot. 90, and Rules for Construction of Policy, rule 16. 
 
 {h) In Allison v. Bristol Marine Insurance Co. (1873), 29 L. T., p. 40, Bovill, 
 C. J., defined freight as " the benefit derived from the employment of the ship." 
 According to Phillips, sect. 327, " In insm-ance the term freight signifies the 
 earnings or profits derived by the shipowner or the hirer of the ship from the use 
 of it himself or by letting it to others to be used, or by carrying goods for others." 
 
FEEIGHT AS THE SUBJECT OF INSUEANCE 7 
 
 must necessarily have reference to some contract of affreightment 
 under which, during the time covered by that policy, freight might 
 be earned ; and to ascertain what the freight insured was, in case of 
 loss, the actual contract of affreightment must necessarily be 
 regarded." {i) " As soon as it is ascertained that the policy attached 
 on the hire under a particular charterparty, the charterparty must 
 be read in order to see how the subject-matter was affected by the 
 misfortune which happened. Under one charterparty a temporary 
 disablement of the ship might occasion a loss for which the under- 
 writers on ship would be responsible, but which would not have any 
 effect at all on the assured' s right to recover the hire of the vessel 
 whilst she was disabled. Under another such a temporary dis- 
 ablement might deprive the shipowner of all claims for hire during 
 the time she was disabled. In the first of these cases there could 
 be no claim against the underwriters on freight, for there was no 
 loss of freight. In the second I do not see how it could properly 
 be denied that there was such a loss." (k) 
 
 Contracts of affreightment relating to the employment of a vessel 
 vary widely in character and in their provisions. They may operate 
 as a demise or lease of the ship, or they may merely give the right to 
 the use of a vessel or of space in a vessel or to have goods carried in 
 a vessel for a particular voyage or series of voyages or period of 
 time. 
 
 Such contracts of affreightment are usually embodied in a docu- 
 ment called a charterparty, (l) but no particular form of document 
 
 (i) Per Lord Selborne in Inman 8.8. Co. v. Bischoff (1882), L. E. 7 A. C, 
 p. 672. 
 
 {k) Ibid., per Lord Blackburn, at p. 678. 
 
 (1) A charterparty has been defined as an "instrument in writing between 
 a merchant and a shipowner for the hire of an entire vessel" (Stephens' Com- 
 mentaries, 16th ed., vol. 2, p. 245) ; or again, " as a contract of affreightment by 
 which an entire vessel or some principal part thereof is let " (Abbott on Shipping, 
 14th ed., pp. 155, 328 ; MacLachlan on Shipping, 5th ed., p. 374). Charter- 
 parties are, however, frequently met with which relate to only a portion of the 
 vessel's carrying capacity (vide Potter v. New Zealand Shipping Co. (1895), 1 Com. 
 Cas. 114). In Nelson v. Nelson Lines, [1908] A. C. 108, the defendants agreed 
 to run a regular line of vessels between the River Plate and the United Kingdom, 
 and the plaintiffs agreed to ship in each vessel so much frozen meat as would fill 
 certain insulated chambers. " The contract which must regulate this contro- 
 versy is called a charterparty. It is an agreement by shipowners to supply and 
 by charterers to fill a part of each vessel. The rest of the space was to be filled 
 with cargo of others " (per Lord Lorbbuen, at p. 110), 
 
8 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 is required. " It makes no difference whether the contract was by 
 charterparty or otherwise, it is sufficient that there was a contract. 
 The word charterparty frequently misleads, and is apt to convey 
 the idea of something extraordinary ; but there is no magic in the 
 word charterparty, and an agreement of any sort is equally valid." (m) 
 The agreement may be under seal, it may be contained in corre- 
 spondence {n) or in entries in a notebook, (o) or it may be merely 
 verbal, (p) As has been already stated, by the terms of most charter- 
 parties the charterer undertakes to fill the vessel with goods for the 
 carriage of which remuneration will be payable. In respect of these 
 goods bills of lading will be issued, and under these biUs of lading 
 the rights and liabilities of the shipowner may be different from his 
 rights and liabilities under the charterparty. But in so far as the 
 freight insured is the freight payable under the charterparty, the 
 rights and liabilities of the shipowner as defined by that document 
 alone need be considered, for the shipowner caimot by voluntarily 
 departing from its terms increase the liability of the underwriter, (g) 
 
 Williams <& Company S Another v. The Canton Insurance Office, 
 Umited (1901), A. 0. 462 ; 70 L. J. K. B. 962 ; 85 L. T. 317 ; 
 6 Com. Cas. 256, 
 
 was an action on a policy of insurance on freight chartered or 
 as if chartered, on board or not on board valued at £3000. 
 
 Pacts. — Messrs. Williams & Co., who were the owners of the S.S. 
 Bamleh, chartered the vessel for a voyage from Buenos Ayres 
 to Liverpool at a lump freight of £3000 payable on the right 
 and true delivery of the cargo. The charterparty provided that 
 the charterer's liability was to cease upon shipment of the cargo* 
 A fuU cargo belonging to numerous shippers was put on board 
 and the master signed bills of lading by which the goods 
 
 (m) Per Btjbbough, J., in Tmscott y. Christie (1820), 5 Moore, 33 ; 2 Br. & 
 B. 320 ; 25 R. R. 446 ; see also Patrick v. Eames (1813), 3 Camp. 442, 
 
 (») Parke v. Hebson, cited in Tmscott v. Christie, see above. 
 
 (o) Warre v. MiUer (1825), 4 B. & C. 538 ; 7 D. & R. 1 ; 1 C. & P. 237 ; 4 
 L. J. (o. s.) K. B. 8 ; 28 R. R. 382. 
 
 ( p) Flint V. Flemyng (1830), 1 B. & Ad. 45 ; LI. & Wels. 257 ; 8 L. J. (o. s.) 
 K. B. 350 ; 35 R. R. 205 ; Lidgett v, Williams (1845), 4 Hare, p. 462. 
 
 (q) See per Lord Selborne in Inman S.S. Co. v. Bischoff (1882), L. R. 7 A. C. 
 p. 675. 
 
FEEIGHT AS THE SUBJECT OF INSUEANCE 9 
 
 mentioned in each bill of lading were made deliverable upon pay- 
 ment of the bill of lading freight in respect of those goods. In 
 the course of the voyage the vessel ran aground, and a portion of 
 the cargo was lost by jettison, but the vessel subsequently 
 arrived at Liverpool with the balance of the cargo, but owing 
 to the jettison the bill of lading freight payable on the cargo 
 delivered was less than the chartered freight by £614. 
 
 Held that the plaintiffs could not recover, as the chartered freight 
 was earned so far as the charter itself was concerned, and if the 
 whole chartered freight was not realised, that was in conse- 
 quence of the form in which the bills of lading were taken. 
 
 Freight may be made payable in many ways. It may be a lump 
 sum freight of a definite amount, or a lump sum freight based upon 
 the capacity of the vessel, or the measure, weight, or character of 
 the goods to be carried (r). It may be payable at a certain rate and 
 that rate may be the current rate, (s) or a nominal rate, (f) or a rate 
 which varies with the nature of the goods shipped, {u) It may be 
 subject to deductions in respect of loss or damage to the goods, (a;) 
 It may be payable in kind, (y) but usually is payable in money. It 
 is not even necessary that a rate of freight should have been agreed. 
 In such a case unless it is proved that the goods were to be carried 
 gratuitously, a reasonable rate of freight will be payable, and this 
 will usually be calculated at the ordinary rate ruling at the time when 
 the shipment was made, (z) 
 
 Freight is usually due and payable when the services in respect 
 
 (r) Of. Red R. 8.S. Go. v. AUatini (1909), 14 Com. Cas. 82, 303; 15 Com., 
 Cas. 290. 
 
 («) Of. Davidson v. WiUasey (1813), 1 M. & S. 313. 
 
 {t) Turner v. Trustees of Liverpool Dochs (1851), 6 Ex. 543 ; Brown v. North 
 (1852), 8 Ex. 1 ; Keith v. Burrows (1877), L. R. 2 A. C. 636; Swan v. Barber 
 1879), L. R. 5 Ex. D. 130. 
 
 (u) Cf. Soiiihampton Steam Colliery Co. v. Clark (1870), L. R. 6 Ex. 53. 
 
 {x} Griffiths v. Bramley Moore (1878), 4 Q. B. D. 70 ; 8.8. Oarston v. Hichie 
 Borman & Co. (1886), 18 Q. B. D. 17. 
 
 {y) Attyv. Lindo (1805), 1 B. & P. N. R. 236 ; Wiggin v. Mercantile Assurance 
 Co. (1828), 7 Pick. 271 (Am.). 
 
 (s) Miller v. Woodfall (1857), 8 E. & B. 493; Mitcheson v. Nicol (1852), 
 7 Exoh. 929 ; Chimm v. Tyrie (1864), 4 B. & S. 680 ; 6 B. & S. 298 ; Ursula 
 Bright 8.8. Co. v. Ripley (1903), 8 Com. Cas. 171. 
 
10 LAW EELATING TO THE INSUEANCE OF PEEIGHT 
 
 of which it is to be paid have been completed, but it may be made 
 payable in advance. At one time the view was held that a payment 
 made due in advance in this way could not properly be called freight, 
 and could not be recovered under the name of freight, {a) " Freight 
 is the reward payable to the carrier for the safe carriage and delivery 
 of goods ; it is payable only on the safe carriage and delivery." (b) 
 A payment made due when goods were put on board or at some other 
 time, whether the goods were safely delivered or not, was regarded 
 as a payment " for taking the goods on board and undertaking 
 to carry and not for carrying them." (c) " There was a time in 
 the history of .the law after the judgment in Kirdhner v. Venus {d) 
 when it was supposed that advanced freight and freight were different, 
 that the former was a loan or a sum payable when the goods were 
 put on board in consideration of their being received on board. So 
 great an authority as Blackburn, J., entertained that view, and 
 entertained it at the time when he delivered his opinion in Allison 
 V. Bristol Marine Insurance Go. The opinions of the law lords in 
 that case make it clear that that view was incorrect, and that 
 * freight,' whether used in respect of advanced freight or otherwise, 
 always has the same meaning. It may be stipulated that it shall 
 be payable on delivery of the goods or that a part shall be payable 
 in advance, but every payment is a payment of the same freight. 
 . . . The practical difference between advanced freight and freight 
 is a difference arising from the stipulations which are made as to 
 payment, but they still remain parts of the one whole. " (e) 
 
 In insurance law no distinction is drawn between freight payable 
 on delivery of goods and freight payable in advance, except in so 
 far as it affects the question of insurable interest. Where freight is 
 paid in advance, it may be in the nature of a loan repayable by the 
 shipowner, if the services in respect of which it is paid are not per- 
 formed. In such cases the shipowner remains subject to the risk of 
 losing the freight through failure to perform the agreed services. 
 
 (o) Blakey v. Dixon (1800), 2 B. & P. 321 ; see also MasUter v. BulUr (1807), 
 
 1 Camp. 84. 
 
 (6) Per Blackbubn, J., in Allison v. Bristol Marine Insurance Co. (1876), 
 L. R. 1 A. C, p. 228. 
 
 (c) lUd., per Blackburn, J., at p. 229; see also Winter v. Haldimand (1831), 
 
 2 B. & Ad., p. 659. 
 
 (d) (1859), 12 Moo. P.O. 361. 
 
 (e) Per Vaughan Williams, L.J., in Weir v. Qirvin (1900), 1 Q. B., at p. 52. 
 
FREIGHT A8 THE SUBJECT OF INSURANCE 11 
 
 On the other hand, the payment may be an out and out payment in 
 advance, which is intended to be independent of the performance 
 of any services, and which cannot be recovered. In such cases the 
 person who has made the payment runs the risk of losing the benefit 
 of the payment. The freight has been paid, but it has not been earned 
 and the person interested in it being earned is not the shipowner, 
 but the person who has paid it. He is in a position similar to that of 
 a purchaser of the freight, (/) and his interest, as will be shown in 
 a later chapter, can be insured as freight. 
 
 (/) Per Byles, J., in Frayes v. Worms (1865), 19 C. B. (n. s.), at p. 177. 
 
CHAPTEE II. 
 
 Insurable Interests in Freight. 
 
 It has long been an established principle of English law that freight 
 is a lawful subject of marine insurance. " It would, indeed, be 
 extraordinary if freight could not be made the subject of protection 
 by an instrument which had its origin in commerce, and was intro- 
 duced for the very purpose of giving security to mercantile trans- 
 actions ; it is a solid substantial interest ascertained by contract, 
 and arising out of labour and capital employed for the purposes of 
 commerce. " (a) 
 
 Freight is the benefit derived from the employment of a vessel. 
 It follows, therefore, that before freight can come into existence, 
 or before an insurable interest in freight can arise, employment 
 must have been found for the vessel. " The underwriter does not 
 insure that the ship shall have freight " (6), but that the earning of 
 the freight derivable from the employment, which may be obtained 
 for the vessel, shall not be prevented by any of the perils insured 
 against. In every action upon such a policy evidence is given, either 
 that goods were put on board, from the carriage of which freight 
 would result, or that there was some contract, under which the ship- 
 owner, if the voyage were not stopped by the perils insured against, 
 would have been entitled to demand freight." (c) 
 
 It has been urged by Mr. Phillips {d) that this view is a narrow 
 one, and that an insurance on freight should cover the interest of a 
 shipowner who is sending his vessel to a port to take in cargo on his 
 own account, which he has a reasonable expectation of obtaining 
 and sufficient means to purchase. He therefore suggests as a modi- 
 fication of the doctrine that " where the vessel has sailed for an 
 
 (a) Per Chambee, J., in Lucena v. Oraufurd (1802), 3 B. & P., p. 102. 
 (6) Per Lord Ellenborough in Forhes v. Cowie (1808), 1 Camp., p. 520. 
 
 (c) Per Lord Ellenboeough in Forbes v. Aspinall (1811), 13 East, p. 326. 
 
 (d) Phillips on Insurance, 3rd ed., sect. 333. 
 
 12 
 
INSUEABLE INTEEE8T8 IN PEEIGHT 13 
 
 intended port of loading, for the mere purpose of there taking a 
 cargo for a subsequent passage, to procure which the owner has funds 
 on board or reliable credit, and it appears that such a cargo can un- 
 doubtedly be there procured, the interest in freight, for the entire 
 voyage homeward, has accrued." 
 
 This doctrine would not be limited to the case of a shipowner 
 who was proposing to load his ship with a cargo on his own account, 
 but would apply with equal force to the case of a shipowner sending 
 his vessel to a port for the purpose of obtaining employment from 
 other persons. It may be that in many such cases the prospects 
 of eventually earning a freight will be better than the prospects of 
 earning the freight contemplated by a contract of affreightment, 
 for the charterer may become unable to fulfil his obligations, (e) 
 There is, however, this fundamental difference, that in the one case 
 employment has been obtained for the vessel, in the other case there 
 is only an expectation of obtaining employment. " When there is 
 an msurance upon freight, so long as the matter remains merely 
 contingent, so long as the shipowners have only a good hope of 
 getting freight, no freight is in existence ; and if the ship is lost, there 
 would be no loss of freight, inasmuch as the freight had never come 
 into existence, and all that the shipowners have lost is the hope of 
 earning the freight." (/) 
 
 Is it sufficient, in order to create an insurable interest in freight, 
 that employment from which freight will result has been obtained ? 
 Early decided cases imposed upon the ordinary insurance on freight 
 a limitation to the effect that the assured must have an " inchoate 
 right to the freight," an expression which has given rise to much 
 difficulty and confusion, as it has been used as referring both to the 
 inception of an insurable interest and to the inception of the risk. 
 " The question whether the assured on freight has at the time of the 
 
 (e) As in Ranlcin y. Potter (1873), L. R. 6 H. L. 83, where the charterer became 
 insolvent, but after the freight had been lost by perils insured against. 
 
 (/) Per Blackbuen, J., in Barber v. Fleming (1869), L. R. 5 Q. B., p. 70. 
 This expectation of obtaining freight may, perhaps, be insured by a policy in 
 which the interest is properly described. " It seems to me clear that a ship- 
 owner has an interest in the use of his ship, and that he may insure against the 
 loss which he may undoubtedly suffer from being deprived of its use by perils 
 of the sea or other causes" per Walton, J., in MaTichester Liners v. British 
 d> Foreign Marine Insurance Co. (1901), 7 Com. Gas., p. 33 ; see also per Mathew, 
 J,, in LaiotJier v. Black (1900), 6 Com. Cas., p. 8. 
 
14 LAW EELATING TO THE INSUEANOE OP FEEIGHT 
 
 loss an insurable interest in the freight is one which is often treated 
 in the cases and text-books in a way which causes a difficulty in 
 distinguishing it from the question of the duration of the risk under 
 a policy on freight. Yet these questions are different ones. Whether 
 there be an insurable interest is a matter independent of the policy. 
 In the absence of an insurable interest, the assured cannot maintain 
 an action, however the policy be worded. If, on the other hand, 
 he had an insurable interest, the question arises whether the loss 
 occurred within the limits of place or time fixed by the policy." (g) 
 In order to understand how this difficulty and confusion arose, it 
 is necessary to trace the origin of the doctrine of the inchoate right 
 to freight, and to follow its development. 
 
 " An ordinary insurance upon freight is a contract of indemnity 
 during the adventure in which the freight is to be earned." Qi) 
 This conception of an insurance on freight has been accepted without 
 challenge, and it is therefore difficult to find any definite authorities 
 in support of it, but there are in the cases many dicta to the effect 
 that the liability of the underwriter under the policy depends upon 
 whether the freight-earning voyage has commenced. " Where 
 jreight is in the course of being earned, the underwriter upon freight is 
 liable for any loss from a peril within the scope of the policy, which 
 prevents its being earned." (i) 
 
 " In the case of a freight policy, where the assured has entered 
 into a contract for freight, under which, except for the wrongful act 
 of the party with whom he has contracted, he would be in a condition 
 to earn his freight if the voyage were not stopped by a peril insured 
 against ; there ij the voyage has commenced in which the freight is 
 to be earned, and be stopped by any of those perils, the assured will 
 be entitled to recover to the full amount." (k) 
 
 " The assurers assure the sum mentioned on freight that shall 
 once commence to be earned. . . . Freight must commence to be 
 earned before the policy can attach." (Z) 
 
 {g) Arnould, sect. 265. 
 
 (h) Per WiLLES, J., in Banhin v. Potter (1868), L. R. 3 C. P., p. 567. 
 (i) Per Lord Ellenboeough in Taylor v. Wilson (1812), 15 East, p. 330. 
 (k) Per Lb Blanc, J., in Davidson v. Willasey (1813), 1 M. & S., p. 317. 
 (1) Per Swift, C.J., in Biley v. Hartford Insurance Co. (1817), 2 Conn., p. 371 
 (Am.). 
 
INSUEABLE INTEEESTS IN FEEIGHT 15 
 
 How this conception originated is not clear, but it was in all 
 probability influenced by the fact that insurances on freight were 
 effected by means of voyage poUcies, and by the pecuUar nature and 
 incidents of freight. When an insurance on freight for a voyage was 
 effected, it was assumed that the shipowner" would be sending his 
 vessel on that voyage for the purpose of earning freight, and it was 
 the freight to be earned on that voyage which, it was considered, was 
 intended to be covered by the policy. As was said by Lord Mans- 
 field, " the intention of the parties to the policy was to insure the 
 object of the voyage." (m) Thus in the case of Bell v. Bell, (n) 
 where freight was insured at and from Eiga to the United Kingdom, 
 and the vessel on arrival at Eiga was seized together with the cargo, 
 and the freight on the voyage to Eiga lost, it was held that the 
 assured could not recover for the loss of this freight. 
 
 To such a length was this view carried, that in one case it was 
 decided that the freight-earning voyage must be identical with the 
 voyage insured by the poUcy. In the case of Murdoch v. Potts (o) 
 the policy was on freight of the ship Bethiah at and from Bordeaux 
 to Virginia, but upon the evidence it appeared that the goods were 
 to be carried from Bordeaux to St. Domingo, the ship merely calling 
 at Norfolk in Virginia for orders. Lord Kenyon held that the 
 plaintiff was not entitled to recover as the freight payable was 
 different from the freight insured. This decision has not, however, 
 been followed. 
 
 Taylor v. Wilson (1812), 15 East, 324 ; 13 E. E. 488, 
 
 was an action on a policy on freight of the ship John upon a 
 voyage at and from St. Ubes to Portsmouth. 
 
 Facts. — The vessel had been chartered for a voyage from St. Ubes 
 to Gottenburg, but was to call at Portsmouth to join a convoy. 
 The vessel was lost before her arrival at Portsmouth. 
 
 Held that the plaintiffs were entitled to recover for the loss of 
 freight. 
 
 (m) Atty V. Lindo (1805), 1 B. & P. N. R,, p. 241. 
 
 (») 2 Camp. 475. 
 
 (o) (1795), 2 Park. Insurance, 8th ed., p. 634. 
 
16 LAW EEIjATING TO THE INSURANCE OF FREIGHT 
 
 Judgment. — Lord Ellenborough, C.J. : " The only question is 
 whether a freight voyage may be insured part of the way. This 
 was a voyage to Gottenburg by the way of Portsmouth, and 
 the freight was to be earned at Gottenburg. There might be a 
 greater peril in the first part of the voyage than in the other, 
 which might have induced the plaintiffs to insure the first part. 
 They did not deceive the underwriters when they insured their 
 freight from St. Ubes to Portsmouth ; they did not tell him 
 that the freight was to be earned there, but only that it was an 
 insurance on freight in that voyage." 
 
 The second and the more important factor, to which may be 
 ascribed the view, that an ordinary insurance upon freight is a con- 
 tract of indemnity during the adventure in which it is to be earned, 
 was the peculiar nature and incidents of freight, (p) At Common 
 Law no right to freight qua freight arose until the voyage was ended 
 and the contract performed (g), but by the Law Maritime an inchoate 
 right to the freight was considered to arise as soon as the freight- 
 earning voyage began. " In view of this law the inception of freight 
 is the ship's breaking ground ; and the inchoate right which then 
 attaches is consummated upon her arrival at the port of destina- 
 tion. " (r) In insurance law, as will be seen, a less strict view pre- 
 vailed, but the fact that according to the Common Law and the 
 
 (p) IVeight in the strict significance of the term is " the reward payable to 
 the carrier for the safe carriage and delivery of goods ; it is payable only on the 
 safe carriage and delivery." Per Blackbtjbn, J., in Allison v. Bristol Marine 
 Insurance Co. (1876), L. R. 1 A. C, p. 228. So strictly was this view held that 
 it was laid down in an early case that remuneration payable previous to the 
 aiTival of the goods could not be sued for as freight ; see Blahey v. Dixon (1800), 
 2 B. & P. 321. 
 
 (g) MaoLachlan, Merchant Shipping, 5th ed., p. 517. 
 
 (r) MacLachlan, p. 543 ; see also Curling v. iomfir (1797), 1 B & P. 634. Where 
 goods have been delivered to a shipowner to be carried, and the vessel has not 
 broken ground on the voyage, the skipper cannot redemand the goods without 
 offering to pay fuU freight. Tindal v. Taylor (1854), 4 E. <& B. 219 ; Parson's 
 Law of Shipping, pp. 179, 231. This right of the shipowner to retain the goods 
 until full freight is paid is based on the rule that a contract once made cannot be 
 dissolved except with the consent of both contracting parties, and not on the 
 existence of a lien for the freight. Thus in the Tornado (1882), 108 U. S. 342 
 (Am.), where a vessel sank before breaking ground on the voyage, it was held 
 that the master could not retam the cargo for purposes of transhipment, as it 
 had become impossible to carry out the contract in the way contemplated, and 
 the lien on the cargo had not yet come into- existence. 
 
INSUEABLE INTEEESTS IN PEEIGHT 17 
 
 Law Maritime no right to freight qua freight arose until the vessel 
 had actually commenced to earn it by breaking ground on the voyage, 
 undoubtedly influenced the view that an ordinary insurance on 
 freight was intended to be an insurance of the freight which the 
 vessel was in the course of earning. 
 
 From the time that freight commenced to be earned, an inchoate 
 right to the freight was said to arise, and it was this inchoate right 
 which was considered to be covered by the ordinary policy on 
 freight. 
 
 " Freight is another word for the remuneration which the owner 
 of a ship is entitled to receive at the end of the voyage for the use 
 which has been made of his property, namely, for the whole ship if 
 the use of the whole ship has been contracted for, or for the carriage 
 of particular goods if such be the contract. But in neither of these 
 cases is the owner entitled to freight unless the voyage be com- 
 pleted, though after the contract is entered upon and the voyage com- 
 menced, an inchoate right commences also to freight. ' It is this 
 inchoate right which is the subject-matter of insurance, and which 
 the underwriter engages shall not be defeated after its commence- 
 ment by any of those perils which are described in the poHcy, and 
 which would occasion the loss of freight." (s) 
 
 It was not sufficient for the assured to have entered into a con- 
 tract of affreightment under which freight would be payable. It 
 was necessary that he should have entered upon the contract and 
 have commenced to earn the freight, for until then the inchoate 
 right " which is the subject-matter of insurance " was not considered 
 to arise. It might, therefore, be thought that the doctrine of the 
 inchoate right to freight as used in insurance law referred to the 
 inception of an insurable interest, and such indeed was the view 
 adopted in America. But in this country it was regarded as referring 
 to the inception of the risk. 
 
 Davidson v. Willasey (1813), 1 M. & S. 313 ; 14 E. E. 438, 
 
 was an action on a policy on freight valued at £4000 upon the 
 ship St. Andrew, at and from any port or ports in Jamaica to 
 her port of discharge in the United Kingdom. 
 
 (s) See the arguments for the plaintiff in Thompson v. Taylor (1795), 6 T. R., 
 p. 478. 
 
 I.F. C 
 
18 LAW RELATING TO THE INSURANCE OF FREIGHT 
 
 Pacts.— The plaintiff hadi entered into a charterparty under which 
 the vessel was to proceed from Liverpool to Jamaica and there 
 load a full and complete cargo of West Indian produce for 
 Liverpool or London. The charterers undertook to load a full 
 cargo and to pay freight at the current rate of freight one 
 month from the discharge of the cargo. The ship arrived at 
 Jamaica and took on board one-half of her homeward cargo, 
 and goods sufficient to have loaded her were on shore ready 
 to be shipped, but the vessel was stranded and became 
 totally lost. 
 
 Held that as the voyage had commenced in which the freight was 
 to be earned, the plaintiff was entitled to recover, (i) 
 
 Judgment. — Lord Ellenboeough, C.J. : " The interest intended to 
 be insured was the freight which the assured would have 
 earned under the terms of the charterparty, if the voyage had not 
 been stopped by the perils insured against ; which has been 
 held for upwards of twenty years past to be an insurable 
 interest as freight. Then the question is, whether the assured 
 were in the prosecution of that interest so as to have acquired 
 an inchoate right to the freight at the time when the loss 
 happened." 
 
 Moses S Another v. Pratt (1815), 4 Camp. 297 ; 16 R. R. 794, 
 
 was an action on a policy on the ship Argus, valued at £2000, 
 and her freight, valued at £3000, at and from port or ports in 
 Cuba to port or ports in St. Domingo and from thence to any 
 port or ports in the United Kingdom. The plaintiffs sought 
 to recover an average loss on the ship, and a return of premium 
 for short interest on the freight. 
 
 Facts. — By a charterparty the plaintiffs let the Argus to freight for 
 a voyage from Liverpool to Cuba and St. Domingo and back, 
 and the charterer covenanted to load her with a complete home- 
 ward cargo, and to pay freight for the same at a stipulated 
 rate. The Argus proceeded to Cuba and St. Domingo, where 
 
 (<) See also Machenzie v. Shedden (1810), 2 Camp. 431. 
 
INSUEABLE INTERESTS IN FREIGHT 19 
 
 no cargo was provided for her, and was guilty of a deviation by- 
 going to a port in Jamaica before the loss happened, which the 
 plaintiffs sought to recover. 
 
 Their right to that being abandoned, it was insisted that they 
 were at all events entitled to the return of premium on the 
 freight, no goods having ever been loaded on the freight of 
 which the policy could attach. 
 
 Held that the plaintiffs were not entitled to a return of premium. 
 
 Judgment. — Lord Ellenboeough, C.J. : " Had the ship been lost 
 while waiting to take in a cargo, the underwriters would have 
 been liable for the whole sum insured upon the freight. The 
 charterparty created an interest on which the policy had attached, 
 and there had been an inception of the risk, although no goods 
 were put on board. Therefore! there shall be no return of 
 premium." 
 
 Truscott V. Christie (1820), 2 B. & B. 320 ; 5 Moore, 33 ; 23 R. R. 
 446, 
 
 was an action on a policy on freight and passage money valued 
 at £5000 by the ship Cor7iwall, at and from Madras to the 
 United Kingdom. 
 
 Pacts. — The plaintiff had entered into an arrangement with the 
 Government of Madras to carry goods for them at a certain 
 freight, and also to fit the vessel up with an extra deck, and 
 make other alterations for the purpose of accommodating two 
 hundred invaHds, whom the Government engaged to send home at 
 a fixed rate of passage- money. The alterations were commenced, 
 a large part of the cargo was received on board, and water for 
 one hundred invaUds had been shipped, but before the alterations 
 were completed, the ship was driven from her moorings and 
 totally disabled. 
 
 Held that the plaintiff was entitled to recover in respect of all the 
 goods and invalids, as there was an inception of the risk as soon 
 as the preparations under the contract were commenced. 
 
20 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 Judgment.— Dallas, C.J. : " This case appears to me to resolve 
 itself into three points. First, whether there was any contract ; 
 secondly, if there was a contract, whether anything was done 
 under that contract by the assured ; thirdly, does the thing done, 
 if it was done, constitute a part execution of the contract and 
 an inception of the risk ? As to the first point, I entertain no 
 doubt. . . . Clearly there was such a contract as the plaintiff 
 asserts ; and the next question is, whether anything was done 
 under the contract? It appears, then, that the ship was in 
 part prepared for passengers, and that the completion of the 
 preparations was prevented by perils of the seas. This was 
 clearly something done under the contract ; and there can be 
 no doubt, that on the commencement of preparations under the 
 contract, there was also an inception of the risk. It is urged 
 that the alterations of the ship were not completed ; but they 
 were begun, and though none of the passengers were on board 
 there was an inception of the voyage. . . . The question, then, 
 being whether or no there has been an inception of the risk, let 
 us inquire what is an inception of the risk. That may be 
 answered by the words of Lord Kenyon in Thompson v. Taylor. 
 ' Here, as the plaintiff had begun to perform his part of the 
 contract, as he had done something under it which, if matured, 
 would have entitled him to his freight, I think he may recover 
 on this policy, which was an insurance on that freight.' This 
 doctrine applies to the present case ; here, something was done 
 in part performance of the contract, which was not matured, 
 because prevented by the perils of the seas ; there was, therefore, 
 a clear inception of the risk." 
 
 From these cases it would seem that the doctrine of the inchoate 
 right to freight was regarded in this country as referring to the 
 inception of the risk. In America, on the other hand, the doctrine 
 was regarded as referring to the inception of an insurable interest, (m) 
 
 (m) See Phillips' Insurance, 3rd ed., sect. 328. It is, however, misleading to 
 treat the inchoate right to freight as referring either to the inception of an insurable 
 interestin the freight or to the inception of the risk under the policy. The ordinary 
 policy only covers freight which is being earned. Until something has been done 
 towards earning the freight, the policy does not attach, and it does not attach 
 because until then the freight does not come within the scope of the policy. 
 See Kent's Commentaries, I2th ed„ vol. 3, sect. 311, notes by O. W. Holmes, Jun. 
 
INSUEABLB INTBEBSTS IN PEBIGHT 21 
 
 but so long as an insurance on freight was treated as an insurance on 
 the freight which the vessel was in the course of earning, it was 
 immaterial which view was adopted. The American view purported 
 to be based on the decisions in the EngUsh cases, and the distinction 
 between the two views was not consciously recognised. The expres- 
 sions in the English cases, which referred the doctrine to the inception 
 of the risk, were explained by saying that until the insurable interest 
 arose, the risk could not attach. In other words, under an ordinary 
 policy on freight there would not be an inception of the risk until 
 the freight commenced to be earned, because imtil the freight com- 
 menced to be earned, there would not be any insurable interest in 
 freight which could be at risk. 
 
 " Had the plaintiffs an insurable interest, before or at the time 
 when the loss happened, as stated by one of the counsel ; or, had the 
 risk then commenced, as it is put by another. There is no difference 
 between them. Eisk is the subject of the contract of insurance. 
 If there be no risk, there can be no contract. Until the risk 
 commences the contract does not attach. If the insured 
 cannot or will not commence the risk, he has no claim to 
 indemnity and the underwriters cannot retain the premium. In 
 an interest poHcy there can be no risk, if there be no interest. 
 The risk, then, can only commence when the interest commences, 
 which leads to the question, when does an inchoate right to freight 
 commence ? " (a;) 
 
 " In England and some of the American States there is no poUcy 
 particularly adapted to insurance on freight; but the common 
 form for insuring on ship or cargo is used, with only a brief 
 memorandum in the margin or elsewhere on the policy, stating the 
 insurance to be on freight. And the practice was formerly the same 
 in this State. In such cases, as the parties have omitted to declare 
 when the risk shall commence, it has been left to the Courts to settle 
 that matter for them. And it has been held that the policy attaches 
 as soon as there is an insurable interest in the freight ; and that as 
 a general rule, there is such an interest when the cargo is on board the 
 ship and not before. But where there is a charterparty for a voyage, 
 in the course of which the goods are to be taken on board and the 
 
 (x) Per Washington, J., in Hart v. The Delaware Insurance Co. (1809), 
 2 Wash., p. 350 (Am.). 
 
22 LAW EBLATING TO THE INSUEANOE OF EEEIGHT 
 
 freight earned, there is an inception of the risk the moment the ship 
 breaks ground for the voyage, although the time for receiving the 
 cargo has not yet arrived." {y) 
 
 Whether treated as referring to the inception of the risk or to the 
 inception of an insurable interest, difficult questions arose as to when 
 the inchoate right commenced. When did freight commence to be 
 earned ? In the case of Thompson v. Taylor, (2) where the pohcy 
 was on " freight of the ship Nancy, at and from London to Teneriffe, 
 at and from thence to any of the West India Islands, and at and from 
 thence to the Bay of Honduras," and a charterparty for a similar 
 voyage had been made, it was suggested on behalf of the assured that 
 the test was whether the contract had been entered upon, and the 
 voyage commenced, and whether there had been an inception of 
 the voyage. It is not clear whether the expressions " after the 
 contract is entered upon and the voyage commenced " and " from 
 the inception of the voyage " merely referred to the beginning of 
 the adventure contemplated by the charterparty, or were intended 
 to convey that the vessel must have broken ground on the voyage. 
 Lord Kbnyon, who professed to accept the argument of the plaintiffs, 
 did not consider it necessary that the voyage should have com- 
 menced in the latter sense, and held that the true test was whether 
 there had been an inception of the contract of affreightment, that 
 is to say, whether the employment in respect of which the freight 
 was payable had been entered upon, and in that way the adventure 
 begun. But on the construction of the charterparty he came to 
 the conclusion that there had been an inception of the contract, 
 that the employment had begun by the sailing of the vessel from the 
 Thames towards Teneriffe, and as the language used by the other 
 judges was decidedly ambiguous, the distinction between the two 
 views was not appreciated. Moreover, bearing in mind the old rule 
 of the Law Maritime that " the inception of freight is breaking 
 ground," it is not surprising to find many dicta to the effect that the 
 aaswer to the question whether the freight had begun to be earned, 
 depended upon whether the vessel had broken ground on the freight- 
 earning voyage. " As soon as the ship broke ground at London 
 
 (y) Per Bronson, C. J., in Gordon v. American Insurance Co. of New York 
 (1847), 4 Denio, 360 (Am.), 
 (z) (1795), 6 T. R. 478. 
 
INSURABLE INTERESTS IN FREIGHT 23 
 
 an inchoate right to freight attached." (a) " There is an inchoate 
 right to the sum agreed on for freight, so soon as the ship breaks 
 ground." {b) 
 
 A similar view was expressed in a recent case. " This being an 
 insurance of chartered freight, the shipowners must have an insurable 
 interest in freight, and this they have if, having made a contract, 
 the execution of which will give them freight, their ship being in a 
 condition to execute the contract, breaks ground on the voyage 
 described in the charterparty." (c) 
 
 The point was distinctly raised in the case of Truscott v. 
 Christie, (d) where preparations for the voyage had been made, but 
 the vessel had not broken ground, and the test laid down by Lord 
 Kbnyon in Thompson v. Taylor was adopted. 
 
 " The question, then, being whether or no there has been an 
 inception of the risk, let us inquire what is an inception of the risk ? 
 That may be answered by the words of Lord Kbnyon in Thompson 
 
 (a) Per Heath, J., in Alty v. Lindo (1805), 1 B. & P. N. R., p. 243 ; see also 
 per Lord ELLBNBOROtrGH in Mackenzie v. Shedden (1810), 2 Camp., p. 435 ; per 
 LeBlanc, J., in Davidson v. Willasey (1813), 1 M. & S., p. 317. 
 
 (6) Per HosMEB, J., in Biley v. Hartford Insurance Co. (1817), 2 Conn., p. 373 
 (Am.). 
 
 (c) Per Vaughan Williams, L.J., in Brankelow S.S. Co. v. Canton Insurance 
 Office (1899), 2 Q. B., p. 186. 
 
 In the Progress (1810), Edwards Admiralty Reports, vol. 1, p. 223, Lord Stowbll 
 said : " The last question which I have to determine is, whether any and what 
 salvage is due upon the freights of those vessels which had been chartered in this 
 country under an agreement to proceed to Oporto in ballast, for the purpose of 
 bringing home these cargoes of wine, and, in consequence of the recapture, 
 have been enabled to carry that purpose into eifect. Now, it is clear, that a 
 service has been rendered to the vessels so circumstanced, and it is a service which 
 goes the length of putting them in a condition to recover their whole freights, 
 which depended entirely upon their final arrival here. As to the freights of the 
 vessels that were taken up at Oporto, no salvage is asked upon them, and certainly 
 it could not have been contended that any would be due, as the voyage had not 
 commenced. But these vessels, which had gone to Oporto from this country 
 under a charterparty for one entire voyage out and home, and had already per- 
 formed the outward voyage, were in the course of earning their freights at the 
 time of capture ; they had actually broken ground, as the phrase is, and had 
 entered upon that adventure out of which their profits were to arise. While 
 lying in the harbour of Oporto they were ui the course of earning thek freights ; 
 they were in itinere, and the salvage is as clearly due as if they had been captured 
 at sea. 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." 
 
 (d) (1820), 2 B. & B. 320, ante, p. 19. 
 
24 LAW EELATING TO THE INSUEANCE OP FBEIGHT 
 
 V. Taylor. ' Here, as the plaintiff had begun to perform his part 
 of the contract, as he had done something under it, which, if matured, 
 would have entitled him to his freight, I think he may recover on 
 this policy, which was an insurance- on that freight.' This doctrine 
 applies to the present case ; here, something was done in part per- 
 formance of the contract, which was not matured, because prevented 
 by the perils of the seas ; there was, therefore, a clear inception of 
 the risk." 
 
 The test, therefore, as laid down in the case of Thomfson v. 
 Taylor, and re-affirmed in the case of Truscott v. Christie, was, whether 
 there had been an inception of the contract of affreightment, that 
 is to say, whether the employment in respect of which the freight 
 was payable had been entered upon and in that way the adventure 
 begun. In the application of this test difficulties arose. The voyage 
 contemplated by the contract of affreightment might not be a simple 
 voyage from one port to another ; it might be a double voyage out 
 and home, or it might consist of a series of voyages. Some hesitation 
 was felt in saying that freight to be earned during a homeward voyage 
 was in course of being earned during the outward voyage. But in 
 the various (jases in which the point was raised, the Courts decided 
 on the construction of the contracts of affreightment that the freight, 
 although dependent on the ' completion of the homeward voyage, 
 was in fact payable in respect of the whole contemplated voyage out 
 and home. The outward voyage and the homeward voyage were not 
 treated as separate adventures, but as parts of one entire adventure. 
 "In short, the great point in all these cases seems to be whether 
 there is one entire contract for the voyage out and home, and whether 
 the freight is entire." (e) 
 
 The point was first raised in the case of Thompson v. Taylor, (/ ) 
 where the charterparty provided " that the ship should on or before 
 the 9th of February next depart out of the Thames and direct proceed 
 to Port Oratava in Teneriffe, and after the ship should be ready to 
 receive goods, lie 20 days and load and receive on board her from 
 Messrs. Cox 500 pipes of wine, and then sail and proceed to Barbadoes 
 
 (e) Park, Insurance, 8th ed., vol. 1, p. 62 ; see also per Hosmee, J., in Biky 
 V. Hartford Insurance Go. (1817), 2 Conn., p. 373 (Am.). 
 (/) (1795), 6 T. R. 478. 
 
INSUEABLE INTEEE8TS IN FEEIGHT 25 
 
 . . . freight for the said voyage being at the rate of 35s. per pipe, 
 the said freight to be paid within 20 days after a certificate of the 
 delivery of the wine." The poHcy was on half of the freight of 
 the ship Nancy, " at and from London to Teneriffe, at and from thence 
 to any of the West India islands, and at and from thence to the bay 
 of Honduras," and the vessel was lost while proceeding on the 
 voyage towards Teneriffe. 
 
 It was argued on behalf of the insurers that " the sustaining 
 of this action will open a door to great frauds, and is directly contrary 
 to the policy of the Act of George II. Suppose a charterparty of 
 affreightment for a certain voyage, and after that voyage performed 
 a covenant to take in other goods and bring them home, the freight 
 of the second voyage could not be insured before the goods were 
 taken in, or the voyage commenced, for otherwise double freight might 
 be recovered. Now, the present is as much two distinct voyages 
 as if the vessel had proceeded with a cargo to Teneriffe, where she 
 was to unload and take in other goods." 
 
 But according to Lord Kenyon " the contract under the charter- 
 party was entire, and we cannot divide it ; the ship was to sail from 
 hence to Teneriffe, where she was to take wine on board and carry 
 it to the West Indies ; he was to receive freight for the whole voyage ; 
 and the plaintiff had performed part of the contract." 
 
 Atty V. Lindo (1806), 1 B. & P. N. E. 236 ; 8 E. E. 788, 
 
 was an action on a poHcy of insurance on the freight of the ship 
 Stranger, at and from London to Jamaica, with Uberty to touch 
 at Madeira and discharge and take in goods there. By a 
 charterparty between the plaintiff as owner and one J. S. de 
 Franca it was agreed that the ship should take in such goods at 
 the port of London as the freighter should think proper and 
 proceed therewith to the island of Madeira, and there deliver 
 all or such part of the goods as the agents of the charterer 
 should direct, and there receive on board from the charterer or 
 his agents such quantity of wine as he or they should think 
 proper, and proceed therewith to Kingston in the island of 
 Jamaica. And it was further agreed that the charterer should 
 pay to the plaintiff £135 in full for freight or hire of the ship 
 during the whole of the voyage from London to Madeira and 
 
26 LAW EBLATING TO THE INSUEANCE OP FEEIGHT 
 
 from thence to Kingston in Jamaica ; such freight to be paid 
 in Madeira on a right and true dehvery of the goods that might 
 be shipped in London for that place, by London Particular 
 Madeira wine, at the rate of £40 per pipe, which wine should 
 be carried in the ship to Jamaica free of freight. 
 
 Facts.— The vessel loaded a cargo at London for Madeira, but 
 before it had been discharged, or the wine by which the 
 freight was to be paid had been put on board, the vessel was 
 lost. 
 
 Held that the plaintiff was entitled to recover for a total loss. 
 
 Judgment.— Sir James Mansfield, C.J. : " In order to judge of 
 the question, we must look at the charterparty, by which it 
 is agreed that De Franca shall pay to the plaintiff the sum of 
 £135 in full for freight by the said ship during the whole of the 
 said voyage from London to Madeira, and from thence to 
 Kingston in Jamaica ; which freight is to be paid in Madeira on 
 a true dehvery of the goods shipped in London, by Madeira 
 wine at £40 per pipe, which wine is to be carried in the ship 
 to Jamaica^free of freight. The charterparty, therefore, treats 
 the whole as one voyage from London to Jamaica, touching 
 atr Madeira. The freight for the whole voyage is to be paid in 
 one gross sum, and that sum is to be paid in Madeira wine, 
 valued at a certain sum, at Madeira ; the payment, therefore, 
 is local and indivisible, and on payment of the freight in 
 Madeira wine, the wine is to be carried in this particular ship from 
 Madeira to Jamaica . . . Without any fault being imputable 
 to any one, an accident happened, which rendered it 
 impossible for the captain to receive the freight at Madeira. 
 Then why may he not recover it from the underwriters ? 
 While the ship was at Madeira, she was in the course of the 
 voyage at and from London to Jamaica, taking Madeira on the 
 way ; and the owner was to receive the freight at Madeira to 
 be carried in the intended voyage to Jamaica. The owner, there- 
 fore, was deprived of his freight by perils insured against by the 
 policy." 
 
INSUEABLE INTEEESTS IN PEEIGHT 27 
 
 Horncastle & Others v. Suart (1806), 7 East, 400 ; 8 E. E. 649, 
 
 was an action on a policy of insurance on freight of the ship 
 Marquis of Lansdown at and from Dominica to London. 
 The vessel had been chartered for a voyage from London to the 
 island of Dominica and back to London, and the charterparty 
 provided that the master should take on board in the river 
 Thames all such goods as the freighters could procure on 
 freight for Dominica, and sail with the first West India convoy 
 to Dominica, and there deUver her outward-bound cargo, and 
 take on board a full cargo of West India produce at the current 
 freight, which the charterers bound themselves to ship^ and 
 being so loaded proceed to England. The charterers agreed 
 to pay the plaintiffs half of the net freight which the ship 
 should make outwards, provided such net freight should 
 exceed £1000, but if it did not amount to £1000, then they 
 should pay the plaintiffs £500. 
 
 Pacts. — The vessel arrived at Dominica and delivered her outward 
 cargo, except such part as was necessary and customary to keep 
 on board until some part of the homeward cargo should be 
 loaded, but before any of the homeward cargo, which was 
 lying ready, could be loaded, the vessel was captured and the 
 homeward freight lost. 
 
 Held that the plaintiffs could recover, " the contract of affreight- 
 ment by the charterparty being entire, and the risk on the 
 policy having commenced." 
 
 Lord Ellbnborough said that it was clear that the under- 
 writer was liable upon the authority of Thompson v. Taylor ; the 
 voyage having commenced in which the freight was to be earned 
 according to the terms of the charterparty, which made it one 
 entire contract, and which voyage was insured by the poHcy.(g') 
 
 Ellis V. Lafone & Another (1853), 8 Exch. 546 ; 22 L. J. Ex. 124 ; 
 17 Jur. 213 ; 1 W. E. 200 ; 91 E. E. 615, 
 
 was an action on a policy of insurance on " freight advanced 
 at and from Monte Video to Havre." A vessel had been 
 
 (j7) See also Mackenzie v. Shedden (1810), 2 Camp. 431 ; Davidson v. Willasey 
 (1813), 1 M. & S. 313, ante, p. 17. 
 
28 LAW EELATING TO THE IN8UEANCE OP FEEIGHT 
 
 chartered to proceed to the Falkland Islands, and thence to 
 Santa Cruz and Monte Video and there load a cargo of guano 
 or other merchandise and proceed therewith to Havre ; freight 
 at the rate of £250 per month to be paid in the following manner, 
 viz.. one month's pay when the vessel sailed from the Falkland 
 Islands, and the balance on true delivery of the cargo. 
 
 Pacts.— The vessel after discharging her cargo at the Falkland 
 Islands proceeded to Santa Cruz and Monte Video and there 
 loaded a homeward cargo, but on the voyage to Havre was lost. 
 
 The charterer had paid £250 when the vessel left the 
 Falkland Islands, which he claimed from the underwriters, but 
 the claim was resisted on the ground that the cargo for the 
 Falkland Islands having been safely delivered, and the vessel 
 therefore having earned her first month's pay, this sum was no 
 longer at risk on the subsequent voyage. 
 
 Held that the assured could recover as the voyage under the 
 charterparty was entire, and the £250 was not a separate sum 
 payable for the voyage to the Falkland Islands, but a portion of 
 the entire sum payable for the entire voyage, and therefore 
 remained at risk until the vessel arrived at Havre. 
 
 In the foregoing cases the voyages out and home had been fixed 
 under a single contract of affreightment, and they were regarded as 
 being portions of one entire adventure. But the subsequent voyage 
 might be quite distinct from the earher one. In such an event, when 
 would the one adventure end, and the other adventure begin ? In 
 one case, where freight had been insured for the homeward 
 voyage, the vessel had arrived at the outward port of discharge, 
 • which was also the port of loading for the homeward voyage, and had 
 discharged all the outward cargo with the exception of a small portion 
 which, according to the shipowner, it was necessary to leave on board 
 as ballast, and which, according to the underwriters, was not required 
 as ballast. The underwriters contended that as the outward cargo 
 had not been discharged, the risk on the homeward cargo had not 
 attached. The question was left to the jury whether the vessel was 
 in a condition to receive the homeward cargo, and this question the 
 jury answered in favour of the assured, who recovered. 
 
IN8UEABLE INTEEESTS IN PKEIGHT 29 
 
 Williamson v. Innes (1831), 8 Bing. 81 n. ; 1 Moo. & E. 88 ; 34 
 E. E. 629n. ; 42 E. E. 765, 
 
 was an action on a policy of insurance on freight at and from 
 Algoa Bay and Table Bay, both or either, to London. 
 
 The declaration stated that the ship had arrived, and was in 
 good safety at Algoa Bay, that a homeward cargo was ready for 
 her under her charterparty, and that before it was put on board 
 she was lost by perils of the sea. Plea, general issue. 
 
 At the trial, the captain proved his arrival at Table Bay ; 
 the discharge of that part of the cargo which was destined for that 
 place ; and that he took in about sixty tons of goods for Algoa 
 Bay, where he arrived on the 30th of September and came to 
 anchor. Till the 8th of October he was engaged in discharg- 
 ing his outward cargo, but on that day he gave orders that 
 no more of the outward cargo should be discharged till some of 
 the homeward cargo should be on board, as his load was 
 reduced to about seventy tons, which, in his judgment, was 
 necessary for the safety of the ship, of 144 tons register ; and he 
 intended to take in, the next morning, part of the homeward 
 cargo, which was ready for him. Before that time, however, the 
 ship was lost in a hurricane. 
 
 For the defendant, it was contended that at the time of the 
 loss, the ship was not in a state to begin to take in her home- 
 ward cargo, and consequently that the voyage at and from 
 Algoa Bay had not commenced. 
 
 Several captains of vessels were called, who stated that, in 
 their judgment, thirty tons were quite sufficient to keep in the 
 ship for her safety, and that with seventy tons of her outward 
 cargo on board, she could not be ready to take in her homeward 
 
 cargo. 
 
 Lord Lyndhurst, O.B., told the jury that if the ship was 
 
 in a condition to begin to take in her homeward cargo, the 
 
 plaintiff was entitled to recover ; if not, the verdict ought to be 
 
 for the defendant. 
 
 Verdict for the plaintiff. 
 
 From this case it has been sought to deduce the principle that 
 the vessel must be in a condition to take in her cargo, before the risk 
 
30 LAW EBLATING TO THE IN8UEANCE OP PKEIGHT 
 
 on freight under such circumstances can attach, but there is no 
 reason for believing that the case was intended to create or that the 
 counsel considered that they were contending for any hard and fast 
 rule. The question was whether the homeward voyage had begun, 
 and the question left to the jury — whether the outward cargo had 
 been discharged and the vessel, therefore, in a condition to take in 
 her homeward cargo, seems to have been intended merely as a test- 
 The principle supposed to have been laid down in this case formed the 
 basis of the contentions of the underwriters in the case of Foley v. 
 United Fire Insurance Company, but it was emphatically rejected 
 by the Court. " It is said that the interest only attaches on a policy 
 Hke this — that the risk only attaches when the voyage on which the 
 freight is to be earned has commenced ; and it is insisted that the 
 risk here could not commence before the [outward] cargo was dis- 
 charged. If that argument be correct, it amounts to this, that there 
 never can be an effective insurance on freight to be earned on a voyage 
 from a given port, until the ship is in a condition to receive goods 
 on board. But we find a long series of cases, beginning with Thompson 
 V. Taylor, and coming down to the recent case of Barber v. Fleming, 
 which conclusively establish the contrary. The real doctrine is this : 
 if the voyage by means of which the chartered freight is to be earned 
 has commenced, there is an inchoate interest in the freight, and the 
 risk attaches, provided the language of the charter, taken with the 
 policy, will warrant that view of the case." {h) 
 
 Foley V. The United Fire d; Marine Insurance Company of Sydney 
 (1870), L. E. 5 C. P. 155 ; 22 L. T. 108 ; 39 L. J. C. P. 
 206 ; 18 W. H. 437, 
 
 was an action on a policy of insurance on the " chartered freight, 
 valued at £1150, of the Edmund Graham at and from Mauritius to 
 rice ports, and at and thence to the United Kingdom." 
 
 Pacts.— The plaintiff was the owner of the Edmund Graham, 
 and when the vessel was about to sail with cargo from Calcutta 
 to Mauritius, he chartered her for a further voyage from 
 Mauritius to the rice ports. The charterparty provided that 
 the vessel should with all convenient speed proceed on her 
 
 (70 Per Kelly, QB. (1870), L. B. 6 C. P., p. 169. 
 
INSURABLE INTERESTS IN FREIGHT 31 
 
 present voyage to Mauritius, and having discharged her cargo 
 should proceed to Akyab and there load a cargo of rice in bags 
 and proceed therewith to a port in the United Kingdom. The 
 vessel arrived at Mauritius and proceeded to discharge her 
 cargo. When about half of the cargo had been discharged, the 
 vessel was driven on shore and became a total loss. 
 
 It was argued on behalf of the defendants that the policy on 
 the chartered freight could not attach until there was an 
 inception of the chartered voyage, and that at the time of the 
 loss that voyage had not commenced, as the vessel had not 
 completed her voyage to Mauritius. The interest in the 
 chartered freight did not begin when the charter was made, but 
 something must first be done under the charter to earn the 
 freight. The vessel, it was true, was at Mauritius, and if it 
 had been a poKcy on ship the risk would have attached, but 
 different principles apphed in the case of a poHcy on ship, and 
 as the vessel had not completed the previous adventure, and 
 was not at Mauritius ready to receive cargo or to proceed on the 
 chartered voyage, she could not be said to be at Mauritius for 
 the purpose of earning the chartered freight, or to be in the 
 course of earning the freight, and the poHcy, therefore, did not 
 attach. 
 
 Held that the risk under the policy attached upon the arrival of the 
 vessel at Mauritius, and that the assured was entitled to 
 recover, (i) 
 
 The question whether the freight- earning voyage has commenced 
 is a question of fact. In the various decided cases the Courts laid 
 
 (i) In the case of Warre v. Miller (1824), 4 B. & C. 538, a vessel was to dis- 
 charge her outward cargo and receive her homeward cargo at several different 
 ports. At the time of the loss the vessel was proceeding to a port for the double 
 purpose of delivering the remaining part of her outward cargo, and of taking in 
 a part of the homeward cargo, that is to say, although the earlier adventure had 
 not terminated, the subsequent adventure had begun, and the jury found a 
 verdict for the plaintiff who had insured the homeward freight. 
 
 A writ of error was brought, and in the Court of King's Bench the point was 
 raised on behalf of the defendant that the risk had not attached as the vessel 
 at the time of the loss was not employed solely upon purposes connected with 
 the homeward voyage, but this point was not allowed to be argued as it was not 
 disputed at the trial, and the Judge had not been requested to give any direction 
 to the jury upon it. 
 
82 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 down certain propositions as to when the freight began to be earned, 
 but these propositions must not be regarded as inflexible rules of 
 universal application, but as useful tests to be applied for the purpose 
 of ascertaining whether the freight- earning voyage has in fact com- 
 menced or not. 
 
 Barher v. Fleming (1869), L. E. 5 Q. B. 59 ; 39 L. J. Q. B. 25 ; 
 10 B. & S. 879 ; 18 W. E. 254, 
 
 was an action on a pohcy of insurance on " freight chartered or 
 otherwise valued at £3600 on the ship Cambodia at and from 
 Bombay to Rowland's Island and thence to the United Kingdom, 
 with hberty to proceed and sail to and touch and stay at any 
 ports or places whatsoever." 
 
 Pacts. — By a charterparty the Cambodia, then lying in the harbour 
 of Bombay, was chartered for a voyage from Howland's 
 Island to a port of discharge in Great Britain for a complete 
 cargo of guano which the charterers engaged to ship. The ship 
 was to be at Howland's Island on or before the 1st of June, 1867, 
 or the charterers were to have the option of declaring the charter 
 null and void. The Cambodia sailed from Bombay for 
 Howland's Island in ballast but was wrecked. 
 
 It will be noticed that the charterparty was not in the 
 usual form, viz. that the ship being at Bombay should with all 
 convenient speed proceed to Howland's Island and there take 
 in the cargo. The only stipulation was that the ship should be 
 at Howland's Island at a date about ten months after the date 
 of the charter, the voyage from Bombay direct taking about 
 three months. This case, therefore, raised the question whether 
 an assured could recover for a loss of freight although the 
 chartered voyage had not commenced, and although nothing 
 had been done under the terms of the contract of affreightment. 
 
 Held that as the ship had sailed in ballast from Bombay with the 
 sole object of going to Howland's Island, in order to earn the 
 freight under the charter from thence to the United Kingdom, 
 the inchoate right to the freight had commenced, and that 
 the plaintiff could recover for the loss under the policy, (h) 
 {k) See also Mercantile Steamship Co., Ltd. v. Tyser (1881), L. R. 7 Q. B. D. 73. 
 
INSURABLE INTERESTS IN FREIGHT 33 
 
 Judgment. — Biackburn, J. : " We have to see whether there was 
 freight lost during the voyage which involves the question whether 
 this chartered freight had come into existence at the time the 
 accident happened which caused the alleged loss ; whether at 
 that time the interest had commenced. . . . The law seems 
 settled by a variety of cases, as I find it laid down by Mr. 
 Philhps, in his book on Insurance, at section 328, where he 
 says, ' In regard to the commencement of this interest [in 
 freight], it is a general rule that it commences, not only by the 
 vessel saihng with the cargo on board, but also when the owner 
 or hirer, having goods ready to ship, or a contract with another 
 person for freight, has commenced the voyage, or incurred 
 expenses and taken steps towards earning the freight.' I 
 think that is the accurate rule. When a shipowner has got a 
 contract with another person under which he will earn freight, 
 and has taken steps and incurred expense upon the voyage 
 towards earning it, then his interest ceases to be a contingent 
 thing, but becomes an inchoate interest, and is an interest 
 which if afterwards destroyed by one of the perils insured 
 against is lost, and ought to be paid for by the underwriters. 
 
 " But the counsel for the defendant says, in each of the 
 cases cited, the party was bound to sail at once on the voyage, 
 for the contract was" that the ship should proceed to the port of 
 loading with all convenient speed ; and, consequently he 
 takes the distinction in the present case — that it is not 
 sufficient, that you are saiHng in order to carry out the charter- 
 party, but there must be a starting on the voyage because you 
 are required and bound to do it by the charterparty ; and 
 consequently under this particular charterparty, where, instead 
 of saying the ship at Bombay shall proceed at once to the 
 Chincha Islands, the charterparty only requires that she shall 
 be there by a particular day, the shipowner might make a 
 seeking voyage on the way there ; and that therefore he was not 
 bound to go. But that is not within the spirit and reason of 
 the rule. The spirit and reason of the rule are, that the interest 
 commenced, not because the man acted under compulsion of 
 the contract, but because he has acted so far under the con- 
 tract as to show it is so no longer speculative, but he had 
 actually begun to do something which makes the inchoate 
 
 I.F. ^ 
 
34 LAW RELATING TO THE INSUEANCE OP FREIGHT 
 
 interest attach, and makes it a real thing ; and it seems to me 
 that as soon as the ship, although not bound to go direct from 
 Bombay to the Chincha Islands, had begun to sail there, the 
 interest had sufficiently attached, and consequently on that 
 point the plaintiff is right." [l) 
 
 Now, it has been seen that an ordinary insurance upon freight has 
 always been regarded as a contract of indemnity during the adventure 
 in which the freight is to be earned. Until the freight- earning 
 adventure began, the inchoate right to freight did not arise, and it 
 was this inchoate right to freight which, it was considered, was 
 intended to be covered by the policy. According to early English 
 decisions the doctrine of the inchoate right to freight referred to the 
 inception of the risk ; according to the American cases it referred to 
 the inception of an insurable interest, and this latter view was adopted 
 by Blackburn, J., (m) a professed admirer of Philhps, the well- 
 known American writer on the law of insurance. So long as insur- 
 ances on freight were Hmited to the freight which a vessel was in 
 the course of earning, it was immaterial which view was adopted, 
 but the American view has given rise to an impression that there 
 cannot be an insurable interest in freight until the freight-earning 
 voyage has commenced. This impression is erroneous, for, as was 
 said by Lord Esher, [n) " no doubt as soon as a shipowner has got 
 a binding contract with somebody to put goods on board his ship, 
 he has an insurable interest." The ordinary poUcy only covers 
 
 Q) There are expressions used by the learned judge which it is not easy to 
 follow, and when he says that " as soon as the shipowner has taken steps and 
 incurred expense upon the voyage towards earning the freight, his interest 
 ceases to be a contingent thing, but becomes an inchoate interest," it is supposed 
 that no more is meant than that the contemplated adventure has begun. See 
 notes by O. W. Holmes, Jun., to par. 311 of Kent's Commentaries, 12th ed., vol. 3. 
 
 (m) See Barber v. Fleming, ante, p. 33. 
 
 (n) In the Copernicus (1896), P., p. 239. According to the report in 65 L. J. 
 Adm. 108, Lord Bshek said : " A shipowner has an insurable interest in freight 
 when he has a binding contract to put goods on board his ship by which freight 
 can be earned. If that contract is contained in a charterparty, then he has such 
 insurable interest the moment the charter is signed." For a similar view see per 
 CocKBURN, C.J., in Barber v. Fkming (1869), L. R. 5 Q. B., p. 67. "It is 
 supposed that a party who has made a contract by which he is to earn freight has 
 an insurable interest at once, although the contract is not to be performed for 
 sis months." See notes by 0. W. Holmes, Jun., to par. 311 of Kent's Com- 
 mentaries, 12th ed., vol. 3. 
 
INSUBABLE INTERESTS IN FREIGHT 35 
 
 freight from the time that it commences to be earned, but freight may 
 be insured from the time that it is engaged, provided that the nature 
 of the insurance is sufficiently indicated by the poHcy. This was 
 decided by the House of Lords in the case of Bankin v. Potter. 
 
 Banhin v. Potter (1873), L. R. 6 H. L. 83 ; 29 L. T. 142 ; 
 42 L. J. C. P. 169 ; 22 W. R. 1 ; 2 Asp. M. C. 65, 
 
 was an action on a poHcy on homeward chartered freight by 
 the Sir William Eyre, at and from the Clyde to Southland, 
 while there, and thence to Otago (N.Z.) and for thirty days in 
 port there after arrival. 
 
 Pacts. — On December 7th, 1862, the vessel left Greenock on a 
 voyage to Southland and thence to Dunedin in Otago (N.Z.) 
 having a general cargo and a large number of government 
 emigrants on board. On February 9th, 1863, while the vessel 
 was on her outward voyage, a charterparty was entered into 
 with one De Mattos, under which the Sir William Eyre, having 
 discharged her cargo and passengers at Otago, was to proceed to 
 Calcutta and there being tight, staunch, and strong and in every 
 way fitted for the voyage, load a homeward cargo to be provided 
 by De Mattos for Liverpool or London. 
 
 While on the voyage to Dunedin the vessel took the ground 
 on several occasions, but arrived at Port Chalmers, the port of 
 Dunedin, on July 4th, 1863. After some temporary repairs had 
 been effected the vessel sailed for Calcutta, where she arrived 
 on June 7th, 1864, and a survey was held which showed that 
 the vessel had sustained so much damage as a result of the 
 grounding that the repairs necessary to make the ship seaworthy 
 and enable her to bring home a cargo, would exceed the value 
 of the ship when repaired. The homeward voyage had therefore 
 to be abandoned and the freight was lost. 
 
 Held that the assured was entitled to recover. 
 
 The voyage insured was treated (o) as being quite distinct from 
 the voyage upon which the freight was to be earned, and the case, 
 
 (o) Blackbtten, J., however, treated the case as falling directly within the 
 principles of Barber v. Fleming and Foley v. United Fire, etc.. Insurance Co. 
 
36 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 therefore, undoubtedly involved the point whether freight to be 
 earned upon a subsequent voyage could be insured during the previous 
 voyage. " The case of insurance of specific chartered freight to be 
 earned upon a future voyage against perils to be incurred in the 
 current one, is, so far as we can learn, exceptional in practice, though 
 not unprecedented. An ordinary insurance on freight is a contract 
 of indemnity, during the adventure in which the freight is to be 
 earned." (p) 
 
 The underwriters did not dispute that the plaintiffs had an 
 insurable interest or that the risk had attached, but suggested that 
 " the interest insured here was not freight, but an interest to be 
 derived from the charterparty on procuring a cargo, and so 
 earning freight. The underwriter, therefore, did not insure freight ; 
 he did not insure even a chose in action — an existing right to 
 a certain amount of money — but only a mere speculation, a claim 
 on the part of the assured to have a homeward freight supplied 
 to him." 
 
 But this view was not accepted. 
 
 " My Lords, in order to answer your Lordships' questions, it 
 seems to me convenient to determine in the first place, what 
 is the correct interpretation of the policy in respect of which 
 these questions arise, and to point out its peculiarity. What 
 is the subject-matter insured? The description is that the 
 insurance is made ' on homeward chartered freight.' Having 
 regard to the surrounding circumstances when the policy was 
 made, to these words of reference, and to the case, the pohcy 
 is not on homeward freight generally, i.e. on any homeward 
 freight, but on the homeward chartered freight to be earned 
 under the charterparty of the 9th of February, 1863. It was 
 argued that the subject-matter insured was not freight, strictly 
 so called, but some right which the counsel described at different 
 times in different terms. It seems to me that those terms are 
 either other phrases to describe the charterparty freight I have 
 mentioned, or that they do not describe what is the only 
 subject-matter insured by this policy. The voyage insured, as 
 descriptive of the voyage during which the perils insured against 
 may arise, is a voyage ' at and from the Clyde to Southland, 
 
 (p) Per WrtLES, J. (1868), L. R. 3 C. P., p. 567. 
 
INSUEABLE INTERESTS IN FREIGHT 37 
 
 while there and thence to Otago (N.Z.), and for thirty days, in 
 port there, after arrival.' This is a different voyage from, and 
 does not comprise any part of the voyage on which the charter- 
 party freight can he earned, which latter is a voyage from 
 Calcutta to Liverpool or London. The subject-matter insured 
 then is freight ; the freight insured is not any, but one particular 
 freight ; it is not freight which might be earned on the voyage 
 insured or part of it ; the goods in respect of the carriage of 
 which the insured freight may be earned, cannot be at risk 
 during any part of the voyage insured ; and therefore the loss 
 of freight covered by this policy cannot occur through damage 
 to goods by a peril insured against, but only through damage to 
 the ship. Assuming then, this to be a valid policy, which is not 
 disputed, the true interpretation of the contract seems to be, 
 that the insurers undertake to indemnify the assured if there 
 should be a loss of the freight to be earned by the charterparty, 
 in consequence of and proximately caused by such injury to 
 the ship from a peril insured against during the voyage from 
 England to New Zealand, as will prevent the assured from being 
 able to earn the whole or any part of the charterparty freight 
 on the voyage from Calcutta to England." (g) 
 
 " First upon the question as to the loss of the freight, it is 
 necessary to bear in mind the exact nature of the insurance. 
 The freight insured is chartered freight upon a cargo to be loaded 
 on board the Sir William Eyre at Calcutta and to be conveyed 
 to Liverpool or London. The voyage insured is ' at and from 
 Clyde to Southland, while there, and thence to Otago, New 
 Zealand, and for thirty days in port there, after arrival.' In 
 other words it is an insurance that the assured shall not be 
 prevented earning the freight under the charterparty by any 
 of the perils of the sea, which might happen on the voyage 
 from Clyde to Otago, and for thirty days afterwards. As this 
 outward voyage is entirely distinct from that on which the 
 freight was to be earned, and as no right to such freight could 
 possibly accrue until the arrival of the Sir William Eyre at 
 Calcutta, the loss of the freight could only happen by such 
 damage to the ship by perils of the sea, during the time 
 
 (q) Per Bkett, J., L. R. 6 H. L., p. 97. 
 
38 LAW KELATING TO THE INSUEANCE OP FEEIGHT 
 
 covered by the policy as would prevent the assured from 
 earning the chartered freight on the voyage from Calcutta to 
 England." (r) 
 
 This case is authority for the proposition that freight to be earned 
 on a subsequent voyage may be insured during the previous voyage, 
 and from this it follows that an insurable interest in freight may 
 exist although the adventure in respect of which it is payable has 
 not commenced, (s) There would seem to be now no doubt but that 
 freight to be earned on a subsequent voyage can be insured during 
 the previous voyage, and the practice, which could be described in 
 1868 as being exceptional, is now by no means uncommon. 
 
 Tumhull, Martin & Company v. Hull Undenvriters Association, 
 Limited, [1900] 2 Q. B. 402 ; 69 L. J. Q. B. 688 ; 82 L. T. 
 818 ; 5 Com. Cas. 248 ; 9 Asp. M. C. 93, 
 
 was an action on a poUcy for £1000 on freight of the Buteshire, 
 " at and from London to any port or ports ^^^/ot place or 
 places in any order or rotation in Australia ^nd/oj Tasmania 
 ^'"^/or New Zealand, risk to continue until steamer sails from 
 final loading port on homeward voyage, on freight of frozen 
 meat chartered or as if chartered, on board or not on board 
 . . . value £15,000. . . . Chartered freight and freight are 
 warranted free from all claims consequent on loss of time 
 whether arising from a peril of the sea or otherwise." 
 
 Pacts. — While the policy was in force a fire occurred on board 
 the Buteshire at Sydney, whereby her refrigerating installation 
 and machinery were destroyed. The damage could not be 
 repaired at Sydney, and it was therefore impossible for the ship 
 to load or carry the frozen meat which had been engaged, or 
 any other frozen meat on the homeward voyage, and the frozen 
 meat freight was lost. 
 
 (r) Per Lord Chelmsford, L. R. 6 H. L., p. 153. 
 
 (s) According to the M.I. Act, 1906, sect. 3 (1), Subject to the provisions of 
 this Act, every lawful marine adventure may be the subject of a contract of marine 
 insurance. 
 
 (2) In particular there is a marine adventure where — 
 
 (6) The earning or acquisition of any freight ... is endangered by the 
 exposure of insurable property to maritime perils. 
 
INSUEABLE INTEEESTS IN FEEIGHT 39 
 
 The main question raised in the case was wliother tlio claim 
 was consequent on loss of time within the meaning o£ the chxuse 
 m the pohcy, and no doubt was expressed as to the sufficiency 
 of the interest. At the commencement of his judgment, 
 Mathrw, J., said : " This was an action to recover a total 
 loss on a policy on freight on a cargo of frozen meat. The 
 insurance was on the outward voyage of the steamship Buicsldrc 
 for freight expected to be earned on the homeward voyage." (i) 
 Scottish Shire Line, Ltd., (0 Others v. London & Provincial Marine 
 
 d- General Insurance Compaiiji, Limited (1912), 8 K. B. 61 ; 
 
 107 L. T. 46; 81 L. J. K. B. 1066; 17 Com. Oas. 240; 
 
 12 Asp. M. C. 258; 56 S. J. 551, 
 was an action on a pohcy for £2000 on " freight on frozen 
 meat and/or apples and/^^, refrigerated produce valued at 
 £15,000, chartered or as if chartered, on board or not on board 
 of the ship or vessel called Aiirsliire . . . lost or not lost at and 
 from any ports or places in any order or rotation in the United 
 Kingdom to any port or places in any order or rotation in 
 Australia '>'^^jor Tasmania. . . . Eisk to commence at once 
 and continue in its entirety until steamer sails from final 
 loading port on homeward ^'oyage. Warranted free from any 
 claim consequent on loss of time whether arising from a peril 
 of the sea or otherwise, but this clause only to apply in cases 
 where the vessel is fulfiUing a special charter containing a 
 cancelling date." 
 Facts. — ^Yhile on the Avay to Australia the Ayrshire came into 
 collision and was seriously damaged. The repairs took some three 
 months. The plaintiffs had previously made a contract dated 
 October 14, 1909, with a firm at Hobart, which provided that 
 " the owners, on or about the 20th day of March next, subject 
 to loss, detention or injury from force majeure, agree to have 
 the steamship Ajirshire at Hobart with a reser\-e space in the 
 insulated holds, ready to start loading 40,000 cases of apples, 
 which the companies agree to supply to the said ship." 
 
 Owing to the delay necessitated by the repairs, the freight 
 on this cargo was lost. 
 (t) In Wan/ v. IIViV (1899), -1 Com. Cas., p. 222, Mathew, J., said : "There 
 is abimdiuit authority (hat, diu-ing the pendency of the outA\ai'd voyage, the 
 honiewai-d freight may be insured, and that the policy does attach." 
 
40 LAW RELATING TO THE INSUEANCE OP FREIGHT 
 
 Held that if the defendants had not been entitled to avoid the 
 policy on the ground of the non- disclosure of a material fact, 
 the plaintiffs would have been entitled to recover for the loss 
 of the contract freight. 
 
 The foregoing remarks have dealt with questions relating to an 
 insurable interest in chartered freight. The term chartered freight 
 may lead to some confusion. It is submitted that it does not refer 
 merely to freight payable under a charterparty, but means freight 
 payable under a contract relating to the use and hire of a vessel or 
 of space in a vessel or to the carriage of gdods in a vessel which the 
 shipowner undertakes to provide, (u) In the cases no distinction 
 has been drawn between freight payable under the terms of a charter- 
 party or under a contract of affreightment in any other form, and it 
 would seem that in principle no distinction can be drawn. As was 
 pointed out by Burrough, J., in the case of Trvjicott v. Christie, 
 " it makes no difference whether the contract was by charterparty 
 or otherwise ; it is sufficient that there was a contract. The word 
 charterparty frequently misleads, and is apt to convey the idea of 
 something extraordinary, but there is no magic in the word charter- 
 party, and an agreement of any sort is equally valid." The form 
 of the contract is immaterial for " this circumstance only varies the 
 mode of proof, without altering the principles on which the rights 
 of the parties depend." {x) In the case of Parke v. Heison (y) 
 there was no complete or definite contract for the whole amount of 
 
 (u) Chartered freight, it is submitted, comprises the remuneration payable 
 for the three kiads of hiring referred to by Lord Campbell, C.J., in Schuster v. 
 McKellar (1857), 7 E. & B., p. 724, viz. "locatio navis, looatio navis et operarum 
 magistri et nauticorum, locatio operis vehendarum mercium." 
 
 In Reg. v. Judge of City of London Court, [1892] 1 Q. B., p. 290, Lord Eshek, 
 M.R., said : " With reference to the words, claims relating out of any agreement 
 made ia relation to the use and hire of any ship, it has been said that you cannot 
 find words which more perfectly describe a charterparty. To my mind there are 
 niaety-niae out of a hundred charterparties which do not give the hire of a ship 
 at aU. But it is said they give the use of a part of the ship. They do nothing of 
 the kind. There are charterparties, rare and few, which do amount to a hire of 
 the ship. Those are exceptional charterparties. A charterparty is an agreement 
 between the shipowner and the shipper with regard to the carriage of goods." 
 
 (a;) Per Lord Ellbnborotjgh in Patrick v. Eames (1813), 3 Camp., p. 443. See 
 also Warre v. Miller (1825), 4 B. & C. 538 ; Flint v. Flemyng (IB'iQ), 1 B. & Ad. 
 45. 
 
 (y) Cited by Richaedson, J., in Truscoit v. Christie (1820), 2 Br. & B., p. 326. 
 
IN8UEABLE INTERESTS IN FREIGHT 41 
 
 the freight. The ship was a seeking ship, and was to complete her 
 loading at a number of different places. Having part of her cargo 
 on board, she was lost at Jamaica in passing from one port to another 
 to complete her cargo. The plaintiff contended that he was entitled 
 to recover in respect of freight for that part of the intended cargo 
 which was not on board at the time of the loss as well as for that which 
 was on board, and he produced several letters from merchants and 
 plantation owners respecting the intended shipments. There was 
 no contract for any specific freight, but it was to be paid according 
 to the terms usual in that trade, which were well understood. The 
 Court thought that the plaintiff might recover under the principle 
 of Thompson v. Taylor, (z) a case in which the freight was payable 
 under a charterparty. 
 
 Nor is it necessary that the contract should relate to the whole 
 vessel, (a) In principle no distinction can be drawn between a 
 contract for a full and complete cargo, a contract for a cargo capable 
 of filUng the major portion of a vessel's carrying capacity, and a 
 contract relating to goods which would occupy only a small space, 
 and it is submitted that the freight payable under any of these con- 
 tracts comes within the expression " chartered freight." (6) 
 
 (2) (1795), 6T. R. 478. 
 
 (as) A charterparty has been defined as a " contract of affreightment by which 
 an entire vessel or some principal part thereof is let," Stephens' Commentaries, 
 16th ed., vol. 2, p. 245 ; Maclachlan, 5th ed., p. 374 ; Abbott, 14th ed., pp. 
 155, 328. Charterparties are, however, frequently met with which relate to only 
 a portion of the vessel's carrying capacity. In Nelson v. Nelson Lines, [1908] 
 A. C, p. 110, Lord Lobebuen said: "_The contract which must regulate this 
 controversy is called a charterparty. It is an agreement by shipowners to supply 
 and by charterers to fiU a part of each vessel. The rest of the space was to be 
 fiUed with cargo of others." See also Potter v. New Zealand Shipping Co. (1895), 
 1 Com. Cas. 114. 
 
 (6) Pothier treats these three kinds of contracts as coming within the definition 
 of contracts by charterparty. 
 
 " The contract of charterparty is a contract for the hiring of ships or vessels. 
 . . . The contract is also denominated affreightment, from the word freight, 
 which signifies the hire agreed to be paid for the use of a ship. A freighter is one, 
 who hires a ship to convey his merchandize to any particular place. 
 
 " It may be defined to be a contract by which a person lets a ship, in part 
 or in whole, to a merchant for the conveyance of his goods ; the latter engaging 
 to transport them in his ship to the place of their destination for a certain sum, 
 which the hirer reciprocally engages to pay the latter as freight, that is, for the 
 tire of the ship. 
 
 " A ship may be let to hire in whole or in part. Hiring a ship in part is either 
 by the quintal or the ton. The quintal is a hundredweight. To hu:e a ship by 
 
42 LAW EELATING TO THE INSUKANCE OF FREIGHT 
 
 " There is no difi&culty in understanding what is meant by- 
 chartered freight. It is contrasted with bill of lading freight. 
 Chartered freight is remuneration paid to the shipowner by another 
 who hires his ship or part of it, generally with an added contract 
 that the shipowner's captain shall sign bills of lading for the charterer's 
 benefit." (c) 
 
 The term chartered freight also includes, it is submitted, the 
 freight payable in respect of freight engagements which provide 
 for the carriage of specified goods. In such cases the right of the 
 shipowner to the freight may be dependent on the continued existence 
 of the goods, (d) and it may be raised as an objection to the right to 
 insure such freight that even if none of the perils insured against were 
 t6 come into operation, no enforceable right of action might arise, 
 because the goods might perish before they could be delivered to 
 the shipowner. But it is no objection to a right to insure that the 
 interest may cease to exist by reason of causes or perils other than 
 those insured against, provided that at the date of the loss there was 
 an interest in existence which was lost by reason of perils insured 
 against. "As to the objection that the plaintiff is not entitled to 
 
 the quintal, is to hire her for the lading and conveyance of so many hundred- 
 weight of certain goods. 
 
 " The marine ton is a space of forty-two cubic feet. To let a ship by the ton, 
 is to let a merchant the space of so many tons, therein to lade and convey his 
 merchandise. 
 
 " When a ship has not been let entire, but by the quintal or ton, here it suffices 
 for the master to receive the goods which he has engaged to receive, or to furnish 
 such accommodation for the freighter's goods as he has engaged to furnish. In 
 both cases he may dispose of the surplus of the ship as he pleases." 
 
 Pothier, Treatise on Maritime Contracts of Letting to Hire, translated by 
 Gushing (1821), Preliminary Article and Article I. 
 
 (c) Per Hamllton, J., in. Scottish Shire Line v. London <Ss Provincial Insurance 
 Co., [1912] 3 K. B., p. 65. In the case of Turnhull, Martin <& Co. v. Hull Under- 
 writers Association, [1900] 2 Q. B. 402, ante, p. 38, where freight of a homeward 
 voyage was insured during the outward voyage, it appeared that at the time when 
 the vessel started on the outward voyage no contracts for the shipment of home- 
 ward cargo had been made, but while the vessel was making her outward voyage, 
 homeward cargo was booked and contracts were made. In argument it was 
 suggested that the freight payable for this homeward cargo was not chartered 
 freight, but according to Mathbw, J., " The several contracts of affreightment 
 made with shippers had the same operation as if they were grouped in a charter- 
 party." 
 
 {d) Of. Howell V. Coupland (1876), L. R. 9 Q. B. 462 ; 1 Q. B. D. 258 ; Nickoll 
 V. Ashton, [1901] 2 K. B. 126 ; Carver, Carriage by Sea, sect. 266. 
 
INSUBABLE INTBEESTS IN FEEIGHT 43 
 
 recover, if, perhaps his gains might have been prevented by accidents 
 other than the perils of the sea, the contrary has often been held, 
 for there are many subjects of insurance which might, by possibility, 
 be lost by other than the perils of the sea ; if, however, they are 
 actually lost by means of such perils, that is sufficient." (e) 
 
 With regard to ordinary freight, that is to say, the freight payable 
 for the carriage of particular goods, an insurable interest, it is sub- 
 mitted, arises as soon as a contract is made with somebody for the 
 shipment of the goods. (/) Under ordinary circumstances, however 
 (and more especially in former times), no contractual relationship with 
 regard to the goods to be carried arises until the goods are put on 
 board, and to this may be attributed the general rule that an insurable 
 interest in freight of this description does not arise until the goods 
 are put on board. Until then there is no freight in existence, but 
 only an expectation of obtaining it, and this cannot be insured by a 
 policy on freight. 
 
 Forbes v. Cowie (1808), 1 Camp. 519, 
 
 was an action on an open poUcy on the freight of the Chiswiclc, 
 at and from St. Domingo to Liverpool. 
 
 Facts. — The Chiswick arrived with a cargo, belonging to the 
 plaintiff, to be bartered for goods. Part of the outward cargo 
 was exchanged for fifty-five bales of cotton which were put on 
 board. The remainder of the outward cargo was still on board 
 when the vessel was lost. 
 
 Beld that the assured could not recover except as to freight on the 
 fifty-five bales which had been shipped. 
 
 Forbes v. Aspinall (1811), 13 East, 323 ; 12 E. E. 352, 
 
 was an action on a valued policy of the freight of the Chiswick. 
 The facts were similar to those in Forbes v. Cowie. 
 
 Held that except' as to the fifty-five bales, the assured could not 
 recover. 
 
 (e) Per Eichaedson, J., in Truscott v. Christie (1820), 2 Br. & B., p. 332 ; 
 see also per Lawbencb, J., in Lucena v. Craufurd (1806), 2 B. & P. N. R., p. 303. 
 (/) See the Copernicus (1896), P. 154, 237. 
 
44 LAW EELATING TO THE INSURANCE OP FREIGHT 
 
 Judgment. — Lord Ellenborough, C.J. : "In every action upon 
 such a policy evidence is given, either that goods were put on 
 board, from the carriage of which freight would result, or that 
 there was some contract, under which the shipowner, if the 
 voyage were not stopped by the perils insured against, would 
 have been entitled to demand freight," 
 
 Patrick v. Eames (1813), 3 Camp. 441, 
 
 was an action on a policy on the freight of the ship Jane, valued 
 at £4000, at and from the ship's port of loading in all or any of 
 the Cape de Verde Islands to Liverpool. 
 
 Pacts. — The intention of the assured was to load the vessel with 
 orchella weed. It was expected that this would be supplied by 
 the governor of the Cape de Verde Islands, and it was suggested 
 that he had verbally undertaken to do so, but there was no 
 evidence of any binding agreement. After the ship had taken 
 in one hundred and fifty bags of orchella weed she was totally 
 wrecked. It did not appear that there was any more orchella 
 weed then ready to be put on board, but there were persons 
 employed to pick and prepare what should have been a sufScient 
 quantity to fill the ship. 
 
 Held that the assured could not recover except in respect of the 
 one hundred and fifty bags which had been put on board. 
 
 Judgment. — Lord Ellenborough, C.J. : " If a contract had been 
 proved for supplying this ship with a full cargo at a stipulated 
 rate of freight, it would have been that by the event which has 
 happened, the assured has been deprived of a profit which they 
 must otherwise have certainly received ; and they would have 
 had a right to resort to the underwriters for a full indemnity. 
 Nor should I have considered it material whether that contract 
 was or was not under seal ; or whether it was written or merely 
 verbal. This circumstance only varies the mode of proof, without 
 altering the principle on which the rights of the parties depend. 
 But here no contract of any sort is proved for loading the ship. 
 Beyond the one hundred and fifty bags of orchella weed actually 
 on board, the interest of the assured- was merely in expectation. 
 
INSUEABLE INTEEESTS IN PEEIGHT 45 
 
 For anything that appears, Don Emanuel Martinus might have 
 refused to send on board another bag, without subjecting himself 
 to an action ; and although the storm had never arisen, the 
 ship might have been obliged to return to Liverpool nearly 
 empty. The loss of freight which the assured now demand, 
 therefore, did not necessarily arise from the event against which 
 the underwriter undertook to indemnify them." 
 
 Although under ordinary circumstances no contractual relation- 
 ship with regard to the goods to be carried arises until the goods are 
 put on board, engagements of cargo may be booked in advance. In 
 such cases, although an insurable interest in the freight eventually 
 to be paid will, it is submitted, arise as soon as the cargo is engaged, 
 the ordinary pohcy on freight will only cover such interest from the 
 time that the assured may be said to have an inchoate right to the 
 freight. It has been seen that in the case of chartered freight, that 
 is to say, freight payable under a contract for the hire of a vessel 
 or of space in a vessel or for the carriage of goods in a vessel which 
 the shipowner undertakes to provide, an inchoate right is considered 
 to arise as soon as the shipowner has done something towards carrying 
 out his obUgation. In the case of ordinary freight, that is to say, 
 freight payable merely for the carriage of goods, an inchoate right, 
 it would seem, arises as soon as the transportation is substantially 
 ready to begin, namely, when the cargo is in readiness to be loaded 
 and the vessel is ready to receive it. This appears to be the 
 explanation of the two cases of Tonge v. Watts and Montgomery v. 
 Egginton. 
 
 Tonge v. Watts (1746), 2 Strange, 1251, 
 
 was an action on a pohcy of insurance on ship and freight at 
 and from Jamaica to Bristol. 
 
 Pacts.— A cargo was ready to be put on board, but the ship being 
 careening, in order for the voyage, a sudden tempest arose and 
 she was lost. The rigging and parts of her were recovered and 
 sold ; and the defendant paid into Court as much as upon an 
 average he was Hable to for the loss of the ship, but the plaintiff 
 insisted to be allowed £600 for the freight the ship would have 
 earned in the voyage, if the accident had not happened. 
 
46 LAW RELATING TO THE INSURANCE OF FREIGHT 
 
 Held that he could not recover, as the goods were not actually on 
 board so as to make his right to freight commence. 
 
 Montgomery v. Egginton (1789), 3 Term. R. 362 ; 1 R. R. 718, 
 was an action on a policy on freight valued at £1500. 
 
 Facts. — Only £500 worth of freight was on board when the ship 
 was driven from her moorings and lost. But goods to the 
 amount of the rest of the freight were ready to be shipped, and 
 were lying on the quay for that purpose at the time. Lord 
 Kenyon, before whom the cause was tried, told the jury that 
 the question for their consideration was, whether this was a 
 mere colourable insurance and a gaming policy, or whether it 
 was a bond fide transaction ; if the latter, the assured was entitled 
 to recover for the whole value in the policy. The jury found 
 a verdict for the plaintiff for the whole sum. 
 
 The case of Tonge v. Watts was cited at the trial, where it 
 was held that, the ship being lost before the cargo was actually 
 on board, although it was ready to be shipped, the assured, who 
 had insured the freight as well as the ship, could not recover the 
 former. The defendant obtained a rule to show cause why 
 the verdict should not be set aside, but the Court, being strongly 
 of opinion against him, he abandoned the rule, and it was 
 accordingly discharged. 
 
 It has been seen {g) that the expression freight in insurance law 
 includes the benefit derivable by a shipowner from the employment 
 of his ship to carry his own goods, but as to when an insurable interest 
 ip. this freight arises, there is little authority. 
 
 Devaux v. I' Anson (1839), 5 Ring. N. C, 519 ; 7 Scott, 507 ; 
 2 Arn. 82 ; 3 Jur. 678 ; 8 L. J. C. P. 284 ; 30 R. R. 786, 
 
 was an action on a policy on freight valued at £1000 by the ship 
 La France, at and from Calcutta or any port on the Coromandel 
 coast to any port or ports in Bourbon. 
 
 {g) Ante, p. 4. 
 
INSUEABLE INTERESTS IN FREIGHT 47 
 
 Pacts. — The vessel arrived at Coringa, a port on the Coromandel 
 coast, and had to put into dock for repairs. After the repairs 
 had been completed and while preparations were being made for 
 bringing the vessel out of dock, she was seriously damaged and 
 was sold. The plaintiff, the owner of the vessel, had purchased 
 a large quantity of goods for the return cargo, and these goods 
 were lying ready for shipment in warehouses about seven miles 
 from Coringa, but owing to the accident they had to be brought 
 back in another vessel. 
 
 Held that the plaintiff was entitled to recover for the loss of freight. 
 
 Judgment. — Tindal, O.J. : " Two main and principal objections 
 against the plaintiff's right to recover any loss on this policy 
 have been raised and argued before us ; viz. first, that under 
 the facts stated in this special case, the policy on freight never 
 attached ; and secondly, that supposing the policy to have 
 attached, there was no loss within the pohcy by any of the 
 perils therein insured against. 
 
 " The first objection involves two distinct and separate 
 heads of consideration ; first, whether the interest of the assured 
 in the subject-matter of insurance is properly described in the 
 policy as freight ; and secondly, if such description is sufficient 
 in the poHcy, then, whether the interest of the assured in the 
 subject-matter of insurance has commenced before the loss 
 happened. 
 
 " But we consider the first question to be set at rest by the 
 decision of the Court of B. R„ in the case of Flint v. Flemyng, 
 and hold it to be now estabhshed law, that the assured under 
 an assurance upon freight, may recover the profits expected to 
 be made by carrying their own goods in their own ship upon the 
 voyage insured. 
 
 " The second head of inquiry may be subject to some degree 
 of doubt and difficulty; but, upon the whole, we concur in 
 opinion, that under the circumstances stated in the case, the 
 interest of the assured had commenced, and the pohcy had 
 attached at the time the loss took place. 
 
 " The argument which has been mainly relied upon on the 
 part of the underwriters is this ; that, in order to enable the 
 
48 LAW RELATING TO THE INSURANCE OF FREIGHT 
 
 assured to recover a loss upon a policy on freight, there must 
 be a cargo either actually put on board, or ready to be put on 
 board under a contract for that purpose ; and in the latter case 
 the ship must also be ready to receive the cargo ; and in this 
 case it is contended by the underwriters, that by reason of the 
 loss of the ship before she was out of dock, and actually afloat, 
 she was never in a condition or ready to receive the goods on 
 board : the defendant relying on the expression used by Lord 
 Ellbnborough in giving the judgment of the Court of King's 
 Bench in Forbes v. Aspinall, that in order to recover on a policy 
 on freight, a full cargo must be ready to be shipped, and the ship 
 must be in a condition to receive the cargo. The proposition 
 that the ship must be ready to receive her cargo, had, in that case, 
 an immediate bearing and application to the facts then before 
 the Court ; for the policy was on freight upon the homeward 
 voyage, and the homeward cargo was to be made by barter of 
 the outward cargo, and the whole of the outward cargo had not 
 been bartered at the time of the loss, part of it being still on board, 
 so that it was impossible under those circumstances that the 
 homeward cargo could be received on board the ship at the 
 time of her loss. In that case, therefore, the loading of the 
 homeward cargo on board, upon which depended the attaching 
 of the poUcy, and the commencement of the right of the as^sured 
 to the freight, was not prevented by any of the perils insured 
 against by the policy, as the proximate and immediate cause of 
 such prevention, but by a cause altogether without the risks 
 included in the policy, namely, by the inability of the ship to 
 receive the cargo on board, by reason of her being then partly 
 loaded with the outward cargo : whereas in the case now before 
 us, it appears that the ship was, on the 13th of August, quite 
 ready to go to sea, and to receive the cargo on board, that nothing 
 remained to prevent her sailing but the getting her out of dock, 
 and that the loss of the ship and consequent inability to receive 
 the cargo was occasioned solely by the endeavour to get her out 
 of the dock, and afloat in the river. If, therefore, the loss of 
 the ship in this case was occasioned by any of the perils within 
 the meaning of the policy, the case is distinguishable from that 
 of Forbes v. Aspinall, in this, that the immediate cause of pre- 
 vention of taking the goods on board was not occasioned by the 
 
INSUEABLE INTERESTS IN FREIGHT 49 
 
 inability of the ship to receive the cargo, but by the ship being 
 disabled to receive the cargo, by one of the perils insured against. 
 For, so far as relates to the cargo, we think it must be considered 
 as in a sufficient state of readiness to be put on board : it was 
 purchased by the assured for the express purpose of the adventure 
 mentioned in the poHcy ; it was comparatively useless for any 
 other purpose ; and the whole of the purchase was completed 
 before the repairs were finished : and although it had been 
 deposited in warehouses at seven miles distance, yet it was 
 deposited there for the purpose of being put on board ; and it 
 is impracticable, as it appears to us, to lay down any precise 
 rule as to the distance within which the cargo must be from the 
 ship at the time of the loss, whether close to it, upon the quay, 
 as in the case of Flint v. Flemyng, or at a more considerable 
 distance, as in the present case. All that it seems necessary to 
 determine with respect to the cargo, being, that it must have 
 become the property of the parties insured, by a contract made 
 with a view to its being sent on board, and actually in a state 
 of readiness, reference being had to the nature and description 
 of the voyage insured, to be put on board, when the ship arrives 
 at the place of deposit." 
 
 This case decides that an insurable interest in freight of this 
 description exists if there are goods belonging to the shipowner ready 
 to be shipped, and the ship is ready to receive them, but there seems 
 to be no reason why a shipowner, who has goods which he definitely 
 intends to carry on his own vessel, should not be entitled to insure 
 the freight in respect of them, although they are not ready to be put 
 on board, and the ship is not ready to receive them. It will, however, 
 be necessary to indicate in the pohcy the nature of the interest 
 intended to be insured, as the ordinary policy on freight only covers 
 this freight from the time that the carriage is substantially ready to 
 begin. 
 
 Flint V. Flemyng (1830), LI. & Wels. 257; 1 B. & Ad. 45; 8 
 L. J. (o. s.) K. B. 350 ; 35 R. E. 205, 
 
 was an action on a poHcy of insurance on freight by the ship 
 Hope, at and from Madras to London. 
 
 I.F. 
 
 E 
 
50 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 Pacts. — The vessel arrived at Madras, and discharged her cargo with 
 the exception of some heavy goods, which it would seem were 
 kept as ballast. Before any of the homeward cargo was loaded, 
 the vessel was wrecked. The defendant contended that the 
 risk had not attached as the ship had not discharged her outward 
 cargo. Lord Tbnterdbn told the jury that as to that point, "the 
 policy on freight could not attach till the ship was in a state to 
 receive the homeward cargo." A general verdict was found for 
 the plaintiffs, against which a rule nisi for a new trial was obtained. 
 In the Court of King's Bench the point was again mentioned. 
 
 The Attoenby-Gbnbral (Sir J. Scarlett) : " But the ship was not 
 shown to have been ready to take in her cargo, so as to make 
 the risk on freight attach." 
 
 Lord Tbntbrden : " She could not part with all her outward cargo ; 
 it was necessary to keep some heavy goods for ballast." 
 
 The Attornby-Genekal : " She was lying in a harbour." 
 
 Lord Tbntbrden : " No, in open roads." 
 
 A shipowner may enter into contracts with a merchant — usually 
 known as freight contracts — under which he undertakes to provide 
 at some agreed date a ship or space in a ship without specifying 
 any particular vessel. In such cases, it is submitted, an insurable 
 interest arises as soon as the assured has definitely allocated a vessel 
 to the performance of the contract. The point was raised in the 
 American case of New York and Cuba Mail Steamship Company v. 
 Boyal Exchange Assurance. In this case cargo had been engaged at 
 Havana by the plaintiffs for transportation by their line to New 
 York, and the plaintiffs had intended to ship the goods by the 
 Vigilancia. Owing to an accident to the \?bssel, the cargo could not 
 be sent by the Vigilancia, but was sent by another vessel of the same 
 line, and the freight for it was received. The Court held that the 
 plaintiffs could not recover as they had not " by any overt act appro- 
 priated any part of the cargoes engaged to any particular vessel for 
 transportation." Qi) The use of the expression " overt act " suggests 
 that the appropriation must be communicated, but it is submitted 
 that this is not necessary, and that it is sufficient if it has been 
 definitely decided upon, {i) 
 
 (h) (1907), 154 Fed. Rep., p. 319 (Am.). 
 
 (i) Cf. Toshers. Cun,ningham (1819), 1 Bligh. 87 ; Amould, sects. 385, 380. 
 
INSUEABLE INTEEESTS IN PEEIGHT 51 
 
 The foregoing remarks have referred to the insurable interest of 
 a shipowner. There are dicta in some of the early cases to the effect 
 that freight, being an incident of the ownership of a vessel, a person 
 who has no right either legal or equitable to a vessel, can have no 
 insurable interest in the freight. There seems, however, to be no 
 doubt that ownership of a vessel is not necessary in order to give 
 an insurable interest in the freight. 
 
 A charterer has an insurable interest in his sub- freight, but there 
 is some controversy as to the extent of his interest. " If the charterer 
 by a sub-charter, or by carrying goods, will, the perils of the voyage 
 excepted, realize earnings exceeding the amount of the charter- 
 money which he has agreed to pay to the owner for the use of the 
 ship, he has an insurable interest in the excess against all perils." (fc) 
 " In some cases the charterer may have an insurable interest in 
 freight ... at all events, for the excess by which such freight exceeds 
 the sum he has engaged to pay the shipowner as charter- money." (l) 
 
 United States Shipping Company v. Empress Assurance Corpora- 
 tion, [1907] 1 K. B. 259 ; [1908] 1 K. B. 115 ; 76 L. J. 
 K. B. 225 ; 12 Com. Cas. 142 ; 23 T. L. E. 137, 
 
 was an action on a pohcy of insurance on freight ^^^/ot chartered 
 freight of the Hero, from July 30, 1901, to July 30, 1902. 
 
 Facts. — The plaintiffs had chartered the Hero for twelv-e months 
 at the rate of £900 per month, and the charterparty provided 
 " that in the event of loss of time from stranding or damage 
 preventing the working of the vessel for more than twenty-four 
 consecutive working hours, the payment of hire shall cease 
 until she be again in an efficient state to resume her service." 
 
 {k) Phillips, Insurance, 3rd ed., sect. 337. 
 
 (l) Arnould, 2nd ed., p. 311. See also Parsons on Insurance, p. 175. In 
 Mellen v. National Insurance Co. (1829), 1 Hall N.Y. 452 (Am.), Jones, C.J. 
 said : " What would be the rule in the case of a surplus, whether such excess 
 would be held an insurable interest in the charterer, or not, and whether if in- 
 surable, it would be covered by a general policy on freight eo nomine, or would 
 require a disclosure and specification of the nature of the interest, are questions 
 which we deem it unnecessary in this case to agitate, for here there was no 
 surplus." 
 
 In Clark v. Ocean Insurance Co. (1835), 16 Pick. 289 (Am.), the Court held 
 that the charterer had an insurable interest in the excess freight, and that such 
 interest was properly described as freight. 
 
52 LAW HELATIKG 1:0 THE INSUBANCE OF PEEIGHT 
 
 The plaintiffs as chartered owners of the Hero, entered into 
 a charterparty with an American railway company for the 
 carriage of a cargo of coal from Baltimore to Colon. A cargo , 
 of 3197 tons of coal was shipped, and on December 24, 1901, the 
 Hero arrived at Colon, and the discharge of her cargo was begun. 
 On December 31, 2298 tons of the cargo then having been dis- 
 charged, the vessel stranded through perils of the seas and 
 became a constructive total loss. That part of the cargo which 
 had not been discharged was lost, and there was a total loss of 
 freight in respect thereof. The defendants contended that £54 
 should be deducted from the plaintiffs' claim on the ground that 
 it would have taken two days to discharge the cargo which was 
 still on board when the vessel stranded. 
 
 Held that the hire saved could not be deducted from the claim for 
 freight lost. 
 
 Judgment. — Channell, J. : " With regard to the defendants' con- 
 tention that the amount of two days' hire, £54, must be deducted 
 from the claim, there are no decisions of the Courts here upon 
 the point, but it does appear that some trustworthy text- writers 
 take the view that, where a charterer loses freight by reason of 
 perils of the sea and by the same event is saved payment in the 
 way of hire, then, notwithstanding the rule as to gross freight, 
 the amount of hire which has been saved may be deducted ; 
 and if the question is looked at logically and as a matter of 
 principle, that is clearly right, because insurance is only an 
 indemnity. But in any case the result of the rule as to gross 
 freight, which is a well-established rule, is that the assured gets 
 more than an indemnity, because he must always save something 
 in the way of expenses. I rather gather that the rule has 
 arisen owing to the dif&culty of taking the account. If the 
 principle of indemnity were carefully adhered to, an account 
 would have to be taken in every case showing exactly what had 
 been lost and exactly what had been saved, and the account 
 would be an extremely difficult one to take ; and to get rid of 
 that difficulty, the rule has been adopted that an insurance 
 on freight is to be an insurance, not upon the net amount, but 
 on the gross amount of freight receivable. That being the rule 
 
INSUEABLE INTEEESTS IN FEEIGHT 53 
 
 the defendants are not in my opinion entitled to say that, 
 although the plaintiffs have lost a certain amount of freight, 
 they have by the same cause been saved the cost of two days' 
 hire which would have been incurred if the cargo had not been 
 lost. That is, in effect, asking that an account should be taken, 
 but the rule shows that that is not to be done." 
 
 This case is authority for the proposition that a charterer has an 
 insurable interest in the gross amount of freight at his risk, and this 
 is in accordance with the Marine Insurance Act, which provides, 
 " In insurance on freight, whether paid in advance or otherwise, 
 the insurable value is the gross amount of the freight at the risk of 
 the assured, plus the charges of insurance," (m) without drawing 
 any distinction between the case of a shipowner and a charterer. 
 The charterer stands pro hac vice in the position of a shipowner, and 
 the principles applicable in the ease of the shipowner apply in the 
 case of a charterer. He can insure the benefit he will derive from 
 the employment of the vessel, whether that benefit is to accrue 
 from a sub-charter or from the price paid to him for carrying the 
 goods of others, or perhaps from the additional value conferred on his 
 own goods by the carriage, (n) 
 
 In the event of a loss of freight the charterer can only recover 
 to the extent that he had freight at risk at the time of the loss. 
 Thus, under the form of charterparty in frequent use, the charterer 
 undertakes to load a full and complete cargo to be carried on the 
 agreed voyage at a stipulated rate of freight. The charterer may 
 procure the cargo from other persons and may arrange with the 
 shippers for a different rate of freight to that which he has agreed to 
 pay under the charterparty, but to the extent that the freight on 
 the goods thus loaded is used to liquidate his hability, the amount at 
 his risk is diminished and accordingly his right to recover in case of 
 loss. A charterer who wishes only to insure the surplus of the freight 
 which he expects to receive over the freight which he will have to 
 pay, can do so by a policy " on profits of charter." (o) 
 
 (m) Sect. 16, sub-sect. (2). 
 
 (n) See Amould, sect. 262 ; Phillips, 3rd ed., sect. 337 ; Clark v. Ocean 
 Insurance Co. (1835), 16 Pick., p. 296 (Am.); contra Mellen y. NationM Insurance 
 Co. (1829), 1 Hall N. Y. 452 (Am.). 
 
 (o) Asfar v, Blundell, [1896] 1 Q. B. 123. 
 
54 LAW EELATING TO THE INSUEANCE OF PEEIGHT 
 
 Under ordinary circumstances the charterer has no insurable 
 int^:cest in the freight he has to pay, because the risk of that freight 
 is usually upon the owner, (p) But he may have an insurable interest 
 in respect of his hability to pay full freight although the goods arrive 
 damaged, (g) or in respect of his liability to pay a lump sum freight 
 although a large part of the cargo may be lost by perils of the sea,(r) 
 or if he agrees to pay dead freight in the event of the ship being 
 prevented from discharging the outward and shipping a return 
 cargo, (s) 
 
 An assignee has an insurable interest in the freight assigned to 
 him. " It is usual to assign the freight without the ship ; and the 
 assignee insures for his own interest. Actions have been frequently 
 brought upon insurances of the freight and the ship ; in which the 
 owners were distinct persons." (t) In an American case (u) the 
 Court expressed the view that the plaintiffs, to whom freight had 
 been assigned, must be " considered as having an insurable interest 
 in the freight," and in the case of Wilson v. Martin {x) the assured, 
 who was in the position of an equitable assignee of the freight, was 
 held to have an insurable interest in the freight. 
 
 A mortgagee, to whom freight has been mortgaged, has an in- 
 surable interest in the freight. " The plaintiff had mortgaged his 
 interest in the goods and freight to the defendant ; and therefore 
 although the defendant may have insured the legal interest on his 
 own account, he might also have insured the equitable interest 
 remaining in the plaintiff on the plaintiff's account." (y) While 
 there is no doubt that a mortgagee may insure, considerable doubt 
 exists as to the extent to which he may insure. According to the 
 
 (p) Cheriot v. Barker (1807), 2 Johns. Eep. 346 (Am.) ; Clark v. Ocean Insurance 
 Co. (1835), 16 Pick., p. 293 (Am.). 
 
 (q) See Amould, sect. 232. This may be insured as " contingency freight," 
 Kung V. Methuen (1907), 24 T. L. R. 145. 
 
 (r) Per Lord Lindley in Williams v. Canton Insurance Office, Ltd., [1901] 
 A. C, p. 472 ; see also per Lord Esher, M.R., in the Bedouin (1894), P. 11. 
 
 (s) Puller V. Staniforth (1809), 11 East. 232 ; Puller v. Glover (1810), 12 East. 
 124 ; Puller v. Halliday (1810), 12 East. 494. 
 
 (t) Per Lord Eldon, L.Q, in Mestaer v. Gillespie (1806), 11 Vesey, p. 629. 
 
 {u) Paradise v. Sun Mutual Insurance Co. (1851), 6 Lou. Ann. 596 (Am.). 
 
 (x) (1856), 11 Exoh. 684; see also Lindsay v. Gibbs (1856), 22 Beav. 522; 
 2 Jur. N. S. 1039. 
 
 {y) Per Ashubst, J., in Smith v. LasceUes (1788), 2 T. R., p. 188, 
 
INSUEABLE INTEEESTS IN EEEIGHT 55 
 
 Marine Insurance Act, " the mortgagee has an insurable interest 
 in respect of any sum due or to become due under the mortgage," (2) 
 and the language of this section at iirst sight suggests that the extent 
 to which a mortgagee may insure is limited to the amount of the 
 mortgage debt. But there is considerable authority to the effect 
 that a mortgagee, whether legal or equitable, may insure the mortgaged 
 property to its full value (although the full value exceeds the amount 
 of the mortgage debt) and may under certain circumstances recover 
 the full value of the mortgaged property. " I think the plaintiff 
 (who was a mortgagee) might have effected an insurance to the 
 whole value, but I also think that whether he intended to insure 
 only his own interest or that of the mortgagor as well was a question 
 very properly left to the jury." (a) " The question, then, as to the 
 amount recoverable under an open policy effected by a mortgagee, 
 will, in all cases, depend upon the intention in point of fact of the 
 mortgagee in effecting the policy ; if he intended it to cover the whole 
 interest, both legal and equitable, he may then recover the whole 
 amount of the insurance, under trust as to the surplus, to hold it 
 for the mortgagor ; if he intended it only to cover his own interest 
 as mortgagee, and the amount of the insurance is greater than that 
 of the mortgage debt, he can recover to the extent only of his lien." {h) 
 Different reasons have been given for this right of a mortgagee to 
 insure to the full value. It is sometimes attributed to his legal title, 
 and there is authority for saying that a legal title to property confers 
 a right to insure the property to the full value, (c) It is sometimes 
 attributed to his being in possession, and there is authority for saying 
 that possession confers a right to insure to the full value. ((?) But the 
 
 (2) Sect. 14, sub-sect. 1. 
 
 (a) PerLiTTLEDALE, J.,in/rTO?isrv.iJ«cAardsoTO(1831),9L. J. (o.s.)K.B.,p. 226. 
 
 (6) Amould, 2nd ed., p. 306 ; see also North British Insurance Co. v. London 
 Insurance Co. (1877), 5 Ch. D., p. 583 ; Ebsworth v. Alliance Marine Insurance 
 Go. (1873), L. R. 8 C. P., p. 608 ; Castellain v. Preston (1881), 11 Q. B. D., p. 398 ; 
 Nichols <fc Co. Y. Scottish Union Insurance Go. (1885), 14 Rettie, 1094 ; 2 T. L. R. 
 190; Glasgow Provident Investment Society v. Westminster Fire Office (1887), 
 14 Rettie, p. 977. 
 
 (c) Lucena v. Graufurd (1806), 2 B. & P. N. R.,p. 324 ; Irving Y.Richardson 
 (1831), 2 B. & Ad. 193 ; Ebsworth v. Alliance Marine Insurance Co. (1873), L. R. 
 8 C. P., p. 638 ; MacGillivray, Insurance, p. 130. 
 
 (d) De Forrest v. Fulton Fire Insurance Co. (1828), 1 Hall. N. Y. 84 (Am.) ; 
 Waiers v. Monarch Life Insurance Go. (1856), 25 L. J. Q. B . 102 ; L. & N. W. 
 Railway Co. v. Glyn (1859), 28 L. J. Q. B. 188 ; MacGUlivray, Insurance, pp. 
 130, 131. 
 
56 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 true view seems to be that a mortgagee, like other persons with a 
 limited linterest,(e) may insure the property to its full value. " A 
 mortgagee, consignee, or other person having an interest in the 
 subject-matter insured may insure on behalf and for the benefit of 
 other persons interested as well as for his own benefit." (/) The 
 whole question is discussed at great length by Bowen, L.J., in the 
 case of Castellain v. Preston. "It is well known in marine and in 
 fire insurances that a person who has a limited interest may insure 
 nevertheless on the total value of the subject-matter of the insurance, 
 and he may recover the whole value, subject to these two provisions ; 
 first of all the form of his poUcy must be such as to enable him 
 to recover the total value, because the assured may so limit himself 
 by the way in which he insures as not really to insure the whole value 
 of the subject-matter ; and secondly, he must intend to insure the 
 whole value at the time when the insurance is effected. He cannot 
 recover the entire value unless he has intended to insure the entire 
 value. A person with a limited interest may insure either for himself 
 and to cover his own interest only, or he may insure so as to cover not 
 merely his own limited interest, but the interest of all others who are 
 interested in the property. It is a question of fact what is his inten- 
 tion when he obtains the policy. But he can only hold for so much 
 as he has intended to insure. Let us take a few of the cases which 
 are most commonly known in commerce of persons who insure. 
 There are persons who have a limited interest, and yet who insure 
 for more than a limited interest, who insure for the total value of the 
 subject-matter. There is the case, which is, I suppose, the most 
 common, of carriers and wharfingers and commercial agents, who have 
 an interest in the adventure. It is well known what their rights are. 
 Then, to take a case which perhaps illustrates more exactly the 
 argument, let us turn to the case of a mortgagee. If he has the 
 legal ownership, he is entitled to insure for the whole value, but even 
 supposing he is not entitled to the legal ownership he is entitled to 
 insure prima, facie for all. If he intends to cover only his mortgage 
 and is only insuring his own interest, he can only in the event of a 
 
 (e) In Ehsworth v. Alliance Marine Insurance Co. (1873), L. R. 8 C. P. 596, 
 Keating and Brett, JJ., while leaving open the question whether this right 
 extended to an equitable interest, held, contrary to the view of the other members 
 of the Court, that it did not apply to an interest which was based merely on 
 contract. 
 
 {/) Marine Insurance Act, sect. 14 (2). 
 
INSUEABLE INTEEESTS IN FEEIGHT 57 
 
 loss hold the amount to which he has been damnified. If he has 
 intended to cover other persons besides himself, he can hold the surplus 
 for those whom he has intended to cover." {g) 
 
 A mortgagor has an insurable interest in the full value of the 
 property mortgaged (/i) even though it be mortgaged to its full 
 value, because in case of loss he would not only be deprived of the 
 property, but would also remain liable for the mortgage debt.(i) 
 When the mortgagor has convenanted to insure the mortgaged pro- 
 perty on account of the mortgagee, he holds the proceeds in trust 
 for him. (fc) 
 
 A vendor of a ship who reserves his right to the freight being earned 
 at the time is in a position similar to that of an assignee of freight, and 
 may insure the freight. (Z) 
 
 With regard to advance freight, the mere advancing of the freight 
 will not give the person making the advance any insurable interest. 
 " In the case of advance freight, the person advancing the freight 
 has an insurable interest, in so far as such freight is not repayable in 
 case of loss." (m) Such money carmot, in case of the loss of the ship 
 or cargo, be recovered back, and the person making the payment 
 runs the risk of losing the benefit which he expected to derive from 
 the payment. In every case the question to be considered is whether 
 the payment is a payment on account of freight, or merely a loan 
 repayable by the shipowner. " The only question is whether this 
 was a mere loan, or an advance of freight. A sum of £300 is to 
 be advanced, subject to certain deductions, one of which is for 
 
 (gr) Per BowEsr, L.J., in Castellain v. Preston (1883), 11 Q. B. D., p. 398. 
 
 (h) Marine Insurance Act, sect. 14 (1). 
 
 (i) Alston r. Campbell (1779), 4 Bro. Pari. Cas. 476; Ward v. Beck (1863), 
 13 C. B. (N. s.) 668. 
 
 (k) Ladbroke v. Lee (1850), 4 De G. & Sm. 106 ; Swan v. Maritime Insurance 
 Co., [1907] 1 K. B. 116; of. Levy v. Merchants Marine Insurance Co. (1885), 
 62 L. T. 263. 
 
 (I) See Amould, sect. 262 ; Crump, Marine Insurance, p. 120 ; Phillips, 
 3rd ed., sect. 480. The case of Riley v. Delafield (1811), 7 Johns. 522 (Am.), 
 did not decide that a vendor under such circumstances had no insurable interest, 
 but that he could not recover under a policy in which the subject-matter was 
 described as freight. 
 
 («») Marine Insurance Act, sect. 12 ; Arnould, sect. 263 ; Phillips, sect. 
 340. 
 
58 LAW EELATING TO THE IN8UEANCE OP FEEIGHT 
 
 insurance. If it is to be insured, it must be for freight in advance ; 
 for a mere loan could not be insured ; and if it is not a mere loan, 
 but advance of freight, the plaintiff cannot recover it back." (n) 
 
 Where the advance is to be made in accordance with the pro- 
 visions of the contract of affreightment, the question, whether the 
 advance is on account of freight or not, is a question of construction, 
 and the intention of the parties must be gathered from the whole 
 charterparty. If the advance is made without previous stipulation, 
 the intention must be gathered from the agreement or the conduct 
 of the parties at the time of making it. (o) 
 
 Manfield S Another v. Maitland (1821), 4 B. & Aid. 582 ; 23 E. E. 402, 
 was an action on a policy to insure an acceptance of £219. 
 
 Pacts. — A charterparty had been made, which provided that one- 
 half of the freight should be paid in cash on unloading and right 
 delivery of the cargo, and the remainder by bill on London at 
 four months' date, the captain to be supplied with cash for the 
 ship's use. In pursuance of this last stipulation, the captain 
 drew the bill of exchange in question for £219, for the use of 
 the ship Agenoria on the plaintiffs, and it was duly accepted 
 and paid. The vessel was lost on the homeward voyage. 
 
 Held that " this was not to be considered as a payment of freight in 
 advance, but as a loan to the owner of the ship, and that the 
 freighter had no insurable interest in such bill." 
 
 Judgment. — Bayley, J. : "If the memorandum of charterparty 
 in this instance had clearly expressed that the money advanced 
 should be in part payment of the freight, then it would follow, 
 that the loss of the ship would produce a loss of the money 
 advanced to the freighter, and he would have an insurable 
 
 (n) Per Lord Campbell in Hicks v. Shield (1857), 7 E. & B., p. 638 ; see also 
 Wilson V. Martin (1856), 11 Exch. 684 ; Hall v. Janson (1855), 4 E. & B. 500 ; 
 Frayes v. Worms (1865), 19 C. B. (n. s.) p. 177 ; Allison v. Bristol Marine Insurance 
 (1876), 1 A. C. 209 ; The Red Sea (1896), P. 20 ; Weir v. Girvin, [1900] 1 K. B. 
 45. 
 
 (o) Carver, Carriage by Sea, 5th ed., sect. 564 ; The Karnak (1869), L. R. 
 2 P. C. 505. 
 
INSUEABLE INTEEESTS IN PEEIGHT 59 
 
 interest in it. But, if that be not so, and it be only a loan by 
 the freighter, he would have no insurable interest, having a 
 remedy against the owner for the debt." 
 
 Currie v. The Bombay Native Insurance Company (1869), L. E. 
 3 P. C. 72 ; 6 Moo. P. C. N. S. 302 ; 39 L. T. P. C. 1 ; 22 
 L. T. 317; 18 W. E. 296, 
 
 was an action on a poUcy of insurance upon disbursements of 
 the ship Northland, upon a voyage from iloulmein to Madras, 
 against total loss only. 
 
 Facts. — The disbursements consisted of advances made by the 
 charterer to the captain of the vessel to be paid out of freight, 
 which would not be earned except by the arrival of the vessel 
 at Madras. 
 
 Held that the sums borrowed by the captain to be repaid by deduc- 
 tions from the freight, must be considered as advances of freight, 
 and that the charterer had, therefore, an insurable interest. 
 
CHAPTEE III. 
 
 The Duration of the Eisk Coveebd by the Policy. 
 
 In the preceding chapter it has been seen that an ordinary policy on 
 freight has always been regarded as a contract of indemnity during 
 the adventure in which the freight was to be earned. Prom the 
 time that the freight began to be earned, an inchoate right to it 
 was said to arise, and from this time according to the American view 
 there was an inception of an insurable interest in the freight, and 
 according to the view adopted in several early English cases there 
 was an inception of the risk. It is, however, misleading to treat the 
 inchoate right as referring either to the inception of an insurable 
 interest in the freight or to the inception of the risk under the poHcy. 
 The ordinary policy on freight was not intended to cover any freight 
 which the assured might have engaged. In the absence of indication 
 to the contrary, it was an insurance of the freight which was being 
 earned. Until something had been done towards earning the freight, 
 the policy did not attach, and it did not attach because until then 
 the freight did not come within the scope of the policy. 
 
 It has also been seen that at different times different tests have 
 been suggested as to the time when, in the case of chartered freight, 
 the policy attached. According to one view the policy did not attach 
 until the vessel had broken ground on the voyage, (a) According to 
 another view it did not attach 'until the vessel was ready to take 
 the cargo on board. (6) According to the cases of Thompson v. Taylor 
 and Truscott v. Christie, the test was whether something had been 
 done under the contract of affreightment, (c) The decision in the 
 case of Barier v. Fleming (d) showed that these tests were merely 
 criteria as to whether the freight had in fact begun to be earned and 
 was therefore within the scope of the policy, and were not artificial 
 
 (a) See ante, p. 23. (6) See ante, p. 30. (c) See ante, p. 24. 
 
 (i) (1869), L. R. 5 Q. B. 59, ante, -p. 32. 
 
 60 
 
DDEATION OF THE EISK 61 
 
 limitations upon the commencement of the risk. Provided that the 
 assured had freight which came within the scope of the policy, the 
 risk could attach at once, and was not subject to any implied condition 
 that something must have been done under the contract of affreight- 
 ment, or that the vessel must be ready to load, or have broken ground 
 on the voyage. The Marine Insurance Act, therefore, provides that 
 " Where chartered freight is insured at and from a particular place, 
 and the ship is at that place in good safety when the contract is 
 concluded, the risk attaches immediately. If she be not there when 
 the contract is concluded, the risk attaches as soon as she arrives 
 there in good safety." (e) 
 
 In pohcies on chartered freight, as in all other policies, the com- 
 mencement of the risk may be made to depend on a certain event, 
 and in such cases the risk does not attach until the happening of the 
 event.(/) 
 
 Gordon c6 Talboi/ v. The American Insurance Company oj Nev: 
 York (1847), 4 Denio. 360 (Am.), 
 
 was an action on a pohcy of insurance at and from Canton to 
 a port of discharge in the United States " upon the freight of 
 all kinds of lawful goods and merchandize, laden or to be laden 
 on board the good ship called the America . . . beginning the 
 adventure upon the said freight, from and immediately following 
 the loading thereof on board of the said vessel." 
 
 In the declaration the plaintiffs averred that they had entered 
 into contracts of affreightment with two commercial houses at 
 Canton, and that the vessel at the time of the loss was ready 
 to receive the goods and the goods were ready to be laden, but 
 there was no averment that any goods had been laden on board. 
 The defendants demurred. 
 
 Held, that the plaintiffs could not recover, as the risk did not com- 
 mence until the goods\were on board. 
 
 (e) Rules for Construction of Policy, Rule 3 (c). This rule is similar to the 
 rule relating to the inception of the risk on ship. 
 
 ( / ) In addition to the cases which are set out in the following pages, see also 
 Barnes v. Akers (1795), 2 Peake, 22. 
 
62 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 Becketty. The West oj England Marine Insurance Co., Ltd. (1872), 
 25 L. T. 739 ; 1 Asp. M. G. 185, 
 
 was an action on a policy of insurance for £300 upon freight 
 valued at £300 of the ship or vessel called the Gem, at and from 
 Lagos to any port of call and/or discharge in the United Kingdom. 
 The policy also contained the following printed clause : " And 
 the said company promises and agrees that the insurance afore- 
 said shall commence upon the freight and goods or merchandise 
 aforesaid, from the loading the said goods or merchandise on 
 board the said ship or vessel as at above, and continue until 
 the goods or merchandise be discharged and safely landed as 
 at above." 
 
 Pacts. — A charterparty had been made under which the vessel was 
 to proceed with cargo to any place on the West Coast of Africa 
 and to bring back a homeward cargo of African produce. The 
 freight was a lump sum freight of £600, of which £300 had been 
 paid in advance. 
 
 The vessel arrived at Lagos, and discharged the outward 
 cargo, but before any of the homeward cargo was put on board 
 the vessel was wrecked. 
 
 Held that as none of the homeward cargo had been loaded, the 
 plaintiffs could not recover. 
 
 Jones <& Another v. The Neptune Marine Insurance Company 
 (1872), L. E. 7 Q. B. 702 ; 41 L. J. Q. B. 370 ; 27 L. T. 
 308 ; 1 Asp. M. C. 416, 
 
 was an action on a policy of re-insurance for £500 upon the 
 freight of the vessel Napier, from Baker's Island to a port of 
 call and/jjj discharge in the United Kingdom, the insurance on 
 the said freight beginning from the loading of the said vessel, 
 and terminating when the said vessel shall be moored as above 
 at a safe anchorage. 
 
 Facts.— The vessel had been chartered to proceed to Baker's Island 
 in the Pacific Ocean, there to load a cargo of guano, and to dis- 
 charge it at Birkenhead, freight to be at the rate of seventy 
 
DUEATION OF THE EISK 63 
 
 shillings per ton. The vessel arrived at Baker's Island and loaded 
 about two-thirds of her cargo (a full cargo being ready), but was 
 obliged to leave her moorings owing to stress of weather and was 
 wrecked. 
 
 The plaintiffs had underwritten a policy " on £500 lost or not 
 lost at and from Melbourne to Baker's Island, while there, 
 and thence to Liverpool or Birkenhead, up^n chartered freight 
 valued at £6000," and having paid £500 upon their policy, sought 
 to recover it from the defendants. 
 
 Held that they could not recover, by Blackburn, J., on the ground 
 that the policy being from Baker's Island, the risk had not 
 attached ; by Mellor and Lush, J.J., on the ground that the 
 risk did not attach until the loading was completed. 
 
 Hopper (& Another v. Wear Marine Insurance Company (1882), 
 46 L. T. 107 ; 4 Asp. M. C. 482, 
 
 was an action on a policy of insurance upon freight of and in the 
 vessel Hawthorn, at and from Libau to Bordeaux, beginning 
 the adventure upon the said goods or freight from the loading 
 thereof on board the said ship at Libau. 
 
 Facts. — The vessel which had been chartered to carry a cargo of 
 oats from Libau to Bordeaux arrived at Libau and commenced 
 to load. A portion of the cargo, which was in lighters alongside 
 the vessel, was lost and the plaintiffs could not obtain other 
 cargo except at a lower rate of freight than that stipulated for 
 in the charterparty. The present action was brought to recover 
 the difference. On demurrer, 
 
 Held that the plaintiffs could not recover. 
 
 The Copernicus, [1896] P. 237 ; 65 L. J. ADM. 108 ; 74 L. T. 
 757 ; 8 Asp. M. C. 166, 
 
 was an action on a policy of insurance on " freight ^^^/ot charges 
 as interest may appear by steamer a-iK^/or steamers at and from 
 any port or ports of loading on the West Coast of South America 
 to any port or porta of discharge in the United Kingdom, to 
 
64 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 cover the freight from the time of the engagement of the goods 
 or after a shipping order has been issued by the agent or his 
 broker." 
 
 Facts. — The Copernicus sailed from Monte Video for Valparaiso 
 for the purpose of loading cargo which had been engaged at 
 Valparaiso and at other ports on the West Coast, and which 
 was ready for shipment, but on the voyage to Valparaiso the 
 vessel was lost. 
 
 Held that the engagement clause must be construed with reference 
 to the voyage described in the pohcy, and, therefore, as the 
 vessel had not arrived at her first loading port on the West 
 ■ Coast of South America, the risk had not attached. 
 
 In most of the foregoing cases the question arose in connection 
 with a printed clause, which is found in many pohcies, to the effect 
 that the risk on freight is not to commence " until the goods are 
 loaded on board the said ship or vessel as at above." The provisions 
 of such a clause, however, may have no application to the facts, as 
 for instance in the case of a shipowner who has chartered his vessel 
 to proceed from A. to B., there to load a cargo, and has effected an 
 insurance on freight " at and from A. to B.," by a pohcy containing 
 such a clause. In such a case the clause would have no application, 
 and should, it is submitted, be ignored, (g) This seems to have been 
 the view put forward by Lord Esher in the case of Hydames S.S. 
 Co. V. Indemnily Mutual Marine Assurance Co., (h) where the pohcy 
 was on freight of meat " at and from Monte Video." " If this were 
 a case of insurance on freight that could be earned in respect of goods 
 or merchandize to be loaded at Monte Video, the case of Beckett 
 V. West oj England Marine Insurance Co. seems to show that in 
 construing the pohcy the words rehed on by the defendants must 
 be left in ; but in this case we cannot leave them in, I think, because 
 they are altogether inappHcable, the insurance being on frozen meat, 
 and Monte Video not being the port of loading for frozen meat." 
 
 (g) The effect of such a clause can be avoided by takmg a policy on " freight 
 on board or not on board." 
 (h) [1895] 1 Q. B., p. 506. 
 
DUEATION OF THE EISK 65 
 
 Hydames Steamship Company v. Indenmity Mutual Marine 
 Assurance Co., [1895] 1 Q. B. 500 ; 64 L. J. Q. B. 353 ; 
 72 L. T. 103 ; 14 E. 216 ; 7 Asp. M. G. 553, 
 
 was an action on a policy of insurance upon freight of meat 
 valued at £3000 against loss occasioned by breaking down of 
 machinery until final sailing of vessel, at and from Monte Video 
 to any ports or places in the Eiver Plate (including the Boca) 
 and thence to any port in the United Kingdom. The policy 
 also contained a printed clause : " The assurance aforesaid 
 shall commence upon the freight and goods or merchandise 
 on board thereof from the loading of the said goods or mer- 
 chandise on board the said ship or vessel at Monte Video, and 
 shall continue until the said goods or merchandise be discharged 
 and safely landed at as aforesaid." The words " Monte Video " 
 and " as aforesaid " were inserted in writing. 
 
 Pacts. — The freight insured arose under a contract between the 
 plaintiffs and certain merchants for the carriage of a cargo of 
 frozen meat from Boca, Buenos Ayres, to the United Kingdom. 
 The vessel proceeded from Monte Video to the Boca, Buenos 
 Ayres, but owing to a breakdown of the refrigerating machinery 
 no meat could be put on board. 
 
 At the time when the policy was entered into no meat ever 
 was or could be loaded at Monte Video, there being no appli- 
 ances there for freezing meat, and this fact was known to the 
 defendants. 
 
 Held that the words in the printed clause defining the commencement 
 of the risk with regard to the loading of the goods being abso- 
 lutely inapphcable under the circumstances of the case, they 
 must be rejected, and the policy, therefore, attached although 
 no meat had been loaded on board the ship. 
 
 Different rules with regard to the inception of the risk apply in 
 the case of ordinary freight, that is to say, freight payable merely 
 for the carriage of particular goods. " Where freight, other than 
 chartered freight, is payable without special conditions and is insured 
 at and from a particular place, the risk attaches pro rata as the goods 
 
 I.F. 1' 
 
66 LAW EELATING TO THE INSUEANCE OP PEEIGHT 
 
 or merchandise are shipped ; provided that if there be cargo in 
 readiness which belongs to the shipowner, or which some other person 
 has contracted with him to ship, the risk attaches as soon as the ship 
 is ready to receive such cargo." (i) The rule that in the case of 
 freight payable for the carriage of goods the risk only attaches as the 
 goods are put on board may be traced to the fact, that in the majority 
 of cases no right to any freight exists until the goods are put on board. 
 But the case of Devaux v. I' Anson (k) decided that, in the case of 
 freight to be derived by the shipowner from the carriage of his own 
 goods, the policy attached as soon as the carriage was substantially 
 ready to begin, that is to say, as soon as the cargo was in readiness 
 and the ship was ready to receive it. The Act accordingly contains 
 a proviso to this effect, and provides that the same rule shall apply 
 to freight to be derived from the carriage of the goods of others. It 
 must, however, be freight, and not a mere expectation of obtaining 
 freight ; it must be freight to be derived from the carriage of goods 
 which some person has contracted to ship. 
 
 The Act substantially reproduces the language used in the text 
 books and by Tindal, C.J., in the case of Devaux v. I' Anson. " In 
 order to enable the assured to recover a loss upon a policy on freight, 
 there must be a cargo either actually put on board, or ready to be put 
 on board under a contract for that purpose ; and in the latter case 
 the ship must also be ready to receive the cargo." " In an insurance 
 on freight properly so called, the risk begins from the time when the 
 goods are put on board, or contracted for under a binding contract 
 and ready to be put on board a ship in a state of readiness to receive 
 them." (T) It must, however, be noted that several of the cases (m) 
 relied on in the text- books do not justify the conclusions which have 
 been drawn from them. Thus in the case of Truscott v. Christie, 
 although a portion of the cargo had been put on board, there is 
 nothing to show that the balance was in readiness. In the case of 
 Parke v. Hebson there is no evidence that the goods, other than those 
 already loaded, were ready, and the ship was not ready to receive 
 
 (i) Marine Insurance Act, 1906. Rules for Construction of Policy, rule 3 (d). 
 
 (k) (1839), 5 Bing. N. C. 519, ante, p 49. 
 
 (I) Marshall, 4th ed., p. 218 ; Arnould, 2nd ed., p. 524 ; Park, 8th ed., p. 56. 
 
 (m) Tonge v. Watts (1746), 2 Str. 1251 ; Montgomery v. Egginton (1789), 
 3 T. R. 362 ; Truscott v. Christie (1820), 2 Br. & B. 320 ; Parke v. Hebson, 2 Br. 
 & B. 320 ; Warre v. Miller (1825), 4 B. & C. 538 ; Flint v. Flemyng (1830), 1 B. 
 & Ad. 45 ; Devaux v. F Anson (1839), 5 Bing. N. C. 519. 
 
DUEATION OP THE EISK 67 
 
 them. In the case of Warre v. Miller there was an averment in the 
 declaration to the effect that the goods were ready to be loaded, but 
 at nisi prius no reliance was placed on this, or on the fact that the 
 vessel was not ready to receive them. Besides, it would seem that 
 in these cases the freight insured was chartered freight, and was so 
 regarded by the Courts. 
 
 The Act speaks of the goods " being in readiness," and the ship 
 " ready to receive them." These expressions should, it is submitted, 
 receive the same construction as they have received in the law of 
 shipping. The cargo must be in readiness, but that does not neces- 
 sarily mean that the cargo must be on the quay at which the ship 
 is to be loaded, although this will generally be the case. If goods 
 are usually stored at a place at a distance from the spot at which the 
 loading is done, it will suffice if the cargo is in readiness at that 
 place, (n) This seems to have been the view adopted in Devaux v. 
 r Anson, (o) where the cargo ;was lying in warehouses about seven 
 miles from the quay. 
 
 The ship must be ready to receive the cargo, but this does not 
 necessarily mean that the vessel must be at the berth where the 
 cargo is to be loaded. In Devaux v. F Anson the vessel had been 
 sent to dry dock for repairs and was still in dry dock at the time of 
 the accident, but it was held that she was ready to receive the cargo. 
 " It appears that the ship was, on the 14th of August, quite ready 
 to go to sea, and to receive the cargo on board, that nothing remained 
 to prevent her sailing but the getting her out of dock, and that the 
 loss of the ship and the consequent inabiUty to receive the cargo was 
 occasioned solely by the endeavour to get her out of the dock and 
 afloat in the river." This decision suggests that a vessel may be 
 " ready to receive " the cargo although she is not at the berth where 
 the cargo is to be loaded. This was the interpretation put upon 
 these words in the case of Hick v. Tweedy, (jp) where a charterparty 
 contained a clause entitling the charterers to cancel if the vessel was 
 not ready to receive cargo by December 12. The vessel arrived 
 
 (m) Carver, Carriage by Sea, 5th ed., § 252. See Hudson v. Ede (1868), L. R. 
 2 Q. B. 666 ; 3 Q. B. 412 ; Grant v. Corerdale (1884), L. R. 9 A. C, p. 477 ; Allerton 
 Sailing Ship Co. v. Falh (1888), 6 Asp. M. C. 287 ; Smith v. Rosario Co., [1894] 
 1 Q. B. 174. 
 
 (o) (1839), 5 Bing. N. C. 519. 
 
 (p) (1890), 63 L T 765 ; 7 T. L. R. 144. 
 
68 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 at Odessa, the port of loading, on December 10 in ballast, but 
 owing to the crowded state of the port could not secure a loading 
 berth before the 18th. The charterers cancelled the charterparty 
 on the ground that the vessel was not ready to receive the cargo, 
 but it was held that they were not entitled to do so, as the words 
 merely referred to the condition of the ship, (g) 
 
 With regard to the termination of the risk on freight, the rule 
 generally laid down is that the risk terminates at the same time as 
 the risk terminates on goods. " The ordinary policy provides that 
 the insurance on a vessel shall end after she has been moored twenty- 
 four hours in good safety, and on goods when they are safely landed. 
 Though this policy is commonly used for freight insurances there is 
 no clause determining the end of the risk on freight. Usually the 
 freight is not payable until the goods are delivered. When this is 
 so, it is submitted that, under a voyage policy to the place of dis- 
 charge, the risk continues as long as the goods remain in the custody 
 of the shipowner exposed to maritime perils, provided there be no 
 unjustifiable delay in discharging them." (r) 
 
 In the case of Atty v. Lindo, (s) where the freight of a voyage 
 from London to Madeira and Jamaica was agreed to be paid in wine 
 to be put on board at Madeira and to be carried free to Jamaica, the 
 Court of Common Pleas were of opinion that the risk under a policy 
 on freight at and from London to Jamaica endured until the wine 
 was safely carried to Jamaica. 
 
 If the locus ad quern referred to in the policy is not the place of 
 discharge of the cargo, the risk under an ordinary pohcy on freight 
 probably terminates when the ship has safely arrived at the agreed 
 port of destination and is at her moorings, (f) In the case of Phillips 
 V. Campion the underwriter contended that the risk terminated when 
 any part of the cargo which was the produce of the voyage insured 
 arrived safely at its destination, but Gibbs, C.J., characterised this 
 as a mere fancy of the imagination. 
 
 (q) See also per Kennedy, L.J., in Leonis S.S. Co. v. Bank, [1908] 1 K. B., 
 p. 527 ; Carver, Carriage by Sea, 5th ed., sect. 221. 
 
 (r) Amould, sect. 520 ; MoArthur, Marine Insurance, p. 100 ; Marshall, 
 4th ed., p. 226 ; Chalmers and Owen's Digest, 2nd ed., p. 154. 
 
 (s) (1805), 1 B. & P. N. R. 236. 
 
 («) See Amould, sect. 493 ; Phillips, sect. 969 ; per Bramwell, B., in Stone 
 V. Marine Insurance Co. of Gotheribmg (1876), L. R. 1 Ex. D., p. 85. 
 
DUEATION OP THE EISK 69 
 
 Phillips V. Campion (1815), 1 Marsh. E. 402 ; 6 Taunt. 3, 
 
 was an action on a policy on the freight of the ship Active, at 
 and from London to the Southern Whale and Seal fishery, 
 during her stay there, and at and thence to London. 
 
 Facts.— While at the fishery the vessel and some twelve hundred seal 
 skins were damaged by a peril of the sea. It was in evidence 
 that if any of the damaged skins had been stowed with sound 
 ones, they would have infected and damaged the latter, and 
 they were therefore sent home by another vessel and arrived 
 safely. Subsequently the Active was lost. The defendant 
 reUed on the fact that some of the produce of the adventure had 
 been shipped to England and had arrived and produced a small 
 profit, as a criterion that the voyage was terminated, and that 
 he was therefore not hable for the subsequeiit loss. The jury 
 found a verdict for the plaintiff, and the Court of Common Pleas 
 refused a rule to set it aside. 
 
 The policy does not attach if the vessel was not seaworthy at the 
 commencement of the voyage, (u) or if the vessel sails on a voyage 
 different from the voyage insured, (x) 
 
 Freight may be insured by a time poHcy, but this, it is submitted, 
 does not affect the view that the freight intended to be covered is 
 the freight which the shipowner is in the course of earning. The 
 difference between a time policy and a voyage policy is that in the 
 one case the duration of the risk is limited by time and in the other 
 by space, (?/) but this does not affect the nature of the insurance. In 
 one case it was argued that a loss of freight could not be recovered 
 because the voyage, on which the freight was to be earned, could 
 not have been completed within the time covered by the pohcy. 
 But this contention was not accepted. Freight may be insured for 
 part of a voyage, and in the same way it may be insured for a portion 
 of the period daring which it is at risk. 
 
 (m) Donnally v. Merchants Mutual Marine Insurance Co. (1876), 28 Lou. Ann. 
 939 ; 26 Am. Rep. 129 (Am.) ; Dodge v. Boston Marine Insurance (1892), 85 
 Maine, 215 (Am.) ; per Brett, J., in Daniels v. Harris (1874), L. R. 10 C. P., 
 p. 5. 
 
 (x) Sellar v. M'Vicar (1804), 1 B. & P. N. R. 23. 
 
 (y) See per Lord Campbell, O.J., in Knight v. Faith (1850), 15 Q. B., p. 652. 
 
70 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 Michael v. Gillespy (1857), 2 C. B. (n. s.) 627 ; 26 L. J. C. P. 
 306 ; 3 Jur. (n. s.) 1219 ; 109 E. E. 809, 
 
 was an action on a policy of insurance on cargo and freight of 
 the Charles Kerr from January 24, 1852, until March 1, 1852, 
 with a proviso for its renewal from time to time for a year. 
 
 Pacts. — The vessel on January 25, 1852, sailed from Shields with 
 a cargo of coals for Aden, where she could not have arrived 
 until long after March 1, Owing to bad weather, the vessel 
 was compelled on February 8 to put into Cuxhaven for 
 repairs, and the coals had to be unloaded. When unloaded 
 they were found to be So damaged that it would have been 
 extremely dangerous, owing to their liabihty to spontaneous 
 ignition, to carry them on, and it was proved that owing to 
 want of facilities at Cuxhaven, it would have cost more than 
 three times their value at Aden to put them in a condition to be 
 carried on. The owner of the coals thereupon abandoned them 
 to the underwriters as a total loss, and the vessel, after being 
 repaired, proceeded upon another voyage. 
 
 On the part of the defendant it was objected, first that 
 there was no loss of the subject-matter of the insurance, because, 
 even if no accident had occurred, the vessel would not have 
 arrived at Aden within the period covered by the policy, and 
 would not have earned any freight during the currency, of the 
 policy ; and secondly, that although by a peril insured against 
 the coals were in such a condition that it would cost more than 
 their value to make it safe to carry them to their destination, 
 yet, inasmuch as it was not physically impossible to carry them 
 on, there was no total loss of freight. 
 
 Held that the plaintiff could recover. 
 
 An assured who has insured freight by a time policy may, it is 
 submitted, recover for a loss of freight caused by perils insured against 
 and sustained during the period covered by the policy, although the 
 loss is not ascertained until the period covered by the policy has 
 expired. " I may observe that it is in my mind quite immaterial 
 that before these things happened the policy, which was a time policy, 
 
DUEATION OF THE EISK 71 
 
 had run out by efflux of time. If the vessel was lost whilst the time 
 was running, or if the injury was sustained then, it may very well be 
 proved by evidence subsequent to the date of the poUcy having 
 expired. The question was, was there while the poHcy was current 
 a loss such as to make the underwriters responsible for it." {z) In 
 the case of Bankin v. Potter, (a) where homeward chartered freight 
 was insured during the outward voyage, and the vessel was so 
 seriously damaged during the outward voyage as to be unable to 
 proceed under the charterparty, the assured was held entitled to 
 recover, although the damage to the vessel was not discovered until 
 after the expiration of the policy. In Bankin v. Potter the poHcy 
 was a voyage and not a time policy, but no distinction in the principle 
 to be appUed can be drawn on that account. In the one case the 
 duration of the risk is limited by time, and in the other by space. (?)) 
 An assured cannot, however, recover for a loss which, although 
 attributable to damage inflicted by perils insured against during the 
 period covered by the policy, is not sustained until after the period 
 covered by the policy has expired. 
 
 Hough V. Head (1885), 53 L. T. 809 ; 55 L. J. Q. B. 43 ; 34 
 W. E. 160 ; 5 Asp. M. C. 505, 
 
 was an action on a poHcy of insurance for £1200 on chartered 
 freight at and from and for and during the space of six calendar 
 months from April 15 to October 14, 1881, both days inclusive, 
 " to pay only loss of hire not exceeding £2000 which may arise 
 in clause 6 of the charterparty for accidents occurring between 
 April 15 and October 15, but free of claim arising from deficiency 
 of men." 
 
 Pacts. — The plaintiffs, who were the owners of the S.S. Presnitz, 
 by a charterparty chartered the vessel for a period of six months, 
 hire being payable monthly in advance. Clause 6 of the charter- 
 party provided that " In the event of loss of time by deficiency 
 of men, collision, breakdown of engines and the vessel becoming 
 
 {z) Per Lord Blackbiten in Shepherd v. Henderson (1881), L. R. 7 A. C, p. 67 : 
 see also per Lord Campbell in Knight v. Faith (1850), 15 Q. B., p. 667. 
 (a) (1873), L. R. 6 H. L. 83. 
 (6) See per Lord Campbell, C.J., in Knight v. Faith (1850), 15 Q. B., p. 652. 
 
72 LAW EELATING TO THE IN8UEANCE OP PEEIGHT 
 
 incapable of steaming and proceeding for more than forty-eight 
 hours, payment of hire to cease until such time as she is again 
 in an ef&cient state to resume her voyage." About June 27, 
 1881, the vessel struck something which must have been very 
 soft, for the vessel did not lose headway. On arrival at Liver- 
 pool the vessel was examined, when it was found that the keel 
 had been seriously damaged, and the vessel was laid up for 
 repairs from November 28 until December 30. This damage 
 was attributed to the accident on June 27. On November 30, 
 the charterers gave notice that hire would cease, and the 
 plaintiffs sought to recover in respect of this loss of hire from 
 the defendant. 
 
 Held that the underwriter was not liable, as the plaintiff had been 
 paid full freight for the period covered by the policy, and had 
 sustained no loss of freight during that period. 
 
CHAPTER IV. 
 
 The Designation of the Subject-Matter in the Policy. 
 
 In every policy the subject-matter of the insurance must be 
 speciiied. (a) It must be designated with reasonable certainty, (b) 
 but it is sufficient if this is done in general terms. Originally insur- 
 ances used to be effected on " freight " eo nomine, and this description 
 is sufficient to cover the freight payable under a bill of lading, (c) 
 a charterparty,(d) or other contract of affreightment, (e) and also the 
 benefit derivable by a shipowner from the employment of his ship 
 to carry his own goods, (/) and the interest of a person who has paid 
 freight in advance. (3) It does not 'include passage-money, (/i) or 
 under ordinary circumstances the remuneration payable for the 
 carriage of live animals,(i) or of goods on deck, (fc) " The rule as 
 to the description of the freight of articles on deck is the same as in 
 reference to the articles themselves. If the articles carried on deck 
 
 (a) Marine Insurance Act, sect. 23, sub-sect. 2. 
 (6) Marine Insurance Act, sect. 26, sub-sect. 1. 
 
 (c) Amould, sect. 233 ; cf. Mordy v. Jmes (1825), 4 B. & C. 394. 
 
 (d) Thompson v. Taylor (1795), 6 T. R. 478 ; Atty v. Lindo (1805), 1 B. & 
 P. N. R. 236 ; Mackenzie v. Shedden (1810), 2 Camp. 430 ; Davidson v. Willasey 
 (1813), 1 M. & S. 313; Moses v. Pratt (1815), 4 Camp. 297; EtcJies v. Aldan 
 (1827), 1 Man. & R. 157. 
 
 (e) Parke v. Hebson, cited in Truscott v. Christie (1820), 2 B. & B. 320 ; Warn 
 V. Miller (1825), 4 B. & Cr. 538 ; Flitd v. Flemyng (1830), 1 B. & Ad. 45. 
 
 (/) Flint Y. Flemyng (1830), 1 B. & Ad. 45; De Vaux v. F Anson (1839), 
 5 Bing. N. C. 519 ; Keith v. Burrows (1877), L. R. 2 A. C. 636 ; The Thyatira 
 (1883), L. R. 8 P. D. 155. 
 
 (</) Amould, sect. 233 ; Hall v. P Anson (1855), 4 E. & B., p. 509 ; Frayes 
 V. Worms (1865), 19 C. B. (n. s.) 159 ; Allison v. Bristol Marine Insurance Co. 
 (1876), L. R. 1 A. C. 209 ; Bobbins v. New York Insurance Co. (1828), 1 HaU. 
 363 (Am.). 
 
 (h) Denoon v. The Home <fc Colonial Assurance Co. (1872), L. R. 7 C. P. 341 ; 
 Marine Insurance Act, sect. 90, and rule 16. 
 
 (»■) Phillips, Insurance, 3rd ed., sect. 479 ; Wolcwtt v. Eagle Insurance Co. 
 (1827), 4 Pick. 429 (Am.) ; Marine Insurance Act, rule 17. 
 
 {k) Adams v. Warren Insurance Co. (1839), 22 Pick. 163 (Am.) ; Marine 
 Insurance Act, rule 17. 
 
 73 
 
74 LAW EELATING TO THE INSUEANCE OF PEEIGHT 
 
 would not be covered under the general description ' cargo,' ' goods,' 
 'merchandise,' 'property,' etc., the compensation for so transporting 
 them will not, in the same circumstances, be covered under the 
 general description ' freight.' " (T) In more recent years the 
 practice has grown up of describing the subject-matter of the insur- 
 ance at greater length and in greater detail, as for instance " freight 
 chartered or otherwise," (m) or " freight chartered or as if chartered, 
 on board or not on board." (n) 
 
 While it is necessary to state with reasonable certainty the subject: 
 matter of the insurance, it is not necessary to state the nature and 
 extent of the interest of the assured in the subject-matter insured. (o) 
 " Thus a mortgagee of a ship may cover his debt by a policy ' on 
 ship,' (p) a shipowner may insure his responsibility for goods carried 
 in his vessel by a poUcy ' on goods,' (g) or an underwriter ' on cotton ' 
 may reinsure by the same description, (r) and the policy need not 
 be expressed in terms as a reinsurance." (s) In the case of Car- 
 ruthers v. Sheddon (t) the assured had several interests in a cargo, 
 viz. as partners in seven-sixteenths, as consignees of the whole, and 
 as having a lien on the whole for advances, and it was held that they 
 might protect all their interests under a policy " on coffee," and that 
 it was unnecessary to state the number or nature or extent of the 
 several interests which they possessed. 
 
 The same rules apply to insurances on freight. Thus in Rising 
 V. BurneU,{u) one of several part owners of a ship effected an insurance 
 on freight generally without specifying what share he had in the 
 ship, and it was held that he could declare generally and recover 
 for such interest as he had. In the case of United States Shipping 
 Company v. Empress Assurance Company {x) the charterer of a 
 
 (I) Phillips, Insurance, 3rd ed., sect. 476. 
 (m) Barber v. Flemyng (1869), L. R. 5 Q. B. 59. 
 
 {n) Scottish Shire Line v. London & Provincial Marine Insurance Co., [1912] 
 3 K. B. 51. 
 
 (o) Marine Insurance Act, sect. 26, sub-sect. 2. 
 
 (p) Irving v. Richardson (1831), 2 B. & Ad. 193. 
 
 {q) Crawley v. Cohen (1832), 3 B. & Ad. 478. 
 
 (r) Mackenzie v. Whitworth (1875), L. R. 1 Ex. D. 36. 
 
 (s) McArthur, Contract of Marine Insurance, 2nd ed., p. 61. 
 
 (t) (1815), 6 Taunt, 14. 
 
 (u) (1798), MarshaU, Insurance, 4th ed., p. 570. 
 
 (X) ri907] 1 K B. ?59. 
 
DESIGNATION OF THE SUBJECT-MATTEE 75 
 
 vessel, who had effected an insurance on " freight an<i/or chartered 
 freight " was held entitled to recover for a loss of freight payable to 
 him under the terms of a sub-charter. In early times the view was 
 entertained that no one but the owner of a vessel was entitled to 
 insure the freight, which he might earn, under the designation of 
 " freight " without disclosing to the underwriters the nature of his 
 interest. In the case of Biley v. Delafield (y) the plaintiff, who had 
 been the owner of a vessel and had chartered her for a voyage, sold 
 her some time before the insurance was effected or the voyage begun, 
 under an arrangement by which he retained the right to the chartered 
 freight. A poHcy was effected on " freight," but it was held that as 
 the circumstances had not been disclosed he could not recover for a 
 loss of the freight. ' ' All the interest of the plaintiff was, then, founded 
 upon this special agreement, and it could not strictly or technically 
 be denominated freight, since it was not an interest accruing to the 
 plaintiff, as owner of the vessel for the use of her. It was an interest 
 founded entirely upon the agreement, and could not have been claimed 
 or recovered under any other title. It could not be insured as freight, 
 eo nomine, unless accompanied with a disclosure of the peculiar 
 nature of the interest. It would otherwise be an imposition upon 
 the insurer, who, when he is asked to insure freight, must presume 
 that he is dealing with the owner of the vessel. The owner has a 
 stronger interest in the equipment and management of the vessel 
 than a stranger having no such stake in the voyage. And to allow 
 such an interest to be covered under the name of freight, without 
 explanation, would lead to abuse and fraud, by affording an oppor- 
 tunity to cumulative insurances upon the same interest and interested 
 combinations to destroy it." (z) 
 
 This view was adversely criticised by Mr. PhiUips,(a) who pointed 
 out that a part-owner of a vessel who had chartered the remainder, 
 with a covenant to pay the value in case of loss, could insure generally 
 " on vessel " without specifying his interest ; (b) and that charterers 
 having no ownership, who had agreed to insure the vessel, need not 
 state the particular nature of their interest, (c) The point was again 
 
 (y) (1811), 7 Johns. 522 (Am.). 
 
 (z) See also Mellen v. National Insurance Co. (1829), 1 Hall. 452 (Am.). 
 
 (a) Insurance, 3rd ed., sect. 480. 
 
 (6) Oliver v. Greene (1807), 3 Masp. 133 (Am.) ; Arnould, 2nd ed , p. 272. 
 
 (c) Bartlet v. Walter (1816), 13 Mass. 267 (Am.). 
 
76 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 raised and fully considered in the case of Huih v. The New York 
 Mutual Insurance Co., {d) and the doctrine as laid down in Biley v. 
 Delafield was approved. The cases in which this view was accepted 
 were in the State of New York. On the other hand, in the State of 
 Massachusetts the view put forward by Mr. Philhps was adopted, 
 and in the case of Clark v. The Ocean Insurance Co. (e) it was held 
 that a charterer might insure the amount of the freight which was 
 for his account and risk under the denomination of freight without 
 disclosing the nature of his interest. Again in the State of Louisiana, 
 in the case of Paradise v. Sun Mutual Insurance Co. (/) the Court 
 incUned to the opinion that a person to whom freight had been assigned 
 by way of security could without disclosure insure his interest by a 
 policy " on fright " eo nomine, {g) In this country the point has 
 not been definitely raised. In the case of Denoon v. The Home <& 
 Colonial Assurance Co., Qi) where the policy was on " freight," the 
 plaintiff was the mortgagee of the ship to whom the freight had been 
 assigned ; and in the case of United States Shipping Co. v. Empress 
 Assurance Co., (i) where the policy was on " freight ^nd/^jj, chartered 
 freight," the plaintiff was the charterer of the vessel, but in neither 
 case was any objection taken, (k) 
 
 The reason for the doctrine that a person other than the owner 
 of the vessel must disclose the nature of his interest in freight, was 
 that the nature of the interest was such as to vary the nature of 
 the risk. " The only reason with any practical point in it that is 
 given for setting aside every policy in which the word ' freight ' is 
 used, when the interest is not that of the owner of the vessel, is, that 
 when insuring freight accruing to the owner of a vessel the under- 
 writer has, in the natural sohcitude of the owner for the safety of his 
 vessel, as well as of his freight, an additional safeguard against 
 possible KabiUty on the policy, and he may be induced by that cir- 
 cumstance to take a risk which, without it, he would have refused." {I) 
 
 {d) (1861), 8 Bosworth 538 (Am.). (e) (1835), 16 Pick. 289 (Am.). 
 
 (/) (1851), 6 Lou. Ami. 596 (Am.). 
 
 (gr) See Simmes v. Marine Insurance Co. of Alexandria (1825), 2 Cranch. C. C, 
 618 (Am.). 
 
 (A) (1872), L. R. 7 0. P. 341 ; see also Moss v. Smith (1850), 9 C. B. 94. 
 
 (i) [1907] 1 K. B. 259. 
 
 (h) Cf. Arnould, sect. 234. , 
 
 {I) Per White, J., in Huth v. New York Mutual Insurance Co. (1861), 8 
 Bosw., p. 563 (Am.). 
 
DESIGNATION OF THE SUBJECT-MATTEE 77 
 
 " In some cases," says Blackburn, J.,(m) " the nature of the 
 interest in the thing insured is such as to vary the nature of the risk, 
 and then it should be stated." But, as has been pointed out,{n) " it 
 is difficult to see how the nature of the interest of the assured in the 
 subject-matter can vary the risk. The true question seems to be 
 whether, having regard to usage, the subject-matter is sufficiently 
 described. Loans on bottomry and respondentia must, it seems, 
 be insured as such." There is, it is submitted, no usage which pre- 
 cludes a charterer, an assignee, or other person having an insurable 
 interest in freight from insuring it eo nomine, (o) 
 
 The extent to which an assured, who has a limited interest in 
 property, may insure is not necessarily limited to the amount of his 
 own Umited interest. Thus a mortgagee of a ship, who has an interest 
 in the safety, not of any specific part of the ship, but of every portion 
 of the ship, and who has an interest in seeing that the whole value of 
 the ship is insured and the full amount of the security maintained, 
 may insure the ship to the full value for his own benefit and the 
 benefit of other persons interested, (p) Similarly, a warehouseman or 
 a carrier, to whom goods have been entrusted, may insure the goods 
 to the full value against loss, although by the terms of his contract 
 he may be under no liability to make good the loss, (g) just as he may 
 recover from a wrongdoer the full value of the goods, although he 
 may be under no liability to the true owner, (r) In every case the 
 question is, what interest did the assured intend to insure. " It is 
 well known in marine and fire insurances that a person who has a 
 limited interest may insure nevertheless on the total value of the sub- 
 ject-matter of the insurance, and he may recover the whole value, 
 
 (m) Mackenzie v. Whitworth (1875), L. E. 1 Ex. Div., p. 41. 
 
 (n) Chalmers & Owen, Marine Insurance Act, 2nd ed., p. 41. 
 
 (o) " It has been settled for a century that ' freight ' must be construed in a 
 policy in its widest sense." Per Blackburn, J., in Beckett v. West of England 
 Marine Insurance Co. (1872), 25 L. T., p. 741. 
 
 (p) See ante, p. 54. Per Bovill, C.J., in Ehsworth v. Alliance Marine 
 Insurance Co. (1873), L. R. 8 C. P., p. 608. 
 
 {q) Crowley r. Cohen (1832), 3 B. & Ad. 478 ; Waters v. Monarch Insurance Co. 
 (1856), 5 E. & B. 870 ; L. dh N. W. By. Co. v. Glyn (1859), 1 E. & E. 652 ; EhswoHh 
 r. Alliance Marine Insurance Co. (1873), L. R. 8 C. P. 596 ; De Forest v. Fulton 
 Fire Insurance Co. (1828), 1 Hall. N. Y. 84 (Am.) ; Munich Assurance Co. v. 
 Dodwell (1904), 128 Fed. R. 410, and cases there cited. 
 
 (r) The WinJcfield (1902), P. 42. 
 
78 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 subject to these two provisions ; first of all, the form of his policy 
 must be such as to enable him to recover the total value, because the 
 assured may so limit himself by the way in which he insures as not 
 really to insure the whole value of the subject-matter ; and secondly 
 he must intend to insure the whole value at the time when the insur- 
 ance is effected. He cannot recover the entire value unless he has 
 intended to insure the entire value. A person with a Umited interest 
 may insure either for himself and to cover his own interest only, 
 or he may insure so as to cover not merely his own limited interest 
 but the interest of all others who are interested in the property. It 
 is a question of fact what is his intention when he obtains the policy. 
 But he can only hold for so much as he has intended to insure." (s) 
 According to this view a person with a limited interest in property 
 may insure on behalf and for the benefit of other persons interested 
 as well as for his own benefit, and may recover the full value of the 
 property insured, provided that he intended the policy to cover not 
 only his own personal interest, but the interest of all those who were 
 interested in the property. This view has, it is submitted, been 
 adopted by the Marine Insurance Act, which enacts that " a mortgagee 
 consignee, or other person having an interest in the subject-mattej 
 insured may insure on behalf and for the benefit of other persons 
 interested as well as for his own benefit," (i) and that " where the 
 policy designates the subject-matter insured in general terms, it shall 
 be construed to apply to the interest intended by the assured to be 
 covered." (m) The meaning of this latter clause was discussed by 
 Kennedy, L.J., in the recent case of 
 
 The Reliance Marine Insurance Company v. Duder, [1913] 
 1 K. B. 265 ; 81 L. J. K. B. 870 ; 106 L. T. 936 ; 17 Com. 
 Cas. 227 ; 28 T. L. E. 469 ; 12 Asp. M. C. 228. {x) 
 
 The plaintiffs, an insurance company, had executed three 
 policies of marine insurance on the vessel Kynance. Of these 
 three pohcies, the first two covered the vessel from Newcastle, 
 N.S.W., to any port or ports on the West Coast of South America. 
 
 (s) Per BowEN, L.J., in Castellain v. Preston (1883), 11 Q. B. D., p. 398. 
 (t) Section 14 (2). 
 (u) Section 26 (3). 
 
 (x) This case must be compared with the case of Janson r. Poole (1915), 
 31 T. L. R. 336. 
 
DESIGNATION OP THE SUBJEOT-MATTEE 79 
 
 The third policy covered the vessel " at and from Valparaiso 
 '^"'^/or any port or ports on the West Coast of South America to the 
 United Kingdom, risk to commence from expiration of previous 
 policy." 
 
 The plaintiffs effected a pohcy of reinsurance with the 
 defendant " upon the Kynance at ^"''/or from Valparaiso and any 
 port or ports on the West Coast of South America to any port or 
 ports in the United Kingdom." 
 
 Facts. — While on the voyage from Newcastle, N.S.W., the Kynance 
 was lost after leaving Valparaiso, and the plaintiffs became liable 
 to pay under the first two policies. They therefore made a 
 claim under their policy of reinsurance, which was resisted on 
 the ground that in taking out this policy they merely intended 
 to cover their liability under the third poUcy. But it was held 
 by Bray, J., and the Court of Appeal, that the object of the 
 plaintiffs in effecting the reinsurance was to cover their liability 
 as underwriters, and that ahihough at the time when the re- 
 insurance was effected, the plaintiffs contemplated that their 
 liability, if any, would be under the third policy, their intention 
 was to cover their liabihty whatever it might turn out to be. 
 The contention of the defendant failed, therefore, on the facts, 
 and in the Court of Appeal the view was also expressed that the 
 contention failed in point of law. 
 
 " But then," says the defendant, " I rely upon section 26, 
 sub-section 3 of the Marine Insurance Act, 1906. That enact- 
 ment runs thus ; ' Where the policy designates the subject- 
 matter insured in general terms, it shall be construed to apply 
 to the interest intended by the assured to be covered.' I hope 
 that I shall not be judged lacking in due respect either to the 
 Legislature or to the eminent judicial authority whose language 
 (Brett, J.) in Allison v. Bristol Marine Insurance Co. (y) has 
 been in this sub-section imported into the statute, if I venture 
 to say that I think, as I understand Scrutton, J., to think, {z) 
 in agreement with the learned editors of the last edition of 
 Arnould on Marine Insurance (a) that this sub- section might 
 
 (y) (1873), 29 L. T., p. 40, and at L. R. 1 A. C, p. 216. 
 (z) Kynance Co. v. Young (1911), 16 Com. Gas. 123. 
 (a) Sect. 252 (&). 
 
80 LAW EBLATING TO THE INSUEANCE OP PEEIGHT 
 
 have been less obscurely worded. Possibly, as those learned 
 editors suggest, a question may some day arise under it in regard 
 to opening a valued policy in cases where designation of the 
 subject-matter in the policy is larger than the insurable interest 
 of the assured, as the valuation was opened by Lord Ellen- 
 borough in Forhes v. Aspinall, (b) and by Willes, J., in Benson 
 V. The Home & Colonial Insurance Co.{c). But, be this as it 
 may, I do not think that this sub-section can rightly be inter- 
 preted to mean that an insurer is thereby entitled to exclude the 
 assured from the benefit of the insurance of any of the risks 
 which are within the terms expressed in the written policy, 
 and which have been presumably considered by the insurer in 
 fixing his premium, (d) by showing that at the time when the 
 insurance was effected, the assured intended in his own mind 
 to cover only some of them. On the contrary, I think that if 
 this sub-section is read, as it ought to be, in connection with 
 the rest of section 26, the purpose of which, as appears by the 
 marginal note, is to deal with ' designation of subject-matter,' 
 the object of the sub- section is to prevent an assured who, 
 at the time of a loss within the policy, has only a limited interest 
 in the subject-matter which is designated in the policy in 
 general terms — such e.g. as ' cargo ' or ' freight ' — from being 
 prejudiced by such generality of designation, provided that 
 the designation is not inappropriate, as e.g. ' rice ' would be 
 if intended to cover an interest in profits which might arise 
 collaterally from a contract relating to the rice (see per Black- 
 burn, J., in Anderson v. Morice ; (e) M'Swiney v. Boyal 
 Exchange Assurance (/)). Having regard to the words 
 ' interest intended by the assured to be covered,' I think that 
 those who introduced the sub-section into the Act may also 
 have had in view the one class of case in relation to Marine 
 Insurance in which the intention of one of the two parties to 
 the contract, i.e. the assured, is properly (I say properly because 
 
 (6) (1811), 13 East, 323. 
 
 (c) (1872), L. R. 7 C. P. 341. 
 
 {d) There does not seem to be much force in this argument, as the assured 
 — ex hypothesi — knew what he was intending to insure, and should have effected 
 the insurance accordingly. 
 
 (e) (1875), L. B. 10 C. P. 609, at p. 621. (/) (1849), 14 Q. B. 634. 
 
DESIGNATION OP THE 8UBJECT-MATTEE 81 
 
 it is required by the very terms of the contract) matter of inquiry 
 in regard to rights under the contract. According to the common 
 form of policy which appears in the reinsurance policy which 
 we are considering in this case, the insurance is effected by the 
 insurance brokers ' as well in their own name as for and in the 
 name and names of all and every other person or persons to whom 
 the subject-matter of this poUcy does, may or shall appertain 
 in part or in all.' The persons for whose benefit the policy was 
 intended to enure have therefore to be ascertained. It is ex- 
 pressly provided by section 14 of this Act that persons— such 
 e.g. as mortgagee or consignee — having only themselves a 
 limited interest may insure for and on behalf of other persons 
 interested as well as for their own benefit, and may recover 
 accordingly upon the poHcy, although of course as laid down 
 by BowEN, L.J., in Castellain v. Preston,{g) the plaintiff in such 
 a case can keep for himself only so much of the amount recovered 
 from the insurer as wiU be due in respect of his own hmited 
 interest." 
 
 It is submitted that the view put forward by the learned judge 
 as to the objects of this clause, viz. first, to protect an assured who 
 has merely a limited interest in the subject-matter which has been 
 insured in general terms, and secondly, to enable an assured, who has 
 in terms insured on behalf of himself and others, to show the persons 
 on whose behalf the insurance was effected, is not justified by the 
 language of the clause. With regard to the first suggestion, if the policy 
 is to cover whatever interest the assured may prove to have, the words 
 " intended by the assured " can have no meaning. With regard to 
 the second suggestion, the clause does not purport to be hmited to 
 policies which in terms are effected on behalf of all persons interested, 
 and there seems to be no sound reason for implying such a limitation. 
 
 There is this further objection, that according to this second sug- 
 gestion the clause would be construed as referring, not to the interest 
 intended to be covered, but to the interests of those assured who are 
 intended to be covered. The clause assumes that the assured {h) is 
 
 ig) (1883), 11 Q. B. D. p. 398. 
 
 (h) The term assured means, it is submitted, the person to be indemnified 
 and not the person who may have effected the policy on his behalf. Cf. Marine 
 Insurance Act, sects. 1, 23. 
 
 I.F. G 
 
82 LAW EELATING TO THE INSUEANCE OP PEEIGHT 
 
 in a position in which he can insure different interests, and deals in 
 apt terms with the case of an assured, who has a limited interest in 
 every portion of the subject-matter insured, and who, by virtue of 
 his relation to the whole subject-matter, may insure it for its full 
 value, and may recover the full value for the benefit of himself and 
 all others interested, {i) 
 
 A more difficult question arises as to effect of the sub- section in 
 those cases where the assured intended the policy to apply to his 
 interest in one capacity, and it happens that he is interested in some 
 other capacity. " If a party insured in his own name has or expects 
 to have an interest in different capacities, or expects an interest 
 in one capacity as that of owner, and proves to have one in a different 
 capacity, as that of trustee, consignee, etc., is he conclusively entitled 
 and liable to be considered as an assured, in respect of any one or 
 more interests to which the policy is, by its terms, applicable ; or 
 may he or others determine the application of the policy by proving 
 his intention. In other words, whether the appKcation of the poUcy 
 to one or another interest, or to divers interests, in such case depends 
 upon the intention, just as the application of a pohcy for whom it may 
 concern, in favour of one or another party, depends upon the intention. 
 
 " The question we are examining has been elaborately discussed 
 by Mr. Duer, who concludes, that ' except in cases of fraud or mis- 
 representation, an inquiry into the specific interest that a party 
 effecting a policy in his own name meant to insure is never to be 
 permitted.' That is to say, if the assured has an interest of what- 
 ever species, answering to the description of the subject in the 
 
 (i) See Waters v. Monarch Life Assurance Co. (1856), 25 L. J. Q. B. 102 ; 
 L. & N. W. By. Co. v. Glyn (1859), 28 L. J. Q. B. 188 ; North British Insurance 
 Co. V. Moffaft (1871), L. B. 7 C. P., p. 31. 
 
 In America the rule is that a mortgagee or other person with a hmited 
 interest may insure to the full extent in his own name and may recover the full 
 vakie {Waring v. Indemnity Fire Insurance Co. (1871), 45 N. Y. 606; Home 
 Insurance Co. r. Baltimore Insurance Co. (1876), 93 U. S. 527 ; Lochhart v. Cooper 
 (1882), 42 Am. Rep. 514 ; Lmms v. Insurance Co. (1883), 48 Am. Bep. 383 ; 
 Munich Insurance Co. v. Dodwell (1904), 128 Fed. B. 410) ; but in the absence 
 of some indication in the policy, the policy is presumed to be intended to cover 
 only the interest of the limited owner (Lee v. Adsit (1867), 37 N. Y., p. 88 ; 
 Johnston v. Charles Abresch Co. (1904), 107, Am. St. Rep. 995). In the case of 
 Browning v. Provincial Insurance Co. of Canada (1873), L. B. 5 P. C, p. 273 ; 
 28 L. T. 853 ; Sir Montagu Smith used language which suggests that this presump- 
 tion would not be held to esist in this country. 
 
DESIGNATION OP THE SUBJECT-MATTER 83 
 
 policy, and at risk within the description of the risks, he is liable for 
 the premium, and the underwriters are liable for the loss, whatever 
 may have been his intention as to the species of interest to which 
 the policy was to be appHed." (k) 
 
 There is no satisfactory authority on the point. In an early 
 American case (Z) the view was expressed that the assured could 
 not recover in respect of his interest as consignee on the ground that 
 he had intended to insure his expected interest as owner. But on 
 the other hand there are several decisions to the effect that a change 
 in the nature of the interest of the assured after the poHcy is eiJected 
 does not affect his right to recover. Thus where a member of a 
 mutual marine insurance association sold his ship, on which he was 
 insured by the association, but agreed with the purchaser that, in 
 case of it being lost within a certain time, he would pay the purchaser 
 £500, it was held that the vendor still had an insurable interest in 
 the ship to that amount and could recover under a poHcy effected 
 while he was still the owner, (m) Similarly, where a person interested 
 as owner subsequently becomes a mortgagee or vice versa.{n) In 
 the case of Martin v. Fishing Insurance Company, {o) the plaintiff 
 at the time when the poHcy was taken out was the owner of half a 
 vessel, and had advanced to his co-owner the money for the purchase 
 of his share. Subsequently a bill of sale in favour of the plaintiff 
 was executed by his co-owner, and it was held that the plaintiff was 
 entitled to recover the whole amount of the loss. 
 
 In none of these cases, however, was the point raised that the 
 assured intended merely to insure his interest in the subject-matter 
 of the insurance in one particular capacity, and in practice such a 
 point could only very rarely be raised with success. The general 
 intent of every person who effects an insurance to cover his personal 
 interest is to apply the insurance to any interest that he may have 
 or acquire. When taking out the policy he may contemplate that 
 he will be interested in some particular capacity, but his intention 
 is to cover his personal interest, whatever it may turn out to be. 
 
 {k) Phillips, Insurance, 3rd ed., sect. 393. 
 
 (l) Toppan V. Atkinson (1807), 2 Mass. R. 365 (Am.) ; see also Conway v. Gray 
 (1809), 10 East. 536. 
 
 (m) Seed r. Cole (1764), 3 Burr. 1512. 
 
 (n) Stetson v. Mass. Mutual Insurance Co, (1808), 4 Mass. R. 330 (Am.). 
 
 (o) (1838). 20 Pick. 389 (Am.). 
 
84 LAW EELATING TO THE INSUEANCE OF EEEIGHT 
 
 It is not easy to say whether the reference in section 27 of the 
 Marine Insurance Act to the " interest intended by the assured," 
 was intended to apply to a case where the assured had several personal 
 interests in the subject-matter, but on the whole it is submitted that 
 it does not. That is to say, where the policy designates the subject- 
 matter in general terms, it should be construed as covering all the 
 personal interests of the assured which he has at risk, unless it was 
 intended by the assured to cover, in addition to his personal interests, 
 also his general interest in the property, (p) 
 
 Where the policy is in general terms, it must not be construed, 
 in the absence of intention or indication to the contrary, (g) as covering 
 the interest of the assured in a portion only of the subject-matter 
 which is within its terms and which he has at risk. 
 
 Boiertson v. Marjoribanks (1819), 2 Starkie, 573 ; 20 E. K. 740. 
 
 was an action on a policy of insurance on freight valued at 
 £10,000 of the ship Lady Castlereagh, on a voyage from New 
 South Wales to her port or ports of discharge and loading in 
 India, during her stay and loading there, and from thence to her 
 port or ports of discharge in Europe. 
 
 Pacts. — The vessel had been engaged to carry emigrants from New 
 South Wales to Madras for the sum of £2500, and a charterparty 
 was made at a later date for the conveyance of troops from 
 Madras to England for the sum of £10,000. The vessel arrived 
 at Madras and earned the £2500, and was then lost in a monsoon. 
 The defendants were wilhng to pay £7500, but the plaintiff 
 claimed £10,000, and offered to prove that his intention in 
 effecting the policy was to cover only the freight from 
 Madras. 
 
 Held that the intention of the assured not having been communicated 
 to the underwriter, could not be regarded. 
 
 ip) See per Brett, J., in Allison v. Bristol Marine Insurance Co. (1876), 
 L. B. 1 A. C, p. 216. 
 
 (q) Janson v. Poole (1915), 31 T. L. R. 336. 
 
DESIGNATION OF THE SUBJEOT-MATTEE 85 
 
 Denoon v. The Home <f Colonial Assurance Company (1872), 
 L. E. 7 0. P. 341 ; 41 L. J. C. P. 162 ; 26 L. T. 628 ; 
 20 W. E. 970 ; 1 Asp. M. C. 309, 
 
 was an action on a policy of insurance for £1000 on freight valued 
 at £2000 of the ship Sandringham. 
 
 Pacts. — An arrangement had been made to convey coolies and rice 
 from Calcutta to Mauritius, the passage-money for the coolies 
 amounting to £1944, and the bill of lading freight for the rice 
 to £1412. The vessel was stranded and the rice lost, but the 
 cooHes were saved and the passage-money for them paid. The 
 plaintiff claimed a total loss, but the defendants contended that 
 they were entitled to credit in respect of the passage-money 
 that had been earned, on the ground that this was covered 
 by the description of freight. On the other hand, the plaintiff 
 said that an insurance on freight did not cover passage-money, 
 and further that in effecting the pohcy he intended merely to 
 insure the freight of the rice. 
 
 Held that an insurance on freight did not cover the passage-money, 
 but that, if it had covered the passage -money, evidence of the 
 intention of the assured to cover only the freight of the rice 
 would not have been admissible, as it had not been communi- 
 cated to the defendants. 
 
 This rule, namely, that where the policy is in general terms it 
 must not be construed, in the absence of intention or indication to 
 the contrary, as covering the interest of the assured in a portion 
 only of the subject-matter which is within its terms and which 
 he has at risk, may be of considerable importance in the case of 
 insurances on freight. A shipowner may have made a charterparty 
 under which the vessel is to proceed from A to B, and there load a 
 cargo to be carried to 0. During the voyage from A to B he may be 
 in the course of earning this freight, and he may also be carrying a 
 cargo in respect of which freight will be payable. He will thus have 
 two freights at risk, both of which would be covered by a policy on 
 freight at and from A to B. Will both these freights be covered by 
 
86 LAW EELATING TO THE INSUEANCE OF PEEIGHT 
 
 the policy ; or if not, what is the principle to be applied, (r) This 
 question was discussed in America in the cases of Melcher v. Ocean 
 Insurance Company, and Ocean Insurance Company v. Sun Mutual 
 Insurance Company. 
 
 Melcher v. Ocean Insurance Company (1871), 59 Maine, 217; 
 (1872), 60 Maine, 77 (Am.), 
 
 was an action on a policy of insurance for 6500 dollars on charter 
 at and from New York to San Francisco. 
 
 Pacts. — On December 24, 1863, the vessel was chartered for a 
 voyage from New York to San Francisco. This charter was 
 known as the San Francisco charter. On January 30, 1864, 
 while the ship was in New York loading under the San 
 Francisco charter, she was chartered to the Peruvian Govern- 
 ment under a charterparty which provided that the vessel 
 was to sail from New York on or before June 1, 1864, to San 
 Francisco, and there proceed with all convenient despatch to 
 CaUao, Peru, and from thence to the Chincha Islands, for a cargo 
 of guano to be taken to Hamburg or Eotterdam. This charter 
 was known as the Eotterdam charter. The insurance was 
 effected about March 23, 1864. The vessel sailed for San 
 Francisco on April 1, 1864, but was wrecked in the course 
 of the voyage. 
 
 The plaintiff recovered under other policies in respect of the 
 freight of the San Francisco charter, and brought an action 
 against the defendants in respect of the loss of freight under the 
 Eotterdam charter, and he offered to give evidence to prove 
 that the poKcy had been intended to cover the Eotterdam charter. 
 The defendants took the objection that the words " at and from 
 New York to San Francisco " in the policy were descriptive 
 of the charter insured, and that extrinsic evidence to show that 
 any other was intended was not admissible, as its effect would be 
 to vary and not to explain the policy. The case was withdrawn 
 from the jury and reported to the full Court for their opinion. 
 
 (r) This point was raised in the case of Barber v. Fleming (1869), L. R. 5 Q. B., 
 p. 69, but no indication was given in the judgments as to the principle to be 
 applied. 
 
DESIGNATION OF THE SUBJEOT-MATTEE 87 
 
 It was held. that the words " at and from New York to San 
 Francisco " did not describe any portion of the property insured, 
 but simply the voyage during which the risk was to continue, 
 and that as there were two charters to which the policy might 
 apply, extrinsic evidence was admissible to explain the latent 
 ambiguity. 
 
 The trial of the case proceeded and the evidence clearlyshowed 
 that the policy was intended by the assured and the insurer 
 to cover the Eotterdam charter, (s) The defendants then raised 
 the further point that as the vessel at the time of the loss was 
 sailing under the San Francisco charter, the policy on the 
 Eotterdam charter had not attached. The Court, however, held, 
 on the authority of Barber v. Fleming (L. E. 5 Q. B. 59), that 
 the poHcy had attached, and the plaintiff recovered. 
 
 The Ocean Insurance Company v. Sun Mutual Insurance Com- 
 pany (1875), 8 Benedict, 272; (1878) 15 Blatch. 249; 
 (1882) 107 U.S. Eep. 485, 
 
 was an action brought by the insurance company, who had been 
 held hable to pay in the previous cases of Melcher v. Ocean 
 Insurance Company, against the insurance company with whom 
 they had re-insured. 
 
 Facts. — An arrangement had been made between the Ocean Company 
 and the defendants under which the latter agreed to reinsure 
 the Ocean Company in respect of approved risks. On March 
 23, 1864, the plaintiffs sent an application to the defendants 
 in the following words : "To the Sun Mutual Insurance 
 Company, enter on open policy of this Company 6500 dollars 
 on charter, 2650 dollars on primage, 1500 dollars on property 
 on board ship Chas. 8. Pennell, at and from New York to San 
 Francisco, including war risk, rate 6 per cent." This apphcation 
 was accepted by the defendants and endorsed on an open poUcy. 
 The Ocean Company, having been held hable for the freight of 
 the Eotterdam charter, sought to recover from the defendants, 
 but the latter contended that they were not hable as they had 
 not been informed of the existence of the Eotterdam charter, 
 and had not intended to insure that freight. 
 
 («) Cf. Janson r. Poole (1916), 31 T, L, K. 336, 
 
88 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 At the trial before Blatchfoed, J., it was held that the 
 defendants were not liable on the ground " that where there are 
 two charters, one of them having the same termini as the voyage 
 described in the policy, and the other covering that route and 
 a further continuing route, and the policy merely insures charter, 
 and there is no explanation between the parties at the time of 
 effecting the insurance, as to which of the two charters is intended, 
 the policy must be regarded as saying that the charter intended 
 is a charter covering only the route of the voyage described in 
 the policy." 
 
 On appeal to the Circuit Court this decision was reversed, 
 on the grounds that the defendants knew of the existence of the 
 Eotterdam charter, and that the policy on charter, which was 
 a poHcy of reinsurance, although not so described, must be 
 presumed as relating to the charter which had been insured by 
 the Ocean Company. 
 
 The case was then taken to the Supreme Court of the United 
 States. That Court reversed (i) the decree of the Circuit Court, 
 on the grounds that the policy, although in substance a rein- 
 surance, was not so in form and must be construed according to 
 its terms ; that although the defendants may have had some 
 information as to the existence of the Eotterdam charter, there 
 was nothing to show that the parties intended to insure the freight 
 of that particular charter ; and that prima facie the policy referred 
 to a charter terminating with the voyage insured. 
 
 The principle to be deduced from these cases is, that if an assured 
 has effected an insurance on chartered freight for a voyage, and has 
 at risk and within the terms of the policy two freights, viz. a freight 
 payable in respect of that voyage and a freight payable in respect of 
 a subsequent voyage, the policy is in the absence of intention or 
 indication to the contrary (m) to be construed as an insurance of the 
 freight payable in respect of the earher voyage. The same principle, 
 it is submitted, apphes in the case of an insurance on freight generally. 
 This view is supported by a series of American decisions in which it 
 
 (t) Three judges dissented on the ground that the policy was intended by the 
 parties to be a policy of reinsurance, and to cover the risk which the Ocean Com- 
 pany had incurred by its poUoies. 
 
 {u) See Janson y. Poole (1916), 31 T, L. B, 336. 
 
DESIGNATION OF THE SUBJECT-MATTEE 89 
 
 was held that where the voyage insured consists of successive stages 
 during which the assured has at risk successive freights, the policy- 
 should in the absence of any intention or indication to the contrary, 
 be construed as an insurance of the freight pending during each 
 successive passage. 
 
 Davy V. Hallett (1805), 3 Caines, 16 (Am.), 
 
 was an action on a pohcy of insurance on the freight of the 
 Hannah, valued at 2000 dollars at and from Philadelphia to Omoa 
 and Golfo Dulce, and at and from thence to Philadelphia. 
 
 Pacts. — The vessel arrived safely at Golfo Dulce and there earned 
 freight to the amount of 2000 dollars. She then took in a return 
 cargo for Philadelphia, the freight of which was equal to 2000 
 dollars more, but was captured on the return voyage. The 
 underwriters contended that as the assured had received a 
 moiety of the freight which had been at risk under the policy, 
 he could only recover a moiety of the valuation. 
 
 Held that the insurance was not on the totality of freight for the 
 whole voyage but upon the freight pending during the outward 
 and homeward voyages, and that the assured was entitled to 
 recover the full amount of the valuation. 
 
 Patapsco Insurance Company v. Biscoe (1835), 7 Gill. & John. 
 293 ; 28 Amer. Dec. 219 (Am.), 
 
 was an action on a policy of insurance on freight valued at 
 1000 dollars, of the Fame, at and from Baltimore to Aux Cayes, 
 with the privilege of one other port in the island of St. Domingo, 
 and at and from either of them back to Baltimore. 
 
 Pacts. — The vessel arrived safely at Aux Cayes, and received freight 
 to the amount of 500 dollars. She was lost with her return cargo 
 on the voyage back to Baltimore, and the question was whether 
 the plaintiff was entitled to recover in respect of the freight so 
 lost the full amount of the valuation. 
 
 Held that the insurance was not intended to be an insurance of the 
 aggregate freights of both voyages, but an insurance of the freight 
 
90 LAW EELATING TO THE INSUEANCB OP FBEIGHT 
 
 of each voyage or passage described in the poHcy, and that the 
 assured could recover the full amount of the valuation. 
 
 Hugg V. Augusta Insurance S Banking Company (1849), 7 How. 
 595 ; 1 Taney, 159 (Am.), 
 
 was an action on an open policy of insurance for 5000 dollars 
 on the freight of the Margaret Hugg, at and from Baltimore to 
 Kio Janeiro and back to Havana or Matanzas, with hberty to 
 touch and stay at any intermediate port in case of stress of 
 weather, or for the purpose of transacting business. 
 
 Pacts. — After completing the outward voyage in respect of which 
 freight was earned, the vessel loaded a cargo of beef at Monte- 
 video, to be delivered at Matanzas. On the voyage back the 
 vessel and cargo were badly damaged, and no freight was 
 earned. 
 
 Held that the insurance should be regarded as covering freight upon 
 separate voyages out and home, and that the assured could 
 recover the full amount of the loss. 
 
 The Insurance Company of the Valley of Virginia v. Mordecai 
 (1859), 22 How. Ill (Am.), 
 
 was an action on. a pohcy of insurance issued at Charleston for 
 4000 dollars on the freight of the barque Susan, thence to Eio 
 Janeiro and back to any port of discharge in the United States. 
 The freight was valued at 4000 dollars. 
 
 pAOTS.-.-The vessel sailed from Charleston with a full cargo and 
 arrived at Eio Janeiro, where the outward cargo was discharged 
 and the freight for it received. A return cargo of coffee was 
 loaded, but after starting on the voyage the vessel was compelled, 
 owing to stress of weather, to put back, and, owing to damage she 
 had received, was sold, the freight of the return voyage being 
 thus lost. 
 
 Held that the insurance was on the freight of each successive voyage, 
 and that the underwriters were not entitled to any reduction 
 in respect of the freight earned on the outward voyage. 
 
DESIGNATION OF THE SUBJECT-MATTEE 91 
 
 Thwing v. The Washington Insurance Company (1858), 10 Gray. 
 443 (Am.), 
 
 was an action on a policy of insurance for 5000 dollars on the 
 freight of the ship Garolus, valued at 25,000 dollars on board or 
 not, from Boston to San Francisco and thence for a voyage 
 from the Chincha Islands to the United States. 
 
 Facts. — The vessel deUvered her cargo at San Francisco on the 
 outward voyage, and made freight to the amount of 23,00d 
 dollars. On the homeward voyage from the Chincha Islands, 
 the vessel in a leaky condition put into Callao and was sold. 
 The cargo was transhipped and forwarded in another vessel 
 to the port of delivery, but the cost of transhipment was equal 
 to the amount of the original freight. 
 
 Held that the plaintiff could recover the full amount of the valuation, 
 as the insurance was not on the aggregate freight of all the 
 voyages, but on the freight pending during each period, {x) 
 
 Where a policy has been effected on freight, and a cargo is loaded 
 on board the vessel, it is the freight of that particular cargo to which 
 the poHcy attaches. 
 
 Green v. The Boyal Exchange Assurance Company (1815), 6 
 Taunt. 68 ; 1 Marsh. 447 ; 16 E. E. 571, 
 
 was an action on a pohcy of insurance on freight by the ship 
 Defiance, at and from the ship's port or ports of lading in the 
 Canary Islands to London. 
 
 Facts. — The ship, which was of two hundred tons burthen, took in a 
 full cargo and proceeded to Lanzaretto, a very short distance 
 from the port of loading, where, in consequence of sea damage, 
 she was obhged to unship her cargo. The condition of the 
 vessel was such that it would have been impossible to bring her 
 home in that condition, or to get her repaired there, so as to 
 bring home that cargo. The vessel was, therefore, surveyed 
 
 (x) See also Lincoln v. Boston Marine Insurance Co. (1893), 159, Mass. R. 337 
 (Am.) ; post, p. 219. 
 
92 LAW EELATING TO THE INSUEANCE OF EEEIGHT 
 
 and sold, to a purchaser, who within five or six weeks partially- 
 repaired her, and safely brought home in her ninety-six tons 
 of goods. 
 
 The plaintiff claimed a total loss, but the defendants contended 
 that he was not entitled to recover, as there had been no abandon- 
 ment. GiBBS, G.J., " thought abandonment was not necessary, 
 for he could not understand what was to be abandoned. The 
 ship was fully laden, and as soon as she was laden, it became an 
 insurance on the freight of the particular cargo that was on board 
 a ship, which became incapable of bringing it home." 
 
 A verdict was given for the plaintiff, which was afterwards 
 set aside, as the Court expressed the opinion " that this case 
 ought to be reconsidered by the jury. They saw no ground for 
 saying that there ought to be an abandonment in this case ; 
 but if the ship had brought home another cargo from the Canaries, 
 and earned freight thereon, that would have been a salvage on 
 the freight of her original cargo ; for that, when the first cargo 
 was once on board, the policy attached on the freight of that 
 specific cargo ; but if the captain being driven back, and unable 
 to proceed with the original cargo, was yet able to proceed with 
 a less cargo, on less freight, of this the underwriter ought to have 
 the benefit." 
 
 Similar views have been expressed in America. " Where the 
 freight is insured on a particular voyage, by a particular vessel, and 
 the cargo has been put on board and the vessel actually sails in the 
 prosecution of the voyage, it is the freight of that cargo, in that vessel 
 and on that voyage, which is the subject of insurance and to which 
 the poUcy attaches." (y) It has been said (z) that this view is 
 inconsistent with the case of Everth v. Smiih,{a) and there are expres- 
 sions in the judgment of Lord Ellenborough in that case which 
 apparently conflict with it. " This was an insurance on freight 
 generally, not on any specific freight. The underwriter did not 
 insure that any particular freight should be brought home, but if 
 
 (y) Per Shaw, C.J., in M'Oaw v. Ocean Insurance Co. (1839), 23 Pick., p. 409 
 (Am.) ; Lord v. Neptune Insurance Co. (1857), 10 Gray, p. 113 (Am.) ; Thwing 
 V. Washington Insurance Co. (1859), 10 Gray, p. 455 (Am.), 
 
 {z) See Amould, sect. 1167. 
 
 (a) (1814) 2 M. & S. 278. 
 
DESIGNATION OP THE SUBJECT-MATTEE 93 
 
 any freight is brought home, a loss has not happened for which he 
 undertook to indemnify the assured." If this language is Hterally 
 construed, it would follow that an assured who by perils insured 
 against has lost the benefit of a freight, say of £1 per ton, but has 
 succeeded in obtaining a substituted cargo at a freight of 10s. per 
 ton, could recover nothing under the policy in respect of his un- 
 doubted loss. This, it is submitted, is not the interpretation to 
 be put upon the language of Everth v. Smith. In that case the 
 plaintiff had obtained a verdict for a total loss, and the question 
 for the Court was whether that verdict could be sustained. At the 
 trial it was proved that the plaintiff had lost the freight which he 
 originally contemplated he would earn (b) during the voyage, but he 
 did in fact earn some freight during the voyage. The plaintiff 
 contended that although some freight had been earned, the costs 
 incurred between the date of the loss of the original freight and the 
 earning of the substituted freight amounted to as much as the sub- 
 stituted freight, and he offered to abandon the substituted freight to 
 the underwriters provided they would pay him the amount of the 
 costs he had incurred. But there was no evidence to the effect that 
 any of the costs were incurred for the purpose of obtaining the sub- 
 stituted freight, and the delay was not attributable to this cause 
 but to the fact of the vessel having been frozen in. Under these 
 circumstances the Court held that there must be a new trial, for 
 the purpose, it is presumed, of ascertaining whether in fact there had 
 been any partial loss. " Whether the freight earned be the parti- 
 cular freight contracted for by the assured or a posterior freight 
 makes no difference. If freight has heen fully earned there can be 
 no loss properly demandable of the underwriters." 
 
 Everth v. Smith (1814), 2 M. & S. 278 ; 15 E. E. 246, 
 
 was an action on a policy of insurance on freight valued at 
 £1200 at and from Eiga to any ports in the United Kingdom. 
 
 Pacts. — The vessel had sailed from London under a charterparty 
 which provided that the vessel after having discharged her cargo 
 
 (6) The loss was declared to be by detention of the Government at Kiga, an 
 embargo having been put on the vessel, but as an embargo does not put an 
 end to a contract of affreightment but only suspends it, there does not seem to 
 have been any loss by a peril insured against. 
 
94 LAW RELATING TO THE INSUEANCE OP PEEIGHT 
 
 should load a cargo of hemp to be carried to London. The 
 vessel after having delivered the outward cargo arrived at Eiga 
 on September 3, 1812, but owing to an order of the Eussian 
 Government was not allowed to load. The restraint continued 
 until the middle of October, and a few days later the frost set 
 in, in consequence of which the ship was detained there the 
 winter, and never got a loading from the charterers, but the 
 next spring the master procured a freight from other persons, 
 with which he returned to this country, the expenses which 
 had been then incurred amounting to as much or more than 
 the freight. 
 
 The plaintiffs claimed a total loss of freight, but were 
 willing to abandon to the underwriters the freight actually 
 earned on being allowed the expenses incurred during the 
 winter. They contended that the poKcy had attached to the 
 freight under the charterparty, and that this freight had been 
 lost by the embargo, which was one of the perils insured against. 
 On the other hand, the defendants contended that the policy 
 was merely on freight for the voyage and not on any particular 
 freight, and that as freight on the voyage had been earned, 
 the plaintiffs could not recover. In any case, they said, the 
 embargo did not release the charterer from his obligation to 
 load a cargo, and therefore the loss of the charterparty freight 
 was not caused by any of the perils insured against. A verdict 
 was found for the plaintiffs, but, a rule nisi having been obtained 
 for a new trial, 
 
 Held that there ought to be a new trial, and the rule was made 
 absolute. 
 
 It is also said that the view that the policy attaches to the freight 
 of a particular cargo is inconsistent with the case of Barclay v. 
 Stirling, but, apart from the fact that the poHcy in that case was so 
 framed as to cover successive freights, when that case is examined, 
 it will be found not inconsistent, because the substituted freight was 
 regarded as a salvage freight to this extent, that the assured was 
 entitled to any expenses incurred while the vessel was waiting to 
 obtain the freight or for the purpose of loading it when obtained. 
 
DESIGNATION OF THE SUBJECT-MATTEE 95 
 
 Barclay v. Stirling (1816), 5 M. & S. 6 ; 17 E. E. 245, 
 
 was an action brought by an underwriter against the defendant 
 for money had and received to his use. 
 
 Facts. — The plaintiff had subscribed a policy of insurance on freight 
 of the ship Neptune " at and from port or ports of loading in 
 Jamaica to her port of discharge in the United Kingdom, with 
 leave to call at any of the West India Islands and discharge, 
 exchange, and take on board goods." 
 
 The vessel sailed with a cargo on freight from various shippers, 
 but got on shore off the island of Cuba, and the greater portion 
 of the cargo, consisting of sugar, was washed away and lost. The 
 vessel was taken to Havana, and after being repaired, took on 
 board so much of the original cargo as had been saved, and a 
 considerable quantity of fresh goods on freight. After news 
 of the disaster had been received, the plaintiff paid the defendant 
 for a total loss of freight, and he brought this action to recover 
 the amount of freight actually received by the defendant. 
 The defendant paid into Court money in respect of the freight 
 of the original cargo only. 
 
 Held that the policy covered freight of goods loaded at an inter- 
 mediate port, and that the plaintiff was therefore entitled to 
 recover in respect of the goods laden at Havana, but only after 
 deducting the charges incurred while the ship was waiting at 
 Cuba to obtain freight, or for the purpose of loading it when 
 obtained, (c) 
 
 The position seems to be that after the policy has attached to 
 the freight payable in respect of a particular cargo or under a parti- 
 cular contract of affreightment, a loss of such freight by perils insured 
 against wiU prima facie constitute a total loss under the pohcy. " An 
 actual total loss of the whole cargo will occasion an actual total loss 
 of freight, unless such loss should so happen as to leave the ship 
 
 (c) The case of Brocklebankv. Sughrue (1831), 1 Moo. & R. 102, is also regarded 
 as an authority to the same effect, but it is difficult to ascertaia from the report 
 what was the ground of the decision. It was admitted that fuU freight was 
 earned. It is not clear that the original freight was lost by any of the perils 
 insured against, and there is no suggestion that any special expenses were incurred 
 in connection with the freight. 
 
96 LAW EELATING TO THE INSUEANCE OP PEEIGHT 
 
 capable, as to time, place, and condition, of earning an equal or some 
 freight by carrying other cargo on the voyage insured." (d) If the 
 assured treats the loss as a constructive total loss, the underwriter 
 on freight will be entitled to the benefit of any freight which is earned 
 or which might have been earned in the course of the voyage insured. 
 If the loss is not an actual total loss, and the assured does not treat 
 the loss as a constructive total loss, he will only be entitled to recover 
 the difference between the original freight and the freight which has 
 been or which might have been earned in the course of the voyage 
 insured, (e) 
 
 If after the policy has attached to the freight payable in respect 
 of a particular cargo, that cargo is voluntarily unladen and a different 
 cargo substituted for it, or if after the policy has attached to the 
 freight payable under a particular charterparty, that charterparty 
 is voluntarily cancelled and other freight obtained in place of it, 
 the policy will, it would seem, attach to this substituted freight. (/) 
 This result certainly follows if the terms of the policy are such as 
 to show that it was not intended to apply merely to the original 
 freight. For instance, the poUcy may contain a clause giving 
 leave to discharge and take in cargo, or the voyage insured may be 
 a trading voyage, or may consist of a series of stages. "If it is 
 permitted by an express clause in the policy, that the ship may touch 
 at a certain port or ports mentioned, and the master there discharges 
 and sells goods, and takes on board others to replace them, or which 
 are the produce of those which he hath deUvered ; these goods are 
 to be considered as in the place of the former, and the insurers run 
 the risk of them, as of the former, together with those which remain 
 on board." (g) 
 
 (d) Per Bbett, J., in BanUn v. Potter (1873), L. R. 6 H. L., p. 99, post, p. 160. 
 
 (e) See further, pp. 161, 162. 
 
 ( / ) iSfee Everth v. Smith, ante, p. 93 ; Hughes v. Union Insurance Co. (1823), 
 8 Wheaton, 294 (Am.). 
 
 {g) Weskett, Insurance, Art. " Touching." See also Emerigon, ch. 13, sect. 8 ; 
 per Lord Bllbnboeotjgh in Hill v. Patton (1807), 8 East, p. 377 ; per Denman, 
 C.J., in Bickman v. Oarstairs (1833), 5 B. & Ad., p. 664 ; Parsons, Marine Insur- 
 ance, vol. 1, p. 523 ; Phillips, 3rd ed., sect. 443. For cases on policies on goods, 
 see Orant v. Delacour (1809), 1 Taunt. 463 ; Columbian Insurance Co. v. Catlett 
 (1827), 12 Wheaton, 383 (Am.) ; Hunter v. Leathley (1831), 7 Bing. 517 ; American 
 Insurance Co. v. Oriswold (1835), 14 Wend. 399 (Am.) ; Crowley v. Cohen (1832), 
 3 B. & Ad. 478 ; Tobin v. Harford (1863), 34 L. J. C. P. 37 ; Merchants Marine 
 Insurance Co. v. Bumsey (1883), 9 S. C. R. 577 (Can.). 
 
DESIGNATION OF THE SUBJECT-MATTEE 97 
 
 The case of Barclay v. Stirling (h) is to the same effect. " The 
 question is, whether the plaintiff is entitled to the whole, or any part 
 of the Havannah freight. The first objection is, that this policy- 
 would only have attached on the freight of such goods as were put 
 on board at Jamaica, but not elsewhere. But such a construction 
 is contrary to the true intent of the policy ; for the policy 
 contains no word limiting it to the goods to be put on board at 
 Jamaica. The two termini were Jamaica and the ship's port of 
 discharge in the United Kingdom, with leave to call at any of the 
 West India islands ; and I think, that any freight earned between these 
 two termini, and within the limits of the leave specified, would have 
 been covered by the poUcy. In a subsequent part of the policy, 
 there is leave given to discharge, exchange, and take on board goods 
 at any place the ship may call at ; this was not to be deemed a devia- 
 tion. Then, if the assured were to have full power to do this, how 
 comes it that the freight of the goods thus taken on board is not to 
 be included in the poHcy ? " (i) 
 
 The foregoing remarks have had reference to policies in which 
 the subject-matter was described as freight or as chartered freight, 
 but, as was mentioned at the beginning of the chapter, the subject- 
 matter is frequently described at greater length. An expression 
 frequently used is " freight on board or not on board." This expres- 
 sion has been discussed on several occasions. 
 
 In Bdbinson v. Manufacturers Insurance Company (k) insurance had 
 
 been effected on freight " on board " ship Herald, at and from Cadiz 
 
 to a port in Sicily, and at and from thence to the port of destination 
 
 in the United States. A charterparty had previously been made 
 
 for a voyage from Palermo to New York at a freight of 2500 dollars, 
 
 and while on the voyage from Cadiz to Palermo the vessel was 
 
 wrecked and the freight lost. It was held that the plaintiff could 
 
 recover for the loss of the charterparty freight. " The question 
 
 is, what was intended by the words ' on board.' The sentence 
 
 is obviously elliptical. Considering ' freight ' as the hire or price 
 
 to be paid for the use of the vessel, ' freight on board ' is unmeaning. 
 
 Something must be supplied. The defendants insist, that we must 
 
 understand it, freight of property, when laden on board. But this 
 
 is certainly not the necessary or most probable meaning. It may 
 
 (A) See ante, p. 95, (i) (1816), 5 M. & S., p. 12. 
 
 {k) (1840), 1 Metoalf, 143 (Am.). 
 I.F. H 
 
98 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 as well mean, freight of property ' expected or intended to be put on 
 board,' or ' agreed to be put on board,' as in the case of a charterer. 
 ... It may be said that the words ' on board ' have, upon this 
 supposition no effect, and mean the same as freight of the ship Herald. 
 We think the meaning is nearly or wholly the same." (Z) 
 
 The effect of these words, was also discussed by Lord Esher in 
 the case of the Bedouin, {m) where the pohcy was on " freight chartered 
 ^^jox as if chartered on board or not on board." " It cannot mean 
 freight on board or not on board, because freight is never on board. 
 Freight is the charge made by the shipowner for the carriage of goods 
 on board his ship, and therefore these words ' on board or not on 
 board ' are a short way of saying you are asked to insure chartered 
 freight, or, as if chartered, on goods on board or not on board. But 
 if there were any difficulty at all in construing the words ' ^^^joi as if 
 chartered,' it seems to me that these words ' on board or not on board ' 
 do conclusively show it must be chartered freight ; because if there 
 is no charter, or no contract equivalent to a charter, there cannot 
 be freight payable on goods not on board. If there is no contract 
 making the freight payable with goods not on board, there is no 
 freight due unless goods are on board and are carried to their desti- 
 nation. It follows, therefore, that these words informed him that 
 he was asked to insure chartered freight." These words, then, 
 according to Lord Bshbe are an indication to the underwriter that 
 the freight may be chartered freight, but not that the chartered 
 freight will be a freight dependent on the amount of goods to be 
 carried, because in the case of the Bedouin the freight was a lump 
 sum payable monthly. 
 
 In the,case of the Scottish Shire Line v. The London d Provincial 
 Marine Insurance Company, Hamilton, J., said : (n) '" What is the 
 subject-matter covered ? It is freight. It is freight on frozen or 
 
 [1) Per Shaw, C.J., at p. 146 ; cf. Phillips, sect. 475. In view of the facts of 
 the case it is not easy to follow the reasoning of this judgment. The interpre- 
 tation suggested was that the words " freight on board " meant " freight of pro- 
 perty expected or intended or agreed to be put on board," but the freight in 
 question was a lump sum freight, and the suggested interpretation would have no 
 application to a freight of this character. It would seem that in America the 
 expression " freight on board " a ship was used, where in this country the form 
 would be "freight of " or "freight upon." 
 
 (m) (1894), P. 1. (m) (1912), 17 Com. Cas. pj 258. 
 
DESIGNATION OP THE SUBJECT-MATTEE 99 
 
 refrigerated produce on board or not on board ; words which no 
 doubt are intended to meet difficulties which once arose when cargo 
 alongside for loading, but not brought on board, was lost. It was 
 then said that no right to freight had accrued, because no hen upon 
 that cargo for remuneration for its carriage had accrued." (o) 
 
 It is submitted that the original object of the words was to get 
 over the difficulties created by the printed clause found in many 
 poHcies, " beginning the adventure upon the said goods or freight 
 from the loading thereof on board the said ship." (p) Gradually 
 these words became identified with a description of the subject-matter, 
 and are now frequently found in policies which do not contain the 
 printed clause they were designed to meet. 
 
 Another expression frequently used is " freight chartered or as 
 if chartered." It has been suggested (g) that these words mean 
 freight contracted for or as if contracted for, and cover, therefore, 
 a mere expectation of freight, but this interpretation has not been 
 adopted. In the case of The Scottish Shire Line, Limited v. London 
 <& Provincial Marine Insurance Company , Limited,{r) where the point 
 was raised, Hamilton, J., said : " It may well be that the phrase 
 is intended to cover an expectation of freights which is an expecta- 
 tion only at the date of the insurance ; but it is another matter 
 altogether to say that it can apply to cover a freight which remains 
 a pure expectation at the time of the loss. I cannot understand how 
 ' contracted for or as if contracted for ' can mean ' contracted for 
 or not contracted for.' ... It seems to me that the first thing to 
 be borne in mind is that whatever ' chartered or as if chartered ' 
 may mean, they are words which qualify and describe a noun sub- 
 stantive which is freight. The thing covered is first and foremost 
 
 (o) In De Longuemere v. The Phcmix , Insurance Co. (1813), 10 Johns. 127 
 (Am.), where a policy had been effected on " freight carried or not carried," and 
 at the time of the loss only a portion of the cargo was loaded, but other goods 
 which the charterer had agreed to put on board were lying ready for shipment, 
 it was held that there could be no question but that the assured was entitled to 
 recover as for a total loss. 
 
 (p) See Jones v. Neptune Marine Insurance Co. (1872), L. R. 7 Q. B. 702 ; 
 Beckett v. West of England Marine Insurance Co. (1872), 25 L. T. 739 ; Hopper r. 
 Wear Marine Insurance Co. (1882), 46 L. T. 107 ; Hydarnes S.8. Co. v. Indemnity 
 Mutual Marine Assurance Co., [1895] 1 Q. B. 500 ; ante, pp. 62-65. 
 
 (q) See Turnbull, Martin db Co. v. Hull Underwriters' Association, [1900] 
 2 Q. B. 402. 
 
 (r) (1912), 17 Com. Gas., pp. 259, 261. 
 
100 LAW EELATING TO THE IN8UEANCE OF PEEIGHT 
 
 freight as known to the law — not all freight, but only freight which 
 can be said to be ' chartered or as if chartered.' " 
 
 In the same case Hamilton, J., discussed the meaning of these 
 words and the interpretations which had been put upon them. 
 " The matter then came up in Williams v. Canton Insurance Office,{s) 
 in the House of Lords. In that case there was a policy upon freight 
 ' chartered or as if chartered ' ; but the question in that case turned 
 upon the contrast between a lump sum charter freight and a bill of 
 lading freight. Three of the opinions which were delivered, however, 
 deal with the question. Earl of Halsbury, L.C, said : ' These 
 words, "or as if chartered," have to my mind no meaning where 
 there is, as in this case, a chartered freight, and if they have any 
 meaning at all in other cases,, of which I have some doubt, I decline 
 to speculate what their meaning would be in a case different from the 
 present.' In the present case, ut res magis valeat quam jpereat, I 
 have to fit some kind of meaning on to those words.' Lord Brampton 
 said : ' I am very much disposed to think that in using in the policy 
 the words, " freight chartered or as if chartered," it was intended 
 by the framers of and the parties to it that whatever the facts might 
 be, whether the ship was wholly loaded by the charterers or wholly 
 or partly under bills of lading by other shippers, the whole was to 
 be treated for the purposes of the policy as one entire undivided 
 cargo, loaded by the charterers, to be carried for that one lump 
 freight.' Lord Lindley said : ' The alternative, " or as if chartered," 
 applies to freight, or what in business is treated as freight, although 
 not made payable by the express terms of any charterparty — e.g. 
 if the shipowner carries other people's goods without a charterparty, 
 or perhaps if he carries his own goods. The phrase, " as if chartered," 
 would also cover freight payable under a charterparty entered into 
 after the date of the policy, if the policy without these words would 
 not extend to such freight.' " 
 
 Hamilton, J., while deciding that the words would not cover 
 a mere expectation of freight, adopted the view put forward by Lord 
 Lindley. " As Lord Lindley said, the words cover the case of a 
 charterparty expected at the date of the policy, but only concluded 
 after it. They cover, or may cover, the benefit that the shipowner 
 derives from carrying his own goods, although it has been held that 
 
 (s) [1901] A. C. 462. 
 
DESIGNATION OF THE SUBJECT-MATTER 101 
 
 that is covered by the description of freight simpliciter, and they 
 cover the case of other people's goods being carried without a charter- 
 party — that is to say, either under a bill of lading, or, if there is no 
 actual bill of lading, under that promise to pay which is impUed 
 from the fact that the goods are shipped and carried." {t) 
 
 It has been seen (m) that in the case of chartered freight different 
 rules with regard to the inception of the risk apply from those which 
 apply in the case of freight other than chartered freight. It is sub- 
 mitted that the object of the words " or as if chartered " is to pro- 
 vide that the rules applicable to chartered freight shall be applied 
 also to other freight. The insurance is on freight generally, either 
 chartered freight or freight which is to be treated as if it were chartered 
 freight. These words are most frequently found in time policies 
 and insurances of homeward freight during the outward voyage. 
 In such cases the assured would desire the protection to be as com- 
 prehensive as possible, and to cover freight engagements of every 
 description. It would, therefore, be more in accordance with the 
 probable intentions of the parties to construe these words as an ex- 
 tension of the term freight and not as a quahfication. Their con- 
 junction, too, with the words " on board or not on board " is some 
 indication that they were framed to meet the difficulties existing 
 with regard to the inception of the risk in an ordinary pohcy on 
 freight. 
 
 It has been suggested (x) that the expression " chartered freight " 
 may only apply to freight payable under a contract of affreightment, 
 which is in existence at the time when the policy is effected. There 
 seems, however, no sound reason why such a narrow construction 
 should be adopted, or why a person who is about to conclude a charter- 
 party should not be allowed to take out an insurance in these terms. 
 These words would, however, be an indication to the underwriter 
 that a charterparty may be in existence. If in fact a charterparty 
 has been effected, it is not necessary for the assured to disclose this 
 
 (t) (1912), 17 Com. Cas., p. 260. 
 
 (u) Ante, p. 65. 
 
 (x) Lord LiNDLEY in Williams v. Canton Insurance Office, [1901] A. C, p. 475. 
 In Asfar v. Blundell, [1896] 1 Q. B., p. 129, Lord Eshbr, M.R., said : " In this 
 case the plaintiffs disclosed that there was a charterparty in existence, for one of 
 the parts of the subject-matter of insurance was chartered freight." 
 
102 LAW EELATING TO THE INSURANCE OF FEEIGHT 
 
 fact. This has been decided in an American case, {y) and the fact 
 that such a point has never been taken in any of the English cases 
 shows that this view has not been questioned. 
 
 While it is not necessary for the assured to disclose the fact that 
 a charterparty has been effected, he must not conceal the fact that 
 the charterparty is in an unusual form. It is no answer to say that 
 the pohcy might attach in respect of such a charterparty, if it were 
 made after the pohcy was effected. The risk that the pohcy may 
 attach tcJ the freight payable under such a charterparty is quite 
 different from the certainty that it will. " I agree that concealment 
 is something more than non-disclosure ; it is the keeping something 
 back which it is the duty of the assured to bring specifically to the 
 notice of the underwriters. ... It is agreed that, if a charter- 
 party contains an unusual clause which it is very material to the 
 underwriters to know, it is not enough for the assured merely to 
 tell the underwriters that there is a charterparty in existence ; the 
 assured is bound to go further, and to state that it contains an 
 unusual clause ; if he does not do so there is concealment which 
 vitiates the policy." (z) 
 
 The Mercantile Steamship Company v. Tyser (1881), 7 Q. B. D. 
 73 ; . 29 W. R. 790 ; 5 Asp. M. C. 6 n., 
 
 was an action on a policy of insurance on chartered freight. 
 
 Pacts. — A charterparty had previously been effected which contained 
 the following provision : "If the vessel has not arrived at the 
 port of New York on or before the 1st of September, 1875, 
 charterers have option of cancelling the charterparty." The 
 evidence showed that such a provision was of comparatively 
 recent introduction. The vessel did not arrive by the 1st of 
 September and the charterparty was cancelled. 
 
 Held that the concealment of the fact that the charterparty contained 
 a cancelling clause avoided the policy, (a) 
 
 (y) Hodgson v. Mississippi Insurance Co. (1831), 2 Lou. Rep. 341 (Am.). 
 
 (z) Per Kay, L.J., in Asfar v. Blunddl, [1896] 1 Q. B., p. 133. 
 
 (a) It is so usual now for oharterparties to contain a cancelling clause, that 
 there seems to be no necessity to disclose the fact, see Bitger v. Firemen's Fund 
 Insurance Co. (1898), 90 Fed. 310 (Am.). 
 
DESIGNATION OF THE SUBJECT-MATTER 103 
 
 The Bedouin, [18941 P. 1 ; 63 L. J. ADM. 30 ; 69 L. T. 782 ; 
 42 W. R. 292 ; 7 Asp. M. C. 391 ; 6 R. 693, 
 
 was an action on a policy of insurance for £1500 on " freight 
 chartered ^■^^/oi as if chartered, on board or not on board," for 
 three months, " one-third diminishing each month." 
 
 Pacts. — A charterparty had previously been made for a voyage to 
 South America and back, freight to be at the rate of £955 per 
 calendar month, to be paid monthly in advance, and " in the 
 event of loss of time by . . . breakdown of engines or machinery 
 . . . and the progress of the steamer is thereby delayed for more 
 than twenty-four running hours, payment of hire to cease until 
 such time as she is again in an efficient state to resume her voyage." 
 Owing to an accident to the machinery the vessel was 
 delayed for twenty-eight days and the hire consequently ceased. 
 The underwriters contended that they were not liable as they 
 had not been told that the charterparty contained a " twenty- 
 four hours' clause." 
 
 Held that the ship, which was in similar terms to the policy, indicated 
 to the underwriters that they were being asked to insure a time 
 charter, and that as it was usual for such charterparties to 
 contain the twenty-four hours' clause, the plaintiffs were entitled 
 to recover. 
 
 Asfar V. Blundell, [1895] 2 Q. B. 196 ; [1896] 1 Q. B. 123 ; 65 
 L. J. Q. B. 138 ; 73 L. T. 648 ; 44 W. R. 130 ; 1 Com. 
 Cas. 185; 8 Asp. M. C. 106 ; 15 R. 481, 
 
 was an action on a policy of insurance for £2000 on " profit on 
 charter warranted free from all average." 
 
 Pacts.— The plaintiffs had chartered a vessel for a voyage from the 
 Persian Gulf to London for a lump sum of £3900 upon the terms 
 that all freight earned by the ship should be for account of the 
 charterers. The plaintiffs placed the ship on the berth at various 
 ports in the Persian Gulf, and cargo was shipped under bills of 
 lading at certain rates of freight amounting in all to £4690. A 
 large portion of the cargo consisted of dates, which were so 
 
104 LAW KELATING TO THE INSUEANCE OF FEEIGHT 
 
 damaged by perils of the sea as to be unmerchantable as dates, 
 although still of considerable value. The freight on this portion 
 of the cargo was therefore not payable, and the total bill of 
 lading freights became reduced to a sum less than the lump sum 
 freight. 
 
 The underwriters endeavoured to escape liability on the 
 ground that they had not been told that the charterparty was 
 for a lump sum. 
 
 Held that the underwriters should have known that there was a 
 charterparty, and that it was highly probable that the freight 
 would be a lump sum freight, and therefore that the plaintiffs 
 were entitled to recover as for a total loss. 
 
 Scottish Shire Line, Limited v. London & Provincial Marine 
 (& General Insurance Company, [1912] 3 K. B. 51 ; 17 Com. 
 Cas. 240; 107 L. T.,46; 81 L. J. K. B. 1066; 12 Asp. 
 M. C. 253 ; 56 S. J. 551, 
 
 was an action on a poUcy of insurance for £2000 on " freight on 
 frozen meat ^^^joi apples ^"^/qj. refrigerated produce, valued at 
 £15,000, chartered or as if chartered on board or not on board " 
 the Ayrshire, from " any Australian ^""^/or Tasmanian ports to 
 the United Kingdom." The policy also contained a clause, 
 " warranted free from any claim consequent on loss of time 
 whether arising from a peril of the sea or otherwise, but this 
 clause only to apply in cases where the vessel is fulfilKng a special 
 charter containing a cancelling date." 
 
 A contract had previously been made with a firm of Jones 
 & Co., under which that firm undertook to ship 40,000 cases of 
 apples on board the Ayrshire, but the contract contained a 
 clause by which it was made a condition precedent that the 
 Ayrshire should arrive on or about March 20, 1910. Owing to 
 an accident the vessel was delayed for several months, and the 
 apples were not loaded. The underwriters resisted a claim 
 for the loss of this freight on the ground that the naiture of the 
 apple contract had not been disclosed to them. 
 
 Held that as there had been concealment of a material fact, the 
 plaintiffs could not recover. 
 
CHAPTEE V. 
 
 Losses under the Policy. 
 
 Freight is the benefit derivable from the employment of a vessel, 
 and where a vessel is being employed in carrying a cargo in respect 
 of which freight is payable, it is the freight of that cargo, in that 
 vessel, and on that voyage which is the subject-matter of the insur- 
 ance and to which the poUcy attaches, (a) Under ordinary circum- 
 stances a loss of both the vessel and the cargo wiU involve a loss of 
 the freight, (b) unless by the terms of the contract of affreightment 
 the freight is payable irrespective of what may happen to the ship 
 or the cargo, (c) and if in such a case the shipowner is prevented 
 from earning the freight by any of the perils insured against, he 
 will be entitled to recover a total loss under the pohcy. 
 
 If the vessel is totally lost or damaged to such an extent as not 
 to be worth repairing, and is not repaired, there may be an actual 
 total loss of the freight, but this result does not necessarily follow, 
 as the shipowner may be able to earn the freight by transhipping 
 the cargo to the place of destination, and the freight thus earned is 
 regarded as the original freight. " If the voyage is completed in the 
 original ship it is completed upon the original contract, and no 
 additional freight is incurred. If the master tranships because the 
 original ship is irreparably damaged, without considering whether 
 he is bound to tranship or merely at liberty to do so, it is clear that 
 he tranships to earn his full freight ; and so the delivery takes place 
 upon the original contract." (d) " If the shipowner, being unable 
 
 (a) Oreen v. Royal Exchange Assurance Go. (1815), 6 Taunt. 68 ; M'Gaw v. 
 Ocean Insurance Co. (1839), 23 Pick., p. 409 (Am.) ; Lordy. Neptune Insurance 
 Co. (1857), 10 Gray, p; 113 (Am.); Thwing v. Washington Insurance Co. (1859). 
 10 Gray, p. 445 (Am.). 
 
 (6) Amould,sect. 1164 ; Parsons, vol. ii., p. 160 ; per Bbett, J., in Rankin 
 V. Potter (1873), L. R. 6 H. L., p. 99. 
 
 (c) Oriental S.S. Co. v. Tyser, [1893] 2 Q. B. 618. 
 
 [d) Per Jbbvis, G.J., in Rosetto v. Ourney (1851), 11 C. B., p. 188 ; cited by 
 Lord Blackbuen in Svendsen v. Wallace (1885) , L. R. 10 A. C, p. 418. 
 
 105 
 
106 LAW EELATING TO THE INSUEANCE OP PEEIGHT 
 
 to repair his ship, tranships the cargo and sends it home in some other 
 ship, which he may do, still, as between him and the original con- 
 signees of the cargo, the original voyage is treated as continuing, 
 in the absence of some agreement to the contrary. This appears 
 from Shipton v. Thornton, (e) where the freight payable in such cases 
 is discussed. Further, in a case of this description, a policy for the 
 original voyage will cover such cargo when transhipped in order to 
 complete such voyage." (/) 
 
 The question has frequently been raised whether the shipowner, 
 as between himself and the freighter, is under a duty to tranship, 
 or has merely the right to do so, if he so desires. In the case of 
 Cook V. Jennings, (g) Lawrence, J., expressed the view that it was 
 the duty of the master to tranship. " When a ship is driven on shore, 
 it is the duty of the master either to repair his ship or to procure 
 another, and having performed the voyage he is then entitled to 
 his freight," but the position of the shipowner is generally laid down 
 in more cautious language. " If the ship be disabled from completing 
 her voyage, the shipowner may still entitle himself to the whole 
 freight, by forwarding the goods by some other means to the place 
 of destination." (h) " All authorities are in unison to this extent, 
 that the master is at liberty to procure another ship to transport 
 the cargo to the place of destination." (i) In America it has been 
 said that according to strong authorities the shipowner is bound to 
 tranship if there be a vessel or other means of transport to the place 
 whither the cargo should go within reasonable reach, (fc) but this duty 
 
 (e) (1838), 9 A. & E. 314. 
 
 (/ ) Per LiNDLBY, J., in Hill v. Wilson (1879), L. E. 4 C. P. D., p. 333 ; cited 
 by Collins, J., in Assicurazioni Generali v. S.S. Bessie Morris Co., [1892] 1 Q. B., 
 p. 577. 
 
 ig) (1797), 7 T. R. 381. 
 
 (h) Per Lord Ellenborotjgh, in Hunter v. Prinsep (1808), 10 East, p. 394. 
 
 (i) Per Denman, O.J., in Shipton v. Thornton (1838), 9 A. & E. 335 ; see also 
 The Gratitvdine (1801), 3 C. Rob. 240 ; Rosetto v. Gurney (1851), 11 0. B. p. 188 ; 
 The Bahia (1864), Br. & Lush. 292 ; De Quadra v. Swann (1864), 16 C. B. (n.s.), 
 772 ; The SoUomsten (1866), L. R. 1 A. & E. p. 297 ; Kidston v. Empire Marine 
 Insurance Co. (1867), L. R. 2 C. P. 357 ; Tronson v. Dent (1853), 8 Moo. P. C, 
 p. 455 ; Currie v. Bombay Native Insurance Co. (1869), L. R. 3 P. C, p. 83 ; 
 Notara v. Henderson (1870), L. R. 7 Q. B., p. 231 ; Attwood v. Sellar (1879), 
 L. R. 4 Q. B. D. 359 ; Hill v. Wilson (1879), L. R. 4 C. P. D., p. 333 ; Svendsen 
 V. Wallace (1885), L. R. 10 A. 0., p. 418 ; Hansen v. Dunn (1906), 11 Com. Cas., 
 p. 102. 
 
 (k) Parsons, Law of Shipping, vol. 1, p. 234. 
 
LOSSES UNDEE THE POLICY 107 
 
 is imposed upon the shipowner not as shipowner, but as agent ex 
 necessitate for the owner of the cargo. {I) 
 
 Although the shipowner, as between himself and the freighter, 
 may not be bound, qua shipowner, to tranship or forward the cargo 
 to its destination, he has undoubtedly the right to do so. " It is 
 not of the essence of the contract, that the cargo should, in every 
 event, be conveyed in the ship mentioned, because the party is allowed 
 to change the ship from necessity. The delivery of the cargo is 
 the cause of earning freight. The ship, on board of which the goods 
 are laden, is the vehicle of conveyance agreed on, but it is only one 
 of the means, and not, in all cases, the indispensable means, to attain 
 the object. It is well understood and settled that when the vessel 
 is disabled in the course' of the voyage, and the cargo remains, the 
 captain is authorised to forward it by another vessel, and thereby 
 to earn his freight." (m) This right, if there is a chance of using it 
 so as to prevent a total loss of freight, the assured must, as between 
 himself and the underwriter on freight, either exercise himself or by 
 a timely abandonment enable the insurer, if he choose, to exercise 
 it for his own benefit. 
 
 The position, however, may be such that there is no chance of 
 an opportunity of the cargo being forwarded to its destination, and 
 in such cases there is an actual total loss of freight, unless the freighter 
 accepts delivery of the cargo at the intermediate port under such 
 circumstances as to render himself liable for freight or for a fro 
 rata freight, (n) " On a policy on freight in general terms there need 
 be no abandonment of freight, and no notice of abandonment is 
 required, where the ship is damaged to such an extent or under such 
 circumstances as would authorise an abandonment of the ship on 
 a policy on the ship, and where there is no cargo on board the ship, 
 or if on board where none is saved with the chance of an opportunity 
 
 (I) See Thwing v. Washington Insurance Co. (1858), 10 Gray. 443 (Am.) ; 
 Lemont v. Lord (1864), 52 Maine, 365 (Am.) ; Kent's Comm., vol. 3, 212. 
 
 (to) Per Kent, C.J., ia Bradhurst v. Columbia Insurance Co. (1812), 9 Johns. 
 R., p. 19. 
 
 («) " An actual total loss of ship will occasion an actual total loss of freight, 
 unless when the ship is lost, cargo is on board, and the whole or a part of such 
 cargo is saved, and might be sent on in a substituted ship so as to earn freight." 
 Per Bbbtt, J., in Rankin v. Potter (1873), L. R. 6 H. L., p. 99 ; cited by Mathew, 
 J. in Guthrie v. North China Insurance Co. (1900), 6 Com. Gas., p. 30. 
 
108 LAW EELATING TO THE INSUEANOE OP FEEIGHT 
 
 of its being forwarded in a substituted ship. In the several states 
 of circumstances above set forth and considered, the loss of freight 
 in the policyon freight would be an actual total loss." (o) "An actual 
 total loss of freight arises only where the circumstances are such as 
 to render the ultimate earning of freight absolutely impossible, or 
 practically hopeless, as where the cargo itself is lost, or there are 
 no means of forwarding it, in case of the loss of the vessel or similar 
 decisive circumstances." (p) 
 
 Trinder Anderson <& Company v. Thames <& Mersey Marine 
 Insurance Com/pany, Limited, [1898] 2 Q. B. 114; 78 L. T. 
 485 ; 67 L. J. Q. B. 666 ; 3 Com. Gas. 123 ; 46 W. E. 561 ; 
 8 Asp. M. C. 373, 
 
 was an action on a policy on " freight chartered or as if 
 chartered " in the ship Gainsborough, from Sydney to Newcastle, 
 N.S.W., while there, and thence to any port or ports in New 
 Zealand, while there, and thence to San Francisco. 
 
 Pacts. — While the ship was proceeding from New Zealand to San 
 Francisco with a cargo of coals, she stranded near Honolulu, 
 and owing to the critical position of both the vessel and the 
 cargo, the master, on the advice of Lloyds' agent, sold them for 
 £400. It was found by Kennedy, J., that the sale, although 
 premature, must have taken place within a few days of the time 
 at which it did. The vessel was eventually got off, and the 
 cargo remaining on board was sold for £1000 by the purchaser. 
 The ship was a constructive total loss, and Kennedy, J., 
 found that it was not " a practicable thing to carry on the cargo 
 either in the stranded ship, or in any other ship, for none could 
 be obtained, and that it could not have been carried on, and no 
 abandonment would have enabled the assurers to do so ; that 
 the cargo, although it did not actually perish, was in a condition 
 in which it was not doubtful whether notice of abandonment 
 could give the assurers any advantage, for it was quite clear it 
 would not ; that the cargo would have had to be sold at Honolulu, 
 
 (o) Per Bkbtt, J., in Bankin v. Potter (1873), L. R. 6 H. L., p. 102. 
 (p) Per Rapallo, J., in Hubbell v. Great Western Insurance Co. (1878), 74 
 N. Y., p. 252 (Am.). 
 
LOSSES UNDEE THE POLICY 109 
 
 and that the freight by reason of the stranding was an actual 
 total loss, and that there was a destruction of the voyage." 
 
 Held by the Court of Appeal that as there was no chance of an 
 opportunity of the cargo being forwarded in a substituted ship, 
 for no other could be obtained, the assured could recover, although 
 no notice of abandonment had been given. 
 
 In considering the question whether the cargo can be forwarded 
 or not, regard must be had to the circumstances existing at the time, 
 and to the interval which would have to elapse before a substituted 
 vessel could be obtained. " Upon the vessel becoming disabled at 
 an intermediate port, the master is allowed a reasonable time within 
 which to reship or tranship, so as to earn the freight," (g) but he is 
 not entitled to retain the cargo for more than a reasonable time, (r) 
 If, therefore, there is no chance of an opportunity of the cargo being 
 forwarded within a reasonable time, and the shipowner in consequence 
 loses his right to detain it, he will be entitled to treat the loss as a 
 total loss. In an early American case (s) the view was expressed 
 that a master was not bound to seek for another vessel except in 
 the port of distress or in a port immediately contiguous, but this view 
 has not been adopted. In the case of Bryant v. Commonwealth 
 Insurance Company, (t) the vessel was stranded on the coast of 
 Virginia. The goods might have been taken to Norfolk, which was 
 distant forty miles by land, and there reshipped, and the Court held 
 that if it was reasonable to require the master to procure a vessel 
 from there, he would be bound to do so. " It may happen that a 
 vessel might be procured at a port in another state, and not geogra- 
 phically contiguous to the port of distress, in convenient time and 
 upon more reasonable terms than could be had in the port of distress. 
 We should not, therefore, be disposed to limit the operation of the 
 
 (q) Per Dr. Lushington in The Sohlomsten (1866), L. R. 1 A. & E., p. 297 ; 
 The Bahia (1864), Br. & Lush. 292 ; per Willes, J., in Kidston v. Empire Insurance 
 Co. (1866), L. R. 1 0. P., p. 542. 
 
 (r) Owen v. Outerbridge (1896), 26 Sup. Can. R. 272 (Can.). If the shipowner 
 retains them for more than a reasonable time, he will be liable for the damage 
 thereby caused, Hansen v. Dunn (1906), 11 Com. Cas. 100. 
 
 (s) Saltus V. Ocean Insurance Co. (1815), 12 Johns. R. 107 (Am.) ; see also 
 Whitney r. New York Firemen's Insurance Co. (1820), 18 Johns. R. 208 (Am.) ; 
 Treadwell v. Union Insurance Co. (1826), 6 Cow. 270 (Am.). 
 
 (t) (1828), 6 Pick. 131 (Am.). 
 
110 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 master to any particular port or place, in regard to procuring another 
 vessel, but to require him to do so, if upon the whole it should seem 
 reasonable, taking into view the nature of the voyage, and the time, 
 expense and risk of the transportation to the port of destination." 
 There is also, it would seem, an actual total loss of freight, if 
 there is no chance of the cargo being transhipped and forwarded 
 except at a cost equal to or exceeding the original freight. " If the 
 ship is totally lost, or rightfully abandoned before the voyage is 
 completed, she cannot earn full freight, and the underwriter is bound 
 to indemnify the assured for the loss which he has sustained. If no 
 freight pro rata itineris has been earned, or the expense of sending 
 on the cargo by another vessel is equal to or exceeds the whole 
 amount of freight agreed upon by the charterparty ; or if no other 
 conveyance can be had at the port of necessity, and the owner refuses 
 to receive the goods, there is an absolute total loss of the freight, 
 and no abandonment is necessary, because there is nothing left to 
 abandon." {u) 
 
 American Insurance Company oj New York v. Center (1827), 
 7 Cowen, 564 ; (1829) 4 Wend. 45 (Am.), 
 
 was an action on a policy of insurance on freight of the Pallas, 
 at and from New Orleans to Havre. 
 
 Facts. — After leaving New Orleans with a cargo of cotton, and while 
 proceeding down the Mississippi Eiver, the vessel was damaged 
 and had to put back to New Orleans, where she was surveyed 
 and found to be a constructive total loss and sold. 
 
 Held that the assured could recover for a total loss of freight. 
 
 Judgment : " Cui bono, in this case employ another vessel ? Here 
 had been no progress in earning freight. The vessel is driven 
 back with the cargo to her port of departure ; where she hes 
 as a wreck, and is sold for the benefit of those concerned. The 
 cargo is unladen and finally received by the shippers. It seems 
 to us that here there was a loss of freight absolutely total. 
 
 (u) Per Walwoeth, C, in American Insurance Co. v. Center (1829), 4 Wend,, 
 p. 53 (Am.). 
 
LOSSES UNDEE THE POLICY 111 
 
 We cannot intend that the hire of a vessel for the same voyage 
 would have been at a freight less than that stipulated for in the 
 original charterparty. There was, in truth, nothing to abandon. 
 It is strongly intimated in Green v. Boyal Exchange Assurance 
 Company that in a case like the present, no abandonment is 
 necessary, as there is nothing to be transferred by the assured 
 to the insurer." (x) 
 
 If the vessel is totally lost or damaged to such an extent as not to 
 be worth repairing and is not repaired, but the cargo can be tran- 
 shipped and forwarded to its destination at a reasonable expense, 
 and within a reasonable time, there is not an actual total loss of the 
 freight, but the shipowner may by giving due notice of abandonment 
 entitle himself to claim as for a total loss. " There seems httle 
 
 (x) 7 Cowen., p. 583 ; see also Lord v. Neptune Insurance Co. (1857), 10 Gray, 
 p. 125 (Am.) ; Thwing v. Washington Insurance Co. (1858), 10 Gray, p. 458 (Am.). 
 
 In Oreen v. Boyal Exchange Assurance Co. (1815), 6 Taunt. 68 ; 1 Marsh. 
 447 ; the vessel, after proceeding a very short way on her voyage, was compelled 
 owing to sea damage to return to the port of departure, where she was surveyed 
 and sold. The evidence, which is not clearly stated in the reports, seems to have 
 been to the effect that the vessel could not have been repaired so as to bring 
 home the original cargo, but she was repaired by the purchaser within some 
 five or six weeks, and brought home another cargo amounting in quantity to 
 about half of the original cargo. The plaintiff claimed a total loss, and at the 
 trial before Gibbs, C.J., the only point taken was that the assured could not 
 recover for a total loss as he had not given notice of abandonment (1 Marsh., 
 p. 462) ; but Gibbs, C.J., thought that abandonment was not necessary, for he 
 could not understand what was to be abandoned, and a verdict was found 
 for the plaintiff. 
 
 Upon a motion for a new trial, the defendants raised the further point that 
 the assured could not recover for a total loss as he should have repaired the vessel, 
 in which case he would have been able to earn freight on the voyage. A new trial 
 was ordered on the latter point, but the Court again stated that they saw no 
 ground for saying that there ought to have been an abandonment. As the 
 vessel had been sold, this view is, it is submitted, correct. If the sale was justi- 
 fiable there was an actual total loss of freight, so minute a portion of the voyage 
 having been performed that the question of transhipment was not considered 
 to arise (6 Taunt., p. 69). If the sale was unjustifiable and the vessel could have 
 brought home other cargo,'the underwriter on freight would not be prejudiced by 
 the failure of the shipowner to do so, and would only be liable to the same extent 
 as if a cargo had been brought home. The Court had not to consider whether, 
 if the vessel had not been sold, and had been able to carry other cargo, the assured 
 could have treated the loss as a constructive total loss by giving notice of abandon- 
 ment. See also Idle v. Boyal Exchange Assurance Co. (1819), 8 Taunt. 755 ; 
 3 Br. & B., p. 151 '; Mount v. Harrison (1827), 4 Bing. 388. 
 
112 LAW EBLATING TO THE INSUEANCE OP PEEIGHT 
 
 doubt that the assured has the right of abandoning the freight where 
 there has been a constructive total loss of the ship, {y) 
 
 Currie v. The Bombay Native Insurance Company (1869), L. E. 
 3 P. 0. 72 ; 6 Moore, P. C. (n. s.) 302 ; 22 L. T. 317 ; 39 
 L.J. C.P.I; 18W. E. 296, 
 
 was an action on a policy of insurance on disbursements of the 
 ship Northland, upon a voyage from Moulmein to Madras. 
 
 Pacts. — The vessel shortly after leaving Moulmein was wrecked and 
 became a constructive total loss, and was sold together with 
 the cargo, which consisted of timber. The plaintiffs, who were 
 the charterers, had made advances to the captain to be paid 
 out of freight, and on hearing of the wreck of the vessel they gave 
 notice of abandonment. 
 
 Held that the plaintiffs could recover. 
 
 Judgment. — " The possibility of freight being earned by the North- 
 land was of course at an end when she was reduced to a wreck, 
 and the case became one of total loss. It was argued on behalf 
 of the respondents, that the captain might have hired another 
 vessel, and forwarded the timber to its destination, and so have 
 earned freight out of which the disbursements might have been 
 paid. But even supposing that the advances made upon the 
 original freight would attach upon the freight thus acquired, 
 the captain is not under an absolute obUgation to tranship a 
 cargo when a ship is disabled from pursuing the voyage insured, 
 but may exercise his discretion upon the subject. And while 
 the ship was unquestionably a wreck, and utterly incapable 
 of conveying the goods to their destination, and so earning freight 
 the assured gave notice of abandonment to the underwriters 
 (which their lordships have determined to be a good notice), 
 and at this time there is no doubt there was a total loss of the 
 disbursements which were to be paid out of freight." 
 
 (y) Benson v. Chapman, per Tindal, C.J. (1843), 6 M. & G., p. 810 ; see also 
 PhiUips, 3rd ed., sect. 1630 ; Amould, sect. 1168. 
 
LOSSES UNDEE THE POLICY 118 
 
 The Buffalo City Bank v. The North Western Insurance Company 
 (1864), 30 N. Y. 251 (Am.), 
 
 was an action on a policy of insurance on freight of the Europa, 
 on a voyage from Chicago to Buffalo. 
 
 Facts. — About six miles from Buffalo the vessel went ashore and 
 became a complete wreck. The vessel, cargo, and freight all 
 belonged to the same owner, and each was insured in a different 
 company. Abandonment was made of the various interests 
 to the different insurers and was accepted. About three- 
 quarters of the cargo was saved by the insurers of the cargo 
 in a damaged condition and was brought to Buffalo. The 
 defendants insisted that the plaintiffs were not entitled to 
 recover for a total loss, but only for a partial loss. 
 
 Held that the abandonment having been accepted, the plaintiffs were 
 entitled to recover a total loss. 
 
 Judgment. — Denio, C.J. : " It is further urged that the loss of 
 freight was not so great as to entitle Bruce to abandon it to the 
 defendant. The judge has, however, found that the abandon- 
 ment was accepted. . . . But I think there was a just occasion 
 for abandonment. The vessel had become a total wreck at 
 an intermediate point which was not a port, and vessel, cargo, 
 and the right to freight were prima, facie lost. No freight had 
 been earned, and the vessel which was to have earned it was 
 broken in pieces. If any could have ever been earned, it would 
 not have been in any natural but in an exceptional way, as by 
 the owner of the cargo accepting it where it then was, or by the 
 abandonee of the ship getting it to port in some other way. 
 An abandonment is said to be justifiable for anything, which in 
 the course of the voyage constitutes at that time a total loss. 
 If anything subsequently occurs as a recapture in the case of 
 a vessel captured, or getting a cargo to port in another vessel, 
 it is the good fortune of the underwriters, but does not affect 
 the legality of the abandonment." (z) 
 
 (z) See also Hubbell v. Oreat Western Insurance Co. (1878), 74 N. Y. 246 
 (Am.). 
 
 I.P. ^ 
 
114 LAW RELATING TO THE IN8UEANCE OF EEEIGHT 
 
 The total or constructive total loss of a vessel may, therefore, 
 be treated by the shipowner as involving a constructive total loss 
 of the freight. He may give due notice of abandonment, and if the 
 abandonment is accepted, or an action commenced, he may, if the 
 loss was caused by perils insured against, recover as for a total loss. 
 
 Barque Bohert S. Besnard Company, Limited v. Murton (1910), 
 101 L. T. 285; 14 Com. Cas. 267; 11 Asp. M. C. 299; 
 53 Sol. J. 717, 
 
 was an action on a policy of insurance on freight from Monte 
 Video to New York. 
 
 Facts — The vessel after leaving Monte Video encountered very bad 
 weather, and had to put into Charlestown, where a survey was 
 held. The vessel was found to be a constructive total loss, and 
 the cost of transhipment was likely to have exceeded the original 
 freight. The plaintiffs thereupon gave notice of abandonment 
 to the defendant, who refused to accept the notice, but agreed 
 that the assured should be placed in the same position as if a 
 writ had been issued. The vessel was subsequently purchased 
 by the underwriters on the cargo, and after some temporary 
 repairs had been effected, was towed into New York, where the 
 cargo was deHvered and the freight earned. The underwriter 
 on freight contended that as the voyage was completed and the 
 freight could have been earned, the assured could not recover. 
 
 Held that as the underwriter had agreed to place the plaintiff in the 
 same position as if a writ had been issued, the material date was 
 the date when the notice of abandonment was given, that as 
 there was a loss of the freight on that date the plaintiffs were 
 entitled to recover, and that this right was not affected by the 
 fact that freight was subsequently earned, (a) 
 
 If the notice of abandonment is not accepted, and an action is 
 not commenced, until freight has been or could have been earned by 
 transhipping and forwarding the cargo to its destination, the position 
 is obscure. In the case of Bankin v. Potter, Beett, J., expressed 
 
 (a) See also Buffalo City Bank v. North- Western Insurance Co., ante, p. 113. 
 
LOSSES UNDEE THE POLICY 115 
 
 the opinion that there was " a partial loss of freight under a general 
 policy on freight, if in case of total loss of the ship the cargo be sent 
 on in a substituted ship," (b) and in the case of Svendsen v. Wallace (c) 
 Lord Blackburn suggested that the expenses of transhipment would 
 be recoverable as particular average. These dicta, however, conflict 
 with the case of Kidston v. Empire Marine Insurance Company, in 
 which it was decided that the expenses of transhipping the cargo 
 were not particular average but particular charges, and that the loss 
 entailed by reason of these expenses was not to be treated as a 
 partial loss, but as a loss under the sue and labour clause in the policy. 
 
 Kidston and Others v. The Empire Marine Insurance Company 
 (1867), L. E. 2 0. P. 357 ; 36 L. J. 0. P. 156 ; 16 L. T. 286 ; 
 12 Jur. (n. s.) 665 ; 15 W. E. 769, 
 
 was an action on a policy of insurance for £2000, on chartered 
 freight of the ship Sebastopol, valued at £5000. The policy 
 contained the usual suing and labouring clause, and a warranty 
 against particular average. 
 
 Facts. — While on a voyage from the Chincha Islands to the United 
 Kingdom with a cargo of guano the vessel was damaged in a 
 storm and had to put into Eio, where she became a wreck. The 
 cargo was landed and warehoused and was afterwards shipped 
 on board a vessel called the Caprice, chartered by the plaintiffs, 
 and was forwarded in safety to the United Kingdom at an 
 expense for freight of £2467 lis. lOd. 
 
 The plaintiffs brought this action with a count claiming for 
 a total loss of freight, and another count for £1145 3s. 6d. 
 under the suing and labouring clause for the charges and expenses 
 of conveying the cargo from Eio. The defendants contended 
 
 (6) (1873), L. R. 6 H. L., p. 99. This view seems to have been adopted in 
 America. " If the ship is rendered unnavigable, and cannot be repaired for the 
 prosecution of the voyage, and another can be procured within a reasonable time 
 and distance, and the master has means to procure such other at an expense 
 materially less than the amount of the freight for the voyage, the underwriter 
 on freight or profit is not liable to be prejudiced by the master's neglect to 
 tranship, and the loss will be adjusted as if the cargo had been transhipped and 
 forwarded, and will be partial or total according to the amount of the loss." 
 Phillips, sect. 1632; ITubbell v. Great Western Insurance Co. (1878), 74 N. Y., 
 p. 254 (Am.). 
 
 (c) (1885), L. K. 10 A. C, p. 418. 
 
116 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 that as the plaintiffs were able to forward the cargo by another 
 vessel at a cost substantially less than the entire freight, a partial 
 loss and not a total loss had been incurred, and that owing to 
 the warranty against particular average they were not entitled 
 to recover. No notice of abandonment was given. 
 
 Held that, when the vessel became a wreck at Eio, there would have 
 been a total loss of freight if the cargo had not been transhipped, 
 that the expenses of transhipment were charges within the 
 suing and labouring clause, and did not have the effect of making 
 the loss a partial loss. 
 
 According to this decision, if freight is in fact earned by tran- 
 shipping the cargo to its destination, there is no loss of freight either 
 total or partial, but the Court refrained from deciding whether the 
 shipowner must tranship the cargo, if in the circumstances tranship- 
 ment was the reasonable course to pursue. It intimated, however, 
 that " it is not unreasonable that if the owner of freight insured fails 
 to earn it by any default of his own, he should be disentitled to 
 recover it against the insurer," and in the case of Guthrie v. The 
 North China Insurance Company, (d) Vaughan Williams, L.J., 
 expressed the view that, if the shipowner failed to avail himself 
 of the right to tranship the cargo in a case in which a prudent un- 
 insured owner would have exercised the right, he cannot say that 
 the loss of the freight was occasioned by perils insured against. In 
 the case of Manchester Liners v. British & Foreign Marine Insurance 
 Company, (e) Walton, J., refused to express any opinion on the 
 point. " I desire to avoid expressing an opinion whether, in such 
 a case the loss would be a loss by perils of the seas, if the cargo could 
 be forwarded at an expense to the shipowner less than the freight 
 to be earned by forwarding it. But, if in such a case the loss is to 
 be treated as a loss by sea perils, it must, I think, be on the ground 
 that the freight insured was the freight arising from the carriage of 
 the cargo by the ship named in the policy, that this was lost by the 
 loss of the ship, and, therefore, by perils of the seas, and that the 
 right remaining in the shipowner to save as much as possible of the 
 money lost by forwarding the cargo in another vessel is in the nature 
 
 (d) (1902), 7 Com. Cas., p. 134. (e) (1901), 7 Com. Cas., p. 35. 
 
LOSSES UNDER THE POLICY 117 
 
 of salvage, to the benefit of which the underwriter is entitled on pay- 
 ment of a total loss." It is not easy to say which is the true view. 
 According to the Marine Insurance Act, (f) "it is the duty of the 
 assured and his agents in all cases to take such measures as may be 
 reasonable for the purpose of averting or minimising a loss," and 
 this provision seems to indicate that the assured must endeavour 
 to avert the loss by transhipping the cargo, if it is reasonable to do 
 so, and if by his neglect to adopt this course, the freight, which 
 might otherwise have been earned, is lost, the loss is to be attributed 
 to this neglect, {g) The position, therefore, seems to be that, where 
 the original vessel is lost the assured may give notice of abandonment 
 and may recover for a total loss of freight, if the notice of abandonment 
 is accepted or an action commenced before the freight has been 
 earned Qi) or could have been earned by transhipping the cargo. 
 If the notice of abandonment is not accepted and the action is not 
 commenced until after the freight has been earned or might have 
 been earned, (i) the assured cannot recover for a loss of freight, but, 
 if he has transhipped the cargo, he may recover under the suing and 
 labouring clause the reasonable expenses which he has incurred.(fc) 
 If notice of abandonment has been given and the assured, while 
 still persisting in the abandonment, endeavours to earn the freight 
 by transhipping the cargo, but is unable to do so by reason of perils 
 which are not covered by the policy, he will, it is submitted, never- 
 theless be entitled to recover for a total loss. The loss of the original 
 vessel by perils insured against entitled the assured to say that there 
 had been a loss of the freight under the policy, and that loss will 
 continue unless it is adeemed by freight being earned, (l) 
 
 (/) Sect. 78 (4). 
 
 (g) Cf. Stringer v. English Insurance Co. (1869), L. R. 4 Q. B., p. 691 ; per 
 Blackbubn, J., in Banhin v. Potter (1873), L. E. 6 H. L., p. 116. 
 
 (h) In Saltus v. Ocean Insurance Co. (1813), 12 Johns. R. 107 (Am.), a portion 
 of the cargo had been transhipped but had not arrived at the time of the action, 
 and no freight had at that date been received for it, and it was held that the 
 underwriters were not entitled to any allowance in respect of it. 
 
 (i) If the position is such that a prudent uninsured owner would not endeavour 
 to earn the freight by transhipping the cargo, the assured is not bound to do so. 
 8altus V. Ocean Insurance Co. (1815), 12 Johns. R. 107 (Am.) ; Whitney v. New 
 York Insurance Co. (1820), 18 Johns. R. 208 (Am.). 
 
 (k) Kidston v. Empire Insurance Co. (1867), L. R. 2 C. P. 357 ; Lee v. Southern 
 Insurance Co. (1870), L. R. 5 C. P. 397. 
 
 (/) In Bradhurst v. Columbia Insurance Co. (1812), 9 Johns. R. 17 (Am.), 
 where the policy was free of capture and seizure, and the transhipment was 
 
118 LAW RELATING TO THE INSUEANCE OP FREIGHT 
 
 If notice of abandonment is not given and the freight can be 
 earned by transhipping the cargo and forwarding it to its destination, 
 the assured must adopt this course. If the cargo is transhipped and 
 the freight earned, there will be no loss of freight, but the assured 
 will be entitled to recover the reasonable costs of transhipment under 
 the suing and labouring clause, (m) If the goods are not transhipped, 
 and the freight, which might have been so earned, is lost, the assured 
 will not be entitled to recover for the loss which is to be attributed 
 to his neglect. 
 
 Huhbell v. Great Western Insurance Company (1878), 74 N. Y. 
 246 ; 10 Hun. 167 (Am.), 
 
 was an action on a policy of insurance upon the freight of the 
 ship Tartar on a voyage from Calcutta to New York. 
 
 Facts. — The vessel went ashore about fifty miles from her port of 
 destination and proved a total loss. About two-thirds of her 
 cargo was taken out of her by a company called the Coast 
 Wrecking Company and transhipped on steamboats and safely 
 delivered at the port of destination, where it was sold and the 
 proceeds received by the insurers on cargo, to whom abandon- 
 ment had been made. There was no proof that the owner was 
 unable to tranship the cargo, or that the cost of transhipment 
 would have been excessive. 
 
 As to whether notice of abandonment had been given to 
 the underwriters on freight the evidence was conflicting, and 
 the judge instructed the jury that, if they found such abandon- 
 ment and that it was justified by the existing facts, the plaintiff 
 was entitled to recover as for a total loss. He further instructed 
 them that if there was no formal abandonment, but no part of 
 
 prevented by the seizure of the goods, it was held that the assured could not 
 recover, but in this case no notice of abandonment had been given. As to the 
 doctrine of ademption, see Halsbury, Bnoy., vol. 17, p. 479 ; Shepherd v. Henderson 
 (1881), L. R. 7 A. C, p. 49 ; M'lver v. Henderson (1816), 4 M. & S. 576 ; Oologan 
 V. London Assurance Co. (1816), 5 M. & S. 447 ; Holdsworth v. Wise (1828), 7 
 B. & 0. 794 ; Parry v. Aberdein (1829), 9 B. & C. 411 ; Lozano v. Janson (1859), 
 2 E. & E. 160. 
 
 (m) Kidston v. Empire Insurance Co. (1867), L. R. 2 C. P. 357. The costs of 
 transhipment will include those costs which are payable out of freight. Huhbell 
 V. Great Western Insurance Co. (1878), 74 N. Y., p. 255 (Am.). 
 
LOSSES UNDEE THE POLICY 119 
 
 the cargo reached the plaintiff at the port of destination, they 
 might still find for the plaintiff. The plaintiff recovered a 
 total loss. 
 
 Held that there must be a new trial on the grounds that the loss 
 of the original vessel did not necessarily involve a total loss of 
 the freight, that there was nothing to show that the assured 
 could not have earned the freight by transhipping the cargo, 
 and that in the absence of notice of abandonment he could not 
 treat the loss as a constructive total loss of freight. 
 
 Parmeter v. Todhunter (1808), 1 Camp. 541, 
 
 wag an action on a policy of insurance on the freight of the 
 ship Portsea, at and from Berbice to London. 
 
 Pacts. — The ship was captured, recaptured, and carried into Grenada, 
 where she was sold with the whole of the cargo. On November 
 9, 1807, news was received that the ship had been captured, 
 recaptured, and carried into Grenada, but no notice of abandon- 
 ment was given. 
 
 The plaintiff contended that in a case like this notice of 
 abandonment was not necessary, sed non allocatur, for the goods 
 might have been brought home in another ship, and so the 
 freight might have been earned. 
 
 If at the time of the casualty it is doubtful whether the cargo 
 can be transhipped and forwarded to its destination, the assured 
 should, in order to make certain his right to treat the loss of freight 
 as a total loss, give due notice of abandonment to the underwriters 
 on freight. " If the ship should be damaged as described, but cargo 
 which was on board has been saved under circumstances which leave 
 it doubtful whether such cargo might or might not be forwarded in 
 a substituted ship, it may be and I think the rule is, that in order 
 to make certain his right to recover as for a total loss on the policy 
 on freight, the assured should give notice of abandonment of the 
 chance of earning such substituted freight." (n) " Where goods are 
 
 (») Per Brett, J., in EanMn v. Potter (1873), L. R. 6 H. L., p. 102 ; M' Arthur, 
 Insurance, 2nd ed., p. 152, 
 
120 LAW RELATING TO THE INSURANCE OP FREIGHT 
 
 on board and the ship becomes a constructive total loss, the shipowner, 
 in order to claim for a constructive total loss on freight, must abandon 
 to the underwriters the right to hire another vessel and carry the 
 cargo to its destination and so earn the freight." (o) 
 
 If, however, it subsequently appears that the cargo cannot 
 reasonably be forwarded, the assured will, it is submitted, be entitled 
 to recover for a total loss although no notice of abandonment has 
 been given. By the loss of the original vessel there is a total loss 
 of the freight, unless it can be averted by forwarding the cargo in 
 another vessel, (p) If the cargo cannot be carried forward by any 
 means which the assured could be expected to employ ; if a prudent 
 uninsured owner would abandon the prospect of earning the freight 
 rather than run the risk and expense of trying to do so, and if from a 
 commercial point of view the loss could not have been averted, the 
 loss has never ceased to be a total loss, and for this the assured 
 should be entitled to recover, unless it is to be said that he is to 
 recover nothing, (g) 
 
 In the preceding remarks, when reference has been made to a 
 vessel being damaged to such an extent as not to be worth repairing, 
 it has been assumed that she has not been repaired. In such cases 
 the rights and obligations of the shipowner with regard to the con- 
 tract of affreightment and to the transhipment of the goods are the 
 same as in the case of an actual total loss of the vessel, (r) But it 
 may happen that the vessel, although damaged to such an extent as 
 not to be worth the cost of the repairs, is repaired either by the owner 
 or by the underwriters to whom she has been abandoned, or by the 
 purchaser to whom she has been sold. If the vessel is repaired by 
 the owner and completes the voyage and earns the freight, then, 
 
 (o) Per CocKBUEN, C.J., in Potter v. Ranhin (1870), L. R. 5 C. P., p. 371. 
 
 (p) Kidston v. Empire Insurance Co. (1867), L. R. 2 C. P., p. 367. 
 
 (q) Cf. Trinder, Anderson <fc Co. v. Thames, etc., Insurance Co., [1898] 2 Q. B., 
 p. 122. 
 
 {r) " That which in the language of maritime commerce constitutes a loss of 
 the ship, is damage to an extent which renders the ship not worth repairing, 
 followed by a determination not to repair. As respects her capacity to earn 
 freight, a ship in such condition is as much lost to the owner as if it had sunk or 
 broken up." Per Lush, J., in Ranhin v. Potter, cited by Mellok, J., in the 
 same case (1873), L. R. 6 H. L., p. 110 ; see also Moss v. Smith (1850), 9 C. B. 
 94 ; Thwing v. Washington Insurance Co. (1858), 10 Gray, 443 (Am.). 
 
LOSSES UNDEE THE POLICY 121 
 
 inasmuch as the freight has been earned by the assured, there is no 
 loss of freight, (s) 
 
 Benson v. Chapman (1849), 2 H. L. C. 696 ; 6 M. «fe G. 792 ; 
 5 C. B. 830 ; 8 C. B. 950 ; 13 Jur. 969 ; 81 E. E. 846, 
 
 was an action on a policy of insurance upon the freight of the 
 Lord Cochrane, at and from Pernambuco to Liverpool. 
 
 Facts. — The vessel struck upon a bank on leaving the harbour of 
 Pernambuco and had to put back. After several surveys had 
 been held, the master decided to repair, and the cost eventually 
 amounted to some £7000, a sum which exceeded the value o^ 
 the vessel. To discharge this sum money had to be borrowed, 
 and the master executed a bottomry bond pledging the ship, 
 freight, and cargo. When the plaintiff heard that the expenses 
 were likely to exceed the value of the vessel he gave notice 
 of abandonment to the underwriters on ship and freight, and 
 did not interfere in any way afterwards in respect of either ship 
 or freight. The ship, after loading the cargo, sailed again from 
 Pernambuco and arrived at Liverpool with the whole of the 
 original cargo. Upon the arrival of the ship, proceedings to 
 enforce payment were taken by the holders of the bottomry 
 bond in the Court of Admiralty, and under the order of that 
 Court the ship was sold and the proceeds of the sale and the 
 freight were paid to the holders of the bond. 
 
 The plaintiff brought an action for a total loss, and at the 
 trial before Erskine, J., a verdict was taken by consent for the 
 plaintiff subject to the opinion of the Court upon a special case, 
 it being agreed that the Court might draw all inferences which 
 in their opinion ought to be drawn by a jury. The Court of 
 Common Pleas appears to have thought that the vessel was a 
 constructive total loss and was justifiably abandoned by the 
 plaintiff, and that the assured was entitled to recover for a total 
 loss of freight. This judgment was reversed in the Court of 
 
 (s) If the vessel is repaired for the express purpose of carrying on the cargo 
 and earning the freight, the shipowner may be entitled to recover from the under- 
 writer the amount of expenses so incurred. He may also be entitled to recover 
 the costs of reshipping the cargo. 
 
122 LAW KELATING TO THE INSUEANCB OP FEEIGHT 
 
 Exchequer Chamber on the ground that the adventure had not 
 in fact been abandoned, and the freight had been earned and 
 would have been received by the plaintiff but for the fact that 
 a bottomry bond had been given for the cost of repairing the 
 ship. The case went to the House of Lords, where the judges 
 were summoned, and the decision of the Exchequer Chamber 
 was unanimously affirmed, and it was 
 
 Held that the plaintiff could not recover for either a total or partial (t) 
 loss of freight. 
 
 Is the result the same if the underwriter to whom the ship has 
 been abandoned or the purchaser to whom the ship has been sold, 
 effects repairs, completes the voyage and earns the freight ? " Cases 
 have occurred, upon ordinary policies on freight, in which, notwith- 
 standing the total loss of the vessel, actual or constructive, the 
 freight has yet been earned. In such cases, if it be earned whilst 
 the vessel is under the control of the owner, the underwriter upon 
 freight is discharged. Where the freight is earned after the owner 
 has ceased to have the control of the vessel and she has been abandoned 
 to the underwriter upon ship, it has been thought questionable how 
 far the underwriter on freight is liable ; and it may be open to con- 
 sider whether the freight ultimately earned, though not for the owner, 
 is to be considered as earned in the adventure assured and over which 
 he had control, or in a new adventure after his control has ceased." (m) 
 In the case of BanMn v. Potter, (x) Lord Colonsay expressed the 
 
 {t) " As to the sum of £569, which is alleged to be the proportion of the expenses 
 at Pernambuoo which the freight ought to bear, a question might have arisen if 
 the underwriters on freight had accepted the abandonment, and paid the total 
 loss claimed ; for then the freight having afterward? been received, if the under- 
 writers had claimed it as money had and received to their use, and could have 
 supported that claim, an attempt might have been made to deduct the £569 as 
 salvage of the freight ; but no such question arises in this action, in which the 
 sum insured is claimed as lost freight, not as money paid by way of average or 
 salvage, or in any other manner than as by loss of freight. The underwriters 
 upon this policy engage only that freight shall be earned, and it has been earned. 
 At all events, if by the terms of the policy any other contract can be considered 
 to be entered into, the declaration in this case is not adapted to such contract, 
 or to anything but loss of freight." Per Aldeeson, B., 2 H. L. C, p. 722. 
 
 (w) Per WiLLES, J., in Potter v. Rankin (1868), L. R, 3 C. P., p. 571. 
 
 (x) (1873), L. R. 6 H. L., p. 161, 
 
LOSSES UNDEE THE POLICY 123 
 
 opinion that the effect was the same whether the freight was earned 
 by the underwriter or by the owner of the vessel, and Brett, J., 
 seems to have thought that this result followed from the decision 
 in the case of Scottish Marine Insurance Company of Glasgow v. 
 Turner, (y) but he was careful-to place on record the fact that this 
 conclusion did not meet with his approval. " If from exceptional 
 facihties the underwriter on ship should repair the ship and earn full 
 freight on the voyage described in the poUcy on freight, such freight 
 would belong to the new owner of the ship ; none of it could go to 
 the assured or underwriter on freight ; but freight would have been 
 earned on the voyage insured in the poHcy on freight, and as the 
 insuring of the ship is the voluntary act of the shipowner, and the 
 abandonment is also his act, it has been decided in your Lordships' 
 House that in such exceptional case there is no loss at all of freight 
 for which the underwriter on freight is liable. If this had not been 
 a decision in your Lordships' House, I should have ventured to think 
 that a valid abandonment of ship was of the same effect as leaving 
 it a wreck, and that the real total loss of freight suffered by the 
 assured on freight was covered by the only policy which could cover 
 ■it, namely, the policy on freight." {z) In Canada and America it 
 has been held that the act of the underwriter to whom the vessel 
 has been justifiably abandoned iru making the repairs and earning 
 the freight, does not prevent the assured from recovering as for a 
 total loss of freight, and these decisions are, it is submitted, correct. 
 
 Coolidge & Gloucester Marine Insurance Company (1819), 15 
 Mass. E. 341 (Am.), 
 
 was an action on a policy of insurance on the ship General 
 Knox, and her freight, at and from Amsterdam to Philadelphia. 
 
 Pacts. — The vessel with goods on board sailed from Amsterdam, 
 but owing to tempestuous weather the vessel had to put into 
 Plymouth, where she was surveyed and found to be a construc- 
 tive total loss. The plaintiffs gave notice of abandonment to 
 
 {y) (1853), 1 Macq. 334 ; discussed, post, at p. 126. 
 
 (z) Rankin v. Potter (1873), L. R. 6 H. L., p. 100. See also Thiving v. Washing- 
 ion Insurance Co. (1858), 10 Gray, p. 461 (Am.). 
 
124 LAW KELATING TO THE INSUEANCE OF FEEIGHT 
 
 both sets of underwriters, those on ship and those on freight. 
 The abandonment of the ship was accepted ; the abandonment 
 of the freight was refused. The vessel was repaired and the 
 cargo, which had been taken out of her, was reladen and the 
 vessel earned the full freight on the voyage. 
 
 Held that the vessel after being repaired must be considered as a 
 new vessel, that the vessel upon which the goods were originally 
 laden was to be considered as much lost as if she was at the 
 bottom of the sea, and that as an event had happened which 
 prevented the old ship from carrying the goods to the port of 
 delivery, the plaintiffs were entitled to recover, (a) 
 
 Troop S Another v. The Merchants Marine Insurance Com'pany 
 (1886), 13 Sup. Can. E. 506 (Can.), 
 
 was an action on a policy of insurance on freight of the Behecca 
 Neily, at and from Arecibo to Acquim and thence to New York. 
 
 Pacts. — While on the voyage the vessel encountered heavy weather, 
 was dismasted, and towed into Guantanamo, where she was 
 found to be a constructive total loss and was abandoned. The 
 underwriters effected some temporary repairs, the cargo was 
 reladen and brought to New York. The plaintiffs claimed for 
 a total loss. 
 
 Held that there being a constructive total loss of the ship, the action 
 of the underwriters in making the repairs and earning the freight, 
 would not prevent the assured from recovering. 
 
 Similar decisions have been given in cases where, the original 
 vessel being a wreck, the cargo has been transhipped by the under- 
 writers or forwarded to its destination by some other means, but at 
 a cost exceeding the amount of the original freight. 
 
 (a) "If the ship had been sold and afterwards repaired by the purchaser, 
 and had earned freight, it would, in effect, have been a different adventure, and 
 a different ship." Per Pollock, C.B., in Chapman v. Benson (1847), 5 C. B., 
 p. 352. Of. Mount v. Harrison (1827), 4 Bing. .388. 
 
LOSSES UNDEE THE POLICY 125 
 
 Thwing v. Washington Insurance Company (1858), 10 Gray, 
 443 (Am.), 
 
 was an action on a policy of insurance for $5000 on the ship 
 Carolus, and on the freight of the said ship, on board or not on 
 board. 
 
 Facts. — On the homeward voyage from the Chincha Islands, the 
 vessel put, in a leaky condition, into Callao, where she was sur- 
 veyed and found to be a constructive total loss and was sold 
 by the master. Due notice of abandonment was given to the 
 underwriters on freight, but it was not accepted. The master 
 forwarded the cargo at a cost equal to the original freight, and 
 although it was not clear on whose behalf he was purporting to 
 act, it was held that he had no authority to do this on behalf of 
 the owner of the ship. The plaintiif claimed for a total loss, 
 which was resisted on the ground that there was no loss of freight 
 whatever, because the cargo had been transhipped and had 
 arrived safety at the port of destination, where the agreed price 
 for its carriage was paid by the consignee. 
 
 Held that the plaintiff could recover. 
 
 Bohertson <f Others v. Atlantic Mutual Insurance Company 
 (1877), 68 N. Y. 192 (Am.), 
 
 was an action on a policy of insurance upon the freight of the 
 brig Ocean Wave, at and from New York to Galveston. 
 
 Facts. — While on the voyage the vessel stranded on the bar, near 
 Galveston, in a storm and became a total wreck. As soon as 
 they heard of the casualty the plaintiffs informed the defendants, 
 and the latter, according to the finding of the Court, assumed 
 the burden of attempting to deliver the cargo. A portion was, 
 in fact, saved and delivered to the consignees, but at a cost 
 exceeding the amount of the original freight. The plaintiffs 
 claimed a total loss, which was resisted on the ground that a 
 portion of the cargo had actually been delivered and the freight 
 thereon collected. 
 
126 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 Held that the plaintiffs were entitled to recover as for a total loss.(&) 
 
 The view that the assured cannot recover, if freight has in fact 
 been earned although by the use of means which he could not reason- 
 ably have been expected to employ, can be traced to the decision in 
 the case of The Scottish Marine Insurance Company v. Turner, and 
 to the statement that " there is no instance to be found in which 
 an action for a total loss of freight has been held to be maintainable, 
 where the freight has been actually earned." (c) 
 
 The Scottish Marine Insurance Company of Glasgow v. Turner 
 (1853), 1 Macq. 334 (Sc.) ; 4 H. L. C. 312 ; 17 Jur, 631 ; 
 1 W. E. 527, 
 
 was an action on a policy of insurance on the freight of the ship 
 Laurel. 
 
 Facts. — While on a voyage from Quebec to Liverpool the vessel was 
 seriously damaged by an iceberg, but succeeded in reaching 
 Liverpool, where the cargo was dehvered and the freight received. 
 The vessel was subsequently surveyed and found to be so much 
 damaged as not to be worth repairing, and she was therefore 
 abandoned to the underwriters on the ship. The underwriters 
 refused to accept the abandonment, and the owners of the 
 vessel thereupon brought an action for a total loss, and in that 
 action it was held that they were entitled to recover for a 
 total loss, but were bound to account for the freight they had 
 received, {d) The owners, therefore, having been compelled to 
 surrender the freight received by them, brought this action 
 
 (6) The point was raised by the defendants in the case of Outhrie v. North 
 China Insurance Co. (1900), 6 Com. Cas. 25 ; (1902), 7 Com. Cas. 130 ; where the 
 cargo was salved by the Salvage Association acting on behalf of the various 
 underwriters, and carried to its destination, but no decision on the point was 
 given, as it was held that no freight was payable, the delivery of the cargo not 
 having been made under the contract of affreightment, which had been justifiably 
 abandoned. See also Rogers v. Nashville Marine Insurance Co. (1854), 9 Lou. 
 Ann. 537 (Am.). 
 
 (o) See per Aldbbson, B., in Benson v. Chapman (1849), 2 H. L. C, p. 721 ; 
 per Lord Ceanwobth, in Scottish Marine Insurance Co. v. Turner, p. 338 ; per 
 Lord Tetjeo, ibid., p. 340. 
 
 {d) Stewart v. The Greenoch Marine Insurance Co. (1848), 1 Macq. 328 (Sc). 
 
LOSSES UNDBE THE POLICY 127 
 
 against the underwriters on the freight for a total loss, contending 
 that as the underwriters on ship had been found entitled to the 
 freight, it must be considered as lost to the assured. 
 
 Held that the plaintiffs could not recover, as the vessel completed her 
 voyage and the freight insured was actually earned and received 
 by them, and but for their own subsequent act of abandoning 
 the vessel, they might have retained it. (e) 
 
 In this case the freight was actually received by the assured as 
 owners of the vessel, and their decision to abandon to the underwriters 
 on ship was not made until a later date. It is not surprising, there- 
 fore, that the House of Lords came to the conclusion that the freight 
 was lost to the assured, not by any of the perils insured against, but 
 by their own subsequent election to treat the vessel as having been 
 lost during the voyage. This decision has no application to a case 
 where the assured justifiably abandons the voyage, and the freight 
 is subsequently earned by reason of the transportation of the cargo 
 being completed by the use of means which the assured could not 
 reasonably be expected to employ, and the judgments of Lord Ckan- 
 WOETH and Lord Teuro emphasised the distinction between a case 
 of total loss and abandonment before the freight is earned, and the 
 circumstances with which they had to deal. " My Lords, where a 
 ship has received such injuries as entitle the owner to treat her as 
 totally lost, and where the owner consequently abandons her to the 
 underwriters, they come in as assignees ; and so are entitled to all 
 freight afterwards earned. It was to this state of circumstances 
 that TiNDAL, C.J., referred in Chapman v. Benson, where he said : 
 ' The assured has sustained a total loss of the freight if he abandons 
 the ship to the underwriters on ship, and is justified in so doing, for 
 after such abandonment he has no longer the means of earning the 
 freight or the possibihty of ever receiving it, if earned, such freight 
 going to the underwriters on ship.' But here the very learned 
 Chief Justice had in contemplation what was then treated as a total 
 loss and abandonment iefore the freight was earned. The distinction 
 between the case of Benson v. Chapman, according to what were 
 
 (e) For a similar decision, see Fiedler v. New York Insurance Co. (1857), 
 6 Duer. 282 (Am.). 
 
128 LAW EELATING TO THE IN8UEANCE OF FEBIGHT 
 
 supposed in the Court of Common Pleas to be the facts, and the 
 present case, is, that in Benson v. Chapman before any freight had 
 been earned there had been a damage so serious as to justify the 
 owner in treating it as a total loss and abandoning the ship to the 
 underwriters. Whereas in the present case the owners remained 
 in actual possession till after the freight had been earned, and earned 
 by reason of the ship having actually performed the voyage in 
 question. 
 
 " I do not apprehend that there is any doubt as to the soundness 
 of the doctrine laid down by Tindal, C. J., though the judgment of 
 the Court of Common Pleas was reversed by the Exchequer Chamber, 
 and that reversal was afterwards sustained by this House. There is, 
 however, a manifest and most important difference between the case 
 on which Tindal, C.J., was reasoning and the present. The Chief 
 Justice was referring to a case of loss and abandonment before the 
 freight had been earned. But in the case before your Lordships, 
 although, according to the verdict, the ship was totally lost, yet 
 there was no abandonment till after she had arrived in port, till 
 the owners were in a position to insist on the payment of freight, and 
 till that freight had in fact been received by them." (/ ) 
 
 Both Lord Cbanworth and Lord Trubo referred with approval 
 to the propositions of law laid down by Tindal, C.J., in the case of 
 Benson Y. Chapman (although, as they pointed out, the judgment was 
 based on an erroneous appreciation of the facts), and it becomes, 
 therefore, necessary to consider what were the propositions laid down 
 by the learned judge. " That there was a constructive total loss on 
 ship, seems not to have been made a question. . . . And there seems 
 to be as little doubt that the assured has the right of abandoning 
 the freight, where there has been a constructive total loss of the ship. 
 The assured has sustained a total loss of the freight, if he abandons 
 the ship to the underwriters on ship, and is justified in so doing ; 
 for, after such abandonment, he has no longer the means of earning 
 the freight, or the possibiUty of ever receiving it if earned, such freight 
 going to the underwriters on ship. In the present case, when the 
 ship was at Pernambuco, the cargo taken out, and the damage to the 
 ship very far exceeding her value, and such as the owner had no means 
 
 (/) Per Lord Cbanworth, p. 337 ; s6e also per Lord Trubo, p. 340. 
 
LOSSES UNDEE THE POLICY 129 
 
 of completing, except at a ruinous expense, if at that time he abandons 
 the ship to the underwriters, as the law allows him to do, the freight 
 is as much lost to him as if the ship had been captured and placed 
 altogether out of his control. ... If the master had actually sold 
 the ship at the time the damage was sustained, and the purchaser 
 had brought her back and earned the freight, there is no doubt but 
 that the owner could have recovered for a total loss after abandon- 
 ment." (g) 
 
 This decision of the Court of Common Pleas is authority for the 
 view that, where a vessel is damaged to such an extent as not to be 
 worth repairing, and abandonment is duly made to the underwriters, 
 the right of the assured to recover for a total loss of freight is not 
 defeated by the fact that freight has been earned by the vessel while 
 out of his control. (Ji) This decision had the approval of the House 
 of Lords in the case of The Scottish Marine Insurance Company of 
 Glasgow v. Turner, (i) and the conclusion, therefore, arrived by 
 Brett, J., (k) namely, that in the last-named case the House of Lords 
 had decided that if the underwriter on ship repaired the ship and 
 earned full freight there would be no loss of freight for which the 
 underwriters on freight would be Hable, is, it is submitted, erroneous. 
 
 This decision of the Court of Common Pleas in the case of Benson 
 V. Chapman is also an instance in which an action for a total loss of 
 freight has been held to be maintainable against the underwriters, 
 although the freight had actually been earned, so that it seems 
 inconsistent on the part of the House of Lords to approve (Z) both 
 the judgment of Tindal, C.J., in that case, and the statement of 
 Alderson, B., that " there is no instance to be found in which an 
 action for a total loss of freight has been held to be maintainable, 
 where the freight has been actually earned." (m) How is this 
 apparent inconsistency to be explained ? The explanation is, it is 
 submitted, to be found in the signification of the words " where the 
 freight had actually been earned," which mean, " where the freight 
 
 {g) (1843), 6 M. & G., pp. 810, 812. 
 (A) Cf. Dixon V. Reid (1822), 1 Dowl. & Ryl. 207. 
 (i) (1853), 1 Macq. 334 (Sc), ante, p. 126. 
 . (jfc) See ante, p. 123. 
 (I) See per Lord Truro in Scottish Marine Insurance Co. v. Turner (1853), 
 
 1 Maoq,, p. 340 (So.). 
 
 (m) Benson v. Chapman (1849), 2 H. L. C, p. 721, ante, p. 126. 
 
 I.P. K 
 
130 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 had actually been earned by the assured." This seems to follow from 
 the language used by Lord Ceanwoeth and Lord Teueo in other 
 parts of their opinions. " The underwriters on freight engaged that 
 the ship should not be prevented by perils of the sea from enabling 
 the owners to earn her freight. Nor was she so prevented ; for in 
 spite of those perils, she arrived in port under the conduct of the 
 owners, and they obtained payment of her freight." (n) " On the 
 ground, therefore that the contract of the underwriters on freight 
 was strictly performed, that the freight insured was actually earned 
 and received by the owners, and that, but for their own subsequent 
 act, they might have retained it against all the world, I have come to 
 the conclusion that the judgment below is erroneous," (o) 
 
 There is, therefore, it is submitted, no foundation for the view that 
 an assured cannot recover, if freight has in fact been received by a 
 purchaser or underwriter by the use of means which the assured 
 could not reasonably have been expected to employ. 
 
 It is further doubtful how far freight earned after a vessel has 
 been damaged to such an extent as not to be worth repairing and has 
 been abandoned, is the freight covered by the policy. When a 
 vessel is, owing to excepted perils, damaged to such an extent as 
 not to be worth repairing, the shipowner is entitled, as against the 
 freighter to abandon the voyage. By abandoning the voyage the 
 contract of affreightment is dissolved, (p) and the shipowner loses his 
 right to possession of the cargo, which the frdghter is entitled to 
 retake. If the underwriter on ship repairs the ship, reloads the cargo, 
 and delivers it to the consignee^, he is not making the delivery under 
 the contract of affreightment, because ex hypothesi the contract has 
 been dissolved, and if he collects any freight, that freight cannot be 
 the freight stipulated for in the contract of affreightment and covered 
 by the policy of insurance. "It is said that where the ownership 
 of the ship is transferred, either by sale or by abandonment to under- 
 writers, after the voyage has commenced, and where the goods which 
 have been shipped on board are carried to their destination by the 
 underwriters, the underwriters or the vendee of the ship can sue the 
 owner of the goods for freight. ... It does not seem to me that the 
 
 (n) Per Lord Ceanwoeth, L.C, 1 Macq., p. 336. 
 
 (o) Ibid., p. 338 ; see also per Dallas, C.J., in Idle v. Eoyal Exchaiige 
 Assurance Go. (1819), 8 Taunt., p. 779. 
 {p) See Carver, sect. 307. 
 
LOSSES UNDEE THE POLICY 131 
 
 payment of freight under these circumstances is made under the 
 original contract of affreightment. It is a payment for work and 
 labour done, and the original contract of affreightment, where it 
 exists, is invariably taken by the tribunal which tries the question 
 as the measure of the value of the work and labour done." {q) 
 
 The position is different where the cargo is forwarded to its 
 destination in a substituted vessel or by some other means. If the 
 original ship is, owing to excepted perils, lost or so much damaged 
 as not to be worth repairing, the shipowner is under no obligation 
 to repair, but he does not necessarily lose the benefit of his contract 
 of affreightment, as he may be able to forward the goods to the place 
 of destination by some other means, and thus earn the agreed freight. 
 That right on abandonment being made to the underwriters, passes 
 not to the underwriters on ship, (r) but to the underwriters on the 
 freight, (s) who are entitled to take, in the name of the assured, all 
 steps which the assured himself would have been entitled to take. 
 If therefore the underwriters decide to complete the delivery of the 
 cargo, the delivery would be under the contract of affreightment, 
 and the freight received would be the freight originally agreed. 
 But in this case, as has been seen, (t) if the cost of transhipping or 
 forwarding the goods is equal to or exceeds the amount of the original 
 freight, the underwriters would not be allowed to say that there had 
 been no loss of freight. When the ship was disabled the assured 
 was under no obligation to take for the benefit of the underwriters 
 steps, which a prudent owner uninsured would not have taken, {u) 
 The underwriters, therefore, if the cargo is not forwarded, cannot 
 complain that the loss which was at that time total was due to any 
 neglect or omission on the part of the assured, {x) and they cannot by 
 gratuitously intervening relieve themselves from a liabihty that had 
 already accrued, (y) 
 
 Lastly, it is necessary to consider the case of M'Carthy v. Abel, 
 
 (q) Per Bbett, M.R., in Sea Insurance Co. v. Hadden (1884), 13 Q. B. D., p. 715 ; 
 see also per Lord Ellenboeough in Case v. Davidson (1816), 5 M. & S., p. 82. 
 
 (r) Hickie v. RodocanacU (1859), 4 H. & N. 456. 
 
 (s) Sea Insurance Co. v. Hadden (1884), 13 Q. B. D. 706. 
 
 (t) See ante, p. 110. 
 
 («) Per Lord Tkueo in Scottish Marine Insurance Co. v. Turner (1863), 1 
 Maoq., p. 341 (Sc). 
 
 (a;) See per Lord Blackbuen in Rankin v. Potter (1873), L. R. 6 H. L., p. 116. 
 
 (y) Sailing Ship Blairmore Co., Ltd. v. Macredie, [1898] A. C. 693. 
 
132 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 which has been regarded as authority for the view that the earning 
 of freight on the voyage insured necessarily prevents the assured 
 from recovering as for a total loss. 
 
 M'Garthy and Others v. Abel (1804), 5 East. 388 ; 1 Smith, 524, 
 
 was an action on a policy of insurance on freight of the ship 
 Thomas, at and from Eiga to Plymouth. 
 
 Pacts. — The vessel was chartered to proceed to Eiga and there 
 load a cargo. After loading the cargo at Eiga, the vessel was 
 detained by the Eussian Government under an embargo, and 
 the cargo was taken out. The plaintiffs on receiving news of 
 this, abandoned to the underwriters on ship and freight. The 
 underwriters on the freight refused (z) to accept the abandon- 
 ment ; the underwriters on ship accepted it and paid a total 
 loss. The vessel was subsequently released, and the cargo was 
 again put on board and the vessel arrived at Plymouth, where 
 the freight was collected by the underwriters on ship. The 
 plaintiffs then brought this action against the underwriters to 
 recover a total loss of freight. 
 
 Held that the plaintiffs could not recover. 
 
 Judgment. — ^Lord Ellenborough, C.J. : " It the question which 
 arises upon this case be stripped of all extraneous circumstances 
 and considerations, it appears to us to resolve itself into this 
 single point, viz. whether the freight has been in this case lost 
 or not ? If the fact be merely looked at, freight in the events 
 which have happened has not been lost, but has been fully 
 and entirely earned and received by or on behalf of the plaintiffs 
 the assured : and if so no loss can be properly demandable 
 against the underwriters on freight, who merely insure against 
 the loss of that particular subject by the assured. But if it 
 have, or can be considered as having, been in any other manner 
 or sense lost to the owners of the ship, it has become so lost to 
 them, not by means of the perils insured against, but by means 
 
 {z) According to the headnote in 5 East, the underwriters on freight accepted 
 the abandonment, but this is obviously a mistake. 
 
LOSSES UNDEE THE POLICY 133 
 
 of an abandonment of the ship, which abandonment was the 
 act of the assured themselves, with which therefore, and the 
 consequence thereof, the underwriters on freight have no con- 
 cern. It appears to us therefore that quacunque via data, 
 that is, whether there has been no loss at all of freight, or being 
 such, it has been a loss only occasioned by the act of the plaintiffs 
 themselves, that they are not entitled to recover ; and that 
 therefore a nonsuit must in that case be entered," 
 
 In this case the freight was earned, and t|ie freight earned was the 
 original freight. The embargo did not put an end to the contract 
 of affreightment, (a) and the contract was not treated by the parties 
 to it as at an end. The vessel was not a cbnstructive total loss,(fe) 
 and the agreement between the shipowner and the underwriter on 
 ship to treat her as a constructive total loss could not make her one. 
 The contract of affreightment was in fact performed and the freight 
 was earned, but instead of being paid to the shipowner was by agree- 
 ment paid to the underwriters on ship. In view of these facts it is 
 not surprising that the Court held that either the freight insured 
 had not been lost, or if it had been lost to the assured, that it had 
 been lost by his own voluntary action. The position which arose 
 in the case of M'Carthy v. Abel is quite different from the position 
 which arises when a vessel is wrecked or damaged to such an extent 
 as not to be worth repairing and the cargo cannot be transhipped. 
 In the latter case the completion of the voyage and the earning of 
 the freight become commercially impossible in consequence of the 
 damage to the vessel ; in the former case the voyage was only tem- 
 porarily suspended and the earning of the freight, if lost to the 
 assured, was lost in consequence of his voluntary action in agreeing 
 to treat the vessel as a constructive total loss. 
 
 (a) See Beale v. Thompson (1804), 4 East, 546. puoh an embargo would now 
 probably be held to put an end to the contract. See Embiricos v. Beid, [1914] 
 3 K. B. 45. 
 
 (6) It has been said that an embargo entitles the assured to abandon, but 
 this view, it is submitted, is not sound, unless the embargo is Ukely to be of long 
 and indefinite duration (Phillips, sect. 1620). The- vessel in M'Carthy v. Abel 
 is often treated as having been a constructive total loss, but it the delay only 
 caused a suspension of the adventure, and would not have entitled the shipowner 
 to abandon the voyage, it could not have entitled -him to abandon the vessel. 
 See. per Dallas, C.J., in Idle v. Boyal Exchange Assurance (1819), 8 Taunt., p, 
 779. 
 
134 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 If a vessel becomes a constructive total loss, and is abandoned 
 by the owner to the underwriters, who accept the abandonment, 
 repair the vessel, and carry on the cargo or are able and ready to 
 do so, this is not, it has been said,(c) a total loss of freight as regards 
 a charterer, who has paid freight in advance, and effected insurance 
 thereon, (d) 
 
 The foregoing remarks have applied to cases where the vessel 
 has been lost, or damaged to such an extent as not to be worth repair- 
 ing. Where the vessel can be repaired at a reasonable cost so as to 
 carry on the cargo within a reasonable time to the port of destination 
 and thus earn the freight, the shipowner is entitled to retain possession 
 of the cargo for the purpose of completing the voyage, and if he fails 
 to do so and thereby loses the freight, he cannot hold the under- 
 writer liable, as the freight in such case would be lost by his default, 
 and not by any of the perils insured against, (e) "It is now well 
 settled by a series of cases, that if a vessel is damaged by one of 
 the perils insured against, and in consequence thereof is obliged to 
 put back or seek a port of refuge, and unlade and repair, the master, 
 if he can refit his ship and proceed in a reasonable time, may retain 
 the cargo and carry it to its place of destination, and wiU then earn 
 his full freight. If, therefore, he voluntarily relinquishes the right 
 to do so, by giving up the cargo to the shippers, he loses the right of 
 earning the freight on that particular cargo, by such voluntary 
 act, and not by one of the perils insured, and therefore the under- 
 writers on freight are not answerable." (/) 
 
 The right of the shipowner to retain the goods while repairs are 
 being effected is well established. "If a freighted ship becomes 
 accidentally disabled on its voyage (without the default of the master) 
 the master has his option of two things ; either to refit it (if that can 
 be done within a convenient time), or to hire another ship to carry the 
 goods to the port of delivery." (g) " Where a ship is damaged and 
 
 (c) Phillips, 3rd ed., sect. 1640 ; Parsons, Insurance, vol. 2, p. 166. 
 
 (d) But see Gurrie v. Bombay Native Insurance Co, (1869), L. R. 3 P. C, p. 83 ; 
 and per Bkett, M.R., in Sea Insurance Co. v. Hodden (1884), L. R. 13 Q. B. D., 
 p. 715. 
 
 (e) Amould, sect. 1172; Phillips, sect. 1633; Parsons, Insurance, vol. 2, p. 163. 
 (/) Per Shaw, C.J., in M'Qaw v. The Ocean Insurance Company (1839), 
 
 23 Pick., p. 412 (Am.). 
 
 (g) Per Lord Mansitield in Liuhe v. Lyde (1759), 2 Burr., p. 887 ; see also 
 Cargo ex Oalam (1863), 2 Moo. P. 0. (n. s.), p. 229 ; Blasco v. Fletcher (1863), 
 
LOSSES UNDEE THE POLICY 135 
 
 obliged to put into an intermediate port for repairs, it is the duty 
 as well as the right of the shipowner, if he can repair his ship without 
 unreasonable sacrifice, and within a reasonable time, to repair his 
 ship and carry the goods to their destination. This is the purpose 
 for which he has been entrusted with the cargo, and this purpose 
 he is bound to accompUsh by every reasonable and practicable 
 method." Qi) 
 
 This right of the shipowner to retain the cargo, while repairs are 
 being effected, and his obHgation to do so, are governed by the con- 
 siderations whether the repairs can be effected so as to carry on the 
 cargo to the port of destination within a reasonable time, and at 
 a reasonaWfe cost. What is meant by a reasonable time ? The 
 expression is not easy to define, but a similar meaning must be given 
 to the word reasonable in this conjunction to that given to it in 
 the expression " reasonable cost." If the delay is from a business 
 point of view unreasonable, is such that in a commercial sense the 
 commercial speculation of the parties cannot be carried out, and the 
 adventure contemplated by the contract of affreightment becomes 
 impossible of fulfilment, the contract of affreightment is dissolved 
 and the shipowner loses his right to retain the cargo, (i) If under 
 such circumstances he redelivers the cargo to the freighter and loses 
 his freight, the loss cannot be attributed to his voluntary action in 
 giving back the goods, because ex hypothesi he had lost the right to 
 retain them, and if the damage to the vessel and the resulting delay 
 were due to perils covered by the policy, he will be entitled to recover 
 from the underwriters for the loss of freight thus caused. The 
 existence of this principle in cases where the cargo has not yet been 
 loaded is well established, (/c) but it has been said that where the cargo 
 is already on board, very different considerations arise.(Z) But those 
 
 14 C. B. (ST. s.) 147 ; The SoUomsten (1866), L. R. 1 A. & E., p. 297 ; Assicurazioni 
 Generali v. S.S. Bessie Morris Co., [1892] 1 Q. B., p. 579. 
 
 (h) Per Kennedy, J., in Hansen v. Dunn (1906), 11 Com. Cas., p. 102. 
 
 (i) See Scrutton, 6th ed., pp. 83 — -88, and cases there cited ; cf . Rodoconachi 
 V. Elliott (1874), L. R. 9 C. P. 622 ; Crump, Insurance, p. 124. 
 
 (k) Jackson v. Union Marine Insurance Co. (1874), L. R. 10 C. P. 125 ; 
 Jamieson r. The Newcastle S.S. Freight Insurance Association, [1895] 2 Q. B. 90 ; 
 NickoU V. Ashton, [1901] 2 K. B. 126. 
 
 (l) Per Lord Blackbubn in Dahl v. Nelson, (1881), L. R. 6 A. C, p. 53 ; see 
 also per Collins, J., in Ben^saude v. Thames & Mersey Insurance Co. (1896), 
 75 L. T., p. 156. 
 
136 LAW EELATING TO THE INSUEANCE OF PEEIGHT 
 
 considerations are considerations of fact, (m) and the principle of 
 law remains the same whether the contract of affreightment is still 
 executory or not. {n) 
 
 What delay will cause a frustration of the adventure ? Under 
 ordinary circumstances a delay for the purpose of repairing the 
 vessel of six,(o) twelve,(p) or fourteen (q) days, or three (r) or six (s) 
 weeks, or of two (t) and even four (w) months, will not have this 
 effect, but no definite time can be prescribed. The circumstances of 
 each case, the nature of the trade and voyage upon which the vessel 
 is engaged must be considered, (a;) Thus in a case where the voyage 
 was a short river trip of about seven or eight days, the view was 
 expressed that the shipowner would not be justified in detaining a 
 cargo for a month or six weeks in order to make the necessary repairs 
 and continue the trip.(2/) On the other hand, where a vessel took a 
 cargo late in the season for transportation around the Lakes, and 
 owing to the closing of navigation could not be repaired until the 
 following spring, it was held that the shipowner was entitled to 
 retain the cargo, and could not recover from the underwriters for 
 a loss of freight due to his failure to do so. (2) 
 
 (m) See per Graham, J., in Musgrave v. Mannheim Insurance Co. (1899), 
 32 Nova Sootia R., p. 423 : Embiricos v. Beid, [1914] 3 K. B. 45. 
 
 (m) Owen v. Outerhridge (1896), 26 S. C. R. 272 (Can.). See per Kennedy, J., 
 in Hansen v. Dunn (1906), 11 Com. Cas., p. 102 ; Embiricos v. Beid (1914), 
 3 K. B. 46. 
 
 (o) Griswold v. New York Insurance Co. (1806), 1 Johns. B. 206 ; (1808), 
 
 3 Johns. R. 321 (Am.). 
 
 (p) Tronson v. Dent (1856), 8 Moo. P. 0. 419. 
 
 (q) Herbert v. Hattett (1802), 3 Johns. Cas. 93 (Am.). 
 
 (r) Allen v. Mercantile Mutual Insurance Co. (1871), 44 N. Y. 437 (Am.). 
 
 («) Jordan v. Warren Insurance Co. (1840), 1 Story, 342 (Am.) ; Ogden v. 
 General Mutual Insurance Co. (1863), 2 Duer. 204 (Am.) ; Assicurazioni OeneraU 
 V. S.S. Bessie Morris Co., [1892] 1 Q. B. 671. 
 
 (t) Saltus V. Ocean Insurance Co. (1817), 14 Johns. R. 138 (Am.). Clarlc v. 
 Mass. Fire Insurance Co. (1824), 2 Pick. 104 (Am.). 
 
 (u) M'Oaw V. Ocean Insurance Co. (1839), 23 Pick. 405. 
 
 (x) Per Kent and Radoltbtb, JJ., in Herbert v. Hallett (1802), 3 Johns. Cas. 
 93 (Am.). Per Pake, J., in M' Andrew v. Adams (1834), 1 Bing. N. C, p. 41 ; 
 per Manisty, J., in Adamson v. Newcastle Insurance Association (1879), L. B. 
 
 4 Q. B. D., p. 465. 
 
 (y) Boe V. Crescent Mutual Insurance Co. (1866), 11 Lou. Ann. 408 (Am.); 
 Blanks v: Hibemia Insurance Co. (1884), 36 Lou. Ann. 599 (Am.) ; Field v. 
 Citizens Insurance Co., 11 Mo. 50 (Am.) ; Parsons, Insurance, vol. 2, p. 163. 
 
 («) Murray v Aetna Insurance Co. (1864), 4 Biss. 417 (Am.) ; see also Braith- 
 waite V. Power, 48 N. W. R. 354. " A shipment by water on the verge of winter 
 
LOSSES UNDEE THE POLICY 137 
 
 If the cargo be of a perishable nature, and so damaged as to 
 become perishable, and would in all probability perish before the 
 repairs could be effected or the voyage completed, the shipowner 
 loses his right to retain it. (a) " If the repairs at the port of distress 
 would take so long that the cargo cannot endure the delay,'' but would 
 in all probability perish before it could arrive at the port of destination, 
 then as the shipowner would in that event not earn freight in respect 
 of the goods not arriving in specie, the reason for the lien would 
 not continue to exist." (b) The object of the adventure from the 
 freighter's point of view is to have his goods carried to the port of 
 destination, and the object of the adventure from the shipowner's 
 point of view is to earn freight by performing that service for the 
 freighter, (c) If the goods are detained while the repairs to the vessel 
 are being effected, they will never be able to arrive in specie. The 
 freighter will lose his goods, and the shipowner will lose his freight, (d) 
 Owing to the damage, therefore, and the consequent necessity for 
 repairs, the mercantile adventure contemplated by the contract 
 of affreightment is frustrated, and if in such a case the damage was 
 due to any of the perils insured against, the assured will be entitled 
 to recover from the underwriters for the resulting loss of freight, 
 
 Musgrave v. The Mannlieim Insurance Company (1899), 32 
 Nova Scotia Eep. 405, 
 
 was an action on a policy of insurance on freight of the steamship 
 Tyrian, at and from Halifax to Havana. 
 
 Pacts. — While on the voyage the vessel was severely damaged by 
 perils of the sea and put into the port of Hamilton, Bermuda, 
 for repairs. Owing to the length of time, which the repairs 
 would take, it was feared that the cargo, which was undamaged 
 and consisted of potatoes and dry fish, would perish, and as it 
 
 must be understood by both parties to be subject to the risks of delay from the 
 closing of navigation, nothing to the contrary appearing in their contract," Cf. 
 Metcalfe v. Britannia Ironworks Co. (1877), L. R. 2 Q. B. D. 423. 
 
 (a) Maclaohlan on Shipping, 5th ed., 479. 
 
 (6) Per King, J., in Owen v. Outerbridge (1896), 26 S. C. R., p. 276 (Can.). 
 
 (c) See per Bkett, J., in Hudson v. Hill (1874), 43 L. J. C. P., p. 279, 
 
 (d) See DutUe v. Hilton (1868), L. R. 4 C. P. 138 ; Asfar v. Blundell, [1896] 
 1 Q. B. 123. 
 
138 LAW EELATING TO THE INSURANCE OF EEEIGHT 
 
 could not be transhipped and forwarded to Havana except at 
 a cost considerably in excess of the original freight, the ship- 
 owner redelivered it to the freighters without demanding any 
 freight. He thereupon claimed to recover from the defendants 
 for a total loss of freight/ and the jury found that owing to the 
 necessary delay in repairing the vessel, the cargo would cease 
 to exist in specie before it could arrive at Havana. 
 
 Held that the adventure having been frustrated by a peril insured 
 against, there was a total loss of the freight, (e) 
 
 If the cargo can be reshipped so as to arrive in specie,( / ) although 
 so damaged as to be of little value, the shipowner is, according to a 
 series of American decisions, (^f) entitled to retain it. If, therefore, 
 instead of so doing, he delivers it to the freighter, he cannot claim 
 from the underwriters on freight for a loss which was caused, not 
 by any of the perils insured against but by his own voluntary action.(/i) 
 
 Herbert v. Hallett (1802), 3 Johns. Cases, 93, 
 
 was an action on a policy of insurance on freight of the brig 
 Eliza from New York to Havana. 
 
 Facts. — Shortly after leaving New York the vessel was driven on 
 shore. The cargo was taken out and brought to New York, 
 and two or three days later the vessel was also brought back, 
 
 (e) Graham, J., discusses the authorities in his judgment. Of. The Isabella 
 (1801), 4 C.Rob. 77. 
 
 (/) The term "in specie" is to be construed in a business sense. Goods 
 which have become unmerchantable so that they cannot be dealt with by business 
 people as the things which they originally were, are considered to have lost 
 their species. See per Lord Esheb, M.R., in Asfar v. Blundell, [1896] 1 Q. B., 
 p. 128. 
 
 (g) There is no English authority to the effect that under such circumstances 
 the shipowner has the right to retain the cargo. In Tronson v. Dent (1853), 
 8 Moo. P. C, pp. 449 — 459, it was laid down that it was the duty of the ship- 
 owner to carry the cargo to the place of destination, if it could be carried to its 
 destination in a merchantable state, although very much damaged. See also 
 Notara v. Henderson (1872), L. R. 7 Q. B. 225. 
 
 (h) M'Oaw V. Ocean Insurance Co. (1839), 23 Pick., p. 412 (Am.) ; Ogden v 
 General Mutual Insurance Co. (1853), 2 Duer. 215 (Am.) ; Lord v. Neptune Insur- 
 ance Co. (1857), 10 Gray, p. 120 (Am.) ; Allen v. Mercantile Mutual Insurance 
 Go. (1871), 44 N. Y., p. 441 (Am.). 
 
LOSSES UNDEE THE POLICY 139 
 
 and repaired at a small expense within two or three weeks. The 
 cargo was damaged, but there was no clear evidence as to the 
 extent of the damage, or what exactly was done with it. When 
 the repairs to vessel were completed, the plaintiff proceeded on 
 a different voyage. 
 
 Held that the plaintiff " had no right to recover, as he ought to have 
 insisted on carrying on the goods, so as to entitle himself to the 
 freight ; and having lost the freight by his neghgence or folly, 
 the insurers were not liable." 
 
 Grisiuold V. The New Yorh Insurance Compamj (1806), 1 Johns. 
 E. 205 ; (1808) 3 Johns. E. 321, 
 
 was an action on a policy of insurance on the freight of the ship 
 Gulloden, at and from New York to Barcelona, with liberty to 
 touch at Gibraltar. 
 
 Pacts. — While endeavouring to get out of New York harbour the 
 vessel stranded and had to put back to New York for repairs, 
 which were effected in about six days, at a cost of one hundred 
 and fifty dollars. The cargo, which consisted of flour, was greatly 
 damaged and was redelivered to the freighters. It was not in a 
 fit condition to be reshipped, and, if this course had been adopted, 
 it would have been valueless at Barcelona, but there was no 
 evidence to show that it would then have ceased to exist in 
 specie. The plaintiffs gave notice of abandonment. 
 
 Held that they were not entitled to recover, as they ought to have 
 insisted on carrying on the cargo, and run the risk of it arriving 
 in specie at the place of destination. 
 
 Saltus V. The Ocean Insurance Company (1817), 14 Johns. E. 138, 
 
 was an action on a policy of insurance on the freight of the ship 
 Nancy, at and from New York to Lisbon. 
 
 Facts. — During the voyage the vessel encountered a very violent 
 storm and was so much damaged that she had to put into New- 
 port for repairs, which took about two months. The cargo, which 
 
140 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 consisted of rye flour and Indian corn, was not in a state to bear 
 transportation and required great care to preserve it from further 
 deterioration, but there was no evidence as to whether it could 
 have been carried to Lisbon so as to arrive in specie. It was, 
 however, unshipped and sold. During the course of the voyage 
 a small portion of the cargo had been jettisoned. 
 
 Held that, except as to freight payable in respect of the portion 
 jettisoned, the plaintiffs could not recover. 
 
 M'Gaw V. The Ocean Insurance Company (1839), 23 Pick. 405 
 (Am.), 
 
 was an action on a policy of insurance on the freight of the ship 
 Choctaw, at and from New Orleans to Havre. 
 
 Facts. — Soon after leaving New Orleans the vessel ran aground and 
 had to be brought back for repairs, which took some three or 
 four months. The cargo, which consisted of tobacco and 
 cotton, was unladen. The greater portion of the tobacco had 
 been wetted and had actually decayed, but the rest of tBe cargo, 
 although damaged, could have been forwarded to its destina- 
 tion in specie. The master, however, believing that his vessel 
 could not be repaired so as to carry it forward in a reasonable 
 time, redelivered it to the consignor. 
 
 Held that, except as to the freight of the tobacco which had decayed, 
 the plaintiff could not recover, because he might have retained 
 it to be transported in his own vessel, and was not bound to give 
 it up without receiving full freight on it. 
 
 Hugg and Another v. Augusta Insurance and Banking Company 
 (1849), 7 How. 595 ; (1851), Taney, 159 (Am.), 
 
 was an action on a policy of insurance on the freight of the bark 
 Margaret Hugg, at and from Baltimore to Eio Janeiro and back 
 to Havana. 
 
 Pacts. — During the voyage the vessel ran ashore and had to put into 
 Nassau for repairs. The cargo consisted of jerked beef. A 
 
LOSSES DNDEE THE POLICY 141 
 
 portion of it was jettisoned at the time of the accident, a portion 
 was so much damaged by sea water that the authorities at 
 Nassau refused to allow it to be landed, and the balance was 
 landed and sold. At the first trial, the Court was divided in 
 opinion upon the question of law, and the case was taken to the 
 Supreme Court. That Court laid down that the plaintiffs 
 could not recover for a total loss if the vessel could have been 
 repaired in a reasonable time and at a reasonable expense so 
 as to perform the voyage, or if another vessel could have been 
 procured and the beef could have been conveyed in specie to 
 the port of destination. At the subsequent trial — 
 
 Held that the plaintiffs could recover. 
 
 Ogden v. The General Mutual Insurance Company (1853), 2 Duer. 
 204 (Am.), 
 
 was an action upon a time policy of insurance upon freight of the 
 St. Patrick against total loss only. The policy provided that the 
 defendants should not be liable for any partial loss whatever, 
 nor for general average. 
 
 Facts. — While on a voyage from New York to Liverpool the vessel 
 was damaged and had to put back to New York, where she was 
 repaired in about six weeks. The cargo, which was a general 
 one belonging to different shippers, with the exception of a 
 portion that had been jettisoned, and a further portion that was 
 so seriously damaged as not to be fit to be forwarded, was tran- 
 shipped and forwarded to Liverpool at an increased freight. 
 When the vessel was repaired, she took in a further cargo for 
 Liverpool at a higher rate of freight than that originally 
 agreed. 
 
 Held that the master might have entitled the plaintiff to freight 
 upon the undamaged goods by retaining them and carrying 
 them forward in his own vessel, and that as the insurance was 
 upon the whole freight as one integral subject, and not upon the 
 separate items of freight, there was not a total loss under the 
 policy. 
 
142 LAW EELATING TO THE INSUEANCE OE FEEIGHT 
 
 Murray v. Aetna Insurance Company of Hartford (1864), 4 Biss. 
 417 (Am.), 
 
 ' was an action on a policy of insurance on freight, at and from 
 Chicago to Kingston. 
 
 Facts. — During the voyage which began late in the autumn the vessel 
 was damaged and had to be towed into the port of Goderich 
 in Canada for repairs, which could not be completed until the 
 opening of navigation in the following spring. The greater 
 part of the cargo was undamaged, and could, in spite of the 
 delay, have been carried to the port of destination in specie, 
 but it was sold. In the action to recover the freight thereby 
 lost. 
 
 Held that the delay, in view of the nature of the voyage, would not 
 have been unreasonable, and the loss, therefore, of the freight was 
 not in consequence of a peril of the sea, but of the voluntary 
 act of the master. 
 
 Allen V. The Mercantile Mutual Insurance Comfany (1871), 
 44 N. Y. 437 (Am.), 
 
 was an action on a policy of insurance on freight of the brig 
 Bio Grande, at and from Cleveland to Ogdensburg. 
 
 Facts. — The vessel sailed with a full cargo of flour and wheat from 
 Cleveland on November 24, 1863, and on the following day 
 stranded at the mouth of the Welland Canal. The cargo, which 
 was wet and damaged, was taken out and the vessel was taken 
 to Buffalo, where she was repaired in about three weeks, but by 
 that time the Welland Canal was closed with ice. The canal 
 would not have been open for navigation until the following 
 spring, and in the meantime the damaged cargo, although 
 existing in specie, would have become worthless, and as there 
 were no means of forwarding it to Ogdensburg except at an 
 expense greater than the original freight,theshipowner redelivered 
 it to the shipper without demanding freight. In an action 
 brought to recover the freight so lost. 
 
LOSSES UNDEE THE POLICY 143 
 
 Held that he could not recover, as the delay caused by the repairs 
 and the closing of navigation did not terminate or dissolve the 
 contract of affreightment, and the shipper was not entitled to 
 the redelivery of his goods without payment of the full freight. 
 
 According to these decisions the question in each case is, whether 
 the goods can arrive in specie ; and the individual interest of the 
 pargo owner or the object which he had in view when making the 
 shipment is not an element to be considered. " The interest of the 
 insured or of the underwriter of the cargo is not taken into the 
 account, nor in any way regarded in determining whether or not a 
 total loss of the freight has happened from any of the perils insured 
 against, but whether there has been a destruction of the entire cargo 
 in specie, or such damage received as would inevitably prevent the 
 arrival of any portion of it in specie at the destined port." {%) 
 " Nothing is better founded in the law on this subject, than that the 
 shippers are bound to pay the full freight for the voyage, if the cargo 
 is carried to the port of destination, and specifically remains, not- 
 withstanding at its arrival it is, by reason of sea damage utterly 
 ruined and worthless. This doctrine, although formerly a matter of 
 some doubt, is now firmly established, and indeed, must be mani- 
 festly correct upon principle. It is as clear that after the shipment 
 of the cargo on the voyage the shippers have no right to demand it 
 at any intermediate port short of the port of destination, without 
 payment of the full freight for the voyage whether the cargo arrive 
 there in a damaged or in an undamaged state. The reason is obvious. 
 The master has a right to carry on the cargo to the port of destination ; 
 and if his ship be capable, either then or within a reasonable time, of 
 carrying the cargo to the port of destination, there is no ground to 
 say that he is not entitled to earn a full freight ; and the shippers of 
 the cargo cannot insist upon changing the original contract in 
 invitum and cut him off from all freight, or dismiss him with a 
 fro rata freight. The contract of the shipowner is to carry the 
 cargo to the port of destination, but he by no means warrants the 
 state in which it shall arrive, as it may be affected by the perils of 
 
 (i) Per Nelson, J., in Hugg v. Augu&ta Insurance Co. (1849), 7 How., p. 608 
 (Am.) ; Griswold v. New York Insurance Co. (1808), 3 Johns. K., p. 328 (Am.) ; 
 M'Gaw V. Ocean Insurance Co. (1839), 23 Pick., p. 413 (Am.) ; Ogden v. General 
 Mutual Insurance Co. (1853), 2 Duer., p. 220 (Am.) ; Lord v. Neptune Insurance 
 Co. (1857), 10 Gray, p. 121 (Am.). 
 
144 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 the seas, or other perils, against which his contract does not bind 
 him. It is no answer to say, that if the cargo is carried on in a 
 damaged state, it will be ruined. The true reply is, that the ship- 
 owner has nothing to do with that ; and that the shippers have no 
 right to throw the loss of freight upon him because the cargo is in 
 danger of ruin by a calamity against which he did not warrant 
 them." (fc) 
 
 Clark V. Massachusetts Fire & Marine Insurance Company 
 (1824), 2 Pick. 104 (Am.), 
 
 was an action on a policy of insurance on the freight of the 
 barque American, at and from Eichmond to Nice, and at and 
 from thence to Malaga. 
 
 Pacts. — In the course of the voyage the vessel was damaged and had 
 to put into the port of Kennebunk, where it was found that 
 the repairs would take about two months. The cargo consisted 
 of tobacco, which was intended by the shippers for the November 
 concours, and this object would have been defeated by the 
 delay occasioned by the repairs of the vessel. It was, therefore, 
 redelivered to them by the plaintiff and the freight thereby 
 lost. 
 
 Held that the plaintiff could not recover, as he might have detained 
 the tobacco for the purpose of earning the freight, while the 
 repairs to the vessel we!re being effected. (I) 
 
 Where the repairs to the ship cannot be effected so as to carry on 
 the cargo to the port of destination within a reasonable time, (m) 
 then, subject to the shipowner's right to tranship for the purpose of 
 earning the freight, the contract of affreightment is dissolved, and 
 if there is no chance of an opportunity of the cargo being forwarded 
 except, perhaps, at a cost which would be equal to or would exceed 
 
 (k) Per Story, J., in Jordan v. Warren Insurance Co. (1840), 1 Story, p. 353 
 (Am.). 
 
 (I) a. Hvdson V. Hill (1874), 43 L. J. 0. P. 273 ; Waugh v. Morris (1873), 
 L. R. 8 Q. B., p. 207 ; Cargo ex Argos (1873), L. E. 5 P. C, p. 162. 
 
 (to) See ante, p. 135. 
 
LOSSES UNDEE THE POLICY 145 
 
 the amount of the original freight, and no chance of obtaining a sub- 
 stituted cargo on the insured voyage, there is an actual total loss of 
 freight, and the assured need not give notice of abandonment. {%) 
 At the time of the accident,- however, it may be difficult to decide 
 whether the repairs can be effected so as to carry on the cargo within 
 a reasonable time, and the freight thereby earned. As between the 
 shipowner and the freighter a reasonable time is allowed in which to 
 decide this question, (o) but if there is no reasonable prospect of 
 the cargo being so carried on, the parties are not bound to wait for 
 an indefinite period to see if any change occurs, (p) On the other 
 hand, if there is a prospect of the cargo being carried and the freight 
 being earned, the shipowner has the right and the duty to prosecute 
 the voyage. As between the shipowner and the underwriter on 
 freight, if the contract of affreightment is dissolved, there is a total 
 loss of that freight. If the contract of affreightment is not dissolved, 
 because, according to existing circumstances, there is a prospect of 
 the adventure being completed, the shipowner cannot by giving 
 notice of abandonment convert into a constructive total loss that 
 which at the time is not a total loss or likely to become one.(g) But 
 in such a case, if the expectation ultimately proves to be erroneous, 
 and the freight cannot be earned, then provided that the loss was due 
 to any of the perils insured against, the assured would be entitled to 
 recover under the policy for a partial loss, if the loss be partial, or 
 for a total loss if the loss be total, (r) 
 
 If in fact the delay is not so great as to break up the voyage but 
 merely suspends it, the shipowner cannot recover under an ordinary 
 policy on freight for the increased cost of wages and provisions caused 
 by the delay or for the loss of profit due to the prolongation of the 
 voyage. " With the cost to the assured of earning freight, the under- 
 writers have nothing to do, and the amount of such cost does not 
 
 (n) See Green v. Royal Exchange Assurance (1815), 6 Taunt. 68 ; Idle v. 
 Royal Exchange Assurance (1819), 8 Taunt. 755; Mount v. Harrison (1827), 
 4 Bing. 388 ; Lord v. Neptune Insurance Co. (1857), 10 Gray, p. 124 (Am.). 
 
 (o) The Bahia (1864), Br. & L. 292; Hansenv. Dunn{l90e), 11 Com. Gas. 100. 
 
 (p) The Savona (1900), P. 252 ; Embiricos v. Reid, [1914] 3 K. B. 45; Miller 
 V. Taylor (1915), 31 T. L. R. 272. 
 
 {q) See Lord v. Neptune Insurance Co. (1857), 10 Gray, 124 (Am.) ; Griswold 
 V. New York Insurance Co. (1808), 3 Johns. R., p. 326 (Am.) ; Saltus v. Ocean 
 Insurance Co. (1817), 14 Johns. R., p. 143 (Am.). 
 
 (r) Cf. Levy v. Merchants Marine Insurance Co. (1885), 52 L. T. 263. 
 
 I.F. ^ 
 
146 LAW EELATING TO THE INSUBANCE OF FEEIGHT 
 
 enter into the consideration whether the latter are or are not liable 
 for an actual total loss of freight. They do not undertake that the 
 wages of the master and crew, and the necessary provisions for the 
 voyage, shall not cost more than the amount of freight to be 
 earned." (s) " The underwriters take upon themselves no risk what- 
 soever, as to the length or duration of the voyage insured. What 
 they undertake is that, notwithstanding any of the perils insured 
 against, the ship shall be capable of performing the voyage, so as to 
 earn the freight insured ; not that the voyage shall be performed 
 in a longer or a shorter period. The owner takes upon himself the 
 chances of a short or of a protracted passage." (i) 
 
 The Insurance Company of North America v. Jones and Clark 
 (1807), 2 Binn. 547 (Am.), 
 
 was an action on a policy of insurance on freight of the brig 
 Benjamin Franklin. 
 
 Facts. — The vessel sailed from Bordeaux on a voyage to Phila- 
 delphia, but before getting out of the river, was stopped by an 
 embargo, which lasted for nearly three months. The embargo 
 being withdrawn the vessel renewed the voyage and arrived 
 in safety at Philadelphia, where the cargo was delivered and the 
 full freight received. But during the embargo extra expense 
 was incurred for seamen's wages, provisions, etc., and in the 
 present action the shipowner was endeavouring to recover these 
 as a partial loss under the policy. 
 
 Held that he could not recover. 
 
 Mayo V. Maine Fire S Marine Insurance Company (1808), 4 
 Mass. E. 374 (Am.), 
 
 was an action on a policy of insurance upon freight of the 
 Harriot. 
 
 (s) Per BoswoETH, J., in Ogden v. General Mutual Insurance Co. (1853), 
 2 Duer., p. 216 (Am.) ; Allen v. Mercantile Mutual Insurance Co. (1871), 44 
 N. Y., p. 441 (Am.) ; see also per Pollock, C.B., in Chapman v. Benson (1847), 
 5 C. B., p. 345. 
 
 (t) Per Story, J., in Jordan v. Warren Insurance Co. (1840), 1 Story, p. 352 
 (Am.) ; see also Anderson v. Wallis (1813), 2 M. & S. 240 ; Everth v. Smith (1814), 
 
LOSSES UN DEE THE POLICY 147 
 
 Facts. — On the voyage to France, the vessel was captured and carried 
 into Plymouth, but after a detention of two months was hberated, 
 proceeded on the voyage, and earned the freight. The plaintiff 
 claimed a partial loss on account of the protraction of the 
 voyage by the capture and detention. 
 
 Held that he could not recover, (m) 
 
 Judgment. — Paesons, O.J. : " The plaintiff says that if there had 
 been no detention his vessel might have earned her freight in 
 less time. But the underwriters did not insure any particular 
 time in which the voyage should be performed ; but only that 
 the freight should be earned. They are not, therefore, answer- 
 able for a partial loss arising from the increased length of the 
 voyage by the detention, any more than they would have been, 
 if the arrival of the vessel had been delayed by violent storms, 
 which had driven her out of her course." 
 
 The other element to be considered is whether the damage to the 
 vessel can be repaired so as to carry on the cargo to the port of 
 destination at a reasonable cost. The continuation of the adventure 
 and the earning of the freight depend upon the continued existence 
 of the ship. If the vessel is destroyed, then, subject to the ship- 
 owner's right to earn the freight by transhipping the cargo, if this 
 course is practicable, the contract of affreightment is dissolved, and 
 if the destruction of the vessel was due to any of the perils covered 
 by the policy, the shipowner will be able to recover from the under- 
 writer for the loss of freight resulting from the loss of the vessel. But 
 the vessel, although seriously damaged, may be physically capable 
 of being repaired, although the cost of the repairs would be com- 
 mercially unreasonable. What is the position then of the ship- 
 owner under the contract of affreightment ? " What is the nature 
 of the contract between the shipowner and the merchant whose 
 goods he contracts to carry on freight? The shipowner engages 
 
 2 M. & S. 278 ; Clarh v. Mass. Fire Insurance Co. (1824), 2 Piok. 104 (Am.) ; 
 M'Oaw V. Ocean Insurance Co. (1839), 23 Pick. 405 (Am.) ; Allen v. Mercantile 
 Mutual Insurance Co. (1871), 44 N. Y. 437 (Am.). 
 
 (u) In the earlier case of Herbert v. Hallett (1802), 3 Johns. Cos., p. 100 (Am.), 
 Kent, C.J., suggested that the assured might be entitled to an indemnity for the 
 loss of freight during the time the vessel was necessarily interrupted on the voyage. 
 
Id8 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 to carry the goods from the port of loading to the port of discharge ; 
 his contract would be absolute but for the exception introduced 
 into the bill of lading — unless prevented by perils of the sea. Now, 
 when is the shipowner said to be prevented by perils of the sea from 
 fulfilling the contract he has entered into ? When the ship is, by 
 a peril of the sea, rendered incapable of performing the voyage. 
 A ship is not rendered incapable of performing the voyage when she 
 is merely damaged to an extent which renders some repairs necessary, 
 ... If the damage which results from a peril of the sea is so great 
 that it cannot be repaired at all, or only at a cost so ruinously large 
 that no prudent owner would undertake the repairs, the owner may 
 treat the loss as total, and say that he is prevented by a peril of the 
 sea from performing his contract." (a;) 
 
 If the vessel is by excepted perils damaged to such an extent as 
 not to be worth repairing, the shipowner, as against the freighter, 
 is entitled to say that he is prevented from completing the voyage, 
 and is released from his obligations under the contract of affreight- 
 ment. By abandoning the voyage the shipowner loses his right to 
 freight, but if the peril, which caused the damage to the ship and which 
 was excepted from the contract of affreightment, was covered by 
 the policy of insurance, the shipowner will be entitled to recover from 
 his underwriter for the resulting loss of freight. For the underwriter 
 undertakes to indemnify the owner if he is prevented by certain 
 perils from earning the freight, and as between the shipowner and 
 the underwriter the question, whether he has been so prevented, 
 must be decided on the same principles as between the shipowner 
 and the freighter, (y) " I think that if there was damage to the ship, 
 such though it was physically possible to repair the ship, the expense 
 would be so great that, according to the rule laid down in Moss v. 
 Smith, it was unreasonable to do so, the owner might, as between 
 him and the charterer, elect not to repair the ship, but to treat the 
 charter as at an end by reason of the exception of the sea perils, and 
 if under such circumstances, the owner did not in fact repair, the 
 freight was totally lost by the perils insured against." (z) 
 
 (x) Per Crbsswbll, J., in Moss v. Smith (1850), 9 C. B., p. 105, cited by 
 BowEN, L.J., in Assicurazioni Oenerali v. S.8. Bessie Morris Co., [1892] 2 Q. B. 
 p. 660 ; see ako per Wilde, C.J., in Moss v. Smith, p. 109 ; per Lord Blackburn 
 in Shepherd v. Henderson (1881), L. R. 7 A. C, p. 69. 
 
 (y) Cf . per Wilde, C.J., in Moss v. Smith (1850), 9 0. B., p. 108. 
 
 (z) Per Blackburn, J., in Bankin v. Potter (1873), L. R. 6 H. L., p. 115. 
 
LOSSES UNDER THE POLICY 149 
 
 A shipowner is not bound to repair the vessel, if in a business 
 sense of the word it is not possible to do so ; (a) or, as it is sometimes 
 said, if the cost of the repairs will exceed the benefit to be derived 
 from them, but there is some uncertainty as to the precise test to 
 be applied in determining whether the shipowner is absolved from 
 further carrying the goods, (b) What extent of repairs is to be taken 
 into account, and ought the freight which will be earned by com- 
 pleting the voyage to be considered as part of the benefit to be 
 derived from the repairs ? 
 
 What extent of repairs is to be taken into account ? Is it the 
 repairs necessary to make good all the damage sustained by the vessel, 
 or merely the repairs sufficient to enable the vessel to carry the cargo 
 to the agreed destination ? The extent of the repairs to be taken into 
 account when considering whether a vessel is a constructive total 
 loss has been stated in different ways. According to one current of 
 authorities, " where the damage to the ship is so great, from the perils 
 insured against, as that the owner cannot put her in a state of repair 
 necessary for the pursuing of the voyage insured, except at an expense 
 greater than the value of the ship, he is not bound to incur that 
 expense, but is at liberty to abandon, and treat the loss as a total 
 loss." (c) 
 
 According to another current of authority there would be a con- 
 structive total loss if the cost of restoring and repairing the vessel 
 so as to be substantially as good as she was before the accident, 
 would exceed the value of the vessel when repaired, (d) The correct 
 view, it is submitted, is that stated by Shbb, J.^ in the case of Kemp 
 V. Halliday. (e) " The engagement of the underwriter is, that the 
 thing which he insures shall, with reasonable repairs and expenses 
 for which he undertakes, should they be rendered necessary by the 
 
 {a) Of. per Lord Eshee, M.K., in Assicurazioni Generali v. S.S. Bessie Morris 
 Co., [1892] 2 Q. B., p. 657. 
 
 (6) See Carver, 5th ed., sect. 303. 
 
 (c) Per TiNDAL, C.J., in Benson v. Chapman (1843), 6 M. & G., p. 810 ; Moss 
 V. Smith (1860), 9 C. B., p. 103. 
 
 (d) See per Lords Watson and Shand, in Sailing Ship Blairmore Co. v. 
 Macredie, [1898] A. G., pp. 603, 612 ; Halsbury,Enoy., vol. 17, p. 483 ; American 
 Insurance Go. v. Center (1827), 7 Cow., p. 580 ; (1829), 4 Wend. 45 (Am.) ; but 
 contra per Blackburn, J., in Rankin v. Potter (1873), L. E. 6 H. L., p. 117. 
 
 (e) (1866), 6 B. & S., p. 741. 
 
150 LAW EELATING TO THE INSUEANCE OF PEEIGHT 
 
 perils insured against, reach its destination capable of being used 
 as the thing which it was when the risk commenced." The repairs, 
 the cost of which are to be considered, do not mean a reconstruc- 
 tion, but the vessel is to be repaired so as to be not merely- 
 seaworthy, but, as far as repairs can effect it, a vessel of the 
 same classification and as nearly as possible the same thing as she 
 was before. (/) 
 
 Does the same test apply as between the shipowner and the 
 freighter ? In the case of Assicurazioni Generali v. S.S. Bessie 
 Morris Company, {g) Collins, J., expressed the view that the standard 
 applied in considering whether there was a constructive total loss 
 of a vessel, was the standard to be applied in deciding the question 
 between the shipowner and the freighter, whether the vessel had been 
 prevented from proceeding on her voyage by the excepted perils,(/i) 
 and this is, it is submitted, the correct view. " It is clear from Moss 
 V. Smith, and Philpott v. Swann, that unless the ship is either irrepar- 
 able, or repair practically impossible, the shipowner cannot show as 
 against his underwriter that he was prevented from earning the freight 
 through damage to the ship, and the standard of what is practically 
 impossible is the same as that of a constructive total loss. In other 
 words, where the freight is said to be lost through damage to the ship, 
 it must be shown that the ship itself to which the freight is an 
 accessory was actually or constructively lost." " That which in the 
 language of maritime commerce constitutes a loss of a ship, is damage 
 to an extent which renders the ship not worth repairing, followed by 
 a determination not to repair. As respects her capacity to earn 
 freight, a ship in such condition is as much lost to the owners as if 
 it had sunk or broken up." (i) 
 
 (/) North Atlantic S.S. Co. v. Burr, [1904] 9 Com. Cas. 164. 
 
 (-7) [1892] 1 Q. B., p. 580. 
 
 (h) The statement of Lord Eshek in Assicurazioni Oenerali v, S.S. Bessie 
 Morris Co., [1892] 2 Q. B., p. 658, " the dootrine of constructive total loss can 
 arise only between an underwriter and his assured," does not seem to have 
 been intended to contradict this view, but to have had reference to the 
 contention of the shipowner that, although the voyage was in fact com- 
 pleted, the vessel ought, owing to the cost of the repairs, to be treated for 
 the purposes of the voyage, as a constructive totaJ loss. See per Bowen, L.J., 
 ibid., at p. 660. 
 
 (i) Per LirsH, J., in Banlcin v. Potter (1870), L. B. 5 C. P., p. 376 ; cited by 
 Mbllor, J., L. B. 6 H. L., p. 110. 
 
LOSSES UNDEE THE POLICY 151 
 
 Moss V. Smith (1850). 9 C. B. 94 ; 19 L. J. C. P. 225 ; 14 Jur., 
 1003 ; 82 E. E. 307, 
 
 was an action on two policies of insurance, one for £1000 upon the 
 ship Aljred, and the other for £1000 on chartered freight of the 
 said ship. 
 
 Pacts. — ^After loading a cargo, which included some eight hundred 
 and fifty tons of guano, the vessel proceeded on the voyage, but 
 owing to bad weather sustained considerable damage and had 
 to put back to Valparaiso, where a survey was held. The 
 expenses and the repairs necessary to enable the vessel to pro- 
 ceed to England were , estimated at some £3700, an amount 
 which would exceed the value of the freight, but would be less 
 thah the value of the ship when repaired, and the surveyors 
 reported that in view of the difficulty of raising money at 
 Valparaiso and of obtaining the necessary workmen and materials, 
 it would be for the interest of all concerned to sell the ship, and 
 to forward the cargo by other vessels. The ship was accordingly 
 sold for £1700, and the cargo ultimately delivered at an increased 
 cost of freight. The plaintiffs claimed for a loss of the ship and 
 freight. 
 
 Held that as the vessel could have been repaired at a reasonable cost 
 and within a reasonable time so as to be able to carry on the 
 cargo, there was no total loss either under the policy on ship 
 or under the policy on freight. 
 
 Philpott V. Swann (1861), 11 C. B. (n. s.) 270 ; 30 L. J. C. P. 
 358 ; 5 L. T. 183 ; 7 Jur. (n. s.) 1291, 
 
 was an action on a policy of insurance on charter freight on the 
 ship Greenwich. 
 
 Pacts. — The Greenwich was a ship of 260 tons burthen, and had 
 taken on board about 140 tons of copper ore (the remaining 
 120 tons being ready for shipment) when a storm arose and the 
 vessel was damaged: Instead of going to the Cape of Good 
 Hope, which was some 180 miles away, the master proceeded 
 to St. Helena, a distance of some 1800 miles ; and ultimately 
 
152 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 finding no facilities there for the necessary repair, and being 
 unable to return to the port of loading without it, he proceeded 
 to Swansea, the port of discharge, with only the 140 tons of 
 ore. The plaintiff sought to recover for the loss of the freight 
 on the 120 tons. 
 
 Held that, although the master in going to St. Helena made the 
 choice which a prudent man uninsured would have made, the 
 choice though apparently prudent was mistaken, and that as 
 the damage could have been repaired at the Cape at a reasonable 
 cost and within a reasonable time, the loss of freight was attri- 
 butable to the action of the master, and not to any of the perils 
 insured against, and therefore that the plaintiff could not recover. 
 
 The American Insurance Company v. Center (1829), 4 Wendell, 
 45 ; (1827), 7 Cowen, 564, 
 
 was an action on a policy of insurance on the freight of the ship 
 Pallas on a voyage from New Orleans to Havre. 
 
 FACTS.-^On the day after leaving New Orleans the vessel ran aground 
 and was so much damaged that it was necessary to return to 
 New Orleans, where a survey was held. The Pallas was a 
 coppered vessel, and the copper was very much injured by the 
 stranding. The cost of recoppering the vessel, together with 
 the other necessary repairs, would have exceeded the value of 
 the vessel when repaired, but the vessel could have been sheathed 
 with wood at a very much lower cost, so as to be seaworthy 
 and competent to perform the voyage to Havre with a full 
 cargo, but the shippers would not consent to this being done, 
 as they had effected insurance on the cargo in a coppered vessel. 
 The cargo was, therefore, delivered back to the shippers, and the 
 vessel was sold. 
 
 Held that the shipowner was entitled to have his ship fully repaired, 
 and that as the cost of so doing would exceed the value of the 
 ship when repaired, he could abandon the vessel and could not 
 be required by the shippers to repair for the purpose of sending 
 on the cargo, and consequently that he could recover for a total 
 loss of the freight. 
 
LOSSES UNDEE THE POLICY 153 
 
 The other question upon which uncertainty exists is, whether 
 the freight, which will be earned by completing the voyage, should 
 be taken into account when considering whether the benefit to be 
 derived from the repairs to the vessel will exceed the outlay necessary 
 to effect them. In the case of Assicurazioni Generali v. S.S. Bessie 
 Morris Company, (k) CoLLtNS, J., seems to have considered that such 
 freight ought to be taken into account. On the other hand, in the 
 case of Moss v. Smith, Wilde, C.J., said that " the amount of freight 
 forms no fair ingredient in the inquiry." (1) It is nqt easy to decide 
 between these two views, but, as haa been pointed out,(m) it seems 
 unreasonable to say that under a contract of affreightment a ship- 
 owner must repair the vessel and continue the voyage if he has not 
 received the freight, and need not do so under similar circumstances 
 if he has been paid in advance for the carriage of the goods. On 
 the whole, the better view, it is submitted, is to disregard the 
 freight. 
 
 Where owing to the cost of repairs a vessel is treated as a con- 
 structive total loss, and there is no chance of an opportunity of the 
 cargo being forwarded at a cost less than the amount of the original 
 freight, (n) there is a total loss of freight and notice of abandonment 
 is not required. " Abandonment can have no effect under such 
 circumstances. If the loss, being a loss by damage to the ship, was 
 total in the first instance, no abandonment was necessary ; if it 
 was not, abandonment could not make it so." (o) And the position 
 of the shipowner, as regards the underwriters on freight, is not 
 affected even though he attempts to repair the vessel, provided that 
 he does not do so. (p) 
 
 (k) [1892] 1 Q. B., p. 578. 
 
 (l) (1850), 9 C. B., p. 109. The question is whether the cost of repairs will 
 exceed the value of the ship when repaired, and as was stated by Bbamwell, B. 
 in Hickie r. Rodocanachi (1859), 4 H. & N., p. 466, " If any question of the ship 
 arose, the insured could not include the freight as an item in the calculation." 
 Cited by Brett, M.R., in Sea Insurance Co. v. Hodden (1884), L. R. 13 Q. B. D., 
 p. 714; but contra per Lord Campbell, in Fleming v. Smith (1848), 1 H. L. C, 
 p. 535. 
 
 (m) Carver, 5th ed., sect. 303. 
 
 (n) See per Bebtt, J., in Rankin v. Potter (1873), L. R. 6 H. L., p. 99. 
 
 (o) Per Aldeeson, B., in Benson v. Chapman (1849), 2 H. L. C, p. 721 ; 
 see also cases referred to in note (x), p. Ill, ante. 
 
 ip) Rankin v. Potter (1873), L. R. 6 H. L., p. 116. 
 
154 LAW EELATING TO THE INSUEANCE OE FEEIGHT 
 
 In the foregoing remarks an endeavour has been made to ascertain 
 the effect upon an insurance of freight of loss of or damage to the 
 freight- earning vessel by perils of the seas and similar causes. 
 Another question which has to be considered is the effect of capture, 
 seizure, and similar perils. It has been seen (5) that where a vessel 
 has been so much damaged by perils of the sea that she cannot be 
 repaired so as to complete the voyage within a reasonable time, the 
 contract of affreightment, subject to the right of transhipment, is 
 dissolved, and this result follows whether the contract is executory 
 or not, and whether the cargo has been loaded or not. Similar 
 results may follow if the prosecution of the voyage is prevented by 
 an embargo. An embargo does not necessarily put an end to the 
 contract of affreightment ; it is to be considered as a temporary 
 suspension of it only, (r) The embargo, however, may be of such a 
 character as to render the completion of the voyage within a reasonable 
 time impossible or unlikely, and in such cases the contract of affreight- 
 ment may be treated as at an end and the adventure may be 
 abandoned.(s) The fact that subsequent events show that the delay 
 would have been of but short duration is immaterial except perhaps 
 as a test of what was the true state of things at the time when the 
 decision to treat the adventure as at an end was made.(i) Com- 
 mercial men cannot be expected to wait till the end of a long delay 
 to find out from what in fact happens whether they are bound by 
 a contract or not : they are entitled to act on reasonable commercial 
 probabilities at the time when they are called upon to make up their 
 minds, (u) 
 
 The effect of capture upon a contract of affreightment is doubtful. 
 There is authority for the view that capture puts an end to the 
 
 (q) Ante, pp. 135-145. 
 
 (r) See Hadley v. Clarke (1799), 8 T. R. 259 ; Touteng v. Hubbard (1802), 
 3 B. & P. 291 ; Beale v. Thompson (1804), 4 East, 546 ; Melville v. De Wolf 
 (1855), 4 E. & B. 844 ; Beal v. Horlock (1915), W. N. 234. 
 
 (s) Geipel v. Smith (1872), L. R. 7 Q. B. 404; Embiricos v. Reid, [1914] 3 
 K. B. 45 ; Sunday v. British Marine Insurance Co. (1915), 31 T. L. R. 374. 
 
 (t) Per Baenes, J., in The Savona, [1900] P., p. 259 ; MiUer v. Taylor (1915), 
 31 T. L. R. 272. 
 
 {u) Per ScRUTTOH, J., in Embiricos v. Beid, [1914] 3 K. B., p. 54. An embargo 
 put on in time of war and likely to continue during the war will, it would seem, 
 entitle the parties to treat the contract of affreightment at an end. " A state ol: 
 war must be presumed to be likely to continue so long, and so to disturb the 
 commerce of merchants, as to defeat and destroy the object of a commercial 
 venture like this." Geipel v. Smith (1872), L. R. 7 Q. B., p. 414. 
 
LOSSES UNDEE THE POLICY 155 
 
 contract,(a;) and there is authority for the view that it does not.{y) 
 The effect is probably to put an end to the contract and to release 
 the parties from their obHgations, if the capture takes place under 
 circumstances which render the completion of the voyage impossible 
 or unlikely, {z) If a vessel, which has been chartered to proceed to 
 a port and load a cargo, is captured under circumstances which render 
 it unlikely that the vessel will be able to perform the voyage, the 
 merchant will not be bound to wait for an indefinite period to see if 
 the vessel is recaptured or released. He will be entitled to rely on 
 the facts as they appear, and to say to the shipowner, " There is no 
 reasonable prospect of your ship being able to perform the voyage 
 within a reasonable time. I must make arrangements to have my 
 cargo carried, and as your vessel cannot do this, I must treat the 
 contract between us as at an end." Similarly, the shipowner may 
 under such circumstances treat the contract as no longer binding. 
 In such cases the contract is dissolved not by the act of the parties, 
 but by the force of circumstances. The declaration of either party 
 that he intends to regard the contract as at an end is not the exercise 
 of an option ; it is merely a declaration that in his opinion circum- 
 stances have arisen which render the contract no longer binding. 
 Until this position is acquiesced in by the other party to the contract, 
 he may perhaps withdraw, but if this position is accepted and is 
 justified by the facts, the contract of affreightment comes to an end, 
 and it comes to an end not because the parties to it agree that it 
 shall, but because, as they recognise, the circumstances have rendered 
 it impossible or unlikely that it can ever be carried out. Similar 
 principles, it is submitted, apply in cases where at the time of the 
 capture the cargo has been loaded. Difficulties may, however, 
 arise in the application of these principles owing to the fact that 
 within a short time of the capture the vessel may be unexpectedly 
 recaptured or released with the cargo still on board. What is then 
 the position of a shipowner who has declared his intention of treating 
 the adventure as at an end? The position seems to be similar to the 
 position which arises when a vessel has been abandoned at sea owing 
 
 {x) Goss V. Withers (1768), 2 Burr., p. 696 ; Curling v. Long (1797), 1 B. & P. 
 p. 637 ; The Friends (1801), 4 C. Rob., p. 144. 
 
 (y) Beale v. Thompson (1804), 4 East, p. 560 ; The Natfianiel Hooper (1839), 
 3 Sumner, p. 557 (Am.). See also Carver, seofc. 242 ; Parsons, Shipping, vol. 1, 
 p. 336. 
 
 («) Polurrian 8.8. Co. v. Young, [1915] 1 K. B. 922. 
 
156 LAW EELATING TO THE INSUEANCE OP FEBIGHT 
 
 to perils of the seas. (a) If the shipowner was justified in his attitude, 
 then, subject to a locus penitentice in the event of the other party 
 to the contract faiHng to acquiesce, the contract of affreightment 
 will be dissolved, and if the vessel comes again into the control of 
 the shipowner with the cargo on board, the contract of affreightment 
 will not revive. Circumstances may arise under which the shipowner 
 will be entitled to a quantum meruit freight, but in the absence of 
 any special circumstances, the freighter will be entitled to his goods 
 without becoming liable to pay any freight. 
 
 What is the position as between the shipowner and the under- 
 writer on freight ? If the circumstances are such as to justify the 
 conclusion that owing to the embargo or the capture the completion 
 of the adventure is impossible or unlikely, and if the parties to the 
 contract, recognising this, treat the contract as at an end, the ship- 
 owner will lose his freight, and, as has been pointed out, he will lose 
 his freight not by the agreement of the parties but by the force of 
 circumstances. In such a case he will, it is submitted, be entitled 
 to recover from the underwriter on freight under a policy in the ordi- 
 nary form, (&) but as the vessel may be recaptured or released and 
 may earn freight on the insured voyage, the assured should give 
 notice of abandonment. He is then, so long as the loss continues 
 apparently total, in a position to bring an action against the under- 
 writers on freight, and if an action is commenced before any change 
 in the situation occurs, he will be able to recover as for a total loss. 
 If no action is commenced, and the ship being recaptured or released 
 comes again under the control of the assured and performs the voyage 
 and earns freight, the assured will not be entitled to treat the loss 
 which has ceased to be total as a total loss merely because he has 
 given notice of abandonment. " In cases of capture or detention, 
 where the loss is apparently total, abandonment to the underwriters 
 on freight may be very important ; but even in such cases, if the 
 ship is retaken or released, and freight earned before action brought, 
 the owner cannot recover on the policy on freight." (c) 
 
 {a) See The Kathleen (1874), L. R. 4 A. & E. 269 ; The Cito (1881), L. R. 7 
 P. D. 5 ; The Leptir (1885), 52 L. T. 768 ; The Arm (1895), 8 Asp. M. C. 5 ; 
 Guthrie v. North China Insurance Co. (1902), 7 Com. Cas., p. 136 ; The Eliza Lines 
 (1905), 199, U. S. Rep. 119 Am.). See also the Florence (1852), 16 Jur. 572. 
 
 (6) It is assumed that the policy does not contain the warranty f.c.s. 
 
 (c) Per Aldeeson, B., delivering the opinion of the Judges in Benson v. 
 Chapman (1849), 2 H. L. C, p. 721. 
 
LOSSES UNDEE THE POLICY 157 
 
 Bainhridge v. Neilson (1808), 1 Camp. 237 ; 10 East, 329 ; 
 10 E. E. 316, 
 
 was an action upon a policy of insurance upon the ship Mary, 
 and also upon another policy of insurance upon the freight of 
 the same ship, from Jamaica to a port of discharge in Great 
 Britain. 
 
 Facts. — The vessel after leaving Jamaica was captured on the 21st 
 September, 1807, and was recaptured on the 25th. On the 30th 
 September the plaintiffs received news of the capture but not 
 of the recapture, and on the following day they gave notice of 
 abandonment to the respective underwriters. On the Gth 
 October they received the first intelligence of the recapture of 
 the vessel, and that she then lay at a port in Ireland in safety 
 in the possession of the recaptors. The plaintiffs, while persisting 
 in their abandonment, offered to do their best for the benefit 
 of those who should be ultimately concerned in the vessel. 
 They compromised with the recaptors, completed the voyage, 
 and received the freight. The salvage charges on the ship 
 amounted to £15 4s. 8d., and on the freight to £13 lis. 5d. 
 per cent, of the sum insured. 
 
 Held that the plaintiffs could only recover for a partial loss. 
 
 The position as between the shipowner and the underwriter on 
 freight is usually complicated by the fact that the vessel will have 
 been insured and may have been abandoned to the underwriters on 
 ship. Now freight is the benefit derivable from the employment of 
 a ship, and in so far as the earning of freight depends upon the con- 
 tinued use and employment of the ship, it follows, as an incident, 
 the property in the ship passes to the underwriters on ship under 
 an abandonment. The underwriter on ship " does not become privy 
 by virtue of such abandonment to any existing charterparty, nor 
 perhaps to any contract of affreightment before made with the owner ; 
 but I think that by the abandonment he acquires possession of the 
 thing from the use of which freight is to be earned. . . . An abandon- 
 ment to the underwriter on ship, transfers to him not merely the 
 hull but the use of the ship, and the advantages resulting from the 
 
158 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 completion of the voyage." (d) My Lords, I do not doubt at all that 
 where the owners of an insured ship have claimed or been paid as for 
 a total loss, the property in what remains of the ship, and all rights 
 incident to the property, are transferred to the underwriters as from 
 the time of the disaster in respect of which the total loss is claimed 
 for and paid. The right to receive payment of freight accruing due 
 but not earned at the time of the disaster is one of those rights so 
 incident to the property in the ship, and it therefore passes to the 
 underwriters because the ship has become their property, just as it 
 would have passed to a mortgagee of the ship who before the freight 
 was completely earned had taken possession of the ship." (e) An 
 abandonment of the ship carries with it the right to any freight earned 
 by the ship subsequent to the abandonment or to the time to which 
 the abandonment relates,( / ) and this freight passes not to the under- 
 writers on freight, but to the underwriters on ship. It follows, 
 therefore, that the position of an underwriter on freight may 
 be affected by the fact that the ship is also insured and has been 
 abandoned to the underwriters on ship. 
 
 There is an impression, based on the case of M'Carthy v. Abel,(g) 
 that in all cases of capture and seizure abandonment to the under- 
 writers on ship prevents the assured from recovering for a loss of 
 freight. But in the case of M'Carthy v. Abel, as has been pointed 
 out,(fe) the abandonment of the ship was not j ustified, and the position, 
 which arose in that case, is quite different from the position which 
 arises when, owing to capture or to some similar peril rendering the 
 completion of the voyage impossible or unlikely, the contract of 
 affreightment is justifiably treated as at an end. In this latter 
 case when the contract is terminated, the freight payable under it is 
 lost and it is lost because the capture or seizure makes it impossible 
 from a commercial point of view to earn the freight. The same 
 circumstances may also justify the shipowner in abandoning the 
 ship to the underwriters on ship, and he may adopt this course, 
 but in such case it would not be correct to say that it is the 
 abandonment of the ship which causes the loss of the freight. 
 
 {d) Per Lord Ellenboeough in Case v. Davidson (1816), 5 M. & S., p. 82. 
 
 (e) Per Lord Blackbuen in Simpson v. Thomson (1877), L. B. 3 A. C, p. 292 ; 
 see also Keith v. Burrows (1877), L. B. 2 A. C, p. 656. 
 
 (/) Stewart v. Greenock Marine Insurance Co. (1848), 2 H. L. C, 159 ; Marine 
 Insurance Act, sect. 63 (2). 
 
 (fif) (1801), 5 East, 388, ante, p. 182. {h) Ante, p. 133. 
 
LOSSES UNDEE THE POLICY ' 159 
 
 And, it is aubmitted, the assured will be entitled to recover for 
 the loss of freight, although the contract of affreightment is not by 
 any definite act of the parties to it treated as at an end, and although 
 the vessel being unexpectedly recaptured or released, completes the 
 voyage and earns freight. The underwriter on freight undertakes 
 to indemnify the assured if by reason of the loss of the ship by perils 
 insured against, he is prevented from earning freight. Under the 
 circumstances which are here being supposed, the shipowner would 
 be justified in treating the loss of the ship as a total loss. The result 
 of treating the ship as a total loss will be to put it out of the power 
 of the assured to receive any freight which the vessel may earn, but 
 in the same way as a shipowner, who has justifiably abandoned his 
 ship by reason of the extent of damage caused by perils of the sea, 
 is entitled to say that he is prevented from earning freight even 
 though freight is in fact subsequently earned by the vessel, so, it 
 is submitted, a shipowner who has justifiably abandoned his vessel 
 by reason of capture or some similar cause, is entitled to say that he 
 is prevented from earning freight even though freight is subsequently 
 earned. It may be argued that but for the abandonment to the under- 
 writers on ship, the shipowner would, upon the release of the vessel, 
 have again obtained control of her and would have received the freight, 
 and that therefore the loss of freight to the assured is due not to the 
 capture but to the abandonment. The proximate cause, however, 
 of the loss was the capture, and if once there has been a total loss by 
 capture, that is construed to be a permanent total loss unless some- 
 thing afterwards occurs by which the assured either has the possession 
 restored or has the means of obtaining such restoration, {i) The 
 shipowner does not have the means of obtaining restoration {h) if 
 he has justifiably abandoned to the underwriters on ship,(/) and as, 
 
 (i) Ci. per Lord Campbell, C.J., in Dean v. Hornby (1854), 3 E. & B., p. 190 ; 
 Holdsworlh v. Wise (1828), 7 B. & C!. 794 ; Lozano v. Janson (1859), 2 E. & E. 
 
 160. 
 
 (k) It is assumed that the abandonment has been accepted, or that an action 
 
 has been commenced. 
 
 (I) It must also be remembered that the principle that an assured, who has 
 given notice of abandonment, cannot recover for a total loss if the loss ceases 
 to be total before action brought, is based on the view that a policy of insurance 
 is intended to be a contract of indemnity, and that an assured cannot recover 
 for a greater loss than he has sustained. If the conclusion above put forward 
 is correct, the assured wiU not recover more than he has lost, whereas if the con- 
 trary view is the true one, he will in many cases be deprived of an indemnity. In 
 
160 LAW EELATING TO THE INSUKANCE OE EEEIGHT 
 
 ex hypothesi, he was justified in treating the vessel as a constructive 
 total loss the underwriter on freight cannot complain because he 
 has so treated it. " The assured has sustained a total loss of the 
 freight if he abandons the ship to the underwriters on ship and is 
 justified in so doing ; for after such abandonment he has no longer 
 the means of earning the freight, or the possibility of ever receiving 
 it if earned, such freight going to the underwriters on ship." (m) 
 
 The actual loss of the cargo usually causes a total loss of the 
 freight payable in respect of it.(?i) By the loss of the cargo the ship- 
 owner loses the freight stipulated for its carriage, and he cannot 
 under ordinary circumstances call upon the shipper or charterer 
 to load other cargo in its place, (o) It has already been seen (j)) 
 that where " freight is insured on a particular voyage, by a parti- 
 cular vessel, and the cargo has been put on board, it is the freight of 
 that cargo, in that vessel and on that voyage which is the subject of 
 insurance, and to which the policy attaches." A loss of that freight 
 by any of the perils insured against will prima, facie involve a total 
 loss of freight under the policy. " An actual total loss of the whole 
 cargo will occasion an actual total loss of freight, unless such loss 
 should so happen as to leave the ship capable, as to time, place, and 
 condition, of earning an equal or some freight by carrying other 
 cargo on the voyage insured." (g) Although the shipowner may 
 thus lose the freight which he contemplated that his ship would 
 earn in the course of the voyage insured, the ship may still be able 
 to make the voyage, and to earn freight in the course of it. Such 
 freight is in the nature of salvage, (r) and the shipowner is entitled 
 
 the foregoing remarks it has been assumed that no change has been made by the 
 Marine Insurance Act in the effect of a notice of abandonment, but see Amould, 
 sect. 1097a. 
 
 (m) Per Tindal, C.J., in Benson v. Chapman (1843), 6 M. & G., p. 810. In 
 practice the question is not likely to arise frequently in the future, as most policies 
 on hull contain the Institute Clauses, which provide that " In the event of total 
 or constructive total loss, no claim to be made by the underwriters for freight 
 whether notice of abandonment has been given or not." 
 
 (n) The freight may be payable irrespective of what happens to the cargo. 
 
 (o) Weir v. Oirvin, [1900] 1 Q. B. 45. 
 
 (p) Ante, p. 105. 
 
 (q) Per Bkett, J., in Rankin v. Potter (1873), L. R. 6 H. L., p. 99. 
 
 (r) Phillips, sect. 1644; Parsons, Insurance, vol. 2, p. 167; Gow, Insurance, 
 p. 165; Lowndes, Insurance, p. 146; Oreen v. Boyal Exchange Assurance Co. 
 (1815), 6 Taunt. 68 ; Qayner v. Sunderland Association (1884), C. & E. 293. 
 
LOSSES UNDEE THE POLICY 161 
 
 to any expenses incurred for the express purpose of obtaining it. (s) 
 Freight so earned has the effect of reducing the shipowner's loss on 
 the voyage, and after it has been received, he will only be able to 
 recover as for a partial loss. (<) If he wishes to recover for a total 
 loss, he should, while the loss is still total, give due notice of abandon- 
 ment and commence an action against the underwriter on freight. 
 " If the original cargo should be lost and the ship may or may not 
 probably earn some freight by carrying other goods on the voyage 
 insured, it may be, and I think the rule is, that in order to make 
 certain his right to recover as for a total loss on the poHcy on freight, 
 the assured should give notice of abandonment of the chance of 
 earning such substituted freight." (it) 
 
 The underwriter is entitled to have the benefit of any other freight 
 earned on the voyage insured, and this raises the difficult question 
 whether the voyage ultimately made by the vessel is the voyage 
 insured. The fact that the ports of loading and discharge are the 
 same does not necessarily make it the same voyage, (a;) but the fact 
 that the ports are different will prevent it from being the same, (y) 
 It has been suggested (2) that in the case of a ship belonging to a line 
 sailing on stated dates, if the vessel is prevented from sailing on the 
 day intended but makes a voyage on a subsequent occasion, the 
 subsequent voyage would not be the same voyage as that originally 
 contemplated. But in the case of The Scottish Shire Line v. London 
 & Provincial Marine Insurance Company, {a) where a vessel, belonging 
 to a line and employed in making round voyages to Australia and 
 back according to a programme, was delayed, after starting on a 
 
 (s) Barclay v. Stirling (1816), 5 M. & S. 6 ; Sharp v. Gladstone (1805), 7 East, 
 24. 
 
 (t) Of. Everth v. Smith (1814), 2 M. & S. 278, ante, p. 93. 
 
 {u) Per Bbett, J., in Rankin v. Potter (1873), L. R. 6 H. L., p. 103. 
 
 (x) Jackson v. Union Marine Insurance Co. (1874), L. R. 10 C. P., p. 141 ; 
 Ogden v. General Mutual Insurance Co. (1853), 2 Duer., p. 226 (Am.) ; Parsons 
 V. Manufacturers Insurance Co. (1860), 16 Gray, p. 470 (Am.). 
 
 {y) Per Stoky, J., in Jordan v. Warren Insurance Co. (1840), 1 Story, p. 351 
 (Am.) ; see also Lord v. Neptune Insurance Co. (1867), 10 Gray, p. 124 (Am.). 
 If the poUoy indicates alternative ports of discharge, the fact that the vessel sails 
 with the substituted cargo to one of these ports which is different from the port 
 to which it would have sailed with the original cargo, does not necessarily mak^ it 
 a different voyage. 
 
 (z) Lowndes, Insurance, p. 147. 
 
 (a) [1912] 3 K. B. 51. 
 I.F. M 
 
16.2 LAW EELATING TO THE IN8UEANCE OP FEEIGHT 
 
 voyage, for three months, and consequently missed the dates arranged 
 but ultimately completed a round voyage, Hamilton, J., expressed 
 the opinion that the voyage actually made came within the descrip- 
 tion in the policy and that the underwriter on freight was entitled 
 to rely on the fact that freight had been earned in the course of it. 
 If the voyage which the vessel actually makes is not the voyage con- 
 templated, the underwriters on freight will not be entitled to avail 
 themselves of freight earned in this new voyage. " I know of no 
 principle or authority upon which the Court can say that the under- 
 writers have a right to avail themselves of a freight earned on a 
 voyage, which they have not insured, by way of recompense for 
 losses on another voyage which they have insured, and whi^ has 
 already terminated." (b) If the shipowner can complete the voyage 
 and earn freight in the course of it, but neglects to do so, the under- 
 writers on freight will not be prejudiced by his failure to adopt this 
 course. 
 
 Gayner v. The Sunderland Joint Stock Premium Association 
 (1884), Cab. & Ell. 293, 
 
 was an action on a policy of insurance for £300 on freight of the 
 Foxglove, valued at £1200, at and f rom. Sundedaad to Valparaiso. 
 
 Facts. — The plaintiffs had shipped at Sunderland on their own 
 account a cargo of coals, and while the vessel was still in port 
 with the coals on board, waiting to proceed on her voyage, she 
 was run into by the Acacia, who was alone to blame. The cargo 
 was discharged, and owing to the damage it had received could 
 not be shipped again, and it was admitted by the defendants 
 that that particular adventure had been determiued,. The 
 Foxglove was detained at Sunderland for repairs — all the expenses 
 of repairs and demurrage being paid by the owners of the Acacia, 
 who also when the Foxglove was again ready to put to sea offered 
 to put on board free of expense a similar cargo of coals for 
 Valparaiso. This, however, the plaintiffs refused, and the 
 Foxglove sailed with a cargo of coals for Algoa Bay. The plaintiffs 
 claimed a total loss of the freight. 
 
 (5) Per Story, J., in Jordan v. Warren Insurance Co. (1840), 1 Story, p. 351 
 (Am.) ; per Blaokbuen, J., in Barher v. Fleming (1869), L. R. 5 Q. B., p. 66. 
 
LOSSES UNDEE THE POLICY 163 
 
 Held that they could not recover, as freight equivalent to the freight 
 insured either had been or might have been earned. 
 
 If the cargo is not wholly destroyed, but is so much damaged by 
 the perils insured against that it cannot be carried on without endan- 
 gering the health or lives of the crew or the safety of the ship, the 
 shipowner may jettison or abandon it, and this constitutes a total 
 loss of the freight payable in respect of such cargo. (c) If the cargo is 
 damaged to such an extent that it cannot be carried to the port of 
 destination so as to arrive in specie, the shipowner, as has been seen,{d) 
 loses his right to retain it, and thereby loses his right to the freight 
 payable in respect of it. In this case if the damage to the goods was 
 due to any of the perils covered by the policy, the assured can recover 
 for the resulting loss of freight, (e) But if the cargo although greatly 
 damaged can be reconditioned at a reasonable expense, so as to be 
 capable of being carried in specie to the port of destination within a 
 reasonable time, the shipowner may retain it, and if he fails to do 
 so, and. thereby loses the freight, he cannot claim from the under- 
 writers for a loss which was caused, not by any of the perils insured 
 against, but by his own voluntary action. ( / ) 
 
 In determining whether cargo can be reconditioned so as to be 
 capable of being carried to its destination in specie, two questions 
 have to be considered, the question of expense and the question of 
 time. With regard to the question of expense, if the cost of recon- 
 ditioning the cargo would exceed the value of the cargo on arrival 
 at the port of destination, the cargo owner need not incur it, and the 
 shipowner would not be authorised to do so on his behalf. In such 
 a case the damaged cargo is from a commercial point of view irrepar- 
 able and need not be repaired. But as, ex hypothesi, the cargo cannot 
 be carried to its destination so as to arrive in specie unless some 
 repairs are effected, and as no repairs need or will be effected, it 
 
 (c) Phillips, sect. 1642 ; Parsons, Insurance, vol. 2, p. 166 ; Whitney v. New 
 York Firemen's Insurance Co. (1820), 18 Johns. R. 208 (Am.) ;■ Hugg v. Augusta 
 Insurance Co. (1849), 7 How. 595 (Am.) ; cf. Dyson v. Bowcroft (1803), 3 B. & P. 
 474 ; Michael v. Oillespy (1857), 2 C. B. (n. s.), p. 644 ; The Knight of St. Michael, 
 [1898] P. 30 ; Iredale v. China Traders Insurance Co., [1900] 2 Q. B., p. 518. 
 
 (d) Ante, p. 137. 
 
 (e) Phillips, sect. 1642, and cases cited above in note (c) ; see also Hill v. 
 Wilson (1879), L. R. 4 C. P. D. 329. 
 
 (/ ) Cf. Rosetto V. Gurney (1851), 11 G. B. at p. 187. 
 
164 LAW EBLATING TO THE INSUEANCE OF FEEIGHT' 
 
 follows that the freight on this cargo will be lost, and for this loss, 
 if attributable to any of the perils covered by the policy, the assured 
 is entitled to recover from the underwriter on freight. 
 
 Michael v. Gillespy (1857), 2 C. B. (n. s.) 627 ; 26 L. J. C. P. 
 306 ; 3 Jur. (n. s.) 1219; 109 E. E. 809, 
 
 was an action on a time policy of insurance on freight, issued by 
 a mutual insurance association. 
 
 Pacts. — The plaintiff was the owner of the Charles Kerr, which sailed 
 from Shields with a cargo of coals for Aden, but owing to damage 
 caused by a storm had to put into Cuxhaven for repairs. The 
 coals were unloaded and were found to be so impregnated with 
 deliquescent salts that it would have been extremely dangerous, 
 owing to their liability to spontaneous combustion, to carry 
 them on in their then state to Aden, and owing to the want of 
 facilities at Cuxhaven, it would have cost more than three 
 times their value at Aden to free them from the salts by washing, 
 which alone would have enabled them to be carried with safety. 
 Under the circumstances the coals were abandoned, and the 
 vessel after being repaired, proceeded upon another voyage . 
 
 Held that as the cargo had been so damaged by one of the perils insured 
 against in the course of the voyage as to render it impossible — 
 except at an expense which would greatly exceed its value on 
 arrival — to carry it to its destination, the assured was entitled 
 to recover. 
 
 While the principle is well established that, if the cost of recon- 
 ditioning the goods will exceed the value of the goods on arrival at 
 the port of destination, the goods may be treated as being irreparable, 
 it is not clear what is included in the cost of reconditioning. The 
 test usually laid down is whether the cargo can be recondit^oned so 
 as to arrive in specie, and this suggests that the cost contemplated 
 is merely the cost of putting the cargo into such a condition as will 
 enable it to arrive in specie, but the correct view, it is submitted, 
 is that the owner of the cargo is entitled to have the cargo put as 
 nearly as possible into the same condition as it was before the accident 
 
LOSSES UNDEE THE POLICY 165 
 
 so far as repairs can bring this about. " It would have been the duty 
 of the master to ascertain whether the cost of unloading the cargo 
 from the original ship, of drying and restoring it, and of transhipping 
 it upon a new bottom, the original ship not being reparable, would, 
 in the aggregate exceed the value of the restored cargo at its place 
 of destination. If it would, then it would not have been practicable 
 to deliver the cargo in a marketable state at its port of destination." (^) 
 
 It is also doubtful how far any freight that will be payable for the 
 goods ought to be taken into account. In the case of Bosetto v. 
 Gurney, where the ship was wrecked and the goods had been damaged 
 in the course of the voyage, and the owner was claiming as for a con- 
 structive total loss on the ground that they could not be repaired 
 and carried on except at a cost exceeding their value on arrival, 
 the Court held that the amount payable under the original contract 
 of affreightment should not be included. This decision has been 
 the subject of much criticism, but when the matter is considered from 
 the point of view of the shipowner and the cargo owner, it seems correct 
 that such freight should not be taken into account when considering 
 whether the cargo can be reconditioned or not. The shipowner has 
 the right and the duty to carry on the goods to the port of destination 
 unless prevented by something happening to the ship or the cargo 
 and covered by the exceptions in the contract of affreightment. If 
 the cargo is destroyed, it is clear that he is prevented from completing 
 the voyage, and the same result follows if the cargo, although in 
 existence, is damaged to such an extent that either physically or 
 commercially it cannot be repaired. But if it can be repaired and 
 the ship can carry it to the port of destination, it follows that nothing 
 has happened to prevent the adventure from being carried out, and 
 the parties must be prepared to complete it. The result of the voyage 
 being completed is that the cargo owner will be liable to pay the freight 
 stipulated in the contract of affreightment, but the fact that the 
 cargo owner may become hable to pay freight for the carriage of the 
 goods ought not to be taken into account when considering whether 
 the goods are capable of being repaired, any more than the fact that 
 he may have bound himself to deliver them under an unprofitable 
 contract of sale. 
 
 (g) Per Jbrvis, C.J., in Rosetto v. Ourney (1851), 11 C. B., p. 187. As to the 
 test applied in the case of damage to the ship, see ante, p. 150. 
 
166 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 The other element to be considered is whether the cargo can be 
 reconditioned so as to be carried to the port of destination within 
 a reasonable time. What is meant by a reasonable time in this 
 conjunction ? It has been seen Qi) that in connection with the 
 repairs to the vessel, any delay is considered reasonable, which is 
 consistent with the character and objects of the adventure, and that 
 in considering whether the delay is reasonable, the circumstances 
 existing in each case must be considered. As between the shipowner 
 and the shipper the separate interests of the latter are not taken into 
 account, even though the delay may cause him considerable loss 
 and may defeat the object which he had in view when entering into 
 the contract. Similar principles should apply where the delay is 
 due to the necessity of repairs to the cargo, and, it is submitted, 
 similar principles do apply in this case. The primary duty of the 
 shipowner is to carry the cargo to the agreed place of destination in 
 his own ship, (i) and this duty he must perform by all practicable 
 and reasonable means. If the cargo can be reconditioned so as to 
 be fit to be carried to the port of destination within such a time as, 
 taking everything into consideration, is consistent with the purposes 
 of the contract of affreightment and the character and objects of 
 the adventure, (fc) the shipowner must wait. He must be prepared 
 to forward the cargo in his vessel as soon as it is in a condition to be 
 reshipped, and if he voluntarily arranges with the shipper to cancel 
 the contract and relinquish the voyage, he cannot hold the under- 
 writer liable for the resulting loss of freight. " The ship was repaired 
 and capable of taking on board the cargo within a reasonable time 
 (six weeks). The master had a right to require that it should be so 
 taken on board and carried on the voyage, as soon as it should be in 
 a condition to be safely reshipped. He had a right to wait until the 
 cargo could be dried, sorted, repacked, and prepared for reshipment. 
 
 (h) See ante, p. 135. 
 
 <i) See SMpton v. Thornton (1838), 9 A. & E., p. 333 ; Bosetto v. Glurney 
 (1851), 11 0. B., p. 187 ; Cargo ex Hamburg (1863), 2 Moo. P. C. (n. s.), p. 319 ; 
 Svendsen v. Wallace (1885), L. R. 10 A. C, p. 417. 
 
 (h) As to the elements to be considered, compare the language of Willbs, J., 
 in Notara v. Henderson (1872), L. R. 7 Q. B., p. 237. " The place, the season, 
 the extent of the deterioration, the opportunity or means at hand, the interests 
 of other persons concerned in the adventure, whom it might be unfair to delay 
 for the sake of the part of the cargo in peril ; in short, all circumstances affecting 
 risk, trouble, delay and inconvenience, must be taken into account." 
 
LOSSES UNDEE THE POLICY 167 
 
 The delay arising thereby would be a mere retardation or 
 temporary interruption or suspension of the voyage, and not an 
 utter prostration or destruction of it. If, then, the freight has been 
 lost, it has been lost by hia own voluntary act, and not by the neces- 
 sary operation of any of the perils insured against. The whole 
 evidence shows, that the cargo could have been dried, sorted, and 
 repacked safely for the voyage, and at the farthest within six months. 
 Mere delay in the voyage, or disappointment as to the time of arrival, 
 constitutes, as we have seen, no ground for an abandonment of the 
 voyage. So that, here the loss of freight has been by a voluntary 
 abandonment of the voyage by the master ; and not from necessity, 
 superinduced by any perils insured against." (l) 
 
 Mordy v. Jones (1825), 4 B. & C. 394 ; 6 D. & Ey. 479 ; 3 
 L. J. (o. s.) K. B. 250 ; 28 E. E. 305, 
 
 was an action on a policy of insurance on freight of the ship 
 Isabella, at and from Kingston in Jamaica to Liverpool. 
 
 Pacts. — In the course of the voyage the vessel was damaged and had 
 to put back to Kingston, where she was soon repaired. The 
 cargo, which consisted of various goods shipped by various 
 persons under bills of lading in the usual terms, had to be 
 relanded, and a part of it was so wetted by sea water that it 
 could not be reshipped without danger from ignition to the 
 ship and the rest of the cargo, unless it underwent a process of 
 washing and drying which would have detained the vessel six 
 weeks, and been attended with expense equal to the freight. 
 Under these circumstances, the shippers refusing to interfere 
 but approving of a sale by the master, the master sold the 
 damaged goods, and finding that he could not obtain other 
 
 (/) Per Stoby, J., in Jordan v. Warren Insurance Co. (1840), 1 Story, p. 354 
 (Am.) ; see also per Shaw, C. J., in Lord v. Neptune Insurance Co. (1857), 10 Gray, 
 p. 125 (Am.). The view that the shipowner may be under a duty to wait, after 
 the repairs to the vessel have been completed, is contrary to the opinion expressed 
 by CocKBUEN, C.J., in the case of Notara v. Henderson (1870), L. B. 5 Q. B., 
 p. 354. In this case, however, the cargo could have been carried without any 
 reconditioning to the port of destination, and the question was not whether the 
 shipowner must wait while cargo is being reconditioned for the purpose of making 
 it fit to continue the voyage, but whether he must wait while steps are being taken 
 to repair the damage which the cargo has suffered. 
 
168 LAW EELATING TO THE INSUEANCE OF PEEIGHT 
 
 goods to complete his cargo in any reasonable time, and being 
 pressed by the shippers of the rest of the cargo to proceed, he 
 sailed for Liverpool. The proceeds of the sale were paid to 
 the parties interested, without any deduction of freight, and the 
 present action was brought to recover the freight so lost. 
 
 Held that the plaintiff could not recover, (m) 
 
 Jordan and Others v. Warren Insurance Company (1840), 1 Story, 
 342 (Am.), 
 
 was an action on a policy of insurance on the freight of the ship 
 Franklin. 
 
 Pacts. — While proceeding down the river Mississippi, on a voyage 
 from New Orleans to Havre, the vessel sustained considerable 
 damage and had to put back for repairs, which were completed 
 in about six weeks. A portion of the cargo was lost, and the 
 great bulk of it, consisting of cotton, was wet and very liable 
 to spontaneous combustion, but it could by a process of drying, 
 sorting, and repacking, have been put in a state for reshipment. 
 But the process was slow and according to some of the witnesses 
 would occupy as long as six months. The cargo was sold, and 
 the shipowner sought to recover for a total loss of freight. 
 
 Held that, except as to the goods which had been lost, he could not 
 recover, as he might have retained the goods until they were 
 made fit for the voyage, and might have then completed the 
 voyage and earned the freight, and the loss of the freight was 
 not due to any of the perils insured against, but to his own 
 default. 
 
 Lord V. The Neptune Insurance Company (1857), 10 Gray, 109, 
 
 was an action on a policy of insurance on freight of the barque 
 Dana, at and from New York to Havre. 
 
 {m) The grounds of the decision are not very satisfactory, but in America 
 this case has always been regarded as an authority for the principle now being 
 discussed, 
 
LOSSES UNDEE THE POLICY 169 
 
 Pacts.— Three days after leaving New York the vessel sprung a leak 
 and had to put back for repairs, which were soon completed. 
 The cargo, which had to be discharged in order to repair the 
 vessel, was more or less damaged, and was not fit for reshipment, 
 but after a process of drying and preparation which would 
 have taken several months, a part of it might have been reshipped 
 and would have arrived at Havre, much deteriorated in value, 
 but capable of being delivered in specie. The owners of the 
 several parts of the cargo, which consisted principally of wheat, 
 flour, and green hides, refused to give any instructions with 
 regard to the goods, in consequence of which the master sold 
 them, and the proceeds came into the hands of the shipowners. 
 The latter refused to pay over these proceeds to the respective 
 owners of the goods without the payment of the freight on 
 them, but in an action brought against them it was held that 
 they were not entitled to deduct any freight. The present 
 action was, therefore, brought to recover a total loss of the 
 freight. 
 
 Held that the shipowners could not recover for a total loss, but only 
 for a partial loss in respect of the freight payable on goods which 
 could not be made fit for the voyage. 
 
 If the cargo cannot be reconditioned in time to be reshipped by 
 the original vessel, it is doubtful whether the shipowner may retain 
 it in order to earn his freight by carrying it in another vessel. The 
 option of the shipowner to earn his freight by transhipping the cargo 
 is usually expressed to be limited to those cases where the cargo 
 cannot be carried to its destination in the original vessel owing to 
 damage to the vessel. There does not seem to be any authority 
 that this option extends also to cases where the failure to carry the 
 cargo to its destination is due, not to the condition of the vessel, 
 but to the condition of the cargo, and there does not seem to be any 
 vaUd reason why, in such cases, an option should be given to the 
 shipowner. If, therefore, cargo is damaged and cannot be recon- 
 ditioned in time to be reshipped by the original vessel, the shipowner 
 • will lose the freight payable in respect of it. If owing to perils insured 
 against the cargo cannot be reconditioned so as to be carried to the 
 
170 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 port of destination within a reasonable time, and there is no chance 
 of obtaining a substituted cargo, the shipowner will be entitled to 
 recover for the loss of freight thus caused, and, it is submitted, need 
 not give notice of abandonment. 
 
 In the foregoing remarks an endeavour has been made to state 
 the principles applicable to freight payable in respect of particular 
 goods and dependent upon their carriage. The freight, however, 
 may be independent of considerations affecting the cargo, as in the 
 case of chartered freight before the goods are put on board, and under 
 , certain circumstances in the case of lump-sum freight. In the case 
 of chartered freight, before the goods are shipped, the loss can occur 
 solely by reason of damage to the ship, (n) A total loss of the ship 
 involves an absolute total loss of the freight, and the same result 
 follows if the vessel, although not totally lost, is damaged to such an 
 extent that she cannot be repaired except at a cost exceeding 
 her value when repaired, or after a delay that would frustrate the 
 adventure contemplated by the contract of affreightment. 
 
 Barber v. Fleming (1869), L. E. 5 Q. B. 59 ; 10 B. & S. 879 ; 
 39 L. J. Q. B. 25 ; 18 W. E. 254, 
 
 was an action on a policy of insurance from Bombay to Howland's 
 Island, and thence to the United Kingdom, on freight chartered 
 or otherwise in the ship Cambodia. 
 
 Pacts. — The vessel had been chartered for a voyage from Howland's 
 Island to the United Kingdom, and in the course of the voyage 
 to Howland's Island she ran ashore on the coast of New Zealand. 
 Surveys were held, and the captain endeavoured to borrow 
 money for repairs, but was unable to get any except on a 
 bottomry bond at 35 per cent., and on the condition that the 
 captain should charter the vessel to the lender for a cargo of 
 timber from New Zealand to England. Communication was 
 made to the owners in England ; they refused to allow any 
 repairs to be done, and gave notice of abandonment to the under- 
 writers on ship and freight. The money, which had been in 
 
 (n) See Rankin v. Potter (1873), L. R. 6 H. L., per Beett, J., at p. 103 ; 
 per Beamwell, B., at p. 133. 
 
LOSSES UNDER THE POLICY 171 
 
 the meantime advanced, was insufficient for the repairs, and 
 the underwriters on ship decided that the best thing to do was 
 to abandon the ship to the holder of the bottomry bond, and this 
 was done. About eighteen months after the disaster the ship 
 came home with the cargo of timber. 
 
 Held that as the ship could not have been repaired so as to have gone 
 to Howland's Island, there was a total loss of the chartered 
 freight. 
 
 BanUn v. Potter and Others (1873), L. E. 6 H. L. 83 ; 29 L. T, 
 142 ; 42 L. J. C. P. 169 ; 22 W. E. 1 ; 2 Asp. M. C. 65, 
 
 was an action on a policy of insurance on homeward chartered 
 freight of the Sir William Eyre, at and from the Clyde to South- 
 land, while there, and thence to Otago (New Zealand), and for 
 thirty days in port there after arrival. 
 
 Pacts. — While the vessel was proceeding to New Zealand with a 
 cargo, a charterparty was made under which the vessel after dis- 
 charging the cargo, was to proceed to Calcutta, and there being 
 tight, staunch, and strong, and in every way fitted for the voyage, 
 take in a cargo and bring the same to England. On the voyage 
 to New Zealand the vessel took the ground. A survey was held, 
 but as there was no dry dock the real nature and extent of the 
 damage which the vessel had sustained could not be discovered. 
 Under the belief that the vessel had not been seriously injured, 
 the master, after some delay, proceeded to Calcutta in ballast. 
 On arrival at Calcutta a survey in dry dock was held, and it was 
 then found that, in consequence of the damage sustained at 
 the time when she took the ground, the vessel had been so 
 much damaged that she could not be made seaworthy and fit 
 to bring home a cargo, except at a cost which would exceed the 
 value of the vessel when repaired. 
 
 Held that the assured could recover for a total loss of the charterparty 
 freight, as the freight had been lost by perils of the seas during 
 the voyage covered by the policy, and notice of abandonment 
 was under the circumstances not necessary. 
 
172 LAW RELATING TO THE INSURANCE OP FREIGHT 
 
 Jackson v. The Union Marine Insurance Company (1874), 
 L. R. 10 C. P. 125 ; 31 L. T. 789 ; 44 L. J. 0. P. 27 ; 23 
 W. R. 169 ; 2 Asp. M. 0. 435, 
 
 was an action on a policy of insurance for £1500 on chartered 
 freight of the Spirit of the Dawn, valued at £2900, at and from 
 Liverpool to Newport and thence to San Francisco, 
 
 Facts. — A charterparty had been made under which the vessel was 
 to proceed from Liverpool to Newport, and there take on board 
 and carry to San Francisco a cargo of iron rails. The vessel 
 sailed from Liverpool and on the following day ran aground. 
 At the trial the jury found that " the time necessary to get the 
 ship off and repair her so as to be a cargo carrying ship was 
 so long as to put an end in a commercial sense to the commercial 
 speculation entered into by the shipowner and charterers." 
 A few weeks after the accident the charterers chartered another 
 vessel by which they forwarded the rails, and six months later 
 the vessel was sold. 
 
 Held that the assured were entitled to recover, as the adventure con- 
 templated by the contract of affreightment was frustrated by 
 reason of the delay, and there was therefore a loss of the chartered 
 freight by perils of the sea. (o) 
 
 It may be that, although the vessel can within a reasonable time 
 and at a reasonable cost be repaired so as to make the insured voyage, 
 she caimot be repaired so as to bring home any of the cargo for which 
 she was chartered. In such a case there is prima facie a total loss 
 of freight, but the loss is not necessarily total, as the assured may be 
 able to earn other freight on the voyage insured. If, however, 
 the assured gives due notice of abandonment, and the notice is 
 accepted or an action commenced, he will be entitled to recover 
 as for a total loss. If the abandonment is not accepted and an 
 action is not commenced, then the right of the assured to recover, 
 and the extent to which he may recover, will depend upon 
 
 (o) See also In re Jamieson dh Newcastle S.S. Freight Insurance Association, 
 [1895] 2 Q. B. 90, post. 
 
LOSSES UNDER THE POLICY 173 
 
 whether other freight has been earned (p) or could have been 
 earned on the voyage insured, (g) and upon the amount of such 
 other freight. 
 
 If the vessel cannot be repaired so as to carry the whole of the 
 contemplated cargo, but can be repaired so as to carry a portion, 
 and the circumstances are not such as to entitle the assured to treat 
 the vessel as a total loss, there will, it would seem, be only a partial 
 loss of freight, (r) 
 
 Lump-sum freights are found — broadly speaking — in two different 
 kinds of contracts of affreightment. Under the one kind of contract 
 the shipowner charters his vessel for a specific voyage and agrees to 
 place at the disposal of the charterer the full carrying capacity of 
 the vessel and to carry the cargo which may be provided by the 
 charterer, and in return he stipulates for a lump-sum freight, which 
 is usually made payable upon the right and true delivery of the 
 cargo. In the other kind of contract, the shipowner charters his 
 vessel for a certain period of time, and while his obligations may be 
 the same as under the former kind of contract, the payment of the 
 freight is not made to depend upon the delivery of the cargo, but is 
 made payable at a certain rajie for the time that the vessel is actually 
 on hire. Under both kinds of contracts the rights of the shipowner 
 to the freight depend upon the particular terms of the contract of 
 affreightment, and it is therefore difficult to laj^ down any general 
 propositions as to what constitutes a loss of such freight. Under 
 the first kind of contracts, where the freight is made payable on the 
 right and true delivery of the cargo, these words are not taken 
 literally, (s) The whole lump freight is payable although a portion 
 of the cargo is lost by excepted perils without any default on the 
 part of the shipowner,(0 and it may perhaps also be payable although 
 the non-deUvery is wrongful and is due to causes not excepted by the 
 
 (p) See Scottish Shire Line, Ltd. v. London di Provincial Marine Insurance Co., 
 [1912] 3 K. B., p. 68 ; Everth v. Smith (1814), 2 M. & S. 278. 
 
 {q) See ante, p. 96. 
 
 (r) Of. Oreen v. Royal Exchange Assurance (1816), 6 Taunt. 68. 
 
 (s) Per Lord Lindley, in Williams v. Canton Insurance Office, Ltd., [1901] 
 A. C, p. 473. 
 
 (<) Merchant Shipping Co. v. Armitage (1873), L. R. 9 Q. B. 99 ; Eobinson v. 
 Knights (1873), L. B. 8 C. P. 465 ; Harrowing S.S. Co. v. Thomas {1Q1&), 19 Com. 
 Cas. 452 ; Carver, 5th ed., sect. 550. 
 
174 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 contract of affreightment, (u) If no cargo is delivered, then probably 
 no freight is payable, (a;) but if the original vessel is lost, the shipowner 
 may still earn the freight by making delivery in a substituted vessel 
 or in some other way, {y) unless the payment of the freight is made to 
 depend upon the arrival of the original vessel. With regard, there- 
 fore, to lump-sum freight payable under the first kind of contracts, 
 although the right to such freight may be affected by accidents to 
 the cargo, it will more usually be affected by accidents to the 
 vessel. 
 
 With regard to lump-sum freight payable under the second kind 
 of contracts, that is to say, lump-sum freight payable in respect of 
 the time during which the vessel is on hire, it is not easy to see how 
 under ordinary circumstances the right to such freight can be affected 
 by accidents to the cargo which may be loaded on board the vessel, 
 and in the absence of provision to the contrary, the right to such 
 freight is not under ordinary circumstances affected by accidents 
 which temporarily affect the efficiency of the ship. Most contracts 
 of affreightment, however, which stipulate for freight of this cha- 
 racter contain a provision to the effect that, if the efficient working 
 of the vessel is prevented for more than twenty-four hours, the 
 payment of freight is to cease until the vessel again becomes 
 efficient. («) If the effect of such a clause is that the freight ceases 
 automatically to be payable, the assured, who has effected an in- 
 surance on this freight, will be entitled to recover for the loss of 
 freight thus caused, provided that the clause was brought into 
 operation by reason of perils covered by the policy. 
 
 The Alps, [1893] P. 109 ; 62 L. J. ADM. 59 ; 68 L. T. 624 ; 41 
 W. E. 527 ; 7 Asp. M. 0. 337, 
 
 was an action on a policy of insurance in chartered freight of 
 the steamship Alps for twelve calendar months. The policy 
 was against the usual risks, including fire. 
 
 (u) The Norway (1865), Br. & Lush, p. 395 ; 13 L. T. 50 ; per Lord Lindley, 
 in Williams v. Canton Insurance Office, Ltd., [1901] A. C, p. 473 ; Harrowing 8.S, 
 Co. V. Thomas, [1913] 2 K. B., p. 192. 
 
 (x) Harrowing 8.8. Co. v. Thomas, [1913] 2 K. B., p. 192. 
 
 (y) Harrowing 8.8. Go. v. Thomas (1915), 19 Com. Gas., p. 452. 
 
 (z) As to the construction of such clauses, see Meade, King <fc Co. v, Jacobs 
 & Co., [1914] 3 K. B. 156. 
 
LOSSES UNDEE THE POLICY 175 
 
 Facts. — A charterparty had been made which provided that freight 
 was to be at the rate of £425 per calendar month, payment 
 to be made in cash at New York monthly in advance, and that 
 " in the event of loss of time from collision, stranding, want of 
 repairs, breakdown of machinery or any cause appertaining to 
 the duties of the owner, preventing the working of the vessel 
 for more than twenty-four working hours, the payment of 
 hire shall cease from the hour when detention begins until she 
 be again in an efficient state to resume her service." 
 
 On August 8, 1891, the vessel, while taking in cargo, took 
 lire, and thirteen days were occupied in repairs. In respect 
 of this period the sum of £179 was repaid to the charterer by 
 the owners, and this action was brought to recover from the 
 underwriters a proportion of the sum so repaid. 
 
 Held that, as the clause in the charterparty had been put into opera- 
 tion through the immediate action of the perils insured against, 
 the plaintiffs were entitled to recover. 
 
 The Bedouin, [1894] P. 1 ; 63 L. J. ADM. 30 ; 6 E. 693 ; 
 69 L. T. 782 ; 42 W. E. 292 ; 7 Asp. M. C. 391, 
 
 was an action on a poUcy of insurance " for and during the space 
 of three calendar months commencing August 11, 1889, and 
 ending November 10, 1889, both days inclusive, on freight of 
 the Bedouin, chartered and/gj, as if chartered on board or not on 
 board, one-third diminishing each month." The policy covered 
 the usual perils, including perils of the seas, 
 
 Facts.— A charterparty had been made which provided that freight 
 was to be at the rate of £955 per calendar month, and to be paid 
 monthly in advance, and that " in the event of loss of time by 
 deficiency of men, want of stores, breakdown of engines or 
 machinery, or other cause appertaining to the owners, and the 
 progress of the steamer is thereby delayed for more than twenty- 
 four running hours, payment of hire to cease until such time as 
 she is again in an efficient state to resume her voyage." 
 
 On August 11, 1889, the Bedouin sailed with a general cargo 
 from Liverpool for the West Coast of South America, but owing 
 
176 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 to damage to the thrust-shaft caused by perils of the seas, the 
 vessel had to be towed to St. Vincent for repairs. There was 
 a delay of twenty- eight days, during which payment of hire 
 ceased, and this action was brought to recover from the under- 
 writers for this loss of freight. 
 
 Held by the Court of Appeal (following and approving the Alps) that 
 the plaintiffs could recover. 
 
 These decisions are in accordance with opinions expressed in the 
 case of Inman Steamship Company, Limited v. Bisclio_ff, but in this 
 last-mentioned case it was held by the House of Lords that the ship- 
 owner, who was claiming for a loss of freight, could not recover from 
 his underwriters. 
 
 Inman Steamship Company, Limited v. Bischo;ff (1882), 7 A. 0. 
 670 ; 52 L. J. Q. B. 169 ; 47 L. T. 581 ; 31 W. E. 141 ; 
 5 Asp. M. 0. 6, 
 
 was an action on a policy of insurance on " freight outstanding " 
 for three months, from February 20, 1879, to May 19, 1879. 
 
 Facts. — The plaintiffs were the owners of a vessel, the City of 
 Paris, which was chartered to th-e Admiralty for a period 
 of three months certain from the 21st February, 1879. 
 The charterparty provided that freight should be payable 
 monthly in respect of the time during which the vessel was in 
 the service of the Admiralty, but if " it should appear to the 
 Commissioners that any delay had been caused or accrued by 
 breach of orders or neglect of duty, or that the vessel had become 
 incapable from any defect, deficiency, or breach of orders, 
 or from any cause whatsoever to perform efficiently the service 
 contracted for, then and in every such case it should and might 
 be lawful to and for the said Commissioners to retain in arrear 
 the pay of the ship for two months as aforesaid, and to put the 
 said ship out of pay, or to make such abatement by way of 
 mulct out of the hire or freight of the said ship, as they should 
 adjudge fit and reasonable. 
 
 About March 21, 1879, the City of Paris struck a rock and 
 
LOSSES UNDEE THE POLICY 177 
 
 received such injuries as to render her unseaworthy and unfit 
 to carry troops. After some delay the vessel was repaired and 
 returned to England. Freight was paid in respect of the period 
 to March 21, and some allowance was made in respect of the 
 expenses of the homeward voyage, but the Admiralty refused 
 to make any payments of freight for the period subsequent 
 to March 21. The plaintiffs, therefore, brought this action to 
 recover for the loss of freight thus caused. 
 
 Held that they could not recover, as on the true construction of the 
 charterparty the freight had been earned, but payment of it 
 had not been received owing to the Commissioners having 
 decided in the exercise of their discretion to retain an equivalent 
 amount by way of mulct. 
 
 Manchester lAners v. British & Foreign Marine Insurance Com- 
 pany, (1901) 7 Com. Cas. 26 ; 86 L. T. 148 ; 9 Asp. M. C. 
 266, 
 
 was an action on a pohcy of insurance upon chartered or hire 
 money valued at £19,500, in the ship or vessel called the Man- 
 chester Corporation, for the space of three calendar months 
 from March 8, 1900, to June 7, 1900. " To cover and pay the 
 loss of hire money calculated at £216 per day as per clause 
 attached. The amount to be paid on this pohcy in the event 
 of loss of time as mentioned in this clause shall be £216 daily, 
 on £19,500." 
 
 The clause was as follows : " In the event of loss of time from 
 deficiency or inefficiency of men or stores, coUision, stranding, 
 want of repairs, breakdown of machinery, or any cause apper- 
 taining to the duties of the owners preventing the working of 
 the vessel for more than twenty-four hours, or rendering her 
 inefficient for the service, the payment of hire shall then cease 
 from the hour when the detention or inefficiency begins until 
 she be again ready and in a fully efficient state to resume her 
 service." 
 
 Facts.— The plaintiffs had chartered the vessel to the Admiralty 
 under a charterparty similar to the one in the case of Inman 
 
 I.F. 
 
 N 
 
178 LAW EELATING TO THE INSUEANCE OE EEEIGHT 
 
 S.S. Go. V. Bischoff, " for the space of three calendar months 
 certain and thenceforward until the Commissioners should 
 cause notice to be given to the owners of the ship that she is 
 discharged from Her Majesty's service. Freight to be paid 
 during such time as the said ship shall be continued in her 
 Majesty's employ, and shall duly and efficiently perform the 
 service for which she is hereby engaged." 
 
 After the vessel had been employed for three months, it was 
 found that there were fractures in three blades of the propeller, 
 and the Commissioners thereupon gave notice that the vessel 
 was discharged from the service as from April 6, 1900. Eepairs 
 to the propeller were immediately begun and were completed 
 by April 20th. The present action was brought to recover for 
 the loss of freight frOm April 5 to April 20. 
 
 Held that the plaintiffs could not recover as the loss of hire was not 
 due to perils insured against, but to the exercise by the Admiralty 
 of their unfettered right to discharge the vessel from the 
 service. 
 Quare. — Whether the result would have been the same if the vessel, 
 instead of being discharged, had been merely put out of pay 
 from April 5 to April 20. 
 
 The distinction usually drawn between these cases and the cases 
 of the Alfs and the Bedouin is that in the latter cases the cesser of 
 hire clauses were automatically brought into operation and the losses 
 directly caused by perils insured against, whereas in the former cases 
 the losses were to be attributed not to the perils of the sea, but to 
 the act of volition or election on the part of the Commissioners. 
 Prom this it has been sought to deduce the principle (a) that if 
 between the peril and the loss there intervenes some act of volition 
 or election on the part either of the shipowner or the charterer to 
 which the loss may be said to be more proximately due, the loss is 
 to be attributed not to the peril, but to such act of volition or election. 
 It is, however, by no means certain that this view is correct. " If, 
 in the present case, the other terms of the charterparty being the 
 same, a power had been reserved to the charterers or their agents to 
 
 (a) See Amould, sect. 785, 
 
LOSSES UNDEE THE POLICY 179 
 
 determine the contract and their Hability to further freight on the 
 occurrence of any such damage to the ship by perils of the sea as might 
 render her inefficient for the service which she had undertaken, and 
 if such power had been exercised before any further freight was earned, 
 I should have been of opinion that this was a loss of freight by perils 
 of the sea, for which the insurers were liable." (b) This question 
 has also been discussed in connection with the exercise by the charterer 
 of the option to cancel given by the cancellation clause contained in 
 most charterparties. In the case of Mercantile Steamship Company, 
 Limited v. Tyser,{c) where the vessel was damaged by perils of the 
 seas and delayed, it was held that loss of freight consequent on the 
 cancellation of the charterparty by the charterer ought not to be 
 attributed to the perils insured against but to the exercise by the 
 charterer of his option. It must, however, be noticed that this case 
 was earUer in date than the decision of the House of Lords in Inman 
 V. Bischoff, and the judge who decided it was a member of the Court 
 of Appeal in Inman v. Bischoff, whose views were not adopted in 
 the House of Lords. In the American case oi Buger v. Firemen's 
 Fund Insurance Company,{d) where the vessel was damaged by 
 collision, but could have been repaired in time to save the sailing 
 date, it was held that loss of commission consequent on the cancellation 
 of the charterparty could not be recovered, as the proximate cause of 
 the loss was the negligence in not repairing the vessel earlier, but the 
 view was expressed that the assured could have recovered, if the 
 charterparty had been cancelled in consequence of the impossibility 
 of completing the repairs before the cancelhng date. " Such a 
 limitation {i.e. the cancellation clause) is presumptively an agreement 
 by the parties themselves that the purposes of the contract would be 
 frustrated, or might be frustrated, by the vessel's delay' in arrival 
 beyond the time named, and if there should be any doubt on the 
 subject, leaving the charterer to determine by the exercise of the option 
 given him." (e) 
 
 (6) Per Lord Sblbornb in Inman S.S. Co. v. Bischoff (1882), L. R. 7 A. C, 
 p. 676 ; but contra per Lord Fitzgeeald, p. 692, and the Court of Appeal, 6 
 Q. B. D. 648. See also Manchester Liners v. British & Foreign Marine Insurance 
 Co. (1901), 7 Com. Cas., p. 34. 
 
 (c) (1881), L. E. 7 Q. B. D. 73. 
 
 (d) (1898), 90 Fed. R. 310. 
 
 (e) Per Brown, J., at p. 312. 
 
180 LAW EELATING TO THE INSUEANCE OF PEEIGHT 
 
 The Mercantile Steamship Company, Limited v. Tyser (1881), 
 7Q. B. D. 73; 29 W. E. 790 ; 5 Asp. M. 0. 6 n., 
 
 was an action on a policy of insurance on chartered freight, " at 
 and from London to New York, while there, and thence to Odessa, 
 via Constantinople, against the usual perils and including all 
 risks incident to steam navigation." 
 
 Pacts. — The vessel, the Ganges, had been chartered for a voyage 
 described as a " voyage from the port of New York to the port 
 of Odessa." The freight was £5500 payable in cash at Hull 
 on the good and proper discharge of the cargo in the aforesaid 
 port of Odessa, and the charterparty contained the following 
 clause : "If the vessel has not arrived at the port of New York 
 on or before the 1st of September, 1875, charterers have option 
 of cancelling this charterparty." 
 
 The vessel started on the voyage from England on August 7, 
 and if all had gone well would have arrived at New York with 
 four or five days to spare, but owing to some failure of the 
 machinery in the British Channel, had to put back for repairs, 
 which took so long that it was impossible for the vessel to reach 
 New York till long after September 8. The charterers thereupon 
 cancelled the charterparty and the freight was lost. 
 
 Held that the assured could not recover, as the freight was not lost 
 by any of the perils insured against, but by the exercise of the 
 option to cancel in the charterparty. 
 
 Buger v. Firemen's Fund Insurance Company (1898), 90 Fed. E. 
 310 (Am.), 
 
 was an action on a policy of insurance on " commissions on 
 charter, shipped on board ship Theodor Fischer." 
 
 Facts. — The charterparty, which was dated November 17, 1896, 
 provided that if the vessel did not arrive at Newport News, on 
 or about February 15, 1897, the charterer should have the 
 option of cancelling. On December 12, 1896, the vessel was 
 damaged by collision, but no attempt to repair was made for 
 
LOSSES UN DEE THE POLICY 181 
 
 nearly four months. As the vessel did not arrive by the agreed 
 date, the charterers cancelled. 
 
 Held that the assured could not recover, as the loss was not due to 
 a sea peril or to a necessary or natural consequence of a sea peril, 
 but to the negligence of the owners. 
 Semble. — The assured would have been entitled to recover if the 
 charterparty had been cancelled owing to the fact that the repairs 
 due to the collision could not have been effected in time. 
 
 In order to exclude HabiHty for loss of freight sustained under a 
 cancellation clause, or under a clause suspending the payment of 
 hire while a vessel is laid up, clauses are frequently inserted in the 
 policy to the effect that " no claim arising from the cancelling of 
 any charter" shall be allowed, and " warranted free from any claim 
 consequent on loss of time, whether arising from a peril of the sea 
 or otherwise." (/) The latter clause will also free the underwriters 
 from liability to pay for loss of freight under a contract of affreight- 
 ment which has been abandoned owing to delay frustrating the object 
 of the adventure thereby contemplated. 
 
 In re an Arbitration between Jamieson <f The Newcastle Steam- 
 ship Freight Insurance Association, [1895] 2 Q. B. 90 ; 
 64 L. J. Q. B. 560 ; 72 L. T. 648 ; 43 W. E. 530 ; 1 Com. 
 Cas. 395 ; 7 Asp. M. C. 593 ; 14 E. 444. 
 
 An award stated by an arbitrator in the form of a special 
 case for the opinion of the Court. The claim was under a time 
 policy on the freight of the Abrota, and the policy provided that 
 " no claim arising from the cancelling of any charter nor for 
 loss of time under a time charter " should be allowed. 
 
 Pacts. — On October 10, 1893, the Abrota was chartered to proceed 
 to Kotka and there load a cargo for Honfleur. On October 14 
 the Abrota left St. Petersburg for Kotka, and on the same day 
 
 {/ ) The words " or otherwise " appear to mean " or from other perils insured 
 against " ; see Turnbull, Martin & Co. v. Hull Undertvriters' Association, Ltd., 
 [1900] 2 Q. B., p. 404. 
 
182 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 stranded and had to be taken to Helsingfors for repairs. The 
 time necessary for repairing the damage was, according to the 
 finding of the arbitrator, so long that the voyage contemplated 
 in the charterparty became in a commercial sense impossible. 
 The charterers, being unwilling to wait for the Abrota, refused 
 to load under the charterparty, and forwarded their cargo by 
 another steamer. 
 
 Held that the assured could recover as the freight had been lost by 
 a peril of the sea, and the charterparty had not been cancelled 
 within the meaning of the provision in the policy. 
 
 Betisaude and Others v. The Thames and Mersey Marine Insurance 
 Company, Umited, [1897] A. C. 609; 66 L. J. Q. B. 666; 
 77 L. T. 282 ; 46 W. E. 78 ; 2 Com. Cas. 238 ; 8 Asp. M. C. 
 315, 
 
 was an action on a time policy of insurance on freight of 
 the Peninsular against total or constructive total loss and 
 general average only, warranted "free from any claim con- 
 sequent on loss of time whether arising from a peril of the sea 
 
 or otherwise." 
 
 * 
 
 Facts. — On April 5, 1895, the Peninsular was chartered to carry 
 Portuguese troops and stores from Lisbon to Louren^o Marques 
 in South Africa, at an agreed freight. On April 15 the vessel 
 sailed, but on the following day the main shaft broke from an 
 admitted peril of the sea. The vessel put back for repairs to 
 Lisbon, where it was found that the delay would be such as to 
 make it impossible for the vessel to convey the troops and stores 
 to Louren90 Marques in the requisite time. The troops and 
 stores were consequently landed and the charterers, as they were 
 admittedly entitled to do under Portuguese law, refused to pay 
 any freight. The Peninsular was repaired in about a fortnight, 
 and was able to earn freight on another voyage. 
 
 Held that the claim was consequent on loss of time within the meaning 
 of the warranty, and that the underwriters were not liable. 
 
LOSSES UNDBE THE POLICY 183 
 
 Turnhull, Martin S Company v. Hull Underwriters Association, 
 Limited, [1900] 2 Q. B. 402 ; 82 L. T. 818 ; 69 L. J, Q. B. 
 588 ; 5 Com. Gas. 248 ; 9 Asp. M. G. 93, 
 
 was an action on a policy of insurance upon freight of " frozen 
 meat, ahartered or as if chartered, on board or not on board." 
 The policy contained the following clause " chartered freights 
 and freights are warranted free from any claim consequent on 
 loss of time whether arising from a peril of the sea or otherwise." 
 
 Pacts. — The vessel, the Buteshire, arrived at Sydney, N.S.W., 
 on October 15, 1898, and discharged the outward cargo. On 
 October 18 a fire occurred on board, which damaged the refrige- 
 rating machinery, and as materials for the repair of the refrige- 
 rating machinery could not be procured at Sydney, the vessel 
 had to be brought back to England for repairs, and no frozen 
 meat could be carried. In an action to recover the freight thus 
 lost. 
 
 Held that the claim was consequent on loss of time within the meaning 
 of the exception, and that the underwriters were not hable. 
 
 Judgment. — Mathew, J. : "... The ship was damaged by a 
 peril insured against ; her capacity to carry frozen meat was 
 suspended until her machinery had been repaired. If she could 
 have been repaired promptly, there would have been no loss of 
 freight. The loss, therefore, was consequent on loss of time 
 within the words of the warranty." 
 
 Scottish Shire Line, Limited, and Others v. The London <f Pro- 
 vincial Marine <& General Insurance Company, Limited, 
 [1912] 3 K. B. 51 ; 107 L. T. 46 ; 81 L. J. K. B. 1066 ; 
 17 Com. Gas. 240 ; 12 Asp. M. 0. 253 ; 56 S. J. 551, 
 
 was an action on a policy of insurance for £2000 " upon freight 
 on frozen meat ^"^^lor apples ^nd/^jj, refrigerated produce valued 
 at £15,000. Chartered or as if chartered. On board or not on 
 board of the ship or vessel called Ayrshire. Eisk to commence 
 at once and continue in its entirety until steamer sails from final 
 
184 LAW EELATING TO THE INSUEANCE OF PEEIGHT 
 
 loading port on homeward voyage. Warranted free from any 
 claim consequent on loss of time whether arising from a peril 
 of the sea or otherwise, but this clause only to apply in cases 
 where the vessel is fulfilling a special charter containing a can- 
 celling date." 
 
 Pacts. — A contract had been made for the shipment on board the 
 Ayrshire at Hobart of 40,000 cases of apples, but the contract 
 was subject to the Ayrshire arriving at Hobart on or about 
 March 20, 1910. Owing to a collision the vessel was greatly 
 damaged and did not arrive at Hobart until three months later, 
 in consequence of which the apples had to be sent by another 
 vessel, and the freight was lost. 
 
 Held that the "warranted free" clause did not apply, as the con- 
 tract was not a special charter and did not contain a cancelling 
 date within the meaning of the provisions of the policy. 
 
 With regard to a partial loss of freight, the view has been expressed 
 that while there may be a total loss of part of the freight insured, 
 there cannot be a partial loss of the whole freight.(g') " As Stevens 
 remarks, the word average is very inapplicable to claims for partial 
 losses on freight, which, in fact, can only arise from one cause, viz. 
 a total loss on part of freight. It seems in this country, that a claim 
 in respect of partial loss on freight can only be made good when either, 
 1st, only part of the full intended cargo out of which the freight was 
 expected to arise was on board, or contracted for at the time of the 
 loss ; Qi) 2nd, when some separable part of the whole cargo (i.e. 
 separately valued or insured by the policy (i)) goes in bulk to the 
 bottom of the sea, or is otherwise totally destroyed by a peril insured 
 against. In both these cases there is a clear total loss of part, or 
 partial loss, of freight, which must be adjusted by the underwriter 
 in the mode hereafter to be indicated. A third case, it seems, may 
 
 {g) See BrocUehanh v. Sughrue (1831), 1 Moo. & Rob. 102 ; Amould, sect. 
 878 ; Crump, Marine Insurance, p. 127. 
 
 {h) Forbes v. Aspinall (1811), 13 East. 323; Forbes v. Cowie (1808), 1 Camp. 
 520. 
 
 (i) Balli V. Janson (1856), 6 E. & B. 422 ; see also Robertson v. Marjoribaniis 
 (1819), 2 Stark. 573. 
 
LOSSES UNDBE THE POLICY 185 
 
 arise. If a ship with a full cargo on board, is so damaged that she 
 can only be so far repaired at the port of distress as to take on part 
 of the cargo, and the residue is thereupon necessarily and justifiably 
 sold, it has been intimated (k) that there may be a total loss on that 
 part of the freight, which the ship is thus incapacited from earning." (l) 
 
 On the other hand, in the case of Bankin v. Potter, Brett, J., 
 said that " there is a partial loss of freight under a general policy 
 on freight, if there be a general average loss caused by a peril insured 
 against giving rise to a general average contribution ; or under 
 certain circumstances if there be a total loss of part of the cargo ; 
 or if in case of total loss of the ship the cargo be sent on in a sub- 
 stituted ship ; or if in case of total loss of the cargo the ship earns 
 some freight in respect of other goods carried on the voyage in- 
 sured." (to) 
 
 It is, however, submitted, that except in the cases enumerated 
 by Arnould, and in the case where, after the loss of the original cargo, 
 some freight is earned by carrying other cargo on the voyage insured, 
 there is not a partial loss of freight. The freight may be subject 
 to salvage or general average charges, but if the freight is earned there 
 is no loss of freight, although the assured may be entitled to recover 
 any money he may be liable to pay as money paid by way of average 
 or salvage, (to) The freight may be earned by transhipping the cargo 
 in another vessel, but if the freight is earned, there is no loss of 
 freight, although the assured may be entitled to recover the cost of 
 forwarding the cargo under the suing and labouring clause in the 
 policy.(o) 
 
 According to the memorandum contained in the ordinary form 
 of Lloyd's policy, freight is warranted " free from average under 
 three pounds per cent., unless general, or the ship be stranded." 
 The meaning of this stipulation does not seem to have been considered 
 in this country, and it is not certain whether for the purpose of 
 estimating the percentage of damage, the aggregate value of the whole 
 
 (k) Per Maude, J., in Moss v. Smith (1845), 9 0. B., p. 104 ; see also Mordy 
 V. Jones (1825), 4 B. & C. 394 ; Philpott v. Swann (1861), 11 C. B. (n. s.) 270. 
 
 (l) Arnould, sect. 878. 
 
 (m) (1873), L. R. 6 H. L., p. 98. 
 
 («) See per Aldbrson, B., in Benson v. Chapman (1849), 2 H. L. C, p. 723, 
 ante, p. 122. 
 
 (o) Kidston v. Empire Marine Insurance Co. (1867), L. R. 2 C. P. 357. 
 
186 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 freight at risk should be considered, or the value of the freight upon 
 the different parts of the cargo. In the American case of Lord v. 
 Neptune Insurance Company, (j)) where freight was valued at 6000 
 dollars and the cargo consisted of wheat, flour, hides, palm leaf, 
 barrels of bacon, and kegs of lard, forming several shipments from 
 distinct owners, the Court expressed the view that each portion of 
 the freight was to be considered separately. On the other hand, 
 in the case of Ogden v. The General Mutual Insurance Company, {q) 
 the Court treated the insurance as being upon the whole freight as 
 one integral subject, and this, it is submitted, is the correct view 
 unless the policy contains any provision or indication that each item 
 of freight is to be treated separately. 
 
 In adjusting such losses the practice " has always been to estimate 
 the rate of the exception upon the aggregate loss of each passage 
 or period during which the risk continues on the same subject." (r) 
 
 Freight may also be subject to losses in general average, and such 
 losses if attributable to perils insured against are recoverable from 
 the underwriter under the ordinary form of pohcy. Such losses 
 may be due either to general average sacrifices or to the liability to 
 contribute in general average. 
 
 If goods are jettisoned for the general safety and the freight 
 payable in respect of them is thereby lost, the freight so lost is a 
 general average loss.(s) Thus in the case of the ship Nathaniel 
 Hooper, {t) where part of a cargo of sugars was jettisoned for the 
 general safety. Story, J., 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 sacrifice, and is to be allowed 
 
 ip) (1857), 10 Gray. 109 (Am.). 
 
 (q) (1853), 2 Duer. 204 (Am.). 
 
 (r) Phillips, 3rd ed., sect. 1780 ; cited by Lord Esher, M.R., in SUwart v. 
 Merchants Marine Insuran(,e Co. (1885), 16 Q. B. D., p. 628 ; Amould, sect. 
 893 ; Hopkins on Average, p. 280. 
 
 (a) Hopkins, p. 18 ; Lowndes, pp. 106, 337 ; Arnould, sect. 925 ; PhiUips, 
 sect. 1301 ; Parsons, vol. 2, p. 309. According to the York Antwerp Rules (xv.) : 
 " Loss of freight arising from damage to or loss of cargo shall be made good as 
 general average, either when caused by a general average act or when the damage 
 to or loss of cargo is so made good." 
 
 (t) (1839), 3 Sumner, 542 (Am.). 
 
LOSSES UNDEE THE POLICY 187 
 
 to the shipowners. This is the settled course in the adjustment of 
 general average." Similarly, if cargo, in respect of which freight 
 would be payable, is sold at a port of distress for the purpose of 
 procuring funds to defray general average expenses, (m) or if cargo 
 is destroyed by water used to extinguish a fire. 
 
 Pirie d Company v. Middle Dock Company (1881), 44 L. T. 
 426 ; 4 Asp. M. C. 388, 
 
 was an action brought by cargo-owners to recover the balance 
 of the proceeds of the sale of cargo at Batavia, which the defen- 
 dants, the owners of the vessel Attila, claimed by way of set-off 
 to retain as representing the contribution by the cargo in general 
 average for the loss of freight. 
 
 Pacts. — The vessel sailed from the Tyne on a voyage to Singapore 
 with a cargo of coals. In the course of the voyage the coal was , 
 found to be on fire and forthegeneral safetythe captain jettisoned 
 a portion of the cargo and caused a large quantity of water to 
 be poured down the hold. Though water was poured on the 
 coals continuously for three days, smoke continued to rise from 
 the hold, and the vessel therefore put into Batavia, where it 
 was found necessary to discharge and sell the coal. The average 
 adjusters employed by the defendants estimated that the amount 
 to be made good by the cargo in respect of the freight lost by 
 the jettison and the means adopted to extinguish the fire was 
 £339 Is. 2d., and this sum the defendants deducted from the 
 proceeds of the sale. In an action to recover this sum, 
 
 Held that the plaintiffs were liable to contribute to the loss of the 
 freight, and could not recover. 
 
 If a vessel be stranded or lost under circumstances which give 
 rise to a claim in general average, and the freight which the vessel 
 would have earned is thereby lost, the freight so lost is regarded as 
 a general average sacrifice. " It may be taken, as a general rule 
 that a claim for freight follows the fate of a claim for the vessel. 
 If the vessel is lost under circumstances which make her loss a case 
 
 (u) Stevens, p. 20 ; Carver, sect. 433. 
 
188 LAW EELATING TO THE INSUEANCE OP PEEIGHT 
 
 of general average, the freight, which is lost, is an additional sacrifice 
 of the vessel." (x) Thus in the case of The Columbian Insurance 
 Company v. Ashby,{y) where a vessel was voluntarily run on shore 
 for the general safety and was wrecked, it was held that the freight 
 thereby lost must be made good in general average. " The only 
 remaining point is, whether freight ought to have been brought into 
 the account, either as a part of the loss, or of the contributory value. 
 The auditors' 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 shipowner for the common 
 benefit." (z) 
 
 If, however, the freight is lost in consequence of the voyage being 
 abandoned, and the proximate cause of the abandonment of the voyage 
 is not the general average act, but the peril which gave rise to the 
 general average act, the loss of freight is not to be treated as a general 
 average sacrifice. Thus in the case of Lee v. Grinnell, (a) where a 
 vessel took fire and was scuttled, and the voyage was abandoned in 
 consequence of the damage which the vessel had received by the 
 fire, it was held that the freight was not to be made good, the contri- 
 butors to general average not being insurers of the freight. 
 
 Iredale and Another y. China Traders Insurance Company, [1900] 
 2 Q. B. 515; 69 L. J. Q. B. 783; 83 L. T. 299; 5 Com. 
 Cas. 337 ; 9 Asp. M. C. 119, 
 
 was an action on a policy of insurance on the chartered freight 
 of the Lodore, valued at £1650. 
 
 Pacts. — The plaintiffs were the owners of the ship Lodore, which was 
 chartered to carry a cargo of coals from Cardiff to Esquimault. 
 In the course of the voyage the cargo began to heat, and the 
 
 (r) Per Hoffman, J., in Nelson v. Beaumont (1866), 5 Duer, p. 322 (Am.). 
 See also Parsons, Insurance, vol. 2, p. 310 ; Phillips, sect. 1302 ; Carver, sect. 
 434. 
 
 (y) (1839), 13 Peters, 331 (Am.). 
 
 {z) Per Story, J., at p. 344. 
 
 (a) (1856), 5 Duer. 400 (Am.) ; see also Nelson v. Beaumont (1856), 5 Duer. 
 310. 
 
LOSSES UNDEE THE POLICY 189 
 
 master decided, for the general safety, to bear up for the river 
 Plate. The vessel reached Buenos Ayres, and there discharged 
 the coals, which were subsequently surveyed and found to be 
 unfit to be reshipped. The vessel abandoned the voyage to 
 Esquimault, and returned to the United Kingdom with another 
 cargo, and the chartered freight was totally lost. 
 
 The defendants, who had underwritten the policy, contended 
 that the action of the master in deciding for the general safety 
 to make for Buenos Ayres amounted to an abandonment of 
 the voyage, and that the consequent sacrifice of freight was to 
 be made good in general average. They admitted that the 
 chartered freight had been lost by reason of perils insured against, 
 and they admitted their liability to make good this loss to the 
 plaintiffs. But they contended that the plaintiffs as owners 
 of the ship were liable to contribute in general average towards 
 the loss of the freight, and they claimed to have credit given to 
 them for the amount of this contribution, when they paid to 
 the plaintiffs the amount recoverable under the policy. 
 
 Held that the master did not make for Buenos Ayres for the purpose 
 of abandoning the voyage, but for the purpose of continuing 
 the voyage after he had got the cargo in order ; that the loss 
 of freight was due to the condition of the cargo and not to any 
 general average act, and that there was, therefore, no right to 
 any general average contribution. 
 
 The amount to be made good in general average will vary according 
 to the circumstances. Where part of the cargo has been jettisoned 
 but the vessel ultimately completes the voyage, the shipowner's loss 
 is of the whole unpaid freight on those goods, less the costs which he 
 would have incurred if those goods had completed the voyage, that 
 is, the cost of landing and delivering the goods. The expenses of 
 the vessel in completing the voyage have not been avoided, and no 
 part of them should therefore be deducted. (&) If, after the jettison 
 of a part of the cargo, the ship is wrecked or condemned at a port of 
 
 (&) Carver, sect. 436. In the United States until recently the rule was to 
 allow the gross freight lost without deductions. Phillips, sect. 1368 ; Parsons, 
 Insurance, vol. 2, p. 310 ; Chrystal v. Flint (1897), 82 Fed. R. 472. The same rule 
 used to prevail in this country, see Hopkins, p. 19 ; Bayly, p. 131 ; Chrystal v. 
 Flint, p. 478. The Average Adjusters' Association of the United States has now 
 
190 LAW EELATING TO THE IN8UEANCE OF EEEIGHT 
 
 refuge, and the balance of the cargo is forwarded to its destination 
 in another vessel, the costs of forwarding, which would have been 
 incurred but for the jettison, must be deducted from the amount to 
 be allowed in general average in respect of the freight which has been 
 lost. If the costs of transhipment are equal to or exceed the original 
 freight, nothing is allowable in general average, since in such a case 
 the jettison has occasioned no loss of freight. (c) Similarly, nothing is 
 allowable if, after the jettison, the vessel and the cargo remaining on 
 board are totally lost. 
 
 If, after a jettison, the ship puts into a port of refuge, and there 
 takes in fresh cargo in the space left vacant through the jettison, the 
 new freight thus earned, less the extra expenses incurred in obtaining 
 and earning it, must go in diminution of the shipowner's claim for 
 loss of freight. It would be otherwise if the ship were not full at 
 first, so that the new cargo might equally have been received on board 
 had there been no jettison. (<^) 
 
 With regard to the contributory value of freight payable for the 
 carriage of goods under a charterparty or bill of lading, it is the gross 
 amount of the freight earned minus those expenses of earning it 
 which would have been avoided, if no general average act had taken 
 place and the ship had been lost.(e) The contribution is based on 
 the benefit derived from the sacrifice by each interest, and in the case 
 of freight the benefit is not the full amount of the freight earned, 
 but that amount less the costs of earning it. From the freight received 
 must be deducted the cost of discharging the cargo and of collection. 
 It is also the practice to deduct the wages of the crew since the general 
 average act, and port charges incurred subsequently to it, until all 
 the cargo has been discharged. ( / ) The value of provisions and coals, 
 laid in before the general average act and subsequently consumed, is 
 not deducted, as the expense of these has been already incurred. The 
 
 adopted a rule to the same effect as the rule of English Adjusters (29) : " That 
 the loss of freight to be made good in general average shall be ascertained by 
 deducting from the amount of gross freight lost, the charges which the owner 
 thereof would have incurred to each such freight, but has, in consequence of the 
 sacrifice, not incurred." 
 
 (c) Lowndes, pp. 339, 340. 
 
 {d) Lowndes, p. 340 ; Baily, p. 134 ; Barclay v. Stirling (1816), 5 M. & S. 6. 
 
 (e) Per Gorbll Baknbs, J., in The Brigella, [1893] P., p. 196. 
 
 ( / ) Carver, sect. 436 ; Lowndes, p. 374. 
 
LOSSES UNDEE THE POLICY 191 
 
 cost of provisions and coals laid in after the general average act and 
 consumed before the end of the voyage, should, it is submitted, be 
 treated as part of the expenses of earning the freight, but there is 
 no settled practice on this point. (3) 
 
 Where a vessel is chartered for a voyage at one entire freight, 
 and at the time of the general average act is engaged in earning that 
 freight, the entire freight should be taken into account for purposes 
 of general average. No distinction, it would seem, should be drawn 
 whether the vessel is in ballast or has goods on board, (h) or whether 
 the voyage described in the charterparty is a single voyage from one 
 port to another port, or is a round voyage out and home. Provided 
 that the chartered voyage is one entire voyage, and that the chartered 
 freight is the only freight to be considered, (i) the whole chartered 
 freight which is at risk and which the vessel is earning at the time of 
 the general average act should be taken into account both for the 
 purpose of making and receiving contributions in general average. 
 It has been suggested (fc) that, in those cases where the chartered 
 voyage is a round voyage or consists of several passages, the freight 
 ought to be divided, and that during each passage such part only 
 ought to be considered as may fairly be presumed to belong to that 
 passage. This view has not, however, been adopted. 
 
 Williams v. The London Assurance Company (1813), 1 M. & S. 
 318 ; 14 E. E. 441, 
 
 was an action on a policy of insurance on the ship Dorsetshire. 
 
 Pacts. — The vessel had been chartered to the East India Company 
 for a trading voyage to the East and back, find by the charter- 
 party freight to the extent of £3000 was to be paid to the ship- 
 owner at the begiiming of the voyage, and the balance was to 
 be paid on the safe arrival of the vessel in London on the home- 
 ward voyage. At the commencement of the voyage the vessel 
 was driven ashore, but was got off and, after being repaired, 
 
 (g) Lowndes, p, 374. 
 
 {h) Baily, pp. 139, 148 ; Lowndes, p. 364. 
 
 (i) As to the position where the chartered freight is not the only freight, see 
 post, p. 193. 
 
 ■ {k) Beneoke, Principles of Indemnity, p. 315. 
 
192 LAW EBLATING TO THE INSUEANCE OF FEEIGHT 
 
 completed the voyage. The question for the opinion of the Court 
 was whether the freight payable under the charterparty was to 
 contribute to the general average. 
 
 Held that the freight ought to contribute, as it was one entire and 
 indivisible sum payable for the use of the ship out and home.(Z) 
 
 The Steamship Carishrooh Company v. The London d Provincial 
 Marine d General Insurance Company, [1902] 2 K. B. 681 ; 
 87 L. T. 418 ; 71 L. J. K. B. 978 ; 7 Com. Cas. 236 ; 50 
 W. E. 691 ; 9 Asp. M. C. 332, 
 
 was an action on a policy of insurance for £2000, upon the hull 
 and machinery of the steamship Nestor. 
 
 Facts. — The vessel, which was described in the charterparty as 
 " reported ready to leave Fleetwood in ballast," was chartered 
 to proceed to Savannah, and there, having discharged her cargo, 
 if any, load a cargo of cotton and proceed therewith to Liver- 
 pool, the freight to be paid on unloading and right delivery of 
 the cargo. On the voyage to Savannah the vessel, which was 
 in ballast, grounded and in the efforts made to get her off, con- 
 siderable damage was sustained. The vessel was eventually 
 got off, and after being repaired, loaded her cargo at Savannah 
 and earned the chartered freight. An average adjustment of 
 the repairs of the ship was prepared, but the average adjusters 
 in preparing it omitted to make the chartered freight contribute. 
 The plaintiffs having sued the defendants on the policy for the 
 cost of the repairs, the defendants contended that the average 
 statement was incorrect, and that upon a proper adjustment of 
 the loss, the plaintiffs were liable to make contribution in respect 
 of the freight payable under the charterparty. 
 
 (l) The Court did not decide as to the amount for which the freight was to 
 contribute, or as to what should have been done had the average been adjusted 
 at the end of the outward voyage. That would ordinarily be the proper place 
 for the adjustment, and, at that place only a prospect of earning the freight had 
 been saved, while the cargo's safety had been definitely reaUzed. To put them 
 on an equality, therefore, the freight should contribute only on the value of the 
 prospect of earning it, and aU the costs of completing the voyage ought to be 
 deducted. See Carver, sect. 438 ; per Spragub, J., in the Brig Mary (1842), 
 1 Sprague, p. 21 (Am.). 
 
LOSSES UNDEK THE POLICY 193 
 
 Held that, as the chartered voyage was one entire voyage, and the 
 only freight was the freight payable on the ultimate arrival of 
 the ship with the cargo on board, the chartered freight was 
 liable to contribute to the general average sacrifice, (m) 
 
 If the chartered voyage is not one entire voyage, but consists of 
 separate voyages in respect of each of which separate freights are 
 payable, only the freight payable in respect of the voyage which the 
 vessel is making at the time of the general average act should, it 
 would seem, be taken into account, (n) " No doubt there are differ- 
 ences of convenience where there is a cargo carried to the inter- 
 mediate port as distinguished from the case where no cargo is carried 
 to the intermediate port, and if cargo is carried under a charter which 
 entitles the ship to a freight at the intermediate port, one can easily 
 understand why the average adjusters should make a difference and 
 limit the contribution in respect of such an average sacrifice, on 
 what I may call the first part of the voyage, to the freight 
 which was to be earned at the first port where the cargo was to be 
 discharged." (o) 
 
 If the chartered freight is not the only freight, as for instance in 
 those cases where a vessel has been chartered at one rate of freight, 
 and is used by the charterer to carry goods under bills of lading which 
 reserve a different rate, the practice is to regard only the bill of lading 
 freight, and to disregard the charterparty freight.(j?) If the bill of 
 lading freight is less than the charterparty freight, it is only this lower 
 rate of freight which is allowed in general average and upon which 
 contribution is to be made.(g) Similarly, if the bill of lading freight 
 
 (m) Of. also The Progress (1810), Edwards Adm. R., p. 223 ; The Dorothy 
 Foster (1805), 6 Rob. 88 ; The Brig Mary (1842), 1 Sprague 17 (Am.) ; The Kaffir 
 Prince (1915), 31 T. L. R. 296. 
 
 (n) See Carver, sect. 439 ; The Progress (1810), 1 Edw. Adm., p. 224 ; but 
 see Parsons on Shipping, vol. 1, p. 452. In an American case, where a vessel was 
 chartered under a time charter for three successive voyages, and the freight was 
 payable monthly, it was held that the value of the freight for purposes of con- 
 tributing to general average incurred on the last voyage, should be based on the 
 current rate of freight for that voyage. Stafford v. Dodge (1817), 14 Mass. R., 
 p. 80 (Am.). 
 
 (o) Per Collins, M.R., in Steamship Carisbrook Co. v. London <fc Provincial 
 Insurance Go., [1902] 2 K. B., p. 690. 
 
 (p) Carver, sect. 435 ; Lowndes, p. 341 ; M' Arthur, 2nd ed., p. 203 ; Baily, 
 p, 131 ; per Goeell Baenbs, J., in The Leitrim, [1902] P., p. 267, 
 
 {q) Baily, p. 132 ; Lowndes, p. 341 ; M' Arthur, p. 203. 
 
 I.F. 
 
194 LAW EELATING TO THE INSUEANCE OP PEEIGHT 
 
 is greater than the charterparty freight, it is only the bill of lading 
 freight which is considered, but as it would be unfair that the ship- 
 owner should contribute or be paid on the higher rate of freight, the 
 charterer is liable to contribute on the excess between the charter- 
 party and the bill of lading rate of freight, (r) and is entitled to any 
 allowance made in respect of the excess. " When a vessel is under 
 charter, and the freight under the charter is less than that under the 
 bill of lading, the loss allowable in general average is the freight under 
 the bill of lading ; and as in such a case it is easy to divide that 
 allowance between the shipowner and the charterer, giving to each 
 the part of it which respectively belongs to each of them, it is usual 
 to do so — not as a recognition in a general average to which cargo 
 contributes, of the freight under the charter, but for practical con- 
 venience." (s) 
 
 The Leitrim, [1902] P. 256 ; 71 L. J. P. 108 ; 87 L. T. 240 ; 
 51 W. E. 158 ; 8 Com. Gas. 6 ; 9 Asp. M. C. 317, 
 
 was an action on a policy of insurance on the ship Leitrim, 
 to recover the sum of £66 18s. Gd. 
 
 Pacts. — The plaintiffs, the owners of the Leitrim, had chartered the 
 vessel for a period of five months under a time charter which 
 provided that hire was to cease in the event of damage preventing 
 the working of the vessel for more than twenty-four hours. 
 The charterers sub-chartered the vessel for a voyage from Barry 
 to Cape Town with a cargo of coals at a freight of 35s. per ton 
 delivered. While the vessel was loading at Barry a fire broke 
 out and to extinguish the fire it was found necessary to pour 
 large quantities of water into the holds. After the fire was 
 extinguished, the vessel was repaired, but under the time charter 
 the vessel was off hire for thirty-nine days, the greater portion 
 of which time was due to repairs consequent on damage caused 
 by the water which had been pumped into the vessel. 
 
 A statement of general and particular average was prepared, 
 to which the plaintiffs objected on the ground that it did not 
 make any allowance in respect of loss of hire, which they con- 
 tended should be made good in general average. 
 
 (r) Hopkins on Average, p. 108 ; M' Arthur, p. 203. 
 
 (s) Baily, p. 131 ; Lowndes, p. 366, note (6) ; Carver, sect. 435. 
 
LOSSES UNDEE THE POLICY 195 
 
 Held that the loss of hire was not to be made good in general average, 
 (1) on the ground that in general average claims for delay are not 
 taken into account, (2) on the ground that the time chartered 
 freight was not a matter with which the owners of the cargo were 
 concerned, and should be disregarded. 
 
 If the charterparty provides for the carriage of goods on a home- 
 ward voyage and contemplates that the shipowner will on the outward 
 voyage be carrying goods for other persons, in the event of a general 
 average act during the outward voyage, it is only the freight payable 
 in respect of the outward cargo which should be taken into account. 
 It has been suggested (i) that a distinction should be drawn between 
 those cases where the charterparty was made before the contract 
 for the carriage of the outward cargo, and those cases where the 
 charterparty was made after the contract for the carriage of the out- 
 ward cargo. But in practice no such distinction is drawn, and the 
 Eules of Practice of the Association of Average Adjusters provide 
 " that when at the time of a general average act the vessel has on 
 board cargo shipped under charterparty or bills of lading, and is also 
 under a separate charter to load another cargo after the cargo then 
 in course of carriage has been discharged, the ulterior chartered freight 
 shall not contribute to the general average." (m) 
 
 If the vessel has been chartered under distinct charterparties 
 for other voyages after the one which she is making, the correct 
 principle, it is submitted, is to take into account only the freight 
 payable in respect of the voyage which the vessel is making at the 
 time of the general average act.(a;) In the case of Bankin v. Potter, 
 
 {t) Eule 34. 
 
 {u) The case of Moran v. Jones (1857), 7 E. & B. 523, apparently conflicts 
 with this view. In this case a vessel had been chartered to proceed in ballast 
 from Liverpool to the Chinoha Islands, and there load a cargo of guano for 
 carriage to the United Kingdom at a freight of £4 10s. per ton. With the con- 
 sent of the charterers the plaintiffs shipped on freight from other parties a small 
 quantity of goods, the value of the goods being about £600. General average 
 expenses were incurred on the outward voyage to which the underwriters on the 
 chartered freight were willing to contribute, and the Court expressed the view 
 that they were liable to do so. It should, however, be noticed that the object 
 of the voyage was to earn the chartered freight, and the freight payable for the 
 outward cargo was so insignificant that no attention seems to have been paid to 
 it. See also the case of the Brig Mary (1842), 1 Sprague, 17 (Am.). 
 
 (x) It has been seen (ante, p. 193) that if the chartered voyage is not one 
 entire voyage, but consists of separate voyages in respect of which separate 
 
196 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 a charterparty had been made under which a vessel was to proceed 
 to New Zealand with cargo for owners' benefit and having discharged 
 that cargo was to proceed to Calcutta and there load a cargo from 
 the charterers for carriage to London, and the view was expressed by 
 WiLLEs, 3.,{y) and Blackburn, J., (2) that as the chartered freight 
 was not to be earned during the voyage to New Zealand, it was not 
 liable to contribute to general average incurred during that voyage. 
 In the case of the Dorothy Foster,{a) Lord Stowell said : " As to 
 the second question, whether a salvage is due on the freight, that 
 will depend on another question of fact, whether the freight was in 
 a course of being earned, because I cannot go the length of holding 
 that it would be sufficient that the ship was enabled to earn freight 
 by the act of recapture. If a vessel had been cut out of port, and had 
 been afterwards recaptured, it could not be contended, I conceive, 
 that salvage would be due on the freight accruing on the following 
 voyage." 
 
 Where freight payable for the carriage of goods has been paid in 
 advance or is unconditionally payable at a certain time whether the 
 goods arrive or not, the obligation to make and the right to receive 
 general average contribution in respect of such freight is transferred 
 from the owner of the ship to the owner of the goods. The rights and 
 obligations of the shipowner in respect of such freight cease, because 
 in such cases the freight is no longer at his risk. The owner of the 
 cargo has purchased the right to have it carried to its destination, 
 and the advantage derivable from the performance of the voyage is 
 thenceforward his concern.(b) In the case of Frayes v. Worins,{c) 
 
 freights are payable, only the freight payable in respect of the voyage which the 
 vessel is making at the time of the general average act should, it would seem, be 
 taken into account. 
 
 {y) (1868), L. R. 3 C. P., p. 567. 
 
 {z) (1873), L. R. 6 H. L., p. 115. 
 
 (a) (1805), 6 Rob. 88. This was a salvage case, but there is a close analogy 
 between questions of salvage claims and questions of general average loss. See 
 per Collins, M.R„ in 8.S. Garishrooh Go. v. London & Provincial Insurance Go., 
 [1902] 2 K. B., p. 689 ; per Lord Ellenboeouoh in Cox v. May (1815), 4 M. & S., 
 p. 159. 
 
 (6) Lowndes, p. 355 ; M' Arthur, p. 202 ; Arnould, sect. 986 ; Carver, sect. 
 440. 
 
 (c) (1865), 19 C. B. (n. s.) 159 ; S. C. reported as Trayes v. Worms, 34 L. J. C. P. 
 274. 
 
LOSSES UNDEE THE POLICY 197 
 
 the question arose whether the charterer was Uable to contribute to 
 general average expenses incurred on the voyage, in respect of 
 freight paid in advance upon a cargo of coals shipped by him for San 
 Francisco and delivered to him there, and it was held that he was 
 liable to contribute. The question whether this contribution was 
 in respect of an interest in freight, or of an interest in cargo, was not 
 decided, but the latter seems the more correct view. It must be 
 remembered that for purposes of general average the value of the cargo 
 under ordinary circumstances is its market value at the date of 
 dehvery or at the time and place which form the basis of adjustment, 
 less those expenses which the owner of the cargo must incur in the 
 event of delivery and will avoid in the event of total loss ; that is, 
 the discount, freight, landing and warehousing charges, duty and 
 brokerage, (d) But if freight has been paid in advance, the cargo - 
 owner will, so far as freight is concerned, incur no further expense 
 in the event of the safe arrival of the cargo and will save nothing in 
 the event of its loss, and in arriving at the value of the cargo in such 
 cases nothing should be deducted in respect of freight. Prepaid 
 freight in such cases should not be regarded as a separate interest, 
 but as forming part of the value of the goods, (e) " When the freight 
 under the bills of lading has been paid, lost or not lost, on the ship- 
 ment of the cargo, frmght is merged in the cargo, and does not con- 
 tribute under that name." (/) 
 
 Where the freight paid in advance is chartered freight payable for 
 the use of a vessel irrespective of the cargo which may be put on board, 
 such freight must, it would seem, be treated as a separate interest, 
 and contributions in respect of such freight will be made and received 
 by the party who has paid the freight, that is, by the charterer. 
 
 Where expenses of reloading are incurred at a port of refuge in 
 consequence of accidental damage to the vessel, the practice is to 
 charge these expenses against the freight whether prepaid or not, 
 although these expenses should properly be chargeable to the ship- 
 owner who is under the duty of completing the voyage and carrying 
 the cargo to its destination. This practice has been the subject of 
 much adverse criticism, (gf) and was treated by Lord Blackburn 
 
 (d) Lowndes, p. 353. 
 
 (e) Ibid., p. 365 ; Carver, sect. 440 ; but see Arnould, sect. 986. 
 (/) Bayly, p. 158. 
 
 (g) Lowndes, p. 261 ; Carver, sect. 410, App. D.. pp. 989, 990 ; Bayly, p. 162. 
 
198 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 in the case of Svendsen v. Wallace Qi) as being wrong, but it is con- 
 firmed by a rule of the Association of Average Adjusters. " The 
 expenses referred to in clause {d) " (viz. the cost of reloading the 
 cargo and the outward port charges) " are charged to the party who 
 runs the risk of freight — that is, wholly to the charterer — if the whole 
 freight has been prepaid, and, if part only, then in the proportion 
 which the part prepaid bears to the whole freight." 
 
 Most of the rules, to which reference has been made, have been 
 the subject of adverse criticism. Thus the rule that, where there is 
 a charterparty and goods have been shipped under bills of lading 
 which reserve a lower rate of freight, it is only the bill of lading freight 
 which should be taken into account, has been criticised by the late 
 Judge Carver (i) on the ground that, to the extent to which the 
 chartered freight exceeds the bill of lading freight, the shipowner 
 has a distinct interest which should contribute and be contributed 
 to in general average. The late Mr. Lowndes, on the other hand, 
 supported the rule on the ground that in such cases the owner of the 
 goods shipped under the bills of lading has no concern with the 
 charterparty. (k) Again, the rule that, where a ship has been chartered 
 at independent freights for other voyages after the one upon which 
 she is proceeding, such ulterior freights should not be taken into 
 account, was not accepted by Judge Carver or Mr. Lowndes. 
 They were of opinion that such freight should be taken into account 
 if they had a peculiar value for the shipowner, on the ground that 
 to that extent the value of the ship to the owner was enhanced, (l) 
 
 It is, however, submitted that the rules, which have been set out 
 above, are on the whole correct in principle for this reason, that the 
 elements to be considered in questions of general average are not 
 the interests of the owners of the cargo or of the owners of the ship, 
 but the cargo, the ship, and the freight which the ship is earning 
 
 (h) (1885), L. R. 10 A. C, p. 416. 
 
 (i) Carver, Carriage by Sea, sect. 435. 
 
 (k) Lowndes, p. 341 ; see also per Gorell Babnes, J., in the Ledtrim, [1902] 
 P., p. 267 ; Bayly, p. 132. Mr. Lowndes, it would seem, also supported the rule 
 on the ground that in such cases the charterparty should be treated as a speculative 
 contract and ignored, although in other parts of his work he expressed the view 
 that any freight which could be insured should be taken into account for purposes 
 of general average, pp. 361 , 366. 
 
 (l) Lowndes, p. 368 ; Carver, sect. 439. 
 
LOSSES UNDEE THE POLICY 199 
 
 at the time of the disaster. That this is so in the case of the cargo 
 is undisputed, as the existence of a profitable contract for the sale of 
 the cargo is ignored. The fact that the owner of the cargo may have 
 an interest in the cargo beyond its ordinary value is disregarded, and 
 by parity of reasoning the fact that the owner of the ship has an 
 interest in the ship beyond its ordinary value should also be dis- 
 regarded. If this view is correct, contracts for the future employment 
 of a ship, which do not afifect the intrinsic value of the ship,(m) 
 must be ignored, and this view is supported by the language of Lord 
 Stowbll in the case of the Dorothy Foster : (n) " As to the second 
 question, whether a salvage is due on the freight, that will depend 
 on another question of fact, whether the freight was in a course of 
 being earned, because I cannot go the length of holding that it would 
 be sufficient that the ship was enabled to earn freight by the act of 
 recapture. If a vessel had been cut out of port, and had been after- 
 wards recaptured, it could not be contended, I conceive, that salvage 
 would be due on the freight accruing on the following voyage." 
 
 The freight which is to be taken into account is the freight which 
 the vessel is engaged in earning at the time of the general average 
 act, and not the interests in freight which may be benefited by the 
 continued existence of the vessel. The rules for ascertaining the 
 freight to be considered for purposes of general average are very 
 similar to the rules for ascertaining the freight covered by an ordinary 
 pohcy. Thus where a vessel has been chartered for a round voyage 
 at one entire freight, and the vessel is sailing on this voyage, either 
 in ballast or with cargo belonging to the charterer, the entire chartered 
 freight is covered by the ordinary policy (o) and contributes in general 
 average. If the charterparty provides for two distinct voyages in 
 respect of which two distinct freights are payable, it is only the 
 freight for the immediate voyage which the vessel is making which 
 is covered by the ordinary policy, and which is considered for purposes 
 of general average. And similarly, if the vessel has been chartered 
 for successive voyages under separate contracts of affreightment. 
 
 (w) See per Bebtt, M.R., in Sea Insurance Co. v. Hadden (1884), L. E. 13 
 Q. B. D., p. 713. " The existence of a contract of affreightment does not add to 
 the value of the ship. It is no part of it." 
 
 [n) (1805), 6 Rob., p. 90. (o) See ante, p. 24. 
 
CHAPTEE VI. 
 
 Adjustment. Valuation. Abandonment. Subrogation. 
 
 According to the Marine Insurance Act, " subject to any express 
 provision or valuation in the poUcy, the insurable value of the subject- 
 matter insured must be ascertained as follows : in insurance on 
 freight, whether paid in advance or otherwise, the insurable value 
 is the gross amount of the freight at the risk of the assured, plus 
 the charges of insurance." (a) This rule is in accordance with old- 
 established practice, which was recognised in the case of — 
 
 Palmer and Others v. Blackburn (1822), 1 Bing. 61 ; 1 L. J. (o. s.) 
 C. P. 1 ; 7 Moore, 339 ; 25 E. E. 599. 
 
 This was an action on an open poHcy of insurance on the 
 freight of the ship Juliana. 
 
 Facts. — The vessel, which was bound from the East Indies to 
 London, was totally lost just before the termination of the voyage. 
 The freight payable to the plaintiffs in the event of the safe 
 arrival of the vessel would have been £3068 ; but out of this 
 the plaintiffs must have paid £700 for seamen's wages, pilotage 
 and dues, etc., from which payment they were altogether 
 exempted by the loss of the vessel. The defendant contended 
 that they were not entitled to recover more than the amount 
 of the net freight, after deducting the charges which the plain- 
 tiffs must have incurred if the ship had arrived in safety. The 
 plaintiffs claimed the amount of the gross freight, and called 
 evidence to prove that although open policies on freight were 
 extremely rare, the uniform custom in settUng losses upon them 
 had been to pay the assured on the amount of the gross freight. 
 
 (o) Sect. 16 (2). 
 200 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 201 
 
 The jury found a verdict for the plaintiffs for the whole amount, 
 and the defendant moved for a rule to show cause why the 
 verdict should not be set aside on the ground that evidence of 
 the usage ought to have been excluded as it was contrary to 
 law, a policy of insurance being a contract of indemnity, whereas 
 the usage would secure to the shipowner a profit in the event of 
 the loss of the ship. 
 
 Held that the evidence was rightly admitted and the rule was 
 refused. (6) 
 
 The subject-matter of the insurance is the freight which the 
 assured may have at risk, and not the profit which he may derive out 
 of that freight, and therefore no account should be taken of the costs 
 and expenses which have to be incurred in order to earn the freight. 
 The underwriter, as it has frequently been said, insures that the 
 freight shall be earned, but he does not insure that the freight when 
 earnfed shall yield a profit to the assured, (c) He has nothing to do 
 with questions of profit or loss. He cannot rely on the fact that the 
 shipowner has by the loss been saved the ordinary expenses of the 
 voyage, and he is not under ordinary circumstances responsible for 
 any extraordinary loss or expenses due to the prolongation of the 
 voyage, (d) 
 
 In the event, therefore, of a total loss of all the freight covered and 
 intended to be covered by the poUcy, the assured, in the absence of 
 any provision to the contrary, (e) will be entitled to recover the full 
 amount insured, provided that this does not exceed the gross amount 
 of the freight at risk under the policy plus the charges of insurance, 
 and he will also be entitled to recover in a proper case under the 
 
 (6) See also Stevens v. Columbia Insurance Co. (1805), 3 Caines, 43 (Am.) ; 
 United States Shipping Go. v. Empress Assurance Corporation, ante, p. 51 ; [1907] 
 1 K. B. 259 ; Thames <& Mersey Insurance Co. v. Gunford Ship Co., Ltd., [1911] 
 A. C, p. 549 ; Phillips, 3rd ed., sect. 1238. 
 
 (c) Cf. per Pollock, C.B., in Benson v. Chapman (1847), 5 C. B., p. 345 ; 
 Jordan v. Warren Insurance Co. (1840), 1 Story, p. 352 (Am.) ; Ogden v. General 
 Mutual Insurance Co. (1853), 2 Duer. 204 (Am.) ; Allen v. Mercantile Mutual 
 Insurance Co. (1871), 44 N. Y., p. 441 (Am.). 
 
 {d) Insurance Co. of North America v. Jones (1807), 2 Binn. 547 (Am.) ; 
 Mayo v.- Maine Insurance Co. (1808), 4 Mass. E. 374 (Am.). 
 
 (e) According to Weskett, art. " Freight," the London Assurance Company used 
 to refuse to make insurance on freight, unless it was specified to be on net freight. 
 
202 LAW EELATING TO THE INSUEANCE OF EEEIGHT 
 
 sue and labour clause any expenses reasonably incurred in endeavour- 
 ing to avert the loss. (/ ) 
 
 It may be, however, that at the time of the loss only a portion 
 of the cargo, which it was contemplated would be loaded and in 
 respect of which freight would be payable, has been put on board, 
 or it may be that at the time of the loss a portion of the cargo, which 
 has been loaded, has been safely landed and the freight payable in 
 respect of it withdrawn from the risk. How in such cases is the loss 
 to be adjusted ? It has been said that in an open policy on freight, 
 where only part of the intended cargo is on board or contracted for 
 at the time of the loss, the underwriter is only Hable for the same 
 proportion of the sum insured as the freight of the goods lost bears 
 to the full freight, which would have been earned, had the whole 
 intended cargo been loaded and all arrived. " If. in an open policy 
 on freight, only part of the cargo be on board or contracted for at the 
 time of the loss and this part be totally lost, the underwriter can only 
 be called upon to pay the actual amount of freight on the goods 
 actually lost, together with premiums and costs of insurance ; in 
 fact, in such cases the underwriters, whether in a valued or open 
 policy, shall adjust as for a total loss of part of the freight : paying 
 the same proportion of the sums for which they have subscribed 
 the policy as the freight of the goods lost bears to the full freight 
 which would have been earned had the whole intended cargo been 
 loaded and all arrived." (g) 
 
 This will be the correct rule to be applied in those cases where the 
 policy was intended to cover the freight of any particular cargo, 
 but in the case of an open policy it will seldom happen that the policy 
 was intended to apply to any particular cargo. It may be con- 
 templated that a full cargo will be loaded, but the intention is generally 
 to cover the freight which the assured may have at risk, whatever 
 that may prove to be. The correct rule, therefore, for adjusting losses 
 under an open policy on freight is, it is submitted, under ordinary 
 circumstances to ascertain the proportion which the freight lost 
 bears to the whole freight which has been at risk under the policy. 
 " Subject to any express provision in the policy, where there is a 
 
 ( / ) Kidston v. Empire Marine Imwance Co. (1867), L. R. 2 C. P. 357 ; Lee v 
 Southern Insurance Co. (1870), L. R. 5 C. P. 397. 
 ig) Amould, sect. 1041. 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 203 
 
 partial loss of freight, the measure of indemnity is such proportion- 
 of the sum fixed by the policy in the case of a valued policy, 
 or of the insurable value in the case of an unvalued policy, as the 
 proportion of freight lost by the assured bears to the whole freight 
 at the risk of the assured under the poUcy." (h) The proper 
 time to ascertain the freight which has been at risk under the 
 policy is at the expiration of the risk. " The underwriter insures 
 against accidents happening during the voyage, and the whole 
 voyage must be regarded before it can be ascertained whether and 
 to what extent the assured are damnified." (i) In adjusting a loss, 
 therefore, under an open policy on freight, it is not under ordinary 
 circumstances the freight which the assured had at risk at the time 
 of the loss, or the freight which it was contemplated would be at risk, 
 which must be taken into account, but the freight which the assured 
 actually has had at risk during the voyage. 
 
 Where a part of the freight which has been at risk and covered 
 by the poUcy has been earned before the loss occurs, it has been 
 suggested that the loss should be adjusted by comparing the value 
 of the freight lost with the value of the freight at risk at the time of 
 the loss. " The amount for which the underwriters are liable, in a 
 partial loss of freight, is computed similarly to a partial loss on the 
 ship. If a part of the original cargo is discharged in the course of the 
 voyage, or lost by inevitable accident, the amount of this interest 
 at risk is thereafter less. Where the sum insured, whether in a 
 valued or open policy, is less than the value of the interest at risk 
 when a partial loss happens, the underwriter pays the same pro- 
 portional part of the loss that the sum insured is of the value of the 
 interest then at risk, but if the sum insured is equal to the value at 
 risk, he pays the whole of the loss." (fc) 
 
 It is submitted that this view is not correct and that the rule which 
 has been set out above, viz. that in adjusting losses under an open 
 policy on freight, it is necessary to compare the value of the freight 
 lost with the value of the whole freight which has been at risk under 
 
 (h) Marine Insurance Act, sect. 70. This section must be read in conjunction 
 with sect. 75 (2). 
 
 (t) Per MoNTAGrE Smith, J., in Lidgett v. Secretan (1871), L. E. 6 C. P., 
 p. 630 ; see also per Maulb, J., in Stewart v. Stede (1842), 5 Scott, N. R., p. 949. 
 
 (k) Phillips, sect. 1454. 
 
204 LAW EELATING TO THE INSUEANOE OP PEEIGHT 
 
 the policy, applies also in those cases where, before the loss, part of the 
 freight which has been at risk under the policy has been earned and 
 withdrawn from the risk. To take an illustration. A policy for 
 £1000 is effected on freight at and from port A to port B, and at port 
 A a full cargo is loaded, the freight of which will be £5000. The 
 vessel arrives at port B, and after unloading half the cargo in respect 
 of which £2500 is paid, is wrecked and the remaining moiety of the 
 freight is lost. In this case there has only been a loss of a moiety of 
 the freight which has been at risk under the policy, and the assured 
 can only recover a moiety of the sum insured, or to put it in another 
 way, the assured can only recover such proportion of the loss as the 
 sum insured bears to the value of the whole freight which has been at 
 risk under the policy, and not that proportion of the loss which the 
 sum insured bears to the value of the freight at risk at the time of the 
 loss. 
 
 In the case of valued policies the principles to be applied in 
 adjusting losses are the same as in the case of open policies. " With 
 regard to the real point to be decided, the fact that this is a valued 
 policy, is, in my mind, a mere accident, and does not affect the ques- 
 tion. The question whether there was a total or a partial loss, is 
 in this case, as I think it ought in every case to be, quite independent 
 of whether the policy was valued or not. The question is, what is 
 the subject-matter that is covered by the insurance, and whether the 
 whole of the subject-matter is lost, in which case it would be a total 
 loss ; or whether only a part of it is lost, in which case it would be a 
 partial loss only, the amount of which would depend upon the pro- 
 portion which the part that was lost bore to the whole subject-matter 
 of the insurance. Then, if that is a valued policy, the value being 
 admitted, the sum when reduced to figures is proved ; if it be an 
 open policy, you must prove the value of the whole subject-matter. 
 When that is proved, it comes to the same result ; the fact of the 
 policy being valued merely dispenses with proof of value." (l) 
 
 Although the principles in the case of valued and open policies 
 are the same, certain complications arise from the fact that the pohcy 
 contains a valuation. A valued policy is a policy which specifies 
 the agreed value of the subject-matter insured, (m) The value fixed 
 
 (I) Per Blackbtjbn, J., in Tobin v. Harford (1864), 17 C. B. (n. s.), p. 536. 
 (m) Marine Insurance Act, sect. 27 (2). 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 205 
 
 by the policy is conclusive of the insurable value of the subject 
 
 intended to be insured, (n) but this leaves open the question, what is 
 
 the subject intended to be insured. It has been laid down that 
 
 " a valuation of freight refers frima facie to the freight of a full cargo, 
 
 or the charter of the entire ship," and in the case of Denoon v. The 
 
 Home and Colonial Assurance Company (o) it was held that the 
 
 policy must be so construed in the absence of something to show the 
 
 underwriter that the valuation was of less than such full freight. It 
 
 may, however, be doubted whether this presumption applies in all 
 
 cases. In those cases where it is expected that the vessel will load 
 
 a full cargo, and the vessel is lost before the loading is completed, 
 
 and before it can be determined whether a full cargo will ultimately 
 
 be loaded or not, the presumption that the valuation refers to the 
 
 freight of a full cargo may be necessary. This was the view adopted 
 
 in the cases of Forbes v. Aspinall and Patrick v. Eames. 
 
 Forbes and Another v. Aspinall (1811), 13 East. 323 ; 12 E. E. 
 352, 
 
 was an action on a policy of insurance on freight valued at 
 £6500, upon the ship Chismck, at and from any port or ports in 
 Hayti to Liverpool. 
 
 Pacts. — The vessel arrived at Hayti with a cargo of goods to be 
 bartered, and had bartered a portion of the goods for 55 bales 
 of cotton when the vessel was driven on shore and lost. The 
 remaining portion of the outward cargo was saved from the 
 wreck and was exchanged for 250 tons of coffee and 100 tons of 
 wood, the freight of which would have been of greater value 
 than the sum insured on freight. 
 
 The defendant settled for the freight of the 55 bales of cotton, 
 but contended that he was not hable for any further amount. 
 The plaintiffs, on the other hand, claimed the full amount of the 
 valuation. 
 
 Held that the plaintiffs could not recover as the valuation looked to 
 freight upon all the goods which the ship was intended to 
 carry upon the voyage insured, viz. a complete cargo, and as the 
 
 («) Marine Insurance Act, sect. 27 (3). (o) (1872), L. R. 7 C. P. 341. 
 
206 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 freight of only a portion of such cargo had been lost, the plain- 
 tiffs could only recover in respect of the freight so lost. 
 
 Patrich V. Eames (1813), 3 Camp. 441, 
 
 was an action on a policy of insurance on the freight of the ship 
 Jane, valued at £4000, at and from the ship's port of loading to 
 Liverpool. 
 
 Pacts. — The vessel was sent by her owners to St. Nicholas with the 
 idea of loading a full cargo of orchella weed, but after taking 
 in 150 bags the vessel was totally wrecked. At the time of the 
 loss no more orchella weed was ready or contracted for, but 
 there were persons in St. Nicholas employed in picking and pre- 
 paring what would have been a sufficient quantity to fill the ship. 
 The defendant paid into Court a sufficient sum to cover the 
 freight of the 150 bags of orchella weed on board at the time 
 when the vessel was wrecked, and a return of the premium for 
 short interest, but the plaintiffs claimed the full amount of the 
 valuation. 
 
 Held that the plaintiffs were not entitled to recover any further 
 amount. 
 
 If, however, the vessel cannot obtain a full cargo, and sails with 
 all the cargo which she can obtain, then, unless it appears that the 
 subject insured was in fact intended to be the freight of a full cargo, 
 the valuation should, it is submitted, be applied to the freight of 
 the cargo so obtained. " It does not appear that, when this policy 
 was subscribed, the plaintiffs knew the quantity of goods which the 
 ship was to take on board at Amsterdam ; or the price, which was 
 to be paid for their transportation to Philadelphia. In this state of 
 uncertainty, the parties agree that it shall be valued at a sum, which 
 eventually proves to be three times the value of the carriage of the 
 goods. But we do not perceive that the estimate was unfairly 
 made. It is not found that the ship did not take all the cargo which 
 could have been procured at Amsterdam." (p) 
 
 (p) Per Putnam, J., in Coolidge v. Olcmcesler Marine Inswance Co. (1819), 
 15 Mass. E., p. 344 (Am.) ; see also Wohutt v. Eagle Insurance Co. (1827), 4 Pick., 
 p. 436 (Am.) ; Boardman v. Boston Marine Insurance Co. (1888), 146 Mass. R., 
 p. 453 (Am.). 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 207 
 
 In America it has been held that in the case of a valued 
 time poUoy on freight, the valuation should be construed as 
 Supplying to that freight only which the assured may have at 
 
 risk. 
 
 New York and Cuba Mail Steamship Com-pany v. Royal Exchange 
 Assurance (1907), 154 Fed. E. 315, 
 
 was an action on a policy of insurance for the period of 12 months 
 on freight of the Vigilancia, on board or not on board, valued 
 at £2062. 
 
 Facts. — While on a voyage from Vera Cruz to New York, via Havana, 
 the Vigilancia stranded and a large portion of the cargo was 
 lost. When the vessel left Vera Cruz for New York the freight 
 amounted to about 6888 dollars, and of this some 3467 was 
 payable in advance and the balance, 3421 dollars, was payable 
 in New York, but of this only 38 dollars was earned. Cargo 
 had been engaged at Havana by the plaintiff company for 
 carriage by its line to New York, and this cargo the plaintiff 
 company proposed to ship by the Vigilancia, but owing to 
 the accident it had to be sent on by another vessel. With 
 regard to this freight, which would have amounted to about 
 3000 dollars, the Court held that as it had not been definitely 
 appropriated to the Vigilancia, it was not at risk under the 
 policy. 
 
 Held that the assured could recover the full amount of the valuation 
 as the policy covered only the freight which the assured had at 
 risk, viz. the freight payable at New York, and the valuation 
 must be construed as applying to this freight, (g) 
 
 If, however, it appears that the subject-matter, to which the 
 valuation was intended to apply, was the freight of a full cargo, the 
 valuation must be so applied. In fact, in every case in which it 
 appears that the valuation was intended to refer to any particular 
 subject-matter, it should be so construed. 
 
 (?) See also Delano v. American Insurance Co. (1864), 42 Barb. 142 (Am.), 
 
208 LAW EELATING TO THE INSUEANOE OF PEEIGHT 
 
 Allison V. Bristol Marine Insurance Company (1876), L. E. 1 
 A. C. 209 ; 34 L. T. 800 ; 24 W. E. 1039 ; 3 Asp. M. C. 178, 
 
 was an action on two policies of insurance on the freight of the 
 Merchant Prince. One of the poUcies was for £500 on " freight 
 valued at £2000 " ; the other was for £700 on " freight payable 
 abroad valued at £2000." 
 
 Pacts. — The vessel was chartered to carry a full cargo of coals from 
 Greenock to Bombay, and by the charterparty half of the freight 
 was payable in advance. The other half was payable on 
 deHvery at Bombay, and the total amount of freight .was 
 estimated at £4573. There was no evidence that the terms of 
 the charterparty had been communicated to the defendants, 
 but the plaintiff intended the policies to cover only the moiety 
 of the freight payable at Bombay. 
 
 Held that the subject-matter intended to be insured by the policy 
 was the freight which the assured had at risk, viz. the freight 
 payable at Bombay, and that the assured was entitled to recover 
 the full amount of the valuation, (r) 
 
 Williums V. The North China Insurance Company (1876), L. E. 
 1 0. P. D. 757 ; 35 L. T. 884 ; 3 Asp. M. C. 342, 
 
 was an action on a policy of insurance on " estimated amount 
 of freight valued at 69,807 guilders," i.e. £5941, the freight of 
 the ship Queen oj the Colonies, on a voyage from Java to a port 
 in the United Kingdom or Continent. 
 
 Held that the Court might inquire what was intended to be included 
 in the valuation, viz. the whole of the freight, or the freight less 
 certain sums which had been paid in advance. 
 
 JunaMENT. — Per Jessel, M.E. : " The next question is, what did 
 they insure ? We have been much pressed by the rule that in the 
 case of a valued policy you cannot open the valuation. This 
 only means, however, that you must take the value of the thing 
 
 (r) This was decided by the Court of Common Pleas, 29 L. T. 38 ; see also per 
 Beett, J., and Lord Hatheeley, in the House of Lords, L. R. 1 A. C, pp. 216, 
 238. 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 209 
 
 insured as proved ; it does not settle the question what the 
 thing insured is. The question here is, what was insured under 
 the words ' estimated freight ? ' Was it meant that the total 
 freight, including advances, should be insured, or only so much 
 of the freight as remained unpaid, or due, or to become due to 
 the shipowners ? It is really a question of fact. The words 
 of the poUcy may mean either. They may cover the portion 
 . of freight paid in advance or not. To ascertain whether they 
 do we must look at the evidence. Now it is clear from the 
 evidence that the total amount of freight, including advances, 
 was intended to be insured." (s) 
 
 A valuation refers to the subject intended to be insured, (i) aijd 
 not to the interest of the assured in that subject. There are, however, 
 in this country dicta to the effect that the valuation refers to the 
 assured's interest, (m) and this view seems to have been adopted in 
 the case of— 
 
 Feise and Another v. Aguilar (1811), 3 Taunt. 506 ; 12 E. E. 695. 
 
 This was an action on a policy of insurance upon goods 
 valued at £19,000. 
 
 (s) The case of Denoon v. Home & Colonial Assurance Co. (1872), L. R. 7 C. P. 
 341, is opposed to these two cases. In Denoon's case the assured effected an 
 insurance for £1000 on freight valued at £2000. He had previously arranged to 
 load his vessel with Coolies, in respect of whom passage- money would be payable, 
 and with rice, in respect of which freight would be payable. The policy was 
 intended by the assured to cover the freight of the rice, which was the only freight 
 at risk, but it was held that as this intention had not been communicated to the 
 underwriters it must be disregarded, and that the valuation should be construed 
 as having been intended to apply to the freight of a full cargo. 
 
 The person whose intention has generally to be considered is the assured, 
 as the underwriter under ordinary circumstances has no intention other than that 
 to be inferred from the fact that he has made an insurance in general terms, and 
 he must be taken to have intended to insure all the freight which the assured in 
 fact has or expects to have at risk. See Allison v. Bristol Marine Insurance Co. 
 (1873), 21 W. R., p. 735. 
 
 (<) Marine Insurance Act, sect. 27. 
 
 {u) " The effect of a valued policy is not to conclude the underwriter from 
 showing that the assured had no interest, and that in fact it was a mere wagering 
 policy within the statute, but in order to avoid disputes as to the quantum of the 
 assured's interest the parties agree that it shall be estimated at a certain value." 
 Per Lawbence, J., in Shawe v. Felton, 2 East., p. 116 ; per Patteson, J., in 
 Irving v. Manning (1846), 1 H. L. Gas., p. 305 ; Amould, sect. 355. 
 I.F. P 
 
210 LAW EELATING TO THE INSUEANCE OF PEEIGHT 
 
 Pacts. — Several persons had contributed to provide this cargo, 
 respectively becoming partners with the plaintiffs in various 
 assortments of goods which those persons chose. The plaintiffs 
 were interested in the proportion of four parts in nine of the 
 whole, and the other persons, some of whom were alien enemies, 
 were interested in the other five parts. 
 
 Held that the value insured must be taken to be the value of the 
 plaintiffs' interest, and that they were entitled to recover the 
 full amount of the valuation. 
 
 In America, on the other hand, the view is that the valuation under 
 ordinary circumstances refers to the value of the whole subject 
 insured, and not to the interest of the assured in that subject. " Had 
 the pohcy been valued, as the insurance was on the cargo generally, 
 the valuation could only have been applied to the whole subject 
 insured, not to an undivided interest. Such an interest to be the 
 object of a valuation must be specifically described, or at least, 
 it must be declared in terms that it is only the interest of the party 
 that is meant to be valued. If A.B. insures 10,000 dollars on a ship 
 valued at 10,000 dollars, if it appeared on the trial that he was only 
 the owner of one-fourth, 2500 dollars and not 10,000 dollars is the 
 sum he would recover." {x) Thus in the case of Dumas v. Jones,{y) 
 where the policy was for 5000 dollars on freight valued at the sum 
 insured, and the assured was only interested as part owner to the 
 extent of one half, it was held that he could not recover more than a 
 moiety of the sum insured, and in the case of Murray v. Coluvibian 
 Insurance Company ^ (z) where a ship was valued at 16,000 dollars, it 
 was held that the assured, who owned only a moiety of the ship, could 
 only recover according to the quantum of the interest proved. On 
 the other hand, in the case of Post v. Phoinix Insurance Company,{a) 
 where the policy was on one-fOurth of the vessel valued at 5500 
 
 (a;) Duer, Marine Insurance, vol. 2, p. 79. 
 
 (y) (1808), 4 Mass. B. 649 (Am.). 
 
 {t) (1814), 11 Johns R. 302. " When a policy is a valued one, and the assured 
 on the trial shows an interest only in a part of the subject insured, as, for example, 
 ail eighth, a fourth or a half, he will recover an eighth, a fourth, or a half of the 
 valuation in the policy, and a greater or smaller proportion of such valuation, 
 according to the quantum of interest proved," per Van Ness, J., at p. 313. 
 
 (a) (1813), 10 Johns R. 79 (Am.). 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 211 
 
 dollars, and one-fourth of the cargo valued at 10,000 dollars, it was 
 held that the valuation appUed to the interests of the assured and not 
 to the whole ship and cargo. 
 
 The view which has been adopted in America is, it is submitted, 
 correct, and is in accordance with the provisions of the Marine 
 Insurance Act. 
 
 The principles to be applied in adjusting losses in the case of 
 valued policies are the same as in the case of open pohcies. If at 
 the time of the loss only a portion of the freight, to which the valuation 
 was intended to apply, is at risk, the assured can only recover in 
 respect of the loss of such portion, and he will recover such proportion 
 of the valuation as the freight lost bears to the whole freight intended 
 to be insured. (6) Similarly, if at the time of the loss, part of the 
 freight, which was at risk, has been earned and withdrawn from the 
 risk. 
 
 The Main, [1894] P. 320 ; 63 L. J. ADM. 69 ; 6 E. 775 ; 70 
 L. T. 247 ; 7 Asp. M. G. 424, 
 
 was an action on a policy of insurance for £1500 upon freight 
 valued at £5500 upon the steamship Main, at and from New 
 Orleans to Liverpool, the insurance to commence upon the 
 freight from the loading of the goods on board the ship. 
 
 Facts. — The policy was effected while the vessel was on her way to 
 New Orleans in anticipation of a full homeward cargo, and at 
 the date of the policy the valuation was reasonable and proper 
 upon a full cargo, having regard to the rates of freight then 
 current at New Orleans, and to the engagements of cargo for 
 the vessel. But on the way out the vessel met with an accident, 
 and during the time occupied in repairs the rates of freight 
 declined considerably, and the greater part of the engagements 
 of cargo had to be cancelled. After some months' delay the 
 vessel sailed for Liverpool with a full cargo, the total freight 
 
 (6) " If the freight of a whole homogeneous cargo is conclusively presumed 
 to be worth the valuation in the pohcy, there seems to be no reason why the 
 freight of one half of it should not be presumed to be worth one halt of the valua- 
 tion," per Holmes, J., in Boardman v. Boston Marine Insurance. Co. (1888), 
 146 Mass. R., p. 452 (Am.) ; see also The Mam, [1894] P., p. 324. 
 
212 LAW EELATING TO THE INSUKANCE OF FREIGHT 
 
 of which amounted to £3250, of which £952 was paid in advance. 
 In the course of the voyage the vessel was lost by fire, and the 
 total freight at risk, £2298, was also lost. The plaintiffs collected 
 under other policies the sum of £3250, and the defendants 
 contended that they were not entitled to recover any further 
 sum, as they had been fully indemnified. 
 
 Held that the valuation was binding, but that as freight to the amount 
 of £952, had been paid in advance, and was, therefore, not at 
 risk, the valuation of £5500, which was intended to refer to the 
 gross freight of the ship, must be reduced by £1611, being the 
 proportion upon the basis of the valuation of the prepaid freight 
 to the gross freight, leaving £3889 as the value at risk, and as, 
 of this sum, the plaintiffs had received £3250, the amount 
 recoverable from the defendants was £639, with a small pro- 
 portionate return of premium. . 
 
 Fay V. Alliance Insurance Company (1860), 16 Gray. 455 (Am.), 
 
 was an action on a policy of insurance for 12,500 dollars, upon 
 the freight of the ship Columbia, valued at 25,000 dollars. 
 
 "Facts. — The vessel arrived at her port of discharge and delivered a 
 portion of the cargo, but before the balance could be deUvered, 
 the ship and cargo were destroyed by fire, and the freight lost. 
 The whole freight Ust of the vessel amounted to 28,183 dollars, 
 and the freight actually received to 8283 dollars. 
 
 Held that the underwriters were responsible only for the proportion 
 af the amount of the entire valuation of freight in the policy, 
 which the freight actually lost bore to the actual value of the 
 entire freight. 
 
 It may, however, be impossible to ascertain the proportion which 
 the freight lost bears to the whole subject to which the valuation was 
 intended to apply, and it may, therefore, be impossible to ascertain 
 the amount which the assured upon the basis of the valuation is 
 entitled to recover. In such a case, although the valuation cannot 
 be given its full effect, it must not be disregarded. The policy will 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 213 
 
 be construed as an open policy, but the proportion between the 
 sum insured and the amount of the valuation will determine the 
 proportion of the loss for which the underwriter will be responsible. 
 
 Denoon v. Home d Colonial Assurance Company (1872), L. E. 
 7 0. P. 341 ; 41 L. .J. C. P. 162 ; 26 L. T. 628 ; 20 W. R. 
 970 ; 1 Asp. M. C. 309, 
 
 was an action on a policyfor £1000, on freight of the Sandringham, 
 valued at £2000. 
 
 Facts. — The vessel sailed from Calcutta having an board 360 coolies 
 and 1200 bags of rice. The passage money of the coolies was 
 £1944, and the bill of lading freight for the rice was £1412. 
 During the voyage the vessel stranded and the rice and the freight 
 payable in respect of it were lost. The coolies were saved and 
 the passage money for them paid. 
 
 The plaintiff contended that the policy being on " freight " 
 did not cover the passage money, and was intended to cover only 
 the freight of the rice, and that, as there had been a total loss of 
 freight, he was entitled to recover a total loss under the pohcy. 
 
 Held that the policy covered only the freight of the rice and not the 
 passage money, but that if the passage money had come within 
 the terms of the policy, the intention of the assured to cover 
 only the freight, not having been communicated to the under- 
 writers, must be disregarded ; that as the valuation of freight 
 in a valued policy prima facie refers to a full cargo, or the charter 
 of the entire ship, and there was nothing to show the under- 
 writers that the valuation was on less than such full freight, 
 the poUcy, which was for £1000 on freight valued at £2000, 
 must be treated as an open pohcy for half the loss of freight, not 
 exceeding in any case £1000, and that as the total loss of freight 
 was £1412, the plaintiff could only recover £706. 
 
 The preceding remarks have dealt with the principles of adjust- 
 ment to be apphed in the case of poUcies which cover a single voyage. 
 More diflcult questions arise in those cases where the pohcy con- 
 templates that successive freights will be at risk, as for instance in 
 the case of a pohcy for a succession of voyages, or in the case of a 
 
214 LAW BELATING TO THE INSUEANCE OF FEEIGHT 
 
 time policy. The question how, in the case of insurances on goods 
 which contemplate successive cargoes, the losses should be adjusted, 
 has been discussed at great length by continental writers, and the 
 conclusion at which they have arrived is that in the case of a policy 
 which contemplates that the cargo at risk will change from time to 
 time, no account is to be taken of goods which may have been with- 
 drawn from the vessel, or have not yet been put on board, and that 
 only goods at risk at the time of the loss are to be considered as the 
 datum with which the amount insured should be compared in order 
 to ascertain the proportion of the loss recoverable under the policy, (c) 
 This view has been followed in two American cases, and there are 
 dicta in the case of Crowley v. Cohen (d) which suggest that this may be 
 the correct rule to be applied in the case of ordinary policies on 
 fluctuating cargoes, (e) In the case of The Columbian Insurance 
 Company v. Catlett{f), a vessel had sailed from Alexandria for St. 
 Thomas with a cargo worth 16,000 dollars. A portion of the cargo 
 was sold at St. Thomas, and the vessel with the balance of the cargo, 
 proceeded to Cape Haytien, where she was lost. " The next question 
 that arises is, how the loss is to be apportioned. The argument on 
 behalf of the company is, that as part of the cargo was landed at 
 St. Thomas, the amount risked by them is to be diminished by their 
 proportion of the cargo so landed. In short, that the loss is now to 
 be made up by them with reference to the value of the whole cargo 
 on board, when the risk first attached, and not with reference to the 
 value on board at the time of the loss, notwithstanding it exceeded 
 the amount insured. We are of a different opinion. We think the 
 true intent and object of the policy was to cover an insurance of 
 10,000 dollars during the whole voyage out and home, so long as the 
 assured had that amount of property on board. . . . The loss, there- 
 fore, must be apportioned in the proportion which the sum insured 
 
 (c) See Emerigon, oh. xiii., sect. 8, where the authorities are collected. 
 
 (d) (1832), 3 B. & Ad. 478. 
 
 (e) A different principle was applied in the case of Tohin v. Harford (1864), 
 17 C. B. (n. s.) 528, but in this case the policy was not construed as being a policy 
 on cargo generally, that is to say, on any cargo which the vessel might have 
 on board, but as being a policy on the cargo which was originally put on board 
 the vessel at the commencement of the voyage — a trading voyage, and on the 
 cargo which was obtained by barter in place of the original cargo : cf . Haven v, 
 Qray (1815), 12 Mass. R. 71 (Am.). 
 
 (/) (1827), 12 Wheatpn 383 (Am.). 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 215 
 
 bears to the amount of value on board at the time of the loss, that 
 is, as 10,000 dollars bears to 12,d2Sj^^ dollars." {g) 
 
 The American Insurance Company v. Griswold Qi) was an action 
 on a policy of insurance for 20,000 dollars on goods on board the 
 China, for the term of eighteen months. The vessel sailed from New 
 York for South America with a cargo of the value of 47,096 dollars. 
 The vessel called at Callao, and there landed a portion of the cargo, 
 leaving cargo to the value of 27,050 dollars on board, which was 
 forcibly seized by the military authorities at Callao, and it was held 
 that the plaintiff could recover for a total loss. " Here is an insurance 
 upon goods to be laden on board a vessel for a trading adventure 
 for eighteen months, with liberty to the assured to extend it to two 
 years, at the same rate of premium without reference to any particular 
 voyage, or any ports or places of lading or discharge, or any specific 
 cargo upon which the risk was to attach for the whole eighteen 
 months or two years. Both parties, therefore, understood and 
 expected that the whole, or particular parts of the cargo, would be 
 frequently changed in the course of the eighteen months, either by the 
 voluntary acts of the assured, or his agents, or by perils which were 
 not insured a,gainst ; and both must have intended that the risk, to 
 the extent of the 20,000 dollars, should attach to any goods remaining 
 on board from time to time, as often as such changes should occur, 
 provided that goods to that amount were on board at the time any 
 loss should occur by the perils insured against. ... A policy of insur- 
 ance upon such a trading voyage, or upoja time merely, where the vessel 
 is to sail upon such a voyage, is in the nature of a new insurance 
 upon the new cargo, or the goods remaining at risk, every time the 
 cargo is increased or diminished otherwise than by the perils insured 
 against." (i) 
 
 Crowley v. Cohen (k) was an action on a policy of insurance for 
 twelve months to the amount of £12,000 on goods to be carried on 
 board of thirty boats belonging to the assured, which weye engaged 
 in the transportation business on a canal. One of the boats was sunk 
 in the canal having on board goods to the value of £1700, and it was 
 held that the plaintiff could recover that proportion of the loss which 
 £12,000 bore to the whole value of the goods afloat at the time of the 
 loss. " As to the mode of calculating the indemnity, the defendant 
 
 (g) Per Story, J., at p. 395. {h) (1835), 14 Wendell, 399 (Am.). 
 
 (») Per Walworth, C, at p. 478. (k) (1832), 3 B. & Ad. 478. 
 
216 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 insists that this is to be done by ascertaining the proportion which 
 £12,000 bears to the whole value of goods carried during the year, 
 and allowing the assured such a proportion of the amount of loss. 
 But the rule of construction reUed on by the defendant is never 
 adopted in cases of policy on goods with Uberty to change the cargoes. 
 Here the whole value of the goods afloat at the time of the loss must 
 be taken, and the plaintiffs will recover such a proportion of their 
 loss as £12,000 bears to the value of all the property on board all the 
 boats at the time of the accident, if that value exceed £12,000 ; if 
 not, they will be entitled to the whole amount lost." (Z) 
 
 In the case of Davy v. Hallett, (m) where the policy was for succes- 
 sive voyages out and home, and freight on the homeward voyage was 
 ■ lost after full freight for the outward voyage had been received, 
 Kent, C.J., used language which suggests that the same principle 
 applies to insurances on freight. " Another objection to the recovery 
 in this case is, that freight, to the amount of 2000 doUars, had already, 
 during the course of the same voyage, been earned and received by 
 the plaintiff. But the present insurance was not upon the totality of 
 freight for the whole voyage, but upon so much freight in that voyage 
 as would amount to 2000 dollars. . . . The present case is analogous 
 to that cited in 2 Valin. 87, and 2 Emerigon, 39, 40, in which one 
 caused an insurance to be made to the amount of 1000 hvres upon 
 goods on board a vessel from America to Marseilles. The vessel 
 sailed with a cargo to the amount of 3000 livres and discharged two- 
 thirds thereof at Cadiz, leaving goods on board for the remainder of 
 the voyage to the amount of the insurance. It is the opinion of 
 these authors, and the same is confirmed by Pothier, that the policy 
 was not thereby reduced two-thirds in value, but operated still upon 
 all the cargo on board, to the amount of 1000 livres." 
 
 It is, however, submitted that this principle does not apply to 
 an insurance on freight. It has been seen (n) that, where the policy 
 covers a voyage consisting of successive passages, during which 
 successive freights will be at risk, the policy is, in the absence of 
 intention or indication to the contrary, to be construed as an insurance 
 
 (0 Per Lord Tentbrden, C.J., at p. 486. (»i) (1805), 3 Gaines, 16 (Am.), 
 (n) See ante, pp. 89-91. 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 217 
 
 of the freight pending during each passage. Eor the purpose of 
 adjusting a loss incurred during any particular passage the policy 
 should be treated as a policy for that particular passage, and the 
 correct principle, it is submitted, where the policy covers the freight 
 of successive voyages or passages, is to keep each voyage or passage 
 distinct in the same way as each voyage or passage is kept distinct 
 for the purpose of calculating the particular average losses excluded 
 by the memorandum, (o) To take an illustration. A poUcy is effected 
 on freight at and from port A to port B, and at and thence back to 
 port A. Cargo, the freight of which will amount to £6000, is put 
 on board at A to be carried to B, and of this freight £2500 is 
 earned. Before the balance of the cargo can be deUvered and 
 the freight payable in respect of it can be earned, the vessel 
 and cargo are destroyed, and the balance of the outward freight, 
 amounting to £2500, is lost. In this case, it is submitted, the 
 assured would not be entitled to recover under the policy for a 
 total loss, and would only be entitled to recover a moiety of the 
 sum insured. 
 
 If losses occur during successive voyages, is the underwriter liable 
 
 to the extent of the sum insured in respect of each of these successive 
 
 losses, or is his total liabiKty limited to the amount of the sum 
 
 insured ? In an American case it has been suggested that to the 
 
 extent to which the underwriter has settled losses under the poUcy, 
 
 his liability for the future is reduced. " The total amount for which 
 
 the underwriters are to be made liable during the whole time or 
 
 voyage, except for general average or other expenses incurred for 
 
 their benefit in preserving or attempting to recover the property 
 
 insured, cannot exceed the amount of their subscription to the policy, 
 
 upon which amount the premium of insurance is calculated. In such 
 
 a case, therefore, if the policy was underwritten for 20,000 dollars, 
 
 and one half of the first cargo was lost by the perils insured against, 
 
 so that the underwriters had become liable to pay 10,000 dollars on 
 
 account of that loss, they would, upon the next change of the cargo, 
 
 only be underwriters for the other half of their original subscription, 
 
 and the shipper would be considered as his own insurer for the residue 
 
 (o) See Stewart v. Merchants Marine Insurance Co. (1885), L. R. 16 Q. B. D. 
 619 ; Price v. A.l. Ships SmaU Damage Insurance Association (1889), L. R. 22 
 Q. B. D., p. 589 ; Phillips, sect. 1780. 
 
218 LAW EELATING TO THE INSUEANCB OF FBEIGHT 
 
 of such new cargo, for the purpose of apportioning a partial loss 
 thereon between him and the underwriters." (p) 
 
 It is submitted, however, that this view is not correct, and that 
 in cases where the poUcy contemplates successive voyages in respect 
 of which there may be successive losses, the underwriter is liable to 
 the extent of the gum insured for losses incurred during such successive 
 voyages, even though the aggregate sum which the underwriter 
 may be called upon to pay exceeds the sum mentioned in the policy 
 as being the sum insured. It must be remembered that the sum 
 mentioned in the policy as being the sum insured is not the limit 
 of the underwriter's hability. Its function is to indicate the pro- 
 portion of the amount which may be covered by the policy for 
 which the underwriter is to be responsible, and if the policy is in- 
 tended to cover the freights of successive voyages, the sum insured 
 indicates the proportion of each of these successive freights, for 
 which the underwriter is to be responsible. 
 
 Where the policy covers the freight of successive voyages, it 
 should be construed, in the absence of intention or indication to the 
 contrary, as covering during ek,ch successive voyage only the freight 
 pending in respect of that voyage. This construction was adopted in 
 the American case of Lincoln v. Boston Marine Insurance Company, 
 and is, it is submitted, correct. It may involve hardship upon the 
 assured in those cases where two voyages overlap, and where he 
 has at risk both the freight of the voyage then ending and also the 
 freight of the succeeding voyage. But, on the other hand, it would 
 be unreasonable to construe the policy as meaning that the under- 
 writer is to be liable at the same time in respect of two distinct 
 freights. Until the insurance of the pending freight has come to an 
 end, the insurance of the succeeding freight, it is submitted, will not 
 drise. It has been seen (g) that where the poUcy covers a single 
 voyage and the assured has at risk two freights which come within 
 the terms of the policy, the policy is to be construed, in the absence 
 of intention or indication to the contrary, as an insurance of the 
 freight pending in respect of the voyage insured. Similarly, where 
 the policy covers successive voyages, it should in the absence of any 
 
 {p) Per Walwoeth, C, in American Insurance Cq. v. Qriswold (1835), 14 
 Wend., p. 479 (Am.). 
 (q) Ante, p. 88, 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 219 
 
 intention or indication to the contrary be construed as an insurance, 
 during each successive voyage, of the freight pending in respect of 
 that voyage. 
 
 Lincoln v. Boston Marine Insurance Company (1893), 159 Mass. 
 E. 337 (Am.), 
 
 was an action on a policy of insurance for 5000 dollars on freight 
 under deck, on board or not on board the ship W. H. Lincoln, at 
 and from New York to Seattle, and at and thence privilege 
 lumber port to ports discharge and/^^ loading West Coast South 
 America, and at and thence to port of advice ^^'^joi discharge 
 in Europe or Atlantic United States. The freight was valued 
 at 15,000 dollars. The poUoy was subsequently altered to 
 cover a voyage to Sydney, N.S.W., and at and thence to port 
 of advice and/^j, discharge in Atlantic United States. 
 
 Pacts. — The vessel after completing her voyage to Seattle proceeded 
 to Sydney, N.S.W., where she arrived safely with a cargo of 
 lumber on November 29, 1891. On December 10, 1891, the 
 vessel was chartered for a voyage from Sydney with a cargo 
 of coal. On the evening of January 4, 1892, after the vessel had 
 discharged about two-thirds of her cargo, a fire broke out and 
 the master scuttled the vessel in the hope of thereby saving her 
 and the cargo. The remaining cargo was saved and the freight 
 on it was earned, but the vessel was a complete wreck and was 
 sold, and the chartered freight was lost. The assured contended 
 that he was entitled to recover for a total loss of freight, or at 
 any rate that when the vessel was unloading, as fast as the policy 
 became unnecessary for the protection of the freight of the 
 discharging cargo, it should cover the freight of the next cargo, 
 so as to keep up a constant insurance of 5000 dollars upon freight 
 valued at 15,000 dollars. 
 
 Held that while the vessel was unloading the policy covered only the 
 freight of the voyage then ending, and did not insure any part 
 of the freight of the next succeeding voyage, and that the plain- 
 tiff, therefore, was not entitled to recover. 
 
220 LAW EELATING TO THE INSUKANCE OF PEEIGHT 
 
 Whenever a loss, whether total or partial, has been paid, the 
 underwriter who has paid it acquires a right either by abandonment 
 or subrogation to whatever may be recoverable by the assured with 
 respect to the loss. The doctrine of abandonment is closely related 
 to that of subrogation, and they are apt to be confused. Abandon- 
 ment applies only to cases of total loss, and has the effect of trans- 
 ferring to the abandonee the right to the property in what remains 
 of the thing abandoned and all rights incident to the property, (r) 
 Subrogation is an equitable principle incident to all contracts of 
 indenmity under which a person, who has made good or is Uable to 
 make good a loss, is entitled to the benefit of every right and remedy 
 by which that loss has been or can be diminished. 
 
 An underwriter to whom freight is abandoned, is entitled to all 
 the rights of the assured in that freight, (s) and if the assured earns 
 the freight, he holds it in trust for the underwriter to whom he has 
 abandoned it. (f) If the freight can be earned by transhipping the 
 cargo, the underwriter on freight is entitled to the benefit of that 
 right, (w) 
 
 The position of the underwriter on freight is, however, usually 
 complicated by the fact that the ship will also have been insured and 
 may have been abandoned to the underwriter on ship, [x) An 
 abandonment of the ship carries with it the right to any freight 
 earned by the vessel subsequent to the abandonment or to the time 
 to which the abandonment relates, {y) and this freight passes not to 
 the underwriter on freight but to the underwriter on ship, {z) The 
 position, therefore, of an underwriter on freight, to whom abandon- 
 ment has been made, may be affected by the fact that the ship is 
 also insured and has been abandoned to the underwriter on ship, 
 
 (r) See per Lord Blackbuen in Simpson v. Thomson (1877), L. R. 3 A. C, 
 p. 292. 
 
 (s) See Barque Robert S. Besnard Co. v. Murton (1909), 14 Com. Cas., p. 277 ; 
 Marine Insurance Act, sect. 63. 
 
 (t) Barclay v. Stirling (1816), 5 M. & S. 6 ; Thompson v. Rowcroft (1803), 
 4 East. 34. 
 
 (it) Hichie v. Rodoconachi (1859), 4 H. & N. 455 ; Sea Insurance Co. v. 
 Hodden (1884), L. R. 13 Q. B. D., p. 715. 
 
 (x) See ante, p. 157. 
 
 {y) Stewart v. Qreenoch Marine Insurance Co. (1848), 2 H. L. C. 159 ; Marine 
 Insurance Act, sect. 63 (2). 
 
 {z) Davidsm v. Case (1820), 2 B. & B. 379. 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 221 
 
 and in certain cases he will be entitled to rely on this fact in order 
 to resist a claim for a loss of freight. Thus the underwriter on freight 
 wiU not be liable if the shipowner loses his freight because he has 
 abandoned the ship to the underwriters on ship under circumstances 
 which did not justify the abandonment, (a) Nor will he be hable, if 
 the shipowner loses the freight after the voyage is completed and 
 the freight is earned, because he has to hand it over to the under- 
 writers on ship, to whom he then elects to abandon the ship by reason 
 of injuries received in the course of the voyage, (b) 
 
 The position is, however, different if the abandonment to the 
 underwriters on ship is made before the freight is earned, and is 
 justified by the facts. Thus if a ship which has been damaged by 
 perils insured against to such an extent as not to be worth the cost 
 of repairs, is justifiably abandoned to the underwriters on ship, 
 and is repaired by them and subsequently completes the voyage and 
 earns freight, the assured will, it is submitted, be entitled to recover 
 for the loss of freight, as he was under no duty to make for the 
 benefit of the underwriter on freight repairs which from a commercial 
 point of view would be unreasonable. (c) Or if a vessel, after being 
 captured or seized and taken out of the possession of the shipowner 
 under circumstances which justify him in treating her as a constructive 
 total loss, is unexpectedly recaptured or released, and earns freight 
 for the underwriters on ship to whom she has passed by abandon- 
 ment, in this case also, it is submitted, the assured may recover for 
 the loss of freight, and the underwriter on freight cannot complain 
 because nothing has passed to him by the abandonment, {d) It 
 might be argued that but for the abandonment to the underwriters 
 on ship he would have been entitled to the freight ultimately earned 
 by the vessel, and that the assured by abandoning to the under- 
 writers on ship has wrongfully deprived him of this freight. This 
 argument, however, loses sight of the true nature of an insurance 
 on freight. The underwriter undertakes to indemnify the assured 
 if by reason of the loss of or damage to the ship or cargo by perils 
 
 (a) M'Carthy v. Abd (1804), 5 East. 388, ante, p. 132. 
 
 (6) Scottish Ma/rine Insurance Co. of Glasgow v. Turner (1853), 1 Maoq. 334, 
 ante, p. 126. 
 
 (c) Ooolidge v. Gloucester Marine Insurance Co. (1819), 15 Mass. 341 (Am.) ; 
 Troop V. Merchants Marine Insurance Co. (1886), 13 Sup. Can. R. 506 (Can.) ; 
 ante, p. 123. 
 
 {d) See ante, p. 159. 
 
222 LAW EELATING TO THE IN8UEANCE OF PEEIGHT 
 
 insured against he is prevented from earning freight. If the ship 
 is captured or seized and is justifiably abandoned, she is lost to the 
 shipowner and he thereby loses the freight or the possibility of ever 
 receiving it if earned. " The assured has sustained a total loss of 
 the freight, if he abandons the ship to the underwriters on ship, and 
 is justified in so doing ; for, after such abandonment he has no longer 
 the means of earning the freight or the possibility of ever receiving 
 it if earned, such freight going to the underwriters on ship. In the 
 present case, when the ship was at Pernambuco, the cargo taken out, 
 and the damage to the ship very far exceeding het value, and such as 
 the owner had no means of completing, except at a ruinous expense, 
 if at that time he abandons the ship to the underwriters, as the law 
 allows him to do, the freight is as much lost to him as if the ship had 
 been captured and placed altogether Out of his control." (e) 
 
 In practice the difficulties which have just been discussed are 
 not likely to arise frequently in the future, as most policies on hull 
 contain the Institute Clauses, which provide that "in the event of 
 total or constructive total loss no claim to be made by the under- 
 writers for freight, whether notice of abandonment has been given or 
 not." By this clause the underwriters on ship 'forego their claim 
 to freight pending at the time of the casualty, and this freight, 
 therefore, will pass under the abandonment to the underwriters on 
 freight subject to certain dedutitions in respect of the cost of earning 
 it. The question as to the deductions to be allowed was discussed 
 in the case of Sharp v. Gladstone. (/ ) In this case a ship was detained 
 under the Eussian embargo and notice of abandonment was given 
 to the underwriters on ship and freight, and accepted. No question 
 arose as to which underwriters were entitled to the freight ultimately 
 earned. It was assumed that the underwriters on freight were 
 entitled to it, and the only questions under consideration were 
 whether any and what deductions should be made out of the freight. 
 The items in dispute were : (1) Expenses of shipping the cargo in 
 respect of which the freight was paid, and the expenses of the ship 
 arid crew at St. Petersburg and Elsinore, including port charges. 
 (2) Insurance on same. (8) Wages and provisions of master and 
 
 (e) Per Tindal, C.J., in Benson v. Chapman (1843), 6 M. & G., p. 810. 
 {/) (1805), 7 East. 24. 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 223 
 
 crew from the time they were hberated in Eussia till discharged in 
 Liverpool. (4) Their wages during the detention under the embargo. 
 (5) Charges paid at Liverpool on ship and cargo. (6) Insurance 
 on ship for the homeward voyage. (7) Diminution of ship's value 
 by wear and tear on the homeward voyage. 
 
 With regard to these items it was held that the expenses of shipping 
 on board the homeward cargo, being altogether for the benefit of the 
 underwriters on freight, should fall exclusively on them ; that the 
 expenses of the ship and crew, and the insurance thereon, the wages 
 and provisions of the master and crew between their liberation from 
 the embargo and the ship's discharge, and their wages during the 
 detention should be deducted from the salvage and apportioned 
 between the two sets of underwriters according to their respective 
 interests ; that the charges on ship and cargo in the port of dis- 
 charge, the cost of insuring the ship for her homeward voyage, and 
 the diminution of value thereon by wear and tear must be struck 
 out as they could not be charged on the freight, {g) 
 
 In order to protect an assured whose claim to recover for a loss 
 of freight might be met by the objection that the loss was due, not 
 to any of the perils insured against, but to his action in abandoning 
 the ship to the underwriters on ship, a provision is sometimes found 
 in policies to the effect that the amount insured on freight shall be 
 paid in the event of the total loss, actual or constructive, of the 
 vessel. If, however, by the terms of the pohcy on ship, no claim is 
 to be made by the underwriters on ship for freight, so that the ship- 
 owner is entitled to any freight which may be earned on the voyage, 
 he must, if he elects to claim for a loss of freight, give to the under- 
 writers on freight the benefit of the fteight so earned. 
 
 Coker v. Bolton, [1912], 3 K. B. 315 ; 82 L. J. K. B. 91 ; 107 
 L. T. 54 ; 12 Asp. M. C. 281 ; 17 Com. Cas. 318 ; 56 S. J. 
 751, 
 
 was an action on a poHcy of insurance on freight of the steamship 
 Ivy, valued at £950. The policy contained the Institute Time 
 Clauses, which provided that 5 " In' the event of the total loss, 
 whether absolute or constructive, of the steamer, the amount 
 
 {g) See also Barclay v. Stirling (1806), 5 M. & S. 6, ante, p. 95. 
 
224 LAW EELATING TO THE INSUEANCE OP PEEIGHT 
 
 underwritten by this policy shall be paid in full, whether the 
 steamer shall be fully or only partly loaded, or in ballast, 
 chartered or not chartered." 
 
 Pacts. — While on a voyage from the Baltic to Manchester with a 
 cargo of grain, the Ivy stranded in the Eiver Mersey and became 
 a constructive total loss. At the time of the stranding the Ivy 
 was insured under a time policy on hull which provided that, 
 " in the event of a total or constructive total loss no claim to be 
 made by the underwriters for freight, whether notice of abandon- 
 ment has been given or not." Notice of abandonment was given 
 to the underwriters of the hull policy and was not accepted, 
 but an arrangement was made without prejudice, under which 
 the Liverpool Salvage Association towed the Ivy to Manchester 
 and discharged her cargo there. The sum of £630 12s. was paid 
 to the plaintiff for freight. Notice of abandonment was also 
 given to the defendants, which was not accepted, but they 
 agreed to place the plaintiff in the same position as if a writ 
 had been issued. The plaintiff claimed to be paid in full the 
 amount of the valuation. The defendants contended that they 
 were entitled to a deduction in respect of the freight which had 
 been received by the plaintiff. 
 
 Held that the defendants were entitled to a deduction in respect of 
 the freight which had been received by the plaintiff, (h) 
 
 The doctrine that the abandonee of the ship was entitled to all 
 pending freight ultimately earned by the ship was long a subject of 
 vexed discussion in this country, (i) but it was finally set at rest by 
 the decision in the case of Davidson v. Case. 
 
 Davidson and Others v. Case (1820), 2 Br, & B. 379 ; 8 Price, 542 ; 
 5 Moore, 116 ; 5 M. & S. 79 ; 17 E. E. 280, 
 
 was an action for money had and received. 
 
 (A) See also United Kingdom Mutual Association v. Bovlion (1898), 3 Com. 
 Cas. 330. 
 
 (j) See Thompson v. Bowcroft (1803), 4 East. 34 ; Leatham v. Terry (1803), 
 3 B. & P. 479 ; M'Ga/tthy v. Ahd (1804), 5 East. 388 ; Sha/rp v. Gladstone (1805), 
 7 East. 24 ; Ker v. Osborne (1808), 9 East 378. 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 225 
 
 Facts.— The owners of a vessel called the Fanny insured the ship 
 with one set of underwriters for £7000, and subsequently insured 
 the freight with other underwriters for £4000. The vessel was 
 captured by a privateer, whereupon the owners gave notice 
 of abandonment to the respective underwriters, who accepted 
 the same. The vessel was afterwards recaptured, delivered her 
 cargo, and earned the freight. An agreement was made between 
 the owners of the vessel and the underwriters on ship, to which 
 the underwriters on freight were not parties, that the owners 
 should receive the freight for the use and benefit of all persons 
 who should legally be entitled thereto, and this action was 
 brought by an underwriter on ship to recover a proportion of 
 the money received by the owners for freight. 
 
 Held that the underwriters on ship were entitled to the freight, and 
 that the plaintiff could recover, (fc) 
 
 The principle of this decision is now embodied in section 68 of the 
 Marine Insurance Act, which enacts : (!) " Where there is a vahd 
 abandonment the insurer is entitled to take over the interest of the 
 assured in whatever may remain of the subject-matter insured, 
 and all proprietary rights incidental thereto. (2) Upon the abandon- 
 ment of a ship, the insurer thereof is entitled to any freight in course 
 of being earned, and which is earned by her subsequent to the casualty 
 causing the loss, less the expenses of earning it incurred after the 
 casualty ; (I) and where the ship is carrying the owner's goods, the 
 insurer is entitled to a reasonable remuneration for the carriage of 
 them subsequent to the casualty causing the loss." 
 
 The freight, to which the abandonee is entitled, is any freight 
 in course of being earned, and which is earned by the ship subsequent 
 to the casualty causing the loss. If some freight has been actually 
 earned before the casualty took place, by payment of part, or delivery 
 
 (k) In America a difEerent principle has been adopted. The amount accruing 
 on account of the part of the voyage performed prior to the constructive total 
 loss goes to the assured or to his underwriters on freight in his stead, and the 
 subsequent portion belongs to the underwriters to whom the ship is abandoned : 
 ^United Insurance Co. v. Lenox (1802), 2 Johns. 443; Marine Insurance Co. v. 
 United Insurarux Co. (1812), 9 Johns. 186 ; Mason v. Marine Insurance Co. (1901), 
 110 Fed. R. 452 ; Phillips, sects. 1738—1742. 
 
 (l) See The Red Sea, [1895] P., p. 299. 
 
 I.F. Q 
 
226 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 of part of the cargo, under the terms of the charterparty, at an 
 antecedent port, or by an agreement between the shipowner and the 
 merchant whereby freight pro rata has been due on part of the goods, 
 the freight so paid or so apportioned would not vest in the abandonee 
 of the ship, (w) 
 
 The Bed Sea (1895), P. 293 ; (1896), P. 20 ; 73 L. T. 462 ; 65 
 L. J. ADM. 9 ; 44 W. E. 306 ; 8 Asp. M. C. 102, 
 
 was an action by underwriters on the hull and machinery of the 
 steamship Bed Sea, against the owners to recover a balance of 
 freight. 
 
 Facts. — The Bed Sea was chartered to carry a cargo of timber from 
 Pensacola to West Hartlepool, and by a clause in the charter- 
 party the charterers were to advance " sufficient cash for ship's 
 ordinary disbursements, ' ship paying 2| per cent, commission, 
 including insurance." The sum of £1679 19s. lOd. was advanced 
 to the master. The vessel was wrecked just outside West 
 Hartlepool, and was justifiably abandoned to the plaintiffs. 
 The cargo, however, was delivered and freight earned. The 
 gross" freight amounted to £4279, but from this the shipowners 
 claimed to deduct the sum of £1679 19s. 10^., the amount of 
 the cash which had been advanced. This action was brought 
 by the underwriters on ship to recover this sum. 
 
 Held that the cash advance was equivalent to prepaid freight, and as 
 such did not pass to the plaintiffs on the abandonment of the 
 vessel, and that the plaintiffs could not recover, (n) 
 
 Where the ship is carrying the owner's goods, the insurer is 
 entitled to a reasonable remuneration for the carriage of them subse- 
 quent to the casualty causing the loss,(o) but cannot claim freight 
 for their carriage over the whole voyage. 
 
 (to) Arnould, sect. 1177. 
 
 (n) Of. per Le Blanc, J., in Thompson v. Bowcroft (1803), 4 East., p. 44 ; 
 Luke V. Lyde (1769), 2 Burr, 882 ; per Lord Campbell, C.J., in MiUer v. WoodJaU 
 (1857), 8 E. & B., p. 504. 
 
 (o) Marine Insurance Act, sect. 63 (2). 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 227 
 
 Miller v. Woodfall (1857), 8 E. & B. 493 ; 27 L. J. Q. B. 120 ; 
 4 Jur. (N. s.) 302 ; 112 E. R. 663, 
 
 was a claim brought by the underwriters of the ship Melbourne 
 for freight in respect of a cargo carried from New Brunswick to 
 Liverpool. 
 
 Pacts. — While on a voyage from New Brunswick to Liverpool with 
 a cargo of timber, shipped on owners' account, the vessel 
 stranded off Southport, about 20 miles from Liverpool. The 
 owners thereupon gave notice of abandonment to the under- 
 writers on ship, which was ultimately accepted by them. Part 
 of the cargo was discharged from the ship and carried in lighters 
 to Liverpool at the expense of the owners. The ship having 
 been so lightened afterwards floated off and was towed with the 
 remainder of the cargo to Liverpool. Bills of lading had been 
 issued but no freight bad been named in them. 
 
 Held that nothing in the nature of freight for the carriage of the 
 shipowners' goods passed to the abandonees, but that they were 
 entitled to an allowance for the carriage of the part of the goods 
 from Southport to Liverpool in the ship, to be estimated at the 
 current rate of freight. 
 
 By subrogation the underwriter on freight, who has paid a loss, 
 is entitled to the benefit of every right and remedy by which the 
 loss has been or can be diminished. Thus, if a vessel is so damaged 
 that she cannot carry the original cargo, but is still able to carry 
 some cargo on the voyage insured, the underwriter will be entitled 
 to any freight which has been, or could have been, earned in respect 
 of such cargo, (p) If the original cargo is so much damaged that it 
 cannot be carried to its destination, but other cargo can be carried 
 by the vessel on the voyage insured, the underwriter on freight will 
 be entitled to the benefit of the freight which is or which might have 
 been received in respect of such substituted cargo. If the cargo is 
 landed under circumstances which give rise to a claim for pro rata 
 freight, the underwriter will be entitled to the benefit of such pro rata 
 
 (p) Phillips, sect. 1644. Barclay v. Stwling (1816), 5 M. & S. 6 ; Gayner v. 
 The Sunderland Joint Stock Premium Association (1884), Cab. & E. 293, ante, 
 p. 162. 
 
228 LAW RELATING TO THE INSURANCE OF FREIGHT 
 
 freight, and if the freight was lost under circumstances which give 
 rise to a claim for damages, the underwriter will be entitled to the 
 benefit of such claim. 
 
 The Thyatira (1883), 8 P. D. 155 ; 52 L. J. ADM. 85 ; 49 L. T. 
 406 ; 32 W. R. 276 ; 5 Asp. M. C. 147, 178, 
 
 was an action for compensation brought against the owners of 
 the Thyatira. 
 
 Facts. — Messrs. Vaughan & Co. were the owners of the ship Atmo- 
 sphere, in which they shipped a cargo of 1660 tons of their own 
 coal from Liverpool to Valparaiso. The price of the coal at 
 Liverpool was 9s. per ton, and it would have fetched from 
 80s. to 33s. per ton at Valparaiso. Messrs. Vaughan & Co., 
 desiring an advance on this cargo, appUed to Messrs. Cockbain 
 & Co., and the latter agreed to make it on the terms that they 
 were given bills of lading together with pohcies of insurance to 
 cover them in case of loss. This arrangement was carried out 
 in the following way. The master of the Atmosphere signed 
 bills of lading for the coal, deliverable to Messrs. Vaughan & 
 Co. or assigns, they paying freight at the rate of 23s, per ton, and 
 he indorsed on the bills of lading a receipt for £1000 on accounti 
 An insurance was effected on advance freight valued at £1000. 
 The Atmosphere, while on her voyage to Valparaiso, was run 
 down and sunk by the Thyatira, and this action was brought by 
 the plaintiffs for the benefit of the underwriters who had paid 
 the £1000 insured by them, to recover compensation for the loss. 
 
 Held that the plaintiffs were entitled to recover the sum of £1000, and 
 that the insurers were subrogated to the rights of the plaintiffs. 
 
 The Sea Insurance Compa/ny v. Hadden and Another (1884), 13 
 Q. B. D. 706 ; 53 L. J. Q. B. 252 ; 50 L. T. 657 ; 32 W. R. 
 841 ; 5 Asp. M. C. 230, 
 
 was an action to recover the sum of £880 19s. 
 
 Facts. — The plaintiffs were an insurance company ; the defendants 
 were the owners of a vessel called the Queen of the East. The 
 vessel was chartered for a voyage from Liverpool to Cardiff, 
 
ADJUSTMENT, VALUATION, ABANDONMENT, ETC. 229 
 
 there to take on board a cargo of coals for Bahia, freight to be 
 paid at the rate of 21s. per ton. The vessel sailed for Cardiff, 
 but on the voyage was seriously damaged in a collision with 
 a steamer called the Cassandra, and was sold. The defendants 
 had effected with the plaintiffs a pohcy of insurance on hull 
 for £1000, the ship being valued at £4000, and they received 
 under the policy settlement on the basis of a constructive total 
 loss. Admiralty proceedings were subsequently instituted and 
 the defendants recovered from the OAvners of the Cassandra 
 a sum of money as compensation for loss of the Queen oj 
 the East, and of the freight under the charterparty. 
 
 The plaintiffs then commenced the present action to 
 recover the sum of £880 19s., being as to £630 lis. 9d., 
 the proportion of damages recovered by the defendants in 
 respect of the loss of the ship, and as to £250 7s. 3d., the 
 proportion recovered in respect of the loss of the freight. The 
 defendants paid into Court the sum of £630 lis. 9d., and denied 
 any liabihty to pay to the plaintiffs the sum of £250 7s. 3d. 
 
 Held that the plaintiffs could not recover, as the damages recovered 
 in respect of the freight were salvage, to which the underwriters 
 on freight were entitled.(g) 
 
 Dafourcet & Company v. Bishop and Another (1886), 18 Q. B. D. 
 373 ; 56 L. J. Q. B. 497 ; 56 L. T. 633 ; 6 Asp. M. C. 109, 
 
 was an action brought by the owners of a cargo, shipped on board 
 the Aurora, against the owners of the ship for damages for non- 
 
 (g) As to the apportionment of damages where a lump sum is recovered in 
 respect of the loss of the vessel and freight, see Thames & Mersey Marine Insur- 
 ance Co. V. British & Chilian Steamship Go. (1915), 31 T. L. E. 275. 
 
 In the American case of Mason v. Marine Insurance Co. (1901), 110 Fed. R. 
 452, it was held that the underwriters on a ship, which was sailing under a charter 
 and which had been sunk in collision, were entitled to damages, based upon the 
 charter freight, for loss of earnings recovered from the wrongdoing vessel. In 
 this case the vessel was not a constructive total loss and after being raised was 
 repaired, but the underwriters on ship had paid a total loss. The grounds of 
 the decision were that the property in the vessel had been transferred to the 
 underwriters, and the damages, though based upon the charter freight, were 
 not for a loss arising upon the charter, but for the loss of prospective earnings 
 of the ship while she was being repaired, the charter being used as evidence 
 merely as to how much they would probably have been worth. 
 
230 LAW EBLATING TO THE INSUEANCE OP FEEIGHT 
 
 delivery of the cargo, the cargo having been lost by the negU- 
 gence of the defendants. 
 
 Faots.— The plaintiffs were the owners of 1500 tons of superphos- 
 phate which had been shipped in the Aurora, and they had 
 paid £600 as advanced freight. They had received from their 
 underwriters an indemnity both for the price of the goods 
 and for the advanced freight, and this action was brought 
 for' the benefit of the underwriters on the advanced freight to 
 recover the sum of £600. 
 
 Held that the plaintiffs were entitled to recover on behalf of the under- 
 writers, as part of the damage, the amount of the advanced 
 freight. 
 
 The London Assurance Corporation v. Williams (1892), 9 T. L.'E. 
 96, 257, 
 
 was a case of insurance on chartered freight, in which the 
 question was as to the right of the underwriters, who had paid 
 for a total loss of freight, to recover pro rata freight paid to the 
 shipowner under foreign law. 
 
 Pacts.— The defendant, the owner of the ship Canute, effected an 
 insurance with the plaintiffs on chartered freight valued at 
 £1660. The Canute, in the course of a voyage from Pensacola 
 to Barrow-in-Purness with a cargo of timber, was driven into 
 Havanna, where she was condemned and sold for the benefit 
 of all concerned. The captain could not procure a vessel to 
 carry on the cargo, and it remained in his possession subject 
 to his lien for general average. The underwriters on cargo 
 sent some one out from England, and in order to free the cargo, 
 entered into an agreement with the shipowner to pay according 
 to the law and usage of Havanna. By the law of Havanna 
 the ship was entitled to pro rata freight, and the shipowner 
 recovered from the cargo owners the sum of £750. 
 
 Held that the underwriters on freight, who had paid a total loss of 
 freight, were entitled to the benefit of the pro rata freight. 
 
CHAPTEE VII. 
 
 Summary. 
 
 Chapter I. — Freight as the Subject op Insurance. 
 
 Ships are built for the purpose of earning money by the carriage of 
 goods. Merchants require ships to carry their merchandise. For 
 this service they are wilhng to pay, and the remuneration thus 
 payable is termed freight (p. 1). 
 
 The conditions under which a vessel may be employed differ 
 widely, but speaking generally, shipowners offer the services of their 
 vessels in two ways. Either the ship is put up for a defined voyage 
 as a general ship and takes the goods of any person willing to ship 
 in her, or the shipowner seeks for some one who will employ the vessel 
 upon some voyage or during some period of time, for purposes and 
 upon terms to be agreed with him (pp. 1, 2). 
 
 In whatever way a vessel may be employed, the remuneration 
 payable is described comprehensively as freight. In the strict 
 significance of the term freight is the remuneration payable for the 
 carriage and safe delivery of goods. In practice it has a more 
 extended application and designates, in addition to the remuneration 
 payable for the carriage and delivery of goods that have been put 
 on board a vessel, the remuneration agreed to be paid under a con- 
 tract of affreightment relating to the use of a vessel or of space in a 
 vessel or to the carriage of goods in a vessel which the shipowner 
 undertakes to provide (pp. 2, 3). 
 
 In insurance law the term freight is not limited to the remunera- 
 tion payable by some one in return for the services of the ship. A 
 shipowner may employ his ship to carry his own goods. Freight 
 will not be directly payable, but the shipowner will receive in the 
 increased value of the goods due to the carriage a benefit equivalent 
 to the benefit he would have received if he hc^d been carrying the 
 
 231 
 
232 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 goods of another, and this, though not strictly freight, is so like it 
 that it has been held that it may be insured under that name (pp. 4-6). 
 
 The term " freight," then, as used in insurance law, may be 
 described as the benefit derivable from the use or employment of 
 a ship or a part thereof by the shipowner or other person entitled 
 to such use or employment ; it does not include passage money 
 (p. 6). 
 
 Except in the case where a shipowner uses his vessel to carry his 
 own goods, freight, whether it be the remuneration payable for the 
 carriage of goods, or the remuneration payable for the use of a vessel 
 or of space in a vessel or for the right to have goods carried in a vessel, 
 results from some contract. The contract defines the amount of 
 the remuneration, and the conditions upon which it is payable, and 
 it is necessary in every case to consider the terms of the contract in 
 order to ascertain the extent to which the right to freight has been 
 affected by the perils insured against (pp. 6, 7). 
 
 Contracts of affreightment relating to the employment of a vessel 
 vary widely in character and in their provisions. They may operate 
 as a demise or lease of the ship, or they may merely give the right to 
 the use of a vessel or of space in a vessel or to have goods carried 
 in a vessel for a particular voyage or series of voyages or period of 
 time (p. 7). 
 
 Such contracts of affreightment are usually embodied in a docu- 
 ment called a charterparty, but no particular form of document is 
 required. By the terms of most charterparties, the charterer under- 
 takes to fill the vessel with goods for the carriage of which remunera- 
 tion will be payable. In respect of these goods bills of lading will be 
 issued, and under these bills of lading the rights and liabilities of the 
 shipowner may be different from his rights and Habilities under the 
 charterparty. But in so far as the freight insured is the freight 
 payable under the charterparty, the rights and liabilities of the 
 shipowner as defined by that document alone need be considered, 
 for the shipowner cannot by voluntarily departing from its terms, 
 increase the liability of the underwriters (pp. 7-9). 
 
 Freight may be made payable in many ways. It may be a lump 
 sum freight of a definite amount, or a lump sum freight based upon 
 
SUMMAEY 233 
 
 the capacity of the vessel, or the measure, weight, or character of . 
 the goods to be carried. It may be payable at a certain rate, and 
 that rate may be the current rate, or a nominal rate, or a rate which 
 varies with the nature of the goods shipped. It may be subject to 
 deductions in respect of loss or damage to the goods. It may be 
 payable in kind, but usually is payable in money. It is not even 
 necessary that a rate of freight should have been agreed. In 
 such a case, unless it is proved that the goods were to be carried 
 gratuitously, a reasonable rate of freight will be payable, and this 
 will usually be calculated at the ordinary rate ruling at the time 
 when the shipment was made (p. 9). 
 
 Freight is usually due and payable when the services in respect 
 of which it is to be paid have been completed, but it may be made 
 payable in advance. In insurance law no distinction is drawn between 
 freight payable in advance and freight payable when the services 
 in respect of which it is to be paid have been completed, except in 
 so far as it affects the question of insurable interest. Freight paid 
 in advance may be insured as freight (pp. 9-11). 
 
 Chapter II. — Insurable Interests in Freight. 
 
 It has long been an established principle of English law that 
 freight is a lawful subject of marine insurance (p. 12). 
 
 Freight is the benefit derived from the employment of a vessel. 
 It follows, therefore, that before freight can come into existence, 
 or before an insurable interest in freight can arise, employment must 
 have been found for the vessel (p. 12). 
 
 This view has been criticised as being too narrow, and it has been 
 suggested that a reasonable expectation of obtaining freight should 
 be covered by an insurance on freight^^ but this view has not been 
 adopted (pp. 12, 18). 
 
 This expectation of obtaining freight may, perhaps, be insured 
 by a policy in which the interest is properly described (p. 13). 
 
 Is it sufficient in order to create an insurable interest in freight, 
 that employment, from which freight will be derived, has been 
 
234 LAW EELATING TO THE INSUEANCE OF PEEIGHT 
 
 obtaiijQd ? Early decided oases imposed upon the ordinary insurance 
 on freight a limitation to the effect that the assured must have an 
 " inchoate right to the freight," an expression which has given rise 
 to much difficulty and confusion as it has been used as referring both 
 to the inception of an insurable interest and to the inception of the 
 fisk. In order to understand how this difficulty and confusion arose, 
 it is necessary to trace the origin of the doctrine of the inchoate right 
 to freight and to follow its development (pp. 13, 14), 
 
 An ordinary insurance upon freight has always beeii regarded 
 as a contract of indemnity during the adventure in which the freight 
 is to be earned. How this conception originated is not clear, but 
 it was in all probability influenced by the fact that insurances on 
 freight were effected by means of voyage policies, and by the peculiar 
 nature and incidents of freight (pp. 14, 15). 
 
 When an insurance on freight for a voyage was effected, it was 
 assumed that the shipowner would be sending his vessel on that 
 voyage for the purpose of earning freight, and it was the freight to 
 be earned on that voyage which, it was considered, was intended to 
 be covered by the policy. To such a length was this view carried 
 that in one case it was decided that the freight- earning voyage must 
 be identical with the voyage insured by the policy, but this decision 
 has not been followed (pp. 15, 16). 
 
 The second and the more important factor was the peculiar 
 nature and incidents of freight. At Conamon Law no right to freight 
 qua freight arose until the voyage was ended and the contract per- 
 formed, but by the Law Maritime an inchoate right to the freight 
 was considered to arise as soon as the vessel broke ground on the 
 voyage. The fact that according to the Common Law and the Law 
 Maritime no right to freight qua freight arose until the vessel had 
 actually commenced to earn it by breaking ground on the voyage, 
 undoubtedly influenced the view that an ordinary insurance on 
 freight was intended to be an insurance of the freight which the 
 vessel was in the course of earning (pp. 16, 17). 
 
 From the time that freight commenced to be earned, an inchoate 
 right to the freight was said to arise, and it was this inchoate right 
 
SUMMABY 2B5 
 
 which was considered to be covered by the ordinary pohcy on freight 
 (P- 17). 
 
 From a series of EtigUsh cases it would seem that the doctrine 
 of the inchoate right to freight was regarded in this country as 
 referring to the inception of the risk. In America, on the other hand, 
 the doctrine was regarded as referring to the inception of an insurable 
 interest, but so long as an insurance on freight was treated as an 
 insurance on the freight which the vessel was then in the course of 
 earning, it was immaterial which view was adopted (pp. 17-22). 
 
 Whether treated as referring to the inception of the risk or to the 
 inception of an insurable interest, diflficult questions arose as to when 
 the inchoate right to freight commenced, that is to say, as to when 
 the freight began to be earned. There are dicta to the effect that 
 the inchoate right did not commence until the vessel had broken 
 ground on the freight-earning voyage, but the test as laid down in 
 several cases was whether there had been an inception of the contract 
 of affreightment, whether the employment in respect of which the 
 freight was payable had been entered upon and in that way the 
 adventure begun (pp. 22-24). 
 
 In the application of this test difficulties arose. The voyage 
 
 contemplated by the contract of affreightment might not be a simple 
 
 voyage from one port to another ; it might be a double voyage out 
 
 and home, or it might consist of a series of voyages. Some hesitation 
 
 was felt in saying that freight to be earned during a homeward voyage 
 
 was in course of being earned during the outward voyage. But in 
 
 the various cases in which the point was raised, the Courts decided 
 
 on the construction of the contracts of affreightment that the freight, 
 
 although dependent on the completion of the homeward voyage, 
 
 was in fact payable in respect of the whole contemplated voyage out 
 
 and home. The outward voyage and the homeward voyage were not 
 
 treated as separate adventures, but as parts of one entire adventure 
 
 (pp. 24-28). 
 
 The voyages out and home might, however, be separate adven- 
 tures, and it has been suggested that in such cases the vessel does not 
 commence to earn the homeward freight until she is in a condition 
 
236 LAW RELATING TO THE INSURANCE OP FREIGHT 
 
 to take in her homeward cargo, but this view has been rejected 
 (pp. 28-31). 
 
 The question whether the freight has commenced to be earned is 
 a question of fact. The propositions laid down in the decided 
 cases as to when the freight began to be earned must not be regarded 
 as inflexible rules of universal application, but as useful tests to be 
 apphed for the purpose of ascertaining whether the freight-earning 
 voyage has in fact commenced or not (pp. 31-34). 
 
 It has been seen that according to the American view the doctrine 
 of the inchoate right to freight referred to the inception of an insurable 
 interest. This view has given rise to an impression that there cannot 
 be an insurable interest in freight until the freight earning voyage 
 has commenced. This impression is erroneous, for, as was said by 
 Lord BsHEE, " No doubt as soon as a shipowner has got a binding 
 contract with somebody to put goods on board his ship, he has an 
 insurable interest." The ordinary policy only covers freight from 
 the time that it commences to be earned, but freight may be insured 
 from the time that it is engaged, provided that the nature of the 
 insurance is sufficiently indicated by the policy (pp. 34-40). 
 
 The foregoing outline has dealt with questions relating to an 
 insurable interest in chartered freight. The term chartered freight, 
 it is submitted, does not refer merely to freight payable under a 
 charterparty, but means freight payable under a contract relating 
 to the use and hire of a vessel or of space in a vessel or to the carriage 
 of goods in a vessel which the shipowner undertakes to provide. 
 No distinction has been drawn between contracts by charterparty 
 and contracts in any form, or between contracts for the use of the 
 whole vessel and contracts relating to the carriage of goods which 
 would occupy only a small portion of the ship's carrying capacity 
 (pp. 40-43). 
 
 With regard to ordinary freight, that is to say, the freight payable 
 for the carriage of particular goods, an insurable interest, it is sub- 
 mitted, arises as soon as a contract is made with somebody for the 
 shipment of the goods. The ordinary poHcy, however, will only 
 cover such freight from the time that the assured may be said to 
 
SUMMAEY 237 
 
 have an inchoate right to the freight. An inchoate right to this 
 freight, it would seem, arises when the goods are put on board or 
 as soon as the carriage is substantially ready to begin, namely, 
 when the cargo is in readiness to be loaded, and the vessel is ready to 
 receive it (pp. 43-46). 
 
 The expression freight in insurance law .includes the benefit 
 derivable by the shipowner from the employment of his own ship 
 to carry his own goods. The ordinary policy does not cover this 
 freight until the carriage is substantially ready to begin, but there 
 seems to be no reason why a shipowner, who has goods which he 
 definitely intends to carry on his own vessel, should not be entitled to 
 insure the freight in respect of them, although they are not ready to 
 be put on board, and the ship is not ready to receive them (pp. 46-50). 
 
 A shipowner may enter into a contract with a merchant under 
 which he undertakes to provide a ship or space in a ship without 
 specifying any particular vessel. In such cases, it is submitted, an 
 insurable interest arises as soon as the assured has definitely allocated 
 a vessel to the performance of the contract (p. 50). 
 
 The foregoing remarks have referred to the insurable interest of 
 a shipowner. There are dicta in some of the early cases to the effect 
 that, freight being an incident of the ownership of a vessel, a person 
 who has no right either legal or equitable to a vessel, can have no 
 insurable interest in the freight. There seems, however, to be no 
 doubt that ownership of a vessel is not necessary in order to give 
 an insurable interest in the freight (p. 51). 
 
 A charterer has an insurable interest in his sub-freight, but there 
 is some controversy as to the extent of his insurable interest. It is 
 submitted that he has an insurable interest in the gross amount of 
 the freight at his risk (pp. 51-53). 
 
 Under ordinary circumstances, the charterer has no insurable 
 interest in the freight he has to pay, but he may have an insurable 
 interest in respect of his liability to pay full freight, although the goods 
 arrive damaged, or in respect of his liability to pay a lump-sum freight 
 although a large part of the cargo may be lost by perils of the sea, 
 or if he agrees to pay dead-freight in the event of the ship being 
 
238 LAW EELATING TO THE INSUEANGE OF FEEIGHT 
 
 prevented from discharging the outward and shipping a return 
 cargo (p. 54). 
 
 An assignee has an insurable interest in the freight assigned to 
 him (p. 54). 
 
 A mortgagee, to whom freight has been mortgaged, has an 
 insurable interest inr the freight, but considerable doubt exists as 
 to the extent to which he may insure. He has an undoubted interest 
 to the extent of the mortgage debt He has also a right to insure 
 the mortgaged property to its full value for his own benefit and for 
 the benefit of other persons interested, and, it is submitted, he may 
 effect this insurance in his own name (pp. 54-57). 
 
 A mortgagor has an insurable interest in the full value of the 
 property insured, even though it be mortgaged to its full value, 
 because in case of loss he would not only be deprived of the property, 
 but would also remain liable for the njortgage debt (p. 57). 
 
 In the case of advance freight, the person advancing the freight 
 has an insurable interest, in so far as such freight is not repayable in 
 case of loss (pp. 57-59). 
 
 Chapter III. — The Duration of the Eisk Covered by the 
 
 Policy. 
 
 In the preceding chapter it has been seen that an ordinary policy 
 on freiglit has always been regarded as a contract of indemnity 
 during the adventure in which the freight was to be earned. From 
 the time that the freight began to be earned, an inchoate right to 
 it was said to arise, and from this time, according to the American 
 view, there was an inception of an insurable interest in the freight, 
 and according to the view adopted in several early English cases, 
 there was an inception of the risk (p. 60). 
 
 It is, however, misleading to treat the inchoate right as referring 
 either to the inception of an insurable interest in the freight, or to 
 the inception of the risk under the policy. The ordinary policy on 
 freight is not intended to cover any freight which the assured may 
 have engaged. In the absence of indication to the contrary, it 
 is an insurance of the freight which is being earned. Until 
 
BUMMAEY 239 
 
 something has been done towards earning the freight, the i^oUcy 
 does not attach, and it does not attach because until then the freight 
 does not come within the scope of the poHcy (p. 60). 
 
 At different times different tests have been suggested as to time 
 when in the case of chartered freight the pohcy attaches. According 
 to one view, the policy did not attach until the vessel had broken 
 ground on the voyage. According to another view, it did not attach 
 until the vessel was ready to take the cargo on board. According 
 to some early decisions the test was whether something had been 
 done under the contract of affreightment. These various tests should 
 be regarded merely as criteria for the purpose of deciding whether 
 the freight has in fact begun to be earned, and not as artificial limi- 
 tations upon the commencement of the risk. Provided that the 
 assured has freight which comes within the scope of the policy, the 
 risk can attach at once, and is not subject to any implied condition 
 that something must have been done under the contract of affreight- 
 ment, or that the vessel must be ready to load, or have broken 
 ground on the voyage (pp. 60, 61). 
 
 The Marine Insurance Act, therefore, provides that " Where 
 chartered freight is insured at and from a particular place, and the 
 ship is at that place in good safety when the contract is concluded, 
 the risk attaches immediately. If she be not there when the contract 
 is concluded, the risk attaches as soon as she arrives there in good 
 safety "(p. 60); 
 
 In policies on chartered freight, as in all other policies, the com- 
 mencement of the risk may be made to depend upon a certain event, 
 and in such cases the risk does not attach until the happening of the 
 event. For instance, many policies contain a clause to the effect that 
 the risk on freight is not to commence until the goods, in respect of 
 which the freight is payable, are loaded on board the ship (pp. 61-64). 
 
 If the provisions of such a clause have no application to the facts, 
 the clause should, it is submitted, be ignored (pp. 64, 65). 
 
 Different rules with regard to the inception of the risk apply in 
 the case of ordinary freight, that is to say, freight payable merely 
 for the carriage of particular goods. According to the Marine Insur- 
 ance Act, where freight, other than chartered freight, is payable 
 without special conditions, and is insured at and from a particular 
 
240 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 place, the risk attaches pro rata as the goods or merchandise are 
 shipped ; provided that if there be cargo in readiness which belongs 
 to the shipowner, or which some other person has contracted with 
 him to ship, the risk attaches as soon as the ship is ready to receive 
 such cargo " (pp. 65, 66). 
 
 The rule, that in the case of freight payable for the carriage 'of 
 goods the risk only attaches as the goods are put on board, may be 
 traced to the fact that in the majority of cases no right to any freight 
 exists until the goods are put on board. But in an early case it was 
 decided that in the case of freight to be derived by the shipowner 
 from the carriage of his own goods, the policy attached as soon as the 
 carriage was substantially ready to begin, that is to say, as soon as 
 the cargo was in readiness, and the ship was ready to receive it. The 
 Act accordingly contains a proviso to this effect, and provides that 
 the same rule shall apply to freight to be derived from the carriage 
 of the goods of others. It must, however, be freight, and not a 
 mere expectation of obtaining freight ; it must be freight to be 
 derived from the carriage of goods, which some person has con- 
 tracted to ship (pp. 66, 67). 
 
 The Act speaks of the goods " being in readiness " and the ship 
 " ready to receive them." The cargo must be in readiness, but this 
 does not necessarily mean that the cargo must be on the quay at 
 which the ship is to be loaded, although this will generally be the 
 case. If the goods are usually stored at a place at a distance from 
 the spot at which the loading is done, it will suffice if the cargo is in 
 readiness at that place (p. 67). 
 
 The ship must be " ready to receive " the cargo, but this does not 
 necessarily mean that the vessel must be at the berth where the cargo 
 is to be loaded. These words refer to the condition of the ship 
 (pp. 67, 68). 
 
 With regard to the termination of the risk on freight, the rule 
 generally laid down is that the risk terminates at the same time 
 as the risk terminates under an ordinary policy on goods. If the 
 locus ad quern referred to in the policy is not the place of discharge 
 of the cargo, the risk under an ordinary policy on freight probably 
 terminates when the ship has safely arrived at the agreed port of 
 destination and is at her moorings (p. 68). 
 
SUMMAEY 241 
 
 The policy does not attach if the vessel was not seaworthy at 
 the commencement of the voyage, or if the vessel sails on a voyage 
 different from the voyage insured (p. 69). 
 
 Freight may be insured by a time policy, but this, it is sub- 
 mitted, does not affect the view that the freight intended to be 
 covered is the freight which the shipowner is in the course of earning. 
 
 It is not necessary that the policy should cover the whole period 
 during which the freight may be at risk, and a loss of freight caused 
 by perils insured against during the period covered by the policy 
 may be recovered, although the loss is not ascertained until the 
 period covered by the policy has expired (pp. 69-71). 
 
 An assured cannot, however, recover for a loss which, although 
 attributable to damage inflicted by perils insured against during the 
 period covered by the policy, is not sustained until after the period 
 covered by the policy has expired (pp; 71, 72). 
 
 Chapter IV. — The Designation of the Subject-Matteb in the 
 
 Policy. 
 
 In every policy the subject-matter must be designated with 
 reasonable certainty, but it is sufficient if this is done in general 
 terms. Originally insurances used to be effected on freight eo 
 nomine, but nowadays it is more usual to describe the subject-matter 
 at greater length and in greater detail (pp. 73, 74). 
 
 The designation freight covers the freight payable under a bill of 
 lading, charterparty, or other contract of affreightment, the benefit 
 derivable by a shipowner from carrying his own goods, and advance 
 freight. It does not include passage money, or under ordinary 
 circumstances the remuneration payable for the carriage of live 
 animals or of goods on deck (p. 73). 
 
 It is not necessary to state the nature and extent of the interest 
 of the assured in the subject-matter insured. In early times the view 
 was entertained that no one but the owner of a vessel could insure 
 freight eo nomine without disclosing the nature of his interest, but 
 this view, it is submitted, is not correct (pp. 74-77). 
 
 I.E. B 
 
242 LAW EELATING TO THE INSUEANCE OP FEEIGHT 
 
 The extent to which an assured, who has a Hmited interest in 
 property, may insure is not necessarily hmited to the amount of 
 his own limited interest. Thus a mortgagee, a carrier, or other person 
 with a limited interest in property, may insure' on behalf and for the 
 benefit of other persons interested as well as for his own benefit, and 
 may recover the full value of the property insured, provided that 
 he intended the policy to cover not only his own personal interest, 
 but the interest of all those who were interested in the property. 
 In such cases the policy should, it is submitted, be construed as 
 applying to the interest intended by the assured to be covered 
 (pp. 77-82); 
 
 If the assured intended the pohcy to apply to his personal interest 
 in one capacity, and it happens that he is interested in some other 
 capacity, it is not clear whether the policy should be construed as 
 applying only to that particular interest which theassured intended to 
 insure. It is submitted that where the policy designates the subject- 
 matter insured in general terms, it should be construed as covering all 
 the personal interests of the assured which he has at risk (pp. 82-84). 
 
 Where the policy is in general terms, it must not be construed 
 in the absence of intention or indication to the contrary, as covering 
 the interest of the assured in a portion only of the subject-matter 
 which is within its terms and which he has at risk. This rule may be of 
 considerable importance in the case of insurances on freight. A ship- 
 owner may have made a charterparty under which the vessel is to 
 proceed from A to B, and there load a cargo to be carried to C. 
 During the voyage from A to B he may be in the course of earning 
 this freight, and he may also be carrying a cargo in respect of which 
 freight will be payable. He will thus have two freights at risk, both 
 of which would be covered by a policy on freight at and from A to 
 B. In such cases the policy should, it is submitted, in the absence of 
 intention or indication to the contrary, be construed as an insurance 
 of the freight payable in respect of the earlier voyage (pp. 84-88). 
 
 Where the voyage insured consists of successive stages during 
 which the assured has at risk successive freights, the policy should, 
 in the absence of intention or indication to the contrary, be construed 
 as an insurance of the freight pending during each successive passage 
 (pp. 88-91). 
 
SUMMAEY 243 
 
 Where a policy has been effected on freight, and a cargo is loaded 
 on board a vessel, it is to the freight of that particular cargo that the 
 pohcy attaches. Similarly, where a charterparty has been made 
 under which freight will be payable, the pohcy attaches to the freight 
 of that particular charterparty. A loss of such freight by a peril 
 insured against will prima facie constitute a total loss under the 
 policy. If the assured treats the loss as a constructive total loss, 
 the underwriter on freight will be entitled to the beneiit of any freight 
 which is earned or which might have been earned in the course of 
 the voyage insured. If the loss is not an actual total loss, and the 
 assured does not treat the loss as a constructive total loss, he will 
 only be entitled to recover the difference between the original freight 
 and the freight which has been or which might have been earned 
 in the course of the voyage insured (pp. 91-96). 
 
 If after the policy has attached to the freight payable in respect 
 of a particular cargo, that cargo is voluntarily unladen, and a different 
 cargo substituted for it, or if after the policy has attached to the 
 freight payable under a particular charterparty, that charterparty 
 is voluntarily cancelled and other freight obtained in place of it, 
 the policy will, it would seem, attach to this substituted freight. 
 This result certainly follows if the terms of the policy are such as to 
 show that it was not intended to apply merely to the original freight. 
 Such an intention is inferred if the policy contained a clause giving 
 leave to discharge and take in cargo, or if the voyage insured is a 
 trading voyage or consists of a series of stages (pp. 96, 97). 
 
 The foregoing remarks have had reference to policies on " freight " 
 eo nomine. Nowadays it is more usual to describe the subject-matter 
 at greater length and in greater detail (p. 97). 
 
 An expression frequently used is freight " on board or not on 
 board." These words were probably framed in order to exclude 
 the printed clause found in many policies, " beginning the adventure 
 upon the said goods or freight from the loading thereof on board the 
 said ship." They are now frequently found in poUcies which do not 
 contain the printed clause (pp. 97-99). 
 
 Another expression is freight " chartered or as if chartered." 
 Thfese words do not cover a mere expectation of freight. Their 
 
2d4 LAW EELATING TO THE IN8UBANCE OP PEEIGHT 
 
 object may be to provide that the principles apphcable to chartered 
 freight shall be applied also to other freight as if it were chartered 
 freight (pp. 99-101). 
 
 It has been suggested that the expression chartered freight may 
 only apply to freight payable under a charterparty which is in 
 existence at the time when the insurance is effected, but there seems 
 to be no sound reason why such a narrow construction should be 
 adopted. These words would be an indication to the underwriter 
 that a charterparty may be in existence (p. 101). 
 
 It is not necessary for the assured to disclose the fact that a 
 charter-party is in existence, but he must not conceal the fact that 
 the charterparty is in an unusual form (pp. 102-104). 
 
 GHiPTBE V. — Losses under the Policy. 
 
 Freight is the benefit derivable from the employment of a vessel, 
 and where a vessel is being employed in carrying a cargo in jespect 
 of which freight is payable, it is the freight of that cargo, in that 
 vessel, and on that voyage which is the subject-matter of the insur- 
 ance and to which the policy attaches. Under ordinary circumstances 
 a loss of both the vessel and the cargo will involve a loss of the freight, 
 unless the freight is payable irrespective of what may happen to the 
 ship and cargo, and, if in such a case the shipowner is prevented from 
 earning the freight by any of the perils insured against, he will be 
 entitled to recover a total loss under the policy (p. 105). 
 
 If the vessel is totally lost or damaged to such an extent as not 
 to be worth repairing, and is not repaired, there may be an actual 
 total loss of the freight, but this result does not necessarily follow, 
 as the shipowner may be able to earn the freight by transhipping 
 the cargo to the place of destination, and the freight thus earned 
 is regarded as the original freight (pp. 105-107). 
 
 Although the shipowner as between himself and the freighter 
 may not be bound, qua shipowner, to tranship or forward the goods 
 to their destination, he has undoubtedly the right to do so. This 
 right, if there is a chance of using it so as to prevent a total loss of 
 
SUMMAEY 245 
 
 freight, the assured must, as between himself and the underwriters 
 on freight, either exercise himself or by a timely abandonment enable 
 the insurer, if he choose, to exercise it for his own benefit (p. 107). 
 
 The position, however, may be such that there is no chance of 
 an opportunity of the cargo being forwarded to its destination, and 
 in such cases there is an actual total loss of freight unless the freighter 
 accept deUvery of the cargo at the intermediate port under such 
 circumstances as to render himself liable for freight or for a ■pro rata 
 freight (pp. 107-109). 
 
 In considering the question whether the cargo can be forwarded 
 or not, regard must be had to the circumstances existing at the time, 
 and to the interval which would have to elapse before a substituted 
 vessel could be obtained. If there is no chance of an opportunity 
 of the cargo being forwarded within a reasonable time, the assured 
 would, it is submitted, be entitled to recover for a total loss (pp. 109, 
 110). 
 
 There is also, it would seem, an actual total loss of freight, if there 
 is no chance of an opportunity of the cargo being transhipped and 
 forwarded except at a cost equal to or exceeding the original freight 
 (pp. 110, 111). 
 
 If the vessel is totally lost or damaged to such an extent as not 
 to be worth repairing and is not repaired, but the cargo can be tran- 
 shipped and forwarded to its destination at a reasonable expense 
 and within a reasonable time, there is not an actual loss of the freight, 
 but the shipowner may, by giving due notice of abandonment, entitle 
 himself to claim as for a total loss (pp. 111-113). 
 
 The total or constructive total loss of a vessel may, therefore, 
 be treated by the shipowner as involving a constructive total loss 
 of the freight. He may give due notice of abandonment, and if 
 the abandonment is accepted or an action commenced, he may, if 
 the loss was caused by perils insured against, recover as for a total 
 loss (p. 114). 
 
 If the notice of abandonment is not accepted and an action is 
 not commenced until freight has been or could have been earned by 
 transhipping and forwarding the cargo to its destination, the position 
 is obscure. It is submitted that in such a case the assured cannot 
 recover for a loss of freight, but if he has transhipped the cargo, he 
 
246 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 may recover under the suing and labouring clause the reasonable 
 expenses which he has incurred (pp. 114-117). 
 
 If notice of abandonment has been given, and the assured, while 
 still persisting in the abandonment, endeavours to earn the freight 
 by transhipping the cargo, but is unable to do so by reason of perils 
 which are not covered by the policy, he will, it is submitted, never- 
 theless be entitled to recover for a total loss of freight (p. 117). 
 
 If notice of abandonment is not given and the freight can be earned 
 by transhipping the cargo and forwarding it to its destination, the 
 assured must adopt this course. If the cargo is transhipped and the 
 freight earned, there will be no loss of freight, but the assured will 
 be entitled to recover the reasonable costs of transhipment under the 
 suing and labouring clause. If the goods are not transhipped, and 
 the freight, which might have been so earned, is lost, the assured 
 will not be entitled to recover for the loss which is to be attributed 
 to his neglect (pp. 118, 119). ^ 
 
 If at the time of the casualty it is doubtful whether the cargo 
 can be transhipped, the assured should in order to make certain 
 his right to treat the loss of freight as a total loss, give due notice 
 of abandonment to the underwriters on freight. If, however, it 
 subsequently appears that the cargo cannot reasonably be forwarded, 
 the assured will, it is submitted, be entitled to recover for a total loss, 
 although no notice of abandonment has been given (pp. 119, 120). 
 
 In the preceding remarks, when reference has been made to a 
 vessel being damaged to such an extent as not to be worth repairing, 
 it has been assumed that the vessel has not been repaired, and has 
 remained a wreck. It may happen, however, that the vessel is 
 repaired either by the owner or by the underwriter to whom she has 
 been abandoned or by the purchaser to whom She has been sold 
 (p. 120). 
 
 If the vessel is repaired by the owner and completes the voyage 
 and earns the freight, then inasmuch as the freight has been earned 
 by the assured, there is under ordinary circumstances no loss of 
 freight (pp. 120-122). 
 
 If the vessel is repaired by the underwriters to whom the vessel 
 has been justifiably abandoned, or by a purchaser to whom she has 
 
SUMMARY 247 
 
 been justifiably sold, and subsequently completes the voyage and 
 earns freight, the right of the assured to recover for a total loss of 
 freight is not defeated by the fact that freight has been earned by 
 the vessel while out of his control (pp. 122-133). 
 
 The right to recover for a total loss is not defeated, if the under- 
 writers, to whom the freight has been abandoned, earn the freight 
 by forwarding the cargo to its destination at a cost equal to or ex- 
 ceeding the original freight (p. 131). 
 
 The foregoing remarks have applied to cases where the vessel 
 has been lost or damaged to such an extent as not to be worth 
 repairing. 
 
 If the vessel can be repaired at a reasonable cost so as to carry 
 on the cargo within a reasonable time to the port of destination and 
 thus earn the freight, the shipowner is entitled to retain possession 
 of the cargo for the purpose of completing the voyage, and if he fails 
 to do so and thereby loses the freight, he cannot hold the under- 
 writer liable, as the freight in such case would be lost by his default, 
 and not by any of the perils insured against (pp. 134, 135). 
 
 This right of the shipowner to retain the cargo while repairs are 
 being effected, and his obligation to do so, are governed by the con- 
 siderations whether the repairs can be effected so as to carry on the 
 cargo to the port of destination within a reasonable time and at 
 a reasonable cost. As to what constitutes a reasonable time, no 
 definite period can be prescribed ; the circumstances of each case, 
 the nature of the trade, and the voyage upon which the vessel is 
 engaged must be considered (pp. 185, 136). 
 
 If, whatever the extent of the delay may be, the cargo be of a 
 perishable nature, or so damaged as to become perishable, and would 
 in all probability perish before the repairs can be effected or the voyage 
 completed, the shipowner loses his right to retain it, and if in such 
 case the damage was due to any of the perils insured against, the 
 assured will be entitled to recover for the resulting loss of freight 
 (pp. 137, 138). 
 
 If the cargo can be reshipped so as to arrive in specie, although 
 so damaged as to be of little value, the shipowner is under ordinary 
 circumstances entitled to retain it, and if, instead of so doing, he 
 redelivers it to the freighter, he cannot claim from the underwriters 
 
248 LAW RELATING TO THE INSURANCE OF FREIGHT 
 
 on freight for a loss which was caused, not by any of the perils insured 
 ^.gainst, but by his own voluntary action (pp. 138-143). 
 
 The question to be determined is whether the cargo can be carried 
 on so as to arrive in specie ; and the individual interest of the cargo- 
 owner, and the object which he had in view when making the ship- 
 ment, is not an element to be considered (pp. 148, 144). 
 
 If the repairs to the ship cannot b6 effected so as to carry on the 
 cargo to the port of destination within a reasonable time, then, 
 subject to the shipowner's right to tranship for the purpose of earning 
 the freight, the contract of affreightment is dissolved, and if there is 
 no chance of an opportunity of the cargo being forwarded except, 
 perhaps, at a cost which would be equal to or would exceed the 
 amount of the original freight, and if there is no chance of obtaining 
 a substituted cargo on the insured voyage, there is an actual total 
 loss of freight and the assured need not give notice of abandonment 
 (p. 144). 
 
 At the time of the accident it may be difficult to decide whether 
 the repairs can be effected so as to carry on the cargo within a reason- 
 able time. If there is no reasonable prospect of the cargo being so 
 carried on, the parties are not bound to wait for an indefinite period 
 to see if any change occurs. If there is a prospect of the cargo being 
 so carried on and of the freight being earned, the shipowner must 
 continue the voyage, but if the expectation ultimately proves to have 
 been erroneous and the freight cannot be earned, then provided that 
 the loss was due to any of the perils insured against, the assured will 
 be entitled to recover for a partial loss if the loss be partial, or for a 
 total loss if the loss be total (p. 145). 
 
 If the delay is not so great as to break up the voyage, but merely 
 suspends it, the shipowner cannot recover under an ordinary policy for 
 the increased cost of wages and provisions caused by the delay, or for 
 theloss of profit due to the prolongation of the voyage (pp. 145-147). 
 
 The other element to be considered in deciding whether a vessel, 
 which has been damaged, should be repaired or not, is whether the 
 damage to the vessel can be repaired so as to carry on the cargo to 
 the port of destination at a reasonable cost. A shipowner is not 
 bound to repair tlje vessel if, in a business sense of the word, it is 
 
SUMMAEY 249 
 
 not possible to do so, and the vessel may be considered as being 
 irreparable, if the cost of the repairs would exceed the value of the 
 vessel when repaired (pp. 147-149). 
 
 The repairs, the costs of which are to be considered, do not mean 
 a reconstruction, but the vessel is to be repaired so as to be not merely 
 seaworthy, but, as far as repairs can effect it, a vessel of the same 
 classification and as nearly as possible the same thing as she was 
 before. In considering whether the cost of repairs will exceed the 
 value of the vessel when repaired, the better view, it is submitted, 
 is not to include in the value of the vessel the freight which will be 
 earned by completing the voyage (pp. 149-153). 
 
 Where, owing to the cost of repairs the vessel is treated as a con- 
 structive total loss, and there is no chance of an opportunity of the 
 cargo being forwarded within a reasonable time and at a cost less than 
 the amount of the original freight, there is a total loss of freight, 
 and notice of abandonment is not required (p. 153). 
 
 If, owing to an embargo or capture rendering the completion of the 
 adventure impossible or unlikely, the contract of affreightment is 
 treated as at an end, the shipowner will lose his freight. In such u 
 case he will be entitled to recover from the underwriter on freight 
 under a policy in the ordinary form, but as the vessel may be re- 
 captured or released and may earn freight on the insured voyage, 
 the assured should give notice of abandonment. He is then, so long 
 as the loss continues apparently total, in a position to bring an action 
 against the underwriters on freight, and if an action is commenced 
 before any change in the situation occurs, he will be able to recover 
 as for a total loss (pp. 154-156). 
 
 If no action is commenced, and the ship being recaptured or 
 released comes again under the control of the assured and performs 
 the voyage and earns freight, the assured will not be entitled to 
 treat the loss, which has ceased to be total, as a total loss (pp. 156,, 
 
 157). 
 
 The position as between the shipowner and the underwriters on 
 freight is usually compUcated by the fact that the ship will have been 
 insured and may have been abandoned to the underwriters on ship, 
 who thereby become entitled to any freight subsequently earned 
 by the ship (p. 157). 
 
250 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 If, by reason of capture or some similar cause, the ship is aban- 
 doned to the underwriters on ship under circumstances which justify 
 the shipowner in treating the ship as a constructive total loss, and 
 in putting an end to the contract of affreightment, and the freight is 
 thereby lost, the assured will, it is submitted, be entitled to recover 
 for this loss from the underwriter on freight, the loss in such case 
 -being due to a peril insured against and not to the abandonment 
 of the ship to the underwriters on ship. And, it is submitted, the 
 assured will be entitled to recover although the contract of affreight- 
 ment is not by any definite act of the parties to it treated as at an 
 end (pp. 158-160). 
 
 The actual loss of the cargo usually causes a total loss of the freight 
 payable in respect of it, and a loss of that freight by any of the perils 
 insured against will occasion an actual total loss of freight unless 
 such loss should so happen as to leave the ship capable, as to time, 
 place, and condition, of earning an equal or some freight by carrying 
 other cargo on the voyage insured (p. 160). 
 
 Such freight is in the nature of salvage, and the shipowner is 
 entitled to any expenses incurred for the express purpose of obtaining 
 it. Freight so earned has the effect of reducing the shipowner's loss 
 on the voyage, and after it has been received, he will only be able to 
 recover as for a partial loss. If he wishes to recover for a total loss, 
 he must, while the loss is still total, give due notice of abandon- 
 ment and commence an action against the underwriter on freight 
 (pp. 160-162). 
 
 If the shipowner can complete the voyage and earn freight in the 
 course of it, but neglects to do so, the underwriters on freight will 
 not be prejudiced by his failure to adopt this course (pp. 162, 163). 
 
 If the cargo is not wholly destroyed, but is so much damaged by 
 perils insured against that it cannot be carried on without endanger- 
 ing the health "or lives of the crew or the safety of the ship, the ship- 
 owner may jettison or abandon it, and this constitutes a total loss 
 of the freight payable in respect of it (p. 163). 
 
 If the cargo is damaged to such an extent that it cannot be 
 carried to the port of destination so as to arrive in specie, the ship- 
 owner loses his right to retain it, and if the damage to the goods was 
 
SUMMAEY 251 
 
 due to any of the perils covered by the policy, the assured can recover 
 for the resulting loss of freight (p. 163). 
 
 If the cargo, although greatly damaged, can be reconditioned at a 
 reasonable expense, so as to be capable of being carried in specie 
 to the port of destination within a reasonable time, the shipowner 
 may retain it, and if he fails to do so, and thereby loses the freight, he 
 cannot claim from the underwriters for a loss which was caused, not 
 by any of the perils insured against, but by his own voluntary 
 action (p. 163). 
 
 In determining whether cargo can be reconditioned so as to be 
 capable of being carried to its destination in specie, two questions 
 have to be considered, the question of expense and the question of 
 time (p. 163). 
 
 With regard to the question of expense, if the cost of reconditioning 
 the cargo would exceed the value of the cargo on arrival at the port 
 of destination, the cargo is from a commercial point of view irreparable 
 and need not be repaired. The cost of reconditioning includes the 
 cost of putting the cargo as nearly as possible into the same condition 
 as it was before the accident, so far as repairs can bring this about. 
 The freight which will be paj^able for the goods should not, it is 
 submitted, be taken into account (pp. 163-165). 
 
 With regard to the question of time, the circumstances existing 
 in each case must be considered. If the cargo can be reconditioned 
 in such a time as, taking everything into consideration, is consistent 
 with the purposes of the contract of affreightment and the character 
 and objects of the adventure, the shipowner must be prepared to wait 
 and forward the cargo in his vessel as soon as it is in a condition to 
 be reshipped, and if he voluntarily arranges with the shipper to 
 cancel the contract and relinquish the voyage, he cannot hold the 
 underwriter liable for the resulting loss of freight (pp. 166-169). 
 
 If the cargo cannot be reconditioned in time to be reshipped by the 
 original vessel, the shipowner cannot, it is submitted, retain it in 
 order to earn his freight by carrying it in another vessel, and if in 
 such a case the damage was due to perils insured against, and there 
 is no chanpe of obtaining a substituted cargo, the shipowner will be 
 entitled to recover for the loss of freight thus caused and need not 
 give notice of abandonment (pp. 169, 170). 
 
252 LAW EELATING TO THE INSUEANCE OF FEEIGHT 
 
 The foregoing remarks have dealt with the principles applicable 
 to freight payable in respect of particular goods and dependent 
 upon their carriage. The freight, however, may be independent of 
 considerations affecting the cargo, as in the case of chartered freight 
 before the goods are put on board, and, under certain circumstances, 
 in the case of lump-sum freight (p. 170), 
 
 In the case of chartered freight before the goods are put on board, 
 the loss can occur solely by reason of damage to the ship. A total loss 
 of the ship by perils insured against will involve a total loss of the 
 freight under the policy, and the same result will follow if the vessel, 
 although not totally lost, is damaged to such an extent that she 
 cannot be repaired except at a cost exceeding her value when repaired, 
 or after a delay which would frustrate the adventure contemplated 
 by the contract of affreightment (pp. 170-172). 
 
 It may be that, although the vessel can within a reasonable time 
 and at a reasonable cost be repaired so as to make the insured voyage, 
 she cannot be repaired so as to bring home any of the cargo for which 
 she was chartered. In such a case there is prima. facie a total loss 
 of freight, but the loss is not necessarily total, as the assured may be 
 able to earn other freight on the voyage insured. If, however, 
 the assured gives due notice of abandonment, and the notice is 
 accepted or an action commenced, he will be entitled to recover as 
 for a total loss. If the abandonment is not accepted and an action 
 is not commenced, then the right of the assured to recover, and the 
 extent to which he may recover, will depend upon whether other 
 freight has been earned or could have been earned on the voyage 
 insured, and upon the amount of such other freight (pp. 172, 173). 
 
 If the vessel cannot be repaired so as to carry the whole of the 
 contemplated cargo, but can be repaired so as to carry a portion, and 
 the circumstances are not such as to entitle the assured to treat the 
 vessel as a total loss, there will, it would seem, be only a partial loss 
 of freight (p. 173). 
 
 Lump-sum freights are found, broadly speaking, in two different 
 kinds of contract of affreightment. Under the one kind of contract 
 the shipowner charters his vessel for a specific voyage and agrees 
 to place at the disposal of the charterer the full carrying capacity of 
 
SUMMAEY 253 
 
 the vessel, and to carry the cargo which may be provided by the 
 charterer, and in return he stipulates for a lump-sum freight, which is 
 usually made payable upon the right and true delivery of the cargo. 
 Under the other kind of contract the shipowner charters his vessel 
 for a certain period of time, and while his obligations may be the same 
 as under the former kind of contract, the payment of the freight is 
 not made to depend upon the delivery of the cargo, but is made 
 payable at a certain rate for the time during which the vessel is 
 actually on hire. Under both kinds of contracts the rights of the 
 shipowner to the freight depend upon the particular terms of the 
 contract of affreightment, and it is, therefore, difficult to lay down 
 any general propositions as to what constitutes a loss of such freight 
 (p. 173). 
 
 Under the first kind of contract where the freight is made payable 
 upon the right and true delivery of the cargo, these words are not 
 taken literally. The whole lump freight is payable although a 
 portion of the cargo is lost by excepted perils without any default 
 on the part of the shipowner, and it may perhaps also be payable 
 although the non-delivery is wrongful and is due to causes not 
 excepted by the contract of affreightment. If no cargo is delivered, 
 then probably no freight is payable, but if the original vessel is 
 lost, the shipowner may still earn the freight by making delivery in a 
 substituted vessel or in some other way, unless the payment of the 
 freight is made to depend upon the arrival of the original vessel. 
 With regard, therefore, to lump-sum freight payable under the lirst 
 kind of contract, although the right to such freight may be affected 
 by accidents to the cargo, it will more usually be affected by accidents 
 to the vessel (pp. 173, 174). 
 
 With regard to lump-sum freight payable under the second kind 
 of contracts, that is to say, lump-sum freight payable in respect of 
 the time during which the vessel is on hire, it is not easy to see how 
 under ordinary circumstances, the right to such freight can be 
 affected by accidents to the cargo which may be on board the vessel, 
 and in the absence of provision to the contrary, the right to such 
 freight is not under ordinary circumstances affected by accidents 
 which temporarily affect the efficiency of the ship. Most contracts 
 of affreightment, however, which stipulate for freight of this 
 
254 LAW EBLATING TO THE INSUEANCE OE EEEIGHT 
 
 character, contain a provision to the effect that, if the efficient 
 working of the vessel is prevented for more than twenty-four hours, 
 the payment of freight is to cease until the vessel again becomes 
 efficient (p. 174). 
 
 If the effect of such a clause is that the freight ceases automatically 
 to be payable, the assured who has effected an insurance on this 
 freight will be entitled to recover for the loss of freight thus caused, 
 provided that the clause was brought into operation by reason of 
 perils covered by the policy (pp. 174-178). 
 
 If the effect of the clause is that the freight does not cease auto- 
 matically to be payable, as for instance in the case of a cancellation 
 clause, and between the peril and the loss there intervenes some act 
 of volition or election on the part either of the shipowner or the 
 charterer to which the loss may be said to be more proximately 
 due, the loss should usually be attributed not to the peril but to such 
 act of volition or election. There may, however, be cases in which 
 the loss can be attributed to the peril (pp. 178-181). 
 
 In order to exclude liability fOr loss of freight sustained" under a 
 cancellation clause or under a clause suspending the payment of 
 hire, while a vessel is laid up, clauses are frequently inserted in the 
 policy to the effect that " no claim arising from the cancellation of 
 any charter " shall be allowed, or that the policy is " warranted free 
 from any claim consequent on loss of time, whether arising from a 
 peril of the sea or otherwise." The latter clause will also free the 
 underwriters from liability to pay for a loss of freight under a contract 
 of affreightment which has been abandoned owing to delay frustrat- 
 ing the object of the adventure thereby contemplated (pp. 181-184). 
 
 With regard to a partial loss of freight, while there may be a 
 total loss of part of the freight insured, there cannot, it is submitted, 
 be a partial loss of the whole freight except in the case where after 
 the loss of the original cargo, some freight is earned by carrying other 
 cargo on the voyage insured (pp. 184, 185). 
 
 According to the memorandum contained in the ordinary policy, 
 freight is warranted " free from average under three pounds per cent., 
 unless general or the ship be stranded." Eor the purpose of estimating 
 the percentage of <lamage the aggregate value of the whole freight at 
 
SUMMAEY 255 
 
 risk should be considered, unless the policy contains any provision 
 or indication that the freight upon the different parts of the cargo 
 is to be treated separately (pp. 185, 186). 
 
 In adjusting such losses the practice has always been to estimate 
 the rate of the exception upon the aggregate loss of each passage or 
 period during which the risk continues on the same subject (p. 186). 
 
 Freight may also be subject to losses in general average, and 
 such losses, if attributable to perils insured against, are recoverable 
 from the underwriter under the ordinary form of policy. Such 
 losses may be due either to general average sacrifices or to the liability 
 to contribute in general average (p. 186). 
 
 If goods are jettisoned for the general safety and the freight 
 payable in respect of them is thereby lost, the freight so lost is a 
 general average loss. Similarly, if cargo, in respect of which freight 
 would be payable, is sold at a port of distress for the purpose of 
 procuring funds to defray general average expenses, or if cargo is 
 destroyed by water used to extinguish a fire (pp. 186, 187). 
 
 If a vessel be stranded or lost under circumstances which give 
 rise to a claim in general average, and the freight, which the vessel 
 would have earned, is thereby lost, the freight so lost is regarded as a 
 general average sacrifice (pp. 187, 188). 
 
 If, however, the freight is lost in consequence of the voyage being 
 abandoned, and the proximate cause of the abandonment of the 
 voyage is not the general average act, but the peril which gave rise 
 to the general average act, the loss of freight is not to be treated as a 
 general average sacrifice (pp. 188, 189). 
 
 The amount to be made good in general average will vary according 
 to the circumstances. Where part of the cargo has been jettisoned, 
 but the vessel ultimately completes the voyage, the shipowner's loss 
 is of the whole unpaid freight on those goods, less the costs which he 
 would have incurred if those goods had completed the voyage, that 
 is the cost o^ landing and delivering the goods. The expenses of the 
 vessel in completing the voyage have not been avoided, and no part 
 of them should be deducted. If, after the jettison of a part of the 
 cargo, the ship is wrecked, or condemned at a port of refuge, and 
 
256 LAW EELATING TO THE INSUEANOE OP PEEIGHT 
 
 the balance of the cargo is forwarded to its destination in another 
 vessel, the costs of forwarding, which would have been incurred 
 but for the jettison, must be deducted from the amount to be allowed 
 in general average in respect of the freight which has been lost 
 (pp. 189, 190). 
 
 If the costs of transhipment are equal to or exceed the original 
 freight, nothing is allowable in general average ; similarly, nothing 
 is allowable if after the jettison, the vessel and the cargo remaining 
 on board are totally lost (p. 190). 
 
 If after a jettison, the ship puts into a port of refuge, and there 
 takes in fresh cargo in the space left vacant through the jettison, 
 the new freight thus earned less the extra expenses incurred in 
 obtaining and earning it, must go in diminution of the shipowner's 
 claim for loss of freight. It would be otherwise if the ship were not 
 full at first, so that the new cargo might equally have been received 
 on board had there been no jettison (p. 190). 
 
 With regard to the contributory value of freight payable for the 
 carriage of goods under a charterparty or bill of lading, it is the gross 
 amount of the freight earned, minus those expenses of earning it 
 which would have been avoided if no general average act had taken 
 place and the ship had been lost. Prom the freight received must be 
 deducted the cost of discharging the cargo and of collection. It is 
 also the practice to deduct the wages of the crew since the general 
 average act, and port charges incurred subsequently to it, until all 
 the cargo has been discharged. The value of provisions and coals 
 laid in before the general average act is not deducted. The cost of 
 provisions and coals laid in after the general average act and con- 
 sumed before the end of the voyage should, it is submitted, be treated 
 as part of the expenses of earning the freight, but there is no settled 
 practice on this point (pp. 190, 191). 
 
 Where the freight to be considered is chartered freight payable 
 for the use of a vessel, and the chartered voyage is one entire voyage 
 and the chartered freight is the only freight, the whole chartered 
 freight which is at risk and which the vessel is earning at the time 
 of the general average act should be taken into account both for 
 purposes of making and receiving contributions in general average, 
 whether the vessel is in ballast or has goods on board (pp. 191-193). 
 
SUMMAEY 257 
 
 If the chartered voyage is not one entire voyage, but consists 
 of separate voyages in respect of each of which separate freights are 
 payable, only the freight payable in respect of the voyage which the 
 vessel is making at the time of the general average act should, it 
 would seem, be taken into account (p. 193). 
 
 If the chartered freight is not the only freight, as for instance in 
 those cases where a vessel has been chartered at one rate of freight, 
 and is used by the charterer to carry goods under bills of lading 
 which reserve a different rate, the practice is to regard only the bill 
 of lading freight, and to disregard the charterparty freight (p. 193); 
 
 If the bill of lading freight is less than the charterparty freight, 
 it is only this lower rate of freight which is allowed in general average, 
 and upon which contribution is to be made. If the bill of lading 
 freight is greater than the charterparty freight, it is only the bill of 
 lading freight which is considered, but as it would be unfair that the 
 shipowner should contribute or be paid on the higher rate of freight, 
 the charterer is liable to contribute on the excess between the charter- 
 party and the bill of lading rate of freight, and is entitled to any 
 allowance made in respect of the excess (pp. 193-195). 
 
 If the charterparty provides for the carriage of goods on a home- 
 ward voyage and contemplates that the shipowner will on the outward 
 voyage be carrying goods for other persons, in the event of a general 
 average act during the outward voyage, it is only the freight pq,yable 
 in respect of the outward cargo which should be taken into account 
 (p. 195). 
 
 If the vessel has been chartered under distinct charterparties for 
 other voyages after the one which she is making, the correct principle, 
 it is submitted, is to take into account only the freight payable in 
 respect of the voyage which the vessel is making at the time of the 
 general average act (pp. 195, 196). 
 
 Where freight payable for the carriage of goods has been paid 
 in advance or is unconditionally payable at a certain time, whether 
 the goods arrive or not, the obligation to make and the right to 
 receive general average contribution in respect of such freight is 
 transferred from the owner of the ship to the owner of the goods 
 (pp. 196, 197). 
 i.F. a 
 
258 LAW EELATING TO THE INSUEANCE OP EEEIGHT 
 
 Where the freight paid in advance is chartered freight payable 
 for the use of a vessel irrespective of the cargo which may be put on 
 board, the obligation to make and the right to receive general average 
 contribution is transferred to the party who has paid the freight, 
 that is, t6 the charterer (p. 197). 
 
 Where expenses of reloading are incurred at a port of refuge in 
 consequence of accidental damage to the vessel, the practice is to 
 charge these expenses to the party who runs the risk of freight, that 
 is, wholly to the charterer, if the whole freight has been prepaid, 
 or if part only, then in the proportion which the part prepaid bears 
 to the whole freight. This practice has been the subject of much 
 adverse criticism, and is, it is submitted, unsound (pp. 197, 198). 
 
 Chapter VI. — AoJtjstment. VALtfAfioN. Abandonment. 
 Subrogation. 
 
 In an insurance on freight, whether paid in advance or otherwise, the 
 insurable value is the gross amount of the freight at the risk of the 
 assured, plus the charges of insurance, and no account is taken of the 
 costs and expenses which have to be incurred in order to earn the 
 freight (pp. 200, 201). 
 
 In the event of a total loss of all the freight covered and intended 
 to be covered by the policy, the assured, in the absence of any 
 provision to the contrary, will be entitled to recover the full amount 
 insured, provided that this does not exceed the gross amount of the 
 freight at risk under the policy plus the charges of insurance, and he 
 will also be entitled to recover in a proper case under the sue and 
 labour clause any expenses reasonably incurred in endeavouring to 
 avert the loss (pp. 201, 202). 
 
 It may be that at the time of the loss only a portion of the cargo, 
 which it was contemplated would be loaded and in respect of which 
 freight would be payable, has been put on board, or it may be that at 
 the time of the loss a portion of the cargo has been safely landed 
 and the freight payable in respect of it withdrawn from the risk 
 (p. 202). 
 
 If the policy was intended to cover the freight of a definite e&,rgo, 
 
SUMMAEY 259 
 
 the assured will only be entitled to recover the proportion of the sum 
 insured that the freight of the goods lost bears to the whole freight 
 which would have been earned had the whole intended cargo been 
 loaded and all arrived (p. 202). 
 
 In the case of an open policy, however, it will seldom happen that 
 the policy was intended to apply to any particular cargo, and the 
 correct rule for adjusting losses under an open pohcy on freight is 
 under ordinary circumstances to ascertain the proportion which the 
 freight lost bears to the whole freight which has been at risk under 
 the policy, and the proper time to ascertain the freight, which has been 
 at risk under the policy is at the expiration of the risk (pp. 202, 203); 
 
 The same rule appUes in those cases where at the time of the loss 
 part of the freight, which has been at risk and covered by the policy, 
 has been earned and withdrawn from the risk (pp. 203, 204). 
 
 Valued policies are policies which specify the agreed value of the 
 subject-matter insured. The value fixed by the policy is conclusive 
 of the insurable value of the subject intended to be insured. It has 
 been laid down that a valuation of freight refers ■prima facie to the 
 freight of a fall cargo, or the charter of the entire ship, but it is 
 doubtful whether this applies except in those cases where it is expected , 
 that the vessel will load a full cargo, and the vessel is lost before the 
 loading is completed and before it can be determined whether a full 
 cargo will ultimately be loaded or not (pp. 204-206). 
 
 If, however, the vessel cannot obtain a full cargo and sails with all 
 the cargo which she can obtain, then, unless it appears that the 
 subject insured was in fact intended to be the freight of a full cargo, 
 the valuation should, it is submitted, be appHed to the freight of the 
 cargo so obtained (p. 206). 
 
 In America it has been held that in the case of a valued time 
 policy on freight, the valuation should be construed as applying 
 to that freight only which the assured may have at risk (p. 207). 
 
 If the valuation was intended to refer to the freight of a full cargo, 
 it must be so applied, and in every case in which it appears that the 
 valuation was intended to refer to any particular subject, it should 
 be so construed (pp. 207-209). 
 
 A valuation refers to the subject intended to be insured, and not 
 to the interest of the assured in that subject (pp. 209-211). 
 
260 LAW BELATING TO THE INSUEANCE OP FEEIGHT 
 
 The principles to be applied in adjusting losses in the case of 
 valued policies are the same as in the case of open policies. If at 
 the time of the loss only a portion of the freight, to which the valua- 
 tion was intended to apply, is at risk, the assured can only recover in 
 respect of the loss of such portion, and he will recover such proportion 
 of the valuation as the freight lost bears to the whole freight intended 
 to be insured. Similarly, if at the time of the loss part of the freight 
 which was at risk, has been earned and withdrawn from the risk 
 (pp. 211, 212). 
 
 If it is impossible to ascertain the proportion which the freight 
 lost bears to the whole subject to which the valuation was intended 
 to apply, the policy must be construed as an open policy, but the 
 proportion between the sum insured and the amount of the valuation 
 will determine the proportion of the loss for which the underwriter 
 will be responsible (pp. 212, 213). 
 
 The preceding remarks have dealt with the principles of adjust- 
 ment to be appHed in the case of policies which cover a single voyage. 
 
 In the case of policies which contemplate that successive freights 
 will be at risk, as for instance in the case of a policy for a succession 
 of voyages or in the case of a time policy, the policy should be treated 
 for the purpose of adjusting a loss incurred during any particular 
 voyage or passage as though it had been a policy for that particular 
 voyage or passage (pp. 213-217). 
 
 In the case of policies which contemplate successive voyages in 
 respect of which there may be successive losses, the underwriter is, 
 it is submitted, Uable to the extent of the sum insured for losses 
 incurred during such successive voyages even though the aggregate 
 sum which the underwriter may be called upon to pay exceeds the 
 sum mentioned in the policy as being the sum insured (pp. 217, 218). 
 
 Where the policy covers the freight of successive voyages, it 
 should be construed, in the absence of intention or indication to the 
 contrary, as covering during each successive voyage only the freight 
 pending in respect of that voyage (pp. 218, 219). 
 
 An underwriter to whom freight is abandoned is entitled to all the 
 rights of the assured in that freight. If the assured earns the freight. 
 
SUMMAEY 261 
 
 he holds it in trust for the underwriter to whom he has abandoned 
 it. If the freight can be earned by transhipping the cargo, the 
 underwriter on freight is entitled to the benefit of that right (p. 220). 
 
 The position of the underwriter on freight is usually complicated 
 by the fact that the ship will also have been insured and may have 
 been abandoned to the underwriters on ship, who thereby become 
 entitled to any freight subsequently earned by the ship. In certain 
 cases the underwriter on freight will be entitled to rely on this fact 
 in order to resist a claim for a loss of freight (pp. 220, 221). 
 
 Thus he will not be hable if the shipowner loses his freight because 
 he has abandoned the ship to the underwriters on ship under circum- 
 stances which did not justify the abandonment. Nor will he be 
 liable, if the shipowner loses the freight after the voyage is completed 
 and the freight is earned, because he has to hand it over to the under- 
 writers on ship, to whom he then elects to abandon the ship by reason 
 of injuries received in the course of the voyage (p. 221). 
 
 The position is, however, different if the abandonment to the 
 underwriters on ship is made before the freight is earned, and is 
 justified by the facts (pp. 221, 222). 
 
 In practice these difficulties are not likely to arise frequently 
 in the future, as most pohcies on hull contain the Institute clauses 
 which provide that " in the event of total or constructive total loss, 
 no claim to be made by the underwriters for freight, whether notice 
 of abandonment has been given or not." By this clause the under- 
 writers on ship forego their claim to freight pending at the time of the 
 casualty, and this freight passes to the underwriters on freight under 
 the abandonment subject to certain expenses in respect of the cost 
 of earning it (pp. 222, 223). 
 
 In order to protect an assured whose claim to recover for a loss 
 of freight might be met by the objection that the loss was due, not 
 to any of the perils insured against, but to his action in abandoning 
 the ship to the underwriters on ship, a provision is sometimes found 
 in policies to the effect that the amount insured on freight shall be 
 paid in the event of the total loss, actual or constructive, of the 
 vessel. If, however, by the terms of the policy on ship, no claim is 
 to be made by the underwriters on ship for freight, so that the ship- 
 owner is entitled to any freight which may be earned on the voyage. 
 
362 LAW EELATING TO THE INSUEANCE OF FEBIGHT 
 
 he must, if he elects to claim for a loss of freight, give to the under- 
 writers on freight the benefit of the freight so earned (pp. 223, 224). 
 
 The doctrine that the abandonee of the ship was entitled to all 
 pending freight ultimately earned by the ship was long a subject 
 of vexed discussion. The Marine Insurance Act provides that " upon 
 the abandonment of a ship, the insurer thereof is entitled to any freight 
 in course of being earned, and which is earned by her subsequent 
 to the casualty causing the loss, less the expenses of earning it, 
 incurred after the casualty ; and where the ship is carrying the 
 owner's goods, the insurer is entitled to a reasonable remuneration 
 for the carriage of them subsequent to the casualty causing the loss " 
 (pp. 224-227). 
 
 By subrogation the underwriter on freight, who has paid a loss,. 
 is entitled to the benefit of every right and remedy by which the 
 loss has been or can be diminished. Thus, if a vessel is so damaged 
 that she cannot carry the original <5argo, but is still able to- carry 
 some cargo on the voyage insured, the underwriter will be entitled 
 to any freight which has been or could have been earned in respect 
 of such cargo (p. 227). 
 
 If the original cargo is so much damaged that it cannot be carried 
 to its destmation, but other cargo can be carried by the vessel on the 
 voyage insured, the underwriter on freight will be entitled to the 
 benefit of the freight which is or might have been received in respect 
 of such substituted cargo (p. 227). 
 
 If the cargo is landed under circumstances which give rise to a 
 claim for pro rata freight, the underwriter will be entitled to the 
 benefit of such fro rata freight, and if the freight was lost under 
 circumstances which give rise to a claim for damages, the underwriter 
 will be entitled to the benefit of such claim (pp. 227-230). 
 
APPENDIX A 
 
 MARINE INSURANCE ACT, 1906 
 [6 Edw. 7, Ch. 41.] 
 
 An Act to codify the Law relating to Marine Insurance. 
 
 [21st December 1906.] 
 
 Be it enacted by the King's most Excellent Majesty, by and with the 
 advice and consent of the Lords Spiritual and Temporal, and Commons, 
 in this present Parliament assembled, and by the authority of the same, as 
 follows : — 
 
 Marine Insurance. 
 
 1. Marine insurance defined. — A contract of marine insurance is a 
 contract whereby the insurer undertakes to indemnify the assured, in 
 manner and to the extent thereby agreed, against marine losses, that is 
 to say, the losses incident to marine adventure. 
 
 2. Mixed sea and land risks. — (1) A contract of marine insurance may, 
 by its express terms, or by usage of trade, be extended so as to protect 
 the assured against losses on inland waters or on any land risk which may 
 be incidental to any sea voyage. 
 
 (2) Where a ship in course of building, or the launch of a ship, or any 
 adventure analogous to a marine adventure, is covered by a policy in the 
 form of a marine policy, the provisions of this Act, in so far as applicable, 
 shall apply thereto ; but, except as by this section provided, nothing in 
 this Act shall alter or afiect any rule of law applicable to any contract of 
 insurance other than a contract of marine insurance as by this Act defined. 
 
 3. Marine adventure and maritime perils defined. — (1) Subject to the 
 provisions of this Act, every lawful marine adventure may be the subject 
 of a contract of marine insurance. 
 
 (2) In particular there is a marine adventure where — 
 (a) Any ship or other moveables are exposed to maritime perils. 
 Such property is in this Act referred to as " insurable pro- 
 perty " ; 
 (6) The earning or acquisition of any fright, passage money, com- 
 mission, profit, or other pecuniary benefit, or the security for 
 any advances, loan, or disbursements, is endangered by the 
 exposure of insurable property to maritime perils ; 
 263 
 
264 APPENDIX A 
 
 (c) Any liability to a third party may be incurred by the owner of, 
 
 or other person interested in or responsible for, insurable 
 
 property, by reason of maritime perils. 
 
 " Maritime perils " means the perils consequent on, or incidental to 
 
 the navigation of the sea, that is to say, perils of the seas, fire, war perils, 
 
 pirates, rovers, thieves, captures, seisures, restraints, and detainments of 
 
 princes and peoples, jettisons, barratry, and any other perils, either of the 
 
 like kind or which may be designated by the policy. 
 
 Insurable Interest. 
 
 4. Avoidance of wagering or gaming contracts. — (1) Every contract of 
 marine insurance by way of gaming or wagering is void; 
 
 (2) A contract of marine insurance is deemed to be a gaming or wagering 
 contract — 
 
 (a) Where the assured has not an insurable interest as defined by 
 this Act, and the contract is entered into with no expectation 
 of acquiring such an interest ; or 
 if)) Where the policy is made " interest or no interest," or 
 " without further proof of interest than the policy itself," 
 or " without benefit of salvage to the insurer," or subject to 
 any other like term : 
 Provided that, where there is no possibility of salvage, a policy may be 
 effected without benefit of salvage to the insurer. 
 
 5. Insurable interest defined. — (1) Subject to the provisions of this Act, 
 every person has an insurable interest who is iaterested in a marine adven- 
 ture. 
 
 (2) In particular a person is interested in a marine adventure where he 
 stands in any legal or equitable relation to the adventure or to any insurable 
 property at risk therein, in consequence of which he may benefit by the 
 safety or due arrival of insurable property, or may be prejudiced by its 
 loss, or by damage thereto, or by the detention thereof, or may incur 
 liabihty in respect thereof. 
 
 6. When interest must attack. — (1) The assured must be interested in 
 the subject-matter insured at the time of the loss though he need not be 
 interested when the insurance is effected : 
 
 Provided that where the subject-matter is insured " lost or not lost," 
 the assured may recover although he may not have acquired his interest 
 until after the loss, unless at the time of effecting the contract of insurance 
 the assured was aware of the loss, and the insurer was not. 
 
 (2) Where the assured has no interest at the time of the loss, he cannot 
 acquire interest by any act or election after he is aware of the loss. 
 
 7. Defeasible or contingent interest. — (1) A defeasible interest is insur- 
 able, as also is a contingent interest. 
 
 (2^ In particular .where the buyer of goods has insured them, he has 
 an insurable interest, notwithstanding that he might, at his -election, have 
 
MARINE INSURANCE ACT, 1906 265 
 
 rejected the goods, or have treated them as at the seller's risk, by reason 
 of the latter's delay in making delivery or otherwise. 
 
 8. Partial interest. — ^A partial interest of any nature is insurable. 
 
 9. Re-insurance. — (1) The insurer under a contract of marine insurance 
 has an insurable interest in his risk, and may re-insure in respect of it. 
 
 (2) Unless the policy otherwise provides, the original assured has no 
 right or interest in respect of such re-insurance. 
 
 10. Bottomry. — The lender of money on bottomry or respondentia has 
 an insurable interest in respect of the loan. 
 
 11. Master's and seamen's wages. — The master or any member of the 
 crew of a ship has an insurable interest in respect of his wages. 
 
 12. Advance freight. — ^In the case of advance freight, the person 
 advancing the freight has an insurable interest, in so far as such freight is 
 not repayable in case of loss. 
 
 13. Charges of insurance. — ^The assured has an insurable interest in 
 the charges of any insurance which he may effect. 
 
 14. Quantum of interest. — (1) Where the subject-matter insured is 
 mortgaged, the mortgagor has an insurable interest in the full value thereof, 
 and the mortgagee has an insurable interest in respect of any sum due or 
 to become due under the mortgage. 
 
 (2) A mortgagee, consignee, or other person having an interest in the 
 subject-matter insured may insure on behalf and for the benefit of other 
 persons interested as well as for his own benefit. 
 
 (3) The owner of insurable property has an insurahle interest in respect 
 of the full value thereof, notwithstanding that some third person may have 
 agreed, or be liable, to indemnify him in case of loss. 
 
 15. Assignment of interest. — Where the assured assigns or otherwise 
 parts with his interest in the subject-matter insured, he does not thereby 
 transfer to the assignee his rights under the contract of insurance, unless 
 there be an express or implied agreement with the assignee to that effect. 
 
 But the provisions of this section do not affect a transmission of interest 
 by operation of law. 
 
 Insurable Value. 
 
 16. Measure of insurable value. — Subject to any express provision or 
 valuation in the policy, the insurable value of the subject-matter insured 
 must be ascertained as follows : — 
 
 (1) In insurance on ship, the insurable value is the value, at the com 
 mencement of the risk, of the ship, including her outfit, provisions 
 and stores for the officers and crew, money advanced for seamen's 
 wages and other disbursements (if any) incurred to make the 
 ship fit for the voyage or adventure contemplated by the policy, 
 plus the charges of insurance upon the whole : 
 
266 APPENDIX A 
 
 The "insurable value, in the case of a steamship, includes also 
 the machinery, boilers, and coals and engine stores if owned by 
 the assured, and, in the case of a ship engaged in a special trade, 
 the ordinary fittings requisite for that trade : 
 
 (2) In insurance on freight, whether paid in advance or otherwise, the 
 
 insurable Value is the gross amount of the freight at the risk of 
 the assured, plus the charges of insurance : 
 
 (3) In insurance on goods or merchandise, the insurable value is the 
 
 prime cost of the property insured, plus the expenses of and 
 incidental to shipping and the charges of insurance upon the 
 whole : 
 
 (4) In insurance on any other subject-matter, the insurable value is 
 
 the amount at the risk of the assured when the policy attaches, 
 plus the charges of insurance. 
 
 Disclosure and Representations. 
 
 17. Insurance is uherrimae fidei.^A contract of marine insurance is a 
 contract based upon the utmost good faith, and, if the utmost good faith 
 be not observed by either party, the contract may be avoided by the other 
 party. 
 
 18. Dischsure by assured. — (1) Subject to the provisions of this section, 
 the assured must disclose to the insurer, before the contract is concluded, 
 every material circumstance which is known to the assured, and -the assured 
 is deenied to know every circumstance which, in the ordinary course of 
 business, ought to be known by him. If the assured fails to make such 
 disclosure, the insurer may avoid the contract. 
 
 (2) Every circumstance is material which would influence the judgment 
 of a prudent insurer in fixing the preniium, or determining whether he will 
 take the risk. 
 
 (3) In the absence of inquiry the following circumstances need not be 
 disclosed, namely : — 
 
 (a) Any circumstance which diminishes the risk ; 
 
 (6) Any circumstance which is known or presumed to be known to the 
 insurer. The insurer is presumed to know matters of common 
 notoriety or knowledge, and matters which an insurer in the 
 ordinary course of his business, as such, ought to know ; 
 
 (s) Any circumstance as to which information is waived by the insurer ; 
 
 {d) Any circumstance which it is superfluous to disclose by reason of 
 any express or implied warranty. 
 
 (4) Whether any particular circumstance, which is not disclosed, be 
 material or not is, in each case, a question of fact. 
 
 (5) The term " circumstance " includes any communication made to, 
 or information received by, the assured. 
 
 19. Disclosure by agent effecting ^nsitrnwcg.— Subject to the provisions 
 of the preceding section as to cjrcumstanceg whieh need not be disclosed, 
 
MARINE INSURANCE ACT, 1906 267 
 
 where an insurance is effected for tte assured by an agent, the agent must 
 disclose to the insurer — 
 
 (a) Every material circumstance which is known to himself, and an 
 agent to insure is deemed to know every circumstance which in 
 the ordinary course of business ought to be known by, or to have 
 been communicated to, him ; and 
 (6) Every material circumstance which the assured is bound to disclose, 
 unless it come to his knowledge too late to communicate it to the 
 agent. 
 
 20. Representations pending negotiation of contract. -^(1) Every material 
 representation made by the assured or his agent to the insurer during the 
 negotiations for the contract, and before the contract is concluded, must 
 be true. If it be untrue the insurer may avoid the contract. 
 
 (2) A representation is material which wpuld influence the judgment 
 of a prudent insurer in fixing the premium, or determining whether he 
 will take the risk. 
 
 (3) A representation may be either a representation as to a matter of 
 fact, or as to a matter of expectation or belief. 
 
 (4) A representation as to a matter of fact is true, if it be substantially 
 correct, that is to say, if the difference between what is represented and 
 what is actually correct would not be considered material by a prudent 
 insurer. 
 
 (5) A representation as to a matter of expectation or belief is true if it 
 be made in good faith. 
 
 (6) A representation may be withdrawn or corrected before the contract 
 is concluded. 
 
 (7) Whether a particular representation be material or not is, in each 
 case, a question of fact. 
 
 21. When contract is deemed to be concluded. — ^A contract of marine 
 insurance is deemed to be concluded when the proposal of the assured is 
 accepted by the insurer, whether the policy be then issued or not ; and for 
 the purpose of showing when the proposal was accepted, reference may be 
 made to the slip or covering note or other customary memorandum of 
 the contract, although it be unstamped. 
 
 The Policy. 
 
 22. Contract must be embodied in policy. — Subject to the provisions of 
 any statute, a contract of marine insurance is inadmissible in evidence unless 
 it is embodied in a marine policy in accordance with this Act. The policy 
 may be executed and issued either at the time when the contract is con- 
 cluded, or afterwards. 
 
 23. What policy must specify. — A marine policy must specify — 
 
 (1) The name of the assured, or of some person who effects the 
 
 insurance on his behalf : 
 
 (2) The subject-matter insured and the risk insured against : 
 
268 APPENDIX A 
 
 (3) The voyage, or period of time, or both, as the case may be, 
 
 covered by the insurance : 
 
 (4) The sum or sums insured : 
 
 (5) The name or names of the insurers. 
 
 24. Signature of insurer. — (1) A marine policy must be signed by or 
 on behalf of the insurer, provided that in the case of a corporation the 
 corporate seal may be sufficient, but nothing in this section shall be con- 
 strued as requiring the subscription of a corporation to be under seal. 
 
 (2) Where a policy is subscribed by or on behalf of two or more insurers, 
 each subscription, unless the contrary be expressed, constitutes a distinct 
 contract with the assured. 
 
 25. Voyage and time policies. — (1) Where the contract is to insure the 
 subject-matter at and from, or from one place to another or others, the 
 policy is called a " voyage policy," and where the contract is to insure 
 the subject-matter for a definite period of time the policy is called a 
 " time policy." A contract for both voyage and time may be included in 
 the same policy. 
 
 (2) Subject to the provisions of section eleven of the Finance Act, 1901, 
 a time policy which is made for any time exceeding twelve months is invalid. 
 
 26. Designation of suhject-matter. — (1) The subject-matter insured must 
 be designated in a marine policy with reasonable certainty. 
 
 (2) The nature and extent of the interest of the assured in the subject- 
 matter insured need not be specified in the policy. 
 
 (3) Where the policy designates the subject-matter insured in general 
 terms, it shall be construed to apply to the interest intended by the assured 
 to be covered. 
 
 (4) In the application of this section regard shall be had to any usage 
 regulating the designation of the subject-matter insured. 
 
 27. Valued policy. — (1) A policy may be either valued or unvalued. 
 
 (2) A valued policy is a policy which specifies the agreed value of the 
 subject-matter insured. 
 
 (3) Subject to the provisions of this Act, and in the absence of fraud, 
 the value fixed by the policy is, as between the insurer and assured, con- 
 clusive of the insurable value of the subject intended to be insured, whether 
 the loss be total or partial. 
 
 (4) Unless the policy otherwise provides, the value fixed by the policy 
 is not conclusive for the purpose of determining whether there has been 
 a constructive total loss. 
 
 28. Unvalued policy. — ^An unvalued policy is a policy which does not 
 specify the value of the subject-matter insured, but, subject to the Hinit 
 of the sum insured, leaves the insurable value to be subsequently ascertained, 
 in the manner herein-before specified. 
 
 29. Floating policy by ship or ships. — (1) A floating policy is a policy 
 which describes the insurance in general terms, and leaves the name of the 
 ship or ships and other particulars to be defined by subsequent declaration. 
 
MAEINE INSUEANCE ACT, 1906 269 
 
 (2) The subsequent declaration or declarations may be made by 
 indorsement on the policy, or in other customary manner. 
 
 (3) Unless the policy otherwise provides, the declarations must be 
 made in the order of dispatch or shipment. They must, in the case of 
 goods, comprise all consignments within the terms of the policy, and the 
 value of the goods or other property must be honestly stated, but an omis- 
 sion or erroneous declaration may be rectified even after loss or arrival, 
 provided the omission or declaration was made in good faith. 
 
 (4) Unless the policy otherwise provides, where a declaration of value 
 is not made until after notice of loss or arrival, the policy must be treated 
 as an unvalued policy as regards the subject-matter of that declaration. 
 
 30. Construction of terms in policy. — (1) A policy may be in the fornj 
 in the First Schedule to this Act. 
 
 (2) Subject to the provisions of this Act, and unless the context of the 
 policy otherwise requires, the terms and expressions mentioned in the 
 First Schedule to this Act shall be construed as having the scope and meaning 
 in that schedule assigned to them. 
 
 31. Premium to he arranged. — (1) Where an insurance is effected at a 
 premium to be arranged, and no arrangement is made, a reasonable 
 premium is payable. 
 
 (2) Where an insurance is effected on the terms that an additional 
 premium is to be arranged in a given event, and that event happens but 
 no arrangement is made, then a reasonable additional premium is payable. 
 
 ■ Double Insurance. 
 
 32. Double insurance.— (1) Where two or more policies are effected by 
 or on behalf of the assured on the same adventure and interest or any part 
 thereof, and the sums insured exceed the indemnity allowed by this Act, 
 the assured is said to be over-insured by double insurance. 
 
 (2) Where the assured is over-insured by double insurance — 
 
 (a) The assured, unless the policy otherwise provides, may claim 
 payment from the insurers in such order as he may think fit, 
 provided that he is not entitled to receive any sum in excess 
 of the indenmity allowed by this Act ; 
 
 (6) Where the policy under which the assured claims is a valued 
 policy, the assured must give credit as against the valuation 
 for any sum received by him under any other policy without 
 regard to the actual value of the subject-matter insured ; 
 
 (e) Where the policy under which the assured claims is an unvalued 
 policy he must give credit, as against the full insurable value, 
 for any sum received by him under any other policy ; 
 
 (d) Where the assured receives any sum in excess of the indemnity 
 allowed by this Act, he is deemed to hold such sum in trust for 
 the insurers, according to their right of contribution among 
 themselves. 
 
270 ~ APPENDIX A 
 
 Warranties, &c,. 
 
 33. Nature of warranty. — (1) A warranty, in the following sections 
 relating to warranties, means a promissory warranty, that is to say, a 
 warranty by which the assured undertakes that some particular thing shall 
 or shall not be done, or that some condition shall be fulfilled, or whereby 
 he affirms or negatives the existence of a particular state of facts. 
 
 (2) A warranty may be express or implied. 
 
 (3) A warranty, as above defined, is a condition which must be exactly 
 complied with, whether it be material to the risk or not. If it be not so 
 complied with, then, subject to any express provision in the policy, the 
 insurer is discharged from liability as from the date of the breach of war- 
 ranty, but without prejudice to any liabihty incurred by him before that 
 date. 
 
 34. When breach of warranty excused. — (1) Non-compliance with a war- 
 ranty is excused when, by reason of a change of circumstances, the warranty 
 ceases to be applicable to the circumstances of the contract, or when com- 
 pliance with the warranty is rendered unlawful by any subsequent law. 
 
 (2) Where a warranty is broken, the assured cannot avail himself of 
 the defence that the breach has been remedied, and the warranty complied 
 with, before loss. 
 
 (3) A breach of warranty may be waived by the insurer. 
 
 35. Express warranties. — (1) An express warranty may be in any form 
 of words from which the intention to warrant is to be inferred. 
 
 (2) An express warranty must be included in, or written upon, the 
 policy, or must be contained in some document incorporated by reference 
 into the policy. 
 
 (3) An express warranty does not exclude an implied warranty, unless 
 it be inconsistent therewith. 
 
 36. Warranty of neutrality. — (1) Where insurable property, whether 
 ship or goods, is expressly warranted neutral, there is an implied condition 
 that the property shall have a neutral character at the commencement of 
 the risk, and that, so far as the assured can control the matter, its neutral 
 character shall be preserved during the risk. 
 
 (2) Where a ship is expressly warranted " neutral " there is also an 
 implied condition that, so far as the assured can control the matter, she 
 shall be properly documented, that is to say, that she shall carry the 
 necessary papers to establish her neutrality, and that she shall not falsify 
 or suppress her papers, or use simulated papers. If any loss occurs through 
 breach of this condition, the insurer may avoid the contract. 
 
 37. No implied warranty of nationality. — There is no implied warranty 
 as to the nationality of a ship, or that her nationality shall not be changed 
 during the risk. 
 
 38. Warranty of good safety. — Where the subject-matter insured is 
 warranted " well " or " in good safety " on a particular day, it is sufficient 
 if it be safe at any time during that day. 
 
MAEINE INSUBANCE ACT, 1906 271 
 
 39. Warranty of seaioorthiness of ship. — (1) In a voyage policy there is 
 an implied warranty that at the commencement of the voyage the ship 
 shall be seaworthy for the purpose of the particular adventure insured. 
 
 (2) Where the policy attaches while the ship is in port, there is also an 
 implied warranty that she shall, at the commencement of the risk, be 
 reasonably fit to encounter the ordinary perils of the port. 
 
 (3) Where the policy relates to a voyage which is performed in different 
 stages, during which the ship requires different kinds of or further pre- 
 paration or equipment, there is an implied warranty that at the commence- 
 ment of each stage the ship is seaworthy in respect of such preparation or 
 equipment for the purposes of that stage. 
 
 (4) A ship is deemed to be seaworthy when she is reasonably fit in all 
 respects to encounter the ordinary perils of the seas of the adventure 
 insured. 
 
 (5) In a time policy there is no implied warranty that the ship shall be 
 seaworthy at any stage of the adventure, but where, with the privity of 
 the assured, the ship is sent to sea in an unseaworthy state, the insurer 
 is not Hable for any loss attributable to unseaworthiness. 
 
 40. No implied warranty that goods are seaworthy. — (1) In a policy on 
 goods or other moveables there is no implied warranty that the goods or 
 moveables are seaworthy. 
 
 (2) In a voyage policy on goods or other moveables there is an implied 
 warranty that at the commencement of the voyage the ship is not only 
 seaworthy as a ship, but also that she is reasonably fit to carry the goods 
 or other moveables to the destination contemplated by the policy. 
 
 41. Warranty of legality. — There is an implied warranty that the 
 adventure insured is a lawful one, aiid that, so far as the assured can control 
 the matter, the adventure shall be carried out in a lawful manner. 
 
 The Voyage. 
 
 42. Implied condition as to commencement of risk. — (1) Where the subject- 
 matter is insured by a voyage policy " at and from " or " from " a parti- 
 cular place, it is not necessary that the ship should be at that place when 
 the contract is concluded, but there is an implied condition that the 
 adventure shall be commenced within a reasonable time, and that if the 
 adventure be not so commenced the insurer may avoid the contract. 
 
 (2) The implied condition may be negatived by showing that the delay 
 was caused by circumstances known to the insurer before the contract was 
 concluded, or by showing that he waived the condition. 
 
 43. Alteration of port of departure. — Where the place of departure is 
 specified by the policy, and the ship instead of sailing from that place sails 
 from any other place, the risk does not attach. 
 
 44. Sailing for different destination. — Where the destination is specified 
 in the policy, and the ship, instead of sailing for that destination, sails for 
 any other destination, the risk does not attach. 
 
272 APPENDIX A 
 
 45. Change of voyage. — (1) Where, after tte commencement of the risk, 
 the destination of the ship is voluntarily changed from the destination 
 contemplated by the policy, there is said to be a change of voyage. 
 
 (2) Unless the policy otherwise provides, where there is a change of 
 voyage, the insurer is discharged from liability as from the time of change, 
 that is to say, as from the time when the determination to change it is 
 manifested ; and it is immaterial that the ship may not in fact have left 
 the course of voyage contemplated by the policy when the loss occurs. 
 
 46. Deviation. — (1) Where a ship, without lawful excuse, deviates from 
 the voyage contemplated by the policy, the insurer is discharged from 
 liability as from the time of deviation, and it is immaterial that the ship 
 may have regained her route before any loss occurs. 
 
 (2) There is a deviation from the voyage contemplated by the policy — 
 (a) Where the course of the voyage is specifically designated by the 
 
 policy, and that course is departed from ; or 
 (6) Where the course of the voyage is not specifically designated by 
 the policy, but the usual and customary course is departed 
 from. 
 
 (3) The intention to deviate is iramaterial ; there must be a deviation 
 in fact to discharge the insurer from his liability under the contract. 
 
 47. Several ports of discharge. — (1) Where several ports of discharge 
 are specified by the policy, the ship may proceed to all or any of them, but, 
 in the absence of any usage or sufficient cause to the contrary, she must 
 proceed to them, or such of them as she goes to, in the order designated 
 by the policy. If she does not there is a deviation. 
 
 (2) Where the policy is to " ports of discharge," within a given area, 
 which are not named, the ship must, in the absence of any usage or sufficient 
 cause to the contrary, proceed to them, or such of them as she goes to, in 
 their geographical order. If she does not there is a deviation. 
 
 48. Delay in voyage. — In the case of a voyage policy, the adventure 
 insured must be prosecuted throughout its course with reasonable despatch, 
 and, if without lawful excuse it is not so prosecuted, the insurer is discharged 
 from liability as from the time when the delay became unreasonable. 
 
 49. Excuses for deviation or delay. — (1) Deviation or delay in prosecuting 
 the voyage contemplated by the policy is excused — 
 
 (o) Where authorised by any special term in the pohcy ; or 
 (6) Where caused by circumstances beyond the control of the master 
 and his employer ; or 
 
 (c) Where reasonably necessary in order to comply with an express 
 
 or implied warranty ; or 
 
 (d) Where reasonably necessary for the safety of the ship or subject- 
 
 matter insured ; or 
 
 (e) For the purpose of saving human life, or aiding a ship in distress 
 
 where human life may be in danger ; or 
 (/) Where reasonably necessary for the purpose of obtaining medical 
 or surgical aid for any person on board the ship ; or 
 
MAEINE INSUEANCE ACT, 1906 273 
 
 (g) Where caused by the barratrous conduct of the master or crew, if 
 
 barratry be one of the perils insured against. 
 (2) When the cause excusing the deviation or delay ceases to operate, 
 the ship must resume her course, and prosecute her voyage, with reasonable 
 despatch. 
 
 Assignment of Policy. 
 
 50. When and how policy is assignable. — (1) A marine policy is assign- 
 able unless it contains terms expressly prohibiting assignment. It may be 
 assigned either before or after loss. 
 
 (2) Where a marine policy has been assigned so as to pass the beneficial 
 interest in such policy, the assignee of the policy is entitled to sue thereon 
 in his own name ; and the defendant is entitled to make any defence arising 
 out of the contract which he would have been entitled to make if the action 
 had been brought in the name of the person by or on behalf of whom the 
 policy was efiected. 
 
 (3) A marine policy may be assigned by indorsement thereon or in 
 other customary manner. 
 
 51. Assured who has no interest cannot assign. — Where the assured has 
 parted with or lost his interest in the subject-matter insured, and has not, 
 before or at the time of so doing, expressly or impliedly agreed to assign 
 the policy, any subsequent assignment of the policy is inoperative : 
 
 Provided that nothing in this section affects the assignment of a policy 
 after loss. 
 
 The Premium. 
 
 52. When premium payable. — Unless otherwise agreed, the duty of the 
 assured or his agent to pay the premium, and the duty of the insurer to 
 issue the policy to the assured or his agent, are concurrent conditions, and 
 the insurer is not bound to issue the policy until payment or tender of the 
 premium. 
 
 53. Policy effected through broker. — (1 ) Unless otherwise agreed, where a 
 marine policy is effected on behalf of the assured by a broker, the broker is 
 directly responsible to the insurer for the premium, and the insurer is 
 directly responsible to the assured for -the amount which may be payable 
 in respect of losses, or in respect of returnable premium. 
 
 (2) Unless otherwise agreed, the broker has, as against the assured, a 
 lien upon the policy for the amount of the premium and his charges in 
 respect of effecting the policy ; and, where he has dealt with the person 
 who employs him as a principal, he has also a lien on the policy in respect 
 of any balance on any insurance account which may be due to him from 
 such person, unless when the debt was incurred he had reason to believe 
 that such person was only an agent. 
 
 54. Effect of receipt on policy. — Where a marine policy effected on behalf 
 of the assured by a broker acknowledges the receipt of the premium, such 
 acknowledgment is, in the absence of fraud, conclusive as between the 
 insurer and the assured, but not as between the insurer and broker. 
 
 I.F. T 
 
274 APPENDIX A 
 
 Loss and Abandonment. 
 
 55. Included and excluded losses. — (1) Subject to the provisions of this 
 Act, and unless the policy otherwise provides, the insurer is liable for any 
 loss proximately caused by a peril insured against, but, subject as aforesaid, 
 he is not liable for any loss which is not proximately caused by a peril 
 insured against. 
 
 (2) In particular, — 
 
 (a) The insurer is not liable for any loss attributable to the wiUul 
 
 misconduct of the assured, but, unless the policy otherwise 
 provides, he is liable for any loss proximately caused by a peril 
 insured agaiost, even though the loss would not have happened 
 but for the misconduct or negligence of the master or crew ; 
 
 (b) Unless the policy otherwise provides, the insurer on ship or goods 
 
 is not liable for any loss proximately caused by delay, although 
 the delay be caused by a peril insured against ; 
 
 (c) Unless the poUcy otherwise provides, the insurer is not liable for 
 
 ordinary wear and tear, ordinary leakage and breakage, 
 inherent vice or nature of the subject-matter insured, or for 
 any loss proximately caused by rats or vermin, or for any injury 
 to machinery not proximately caused by maritime perils. 
 
 56. Partial and total loss. — (1) A loss may be either total or partial. 
 Any loss other than a total loss, as hereinafter defined, is a partial loss. 
 
 (2) A total loss may be either an actual total loss, or a constructive 
 total loss. 
 
 (3) Unless a difEerent intention appears from the terms of the policy, 
 an insurance against total loss includes a constructive, as well as an actual, 
 total loss. 
 
 (4) Where the assured brings an action for a total loss and the evidence 
 proves only a partial loss, he may, unless the policy otherwise provides, 
 recover for a partial loss. 
 
 (5) Where goods reach their destination in specie, but by reason of 
 obKteration of marks, or otherwise, they are incapable of identification, 
 the loss, if any, is partial, and not total. 
 
 57. Actual total loss. — (1) Where the subject-matter insured is destroyed, 
 or so damaged as to cease to be a thing of the kind insured, or where the 
 assured is irretrievably deprived thereof, there is an actual total loss. 
 
 (2) In the case of an actual loss no notice of abandonment need be 
 given. 
 
 58. Missing ship. — Where the ship concerned in the adventure is missing, 
 and after the lapse of a reasonable time no news of her has been received, 
 an actual total loss may be presumed. 
 
 59. E^ect of transhipment, &c. — Where, by a peril insured against, the 
 voyage is interrupted at an intermediate port or place, under such circum- 
 stances as, apart from any special stipulation in the contract of a&eight- 
 ment, to justify the master in landing and reshipping the goods or other 
 
MAEINE INSUEANCE ACT, 1906 275 
 
 moveables, or in transhipping ttem, and sending them on to their destina- 
 tion, the liability of the insurer continues, notwithstanding the landing 
 or transhipment. 
 
 60. Constructive total loss defimd.—{l) Subject to any express provision 
 in the policy, there is a constructive total loss where the subject-matter 
 insured is reasonably abandoned on account of its actual total loss appear- 
 ing to be unavoidable, or because it could not be preserved from actual 
 total loss without an expenditure which would exceed its value when the 
 expenditure had been incurred. 
 
 (2) In particular, there is a constructive total loss — 
 (i) Where the assured is deprived of the possession of his ship or 
 goods by a peril insured against, and (a) it is unlikely that he 
 can recover the ship or goods, as the case may be, or (6) the 
 cost of recovering the ship or goods, as the case may be, would 
 exceed their value when recovered ; or 
 (ii) In the case of damage to a ship, where she is so damaged by a 
 pern insured against that the cost of repairing the damage 
 would exceed the value of the ship when repaired. 
 
 In estimating the cost of repairs, no deduction is to be made 
 
 in respect of general average contributions to those repairs 
 
 payable by other interests, but account is to be taken of 
 
 the expense of future salvage operations and of any future 
 
 general average contributions to which the ship would be 
 
 liable if repaired ; or 
 
 (iii) In the case of damage to goods, where the cost of repairing 
 
 the damage and forwarding the goods to their destination 
 
 would exceed their value on arrival. 
 
 61. Effect of constructive total loss. — Where there is a constructive total 
 loss the assured may either treat the loss as a partial loss, or abandon 
 the subject-matter insured to the insurer and treat the loss as if it were an 
 actual total loss. 
 
 62. Notice qfabandonment. — (1) Subject to the provisions of this section, 
 where the assured elects to abandon the subject-matter insured to the 
 insurer, he must give notice of abandonment. If he faUs to do so the loss 
 can only be treated as a partial loss. 
 
 (2) Notice of abandonment may be given in writing, or by word of 
 mouth, or partly in writing and partly by word of mouth, and may be given 
 in any terms which indicate the intention of the assured to abandon his 
 insured interest in the subject-matter insured unconditionally to the insurer. 
 
 (3) Notice of abandonment must be given with reasonable diligence 
 after the receipt of reliable information of the loss, but where the information 
 is of a doubtful character the assured is entitled to a reasonable time to 
 make inquiry. 
 
 (4) Where notice of abandonment is properly given, the rights of the 
 assured are not prejudiced by the fact that the insurer refuses to accept 
 the abandonment. 
 
276 APPENDIX A 
 
 (5) The acceptance of an abandonment may be either express or implied 
 from the conduct of the insurer. The mere silence of the insurer after 
 notice is not an acceptance. 
 
 (6) Where notice of abandonment is accepted the abandonment is 
 irrevocable. The acceptance of the notice conclusively admits liability 
 for the loss and the sufficiency of the notice. 
 
 (7) Notice of abandonment is unnecessary where, at the time when the 
 assured receives information of the loss, there would be no possibility of 
 benefit to the insurer if notice were given to him. 
 
 (8) Notice of abandonment may be waived by the insurer. 
 
 (9) Where an insurer has re-insured his risk, no notice of abandonment 
 need be given by him. 
 
 63. Effect of abandonment. — (1) Where there is a valid abandonment 
 the insurer is entitled to take over the interest of the assured in whatever 
 may remain of the subject-matter insured, and all proprietary rights 
 incidental thereto. 
 
 (2) Upon the abandonment of a ship, the insurer thereof is entitled to 
 any freight in course of being earned, and which is earned by her subsequent 
 to the casualty causing the loss, less the expenses of earning it incurred 
 after the casualty ; and, where the ship is carrying the owner's goods, the 
 insurer is entitled to a reasonable remuneration for the carriage of them 
 subsequent to the casualty causing the loss. 
 
 Partial Losses {including Salvage and General Average and Particular 
 
 Charges). 
 
 64. Particular average loss. — (1) A particular average loss is a partial 
 loss of the subject-matter insured, caused by a peril insured against, and 
 which is not a general average loss. 
 
 (2) Expenses incurred by or on behalf of the assured for the safety or 
 preservation of the subject-matter insured, other than general average 
 and salvage charges, are called particular charges. Particular charges 
 are not included in particular average. 
 
 65. Salvage charges. — (1) Subject to any express provision in the policy, 
 salvage charges incurred in preventing a loss by perils insured against may 
 be recovered as a loss by those perils. 
 
 (2) " Salvage charges " means the charges recoverable under maritime 
 law by a salvor independently of contract. They do not include the 
 expenses of services in the nature of salvage rendered by the assured or his 
 agents, or any person employed for hire by them, for the purpose of averting 
 a peril insured against. Such expenses, where properly incurred, may be 
 recovered as particular charges or as a general average loss, according to 
 the circumstances under which they were incurred. 
 
 66. General average loss. — (1) A general average loss is a loss caused 
 by or directly consequential on a general average act. It includes a general 
 average expenditure as well as a general average sacrifice. 
 
MAEINE INSUEANCE ACT, 1906 277 
 
 (2) There is a general average act where any extraordinary sacrifice 
 or expenditure is voluntarily and reasonably made or incurred in time of 
 peril for the purpose of preserving the property imperilled in the common 
 adventure. 
 
 (3) Where there is a general average loss, the party on whom it falls 
 is entitled, subject to the conditions imposed by maritime law, to a rateable 
 contribution from the other parties interested, and such contribution is 
 called a general average contribution. 
 
 (4) Subject to any express provision in the policy, where the assured 
 has incurred a general average expenditure, he may recover from the 
 insurer in respect of the proportion of the loss which falls upon him ; and, 
 in the case of a general average sacrifice, he may recover from the insurer 
 in respect of the whole loss without having enforced his right of contribution 
 from the other parties liable to contribute. 
 
 (5) Subject to any express provision in the policy, where the assured 
 has paid, or is liable to pay, a general average contribution in respect of 
 the subject insured, he may recover therefor from the insurer. 
 
 (6) In the absence of express stipulation, the insurer is not liable for 
 any general average loss or contribution where the loss was not incurred 
 for the purpose of avoiding, or in connection with the avoidance of, a peril 
 insured against. 
 
 (7) Where ship, freight, and cargo, or any two of those interests, are 
 owned by the same assured, the liability of the insurer in respect of general 
 average losses or contributions is to be determined as if those subjects 
 were owned by different persons. 
 
 Measure of Indemnity. 
 
 67. Extent of liahility of insurer for loss. — (1) The sum which the assured 
 can recover in respect of a loss on a policy by which he is insured, in the 
 case of an unvalued policy to the fuU extent of the insurable value, or, in 
 the case of a valued policy to the fuU extent of the value fixed by the policy, 
 is called the measure of indemnity. 
 
 (2) Where there is a loss recoverable under the policy, the insurer, or 
 each insurer if there be more than one, is liable for such proportion of the 
 measure of indemnity as the amount of his subscription bears to the value 
 fixed by the policy in the case of a valued policy, or to the insurable value 
 in the case of an unvalued policy. 
 
 68. Total Zoss.— Subject to the provisions of this Act and to any express 
 provision in the policy, where there is a total loss of the subject-matter 
 insured, — 
 
 (1) If the policy be a valued policy, the measure of indemnity is the 
 
 sum fixed by the policy : 
 
 (2) If the policy be an unvalued policy, the measure of indemnity is 
 
 the insurable value of the subject-matter insured. 
 
278 APPENDIX A 
 
 69. Partial loss of ship. — 'Where a ship is damaged, but is not totally 
 lost, the measure of indemnity, subject to any express provision in the 
 policy, is as follows : — 
 
 (1) Where the ship has been repaired, the assured is entitled to the 
 
 reasonable cost of the repairs, less the customary deductions, 
 but not exceeding the sum insured in respect of any one casualty : 
 
 (2) Where the ship has been only partially repaired, the assured is 
 
 entitled to the reasonable cost of such repairs, computed as above, 
 and also to be indemnified for the reasonable depreciation, if 
 any, arising from the unrepaired damage, provided that the 
 aggregate amount shall not exceed the cost of repairing the whole 
 damage, computed as above : 
 
 (3) Where the ship has not been repaired, and has not been sold in 
 
 her damaged state during the risk, the assured is entitled to be 
 indemnified for the reasonable depreciation arising froiA the 
 unrepaired damage, but not exceeding the reasonable cost of 
 repairing such damage, computed as above. 
 
 70. Partial loss of freight. — Subject to any express provision in the 
 policy, where there is a partial loss of freight, the measure of indemnity is 
 such proportion of the sum fixed by the policy in the case of a valued policy, 
 or of the insurable value in the case of an unvalued policy, as the proportion 
 of freight lost by the assured bears to the whole freight at the risk of the 
 assured under the policy. 
 
 71. Partial loss of goods, merchandise, &c. — Where there is a partial 
 loss of goods, merchandise, or other moveables, the measure of indemnity, 
 subject to any express provision in the policy, is as follows : — 
 
 (1) Where part of the goods, merchandise or other moveables insured 
 
 by a valued policy is totally lost, the measure of indemnity is 
 such proportion of the sum fixed by the policy as the insurable 
 value of the part lost bears to the insurable value of the whole, 
 ascertained as in the case of an unvalued policy : 
 
 (2) Where part of the goods, merchandise, or other moveables insured 
 
 by an unvalued policy is totally lost, the measure of indemnity 
 is the insurable value of the part lost, ascertained as in the case of 
 total loss : 
 
 (3) Where the whole or any part of the goods or merchandise insured 
 
 has been delivered damaged at its destination, the measure of 
 indemnity is such proportion of the sum fixed by the policy in 
 the case of a valued policy, or of the insurable value in the case 
 of an unvalued policy, as the difierence between the gross sound 
 and damaged values at the place of arrival bears to the gross 
 sound value : 
 
 (4) " Gross value " means the wholesale price or, if there be no such 
 
 price, the estimated value, with, in either case, freight, landing 
 charges, and duty paid beforehand ; provided that, in the case 
 of goods or merchandise customarily sold in bond, the bonded 
 
MAEINE INSUEANCE ACT, 1906 279 
 
 price is deemed to be tlie gross value. " Gross proceeds " means 
 the actual price obtained at a sale where all charges on sale are 
 paid by the sellers. 
 
 72. Apportionment of valuation. — (1) Where different species of property- 
 are insured under a single valuation, the valuation must be apportioned 
 over the different species in proportion to their respective insurable values, 
 as in the case of an unvalued .policy. The insured value of any part of a 
 species is such proportion of the total insured value of the same as the 
 insurable value of the part bears to the insurable value of the whole, ascer- 
 tained in both cases as provided by this Act. 
 
 (2) Where a valuation has to be apportioned, and particulars of the 
 prime cost of each separate species, quality, or description of goods cannot 
 be ascertained, the division of the valuation may be made over the net 
 arrived sound values of the different species, qualities, or descriptions of 
 goods. 
 
 73. General average contributions and salvage charges. — (1) Subject to any 
 express provision in the policy, where the assured has paid, or is liable for, 
 any general average contribution, the measure of indemnity is the full 
 amount of such contribution, if the subject-matter liable to contribution 
 is insured for its full contributory value ; but, if such subject-matter be 
 iiot insured for its full contributory value, or if only part of it be insured, 
 the indemnity payable by the insurer must be reduced in proportion to 
 the under insurance, and where there has been a particular average loss 
 which constitutes a deduction from the contributory value, and for which 
 the iosurer is liable, that amount must be deducted from the insured value 
 in order to ascertain what the insurer is liable to contribute. 
 
 (2) Where the insurer is liable for salvage charges the extent of his 
 liability must be determined on the like principle. 
 
 74. Liabilities to third parties. — Where the assured has effected an 
 insurance in express terms against any liability to a third party, the 
 measure of indemnity, subject to any express provision in the policy, 
 is the amount paid or payable by him to such third party in respect of such 
 liability. 
 
 75. General provisions as to measure of indemnity. — (1) Where there has 
 been a loss in respect of anj subject-matter not expressly provided for in 
 the foregoing provisions of this Act, the measure of ind enmity shall be 
 ascertained, as nearly as may be, in accordance with those provisions, in 
 so far as applicable to the particular case. 
 
 (2) Nothiag in the provisions of this Act relating to the measure of 
 indenmity shall affect the rules relating to double insurance, or prohibit 
 the insurer from, disproving interest wholly or in part, or from showing that 
 at the time of the loss the whole or any part of the subject-matter insured 
 was not at risk under the policy. 
 
 76. Particular average warranties.— (l) Where the subject-matter 
 insured is warranted free from particular average, the assured cannot 
 
280 APPENDIX A 
 
 recover for a loss of part, otter tkan a loss incurred by a general average 
 sacrifice, unless the contract contained in the policy be apportionable ; 
 but, if the contract be apportionable, the assured may recover for a total 
 loss of any apportionable part. 
 
 (2) Where the subject-matter insured is warranted free from particular 
 average, either wholly or under a certain percentage, the insurer is never- 
 theless liable for salvage charges, and for particular charges and other 
 expenses properly incurred pursuant to the provisions of the suing and 
 labouring clause in order to avert a loss insured against. 
 
 (3) Unless the policy otherwise provides, where the subject-matter 
 insured is warranted free from particular average under a specified per- 
 centage, a general average loss cannot be added to a particular average 
 loss to make up the specified percentage. 
 
 (4) For the purpose of ascertaining whether the specified percentage 
 has been reached, regard shall be had only to the actual loss sufiered by 
 the subject-matter insured. Particular charges and the expenses of and 
 incidental to ascertaining and proving the loss must be excluded. 
 
 77. Successive losses. — (1) Unless the policy otherwise provides, and 
 subject to the provisions of this Act, the insurer is liable for successive 
 losses, even though the total amount of such losses may exceed the sum 
 insured. 
 
 (2) Where, under the same policy, a partial loss, which has not been 
 repaired or otherwise made good, is followed by a total loss, the assured 
 can only recover in respect of the total loss : 
 
 Provided that nothing in this section shall afiect the liability of the 
 insurer under the suing and labouring clause. 
 
 78. Suing and labouring clause. — (1) Where the policy contains a suing 
 and labouring clause, the engagement thereby entered into is deemed to 
 be supplementary to the contract of insurance, and the assured may 
 recover from the insurer any expenses properly incurred pursuant to the 
 clause, notwithstanding that the insurer may have paid for a total loss, or 
 that the subject-matter may have been warranted free from particular 
 average, either wholly or under a certain percentage. 
 
 (2) General average losses and contributions and salvage charges, as 
 defined by this Act, are not recoverable under the suing and labouring clause. 
 
 (3) Expenses incurred for the purpose of averting or diminishing any 
 loss not covered by the policy are not recoverable under the suing and 
 labouring clause. 
 
 (4) It is the duty of the assured and his agents, in all cases, to take such 
 measures as may be reasonable for the purpose of averting or minimising 
 a loss. 
 
 Rights of Insurer on Payment. 
 
 79. Right of subrogation. — (1) Where the insurer pays for a total loss, 
 either of the whole, or in the case of goods of any apportionable part, of 
 the subject-matter insured, he thereupon becomes entitled to take over the 
 
MAEINE INSUEANCE ACT, 1906 281 
 
 interest of the assured in whatever may remain of tte subject-matter so 
 paid for, and he is thereby subrogated to all the rights and remedies of the 
 assured in and in respect of that subject-matter as from the time of the 
 casualty causing the loss. 
 
 (2) Subject to the foregoing provisions, where the insurer pays for a 
 partial loss, he acquires no title to the subject-matter insured, or such part 
 of it as may remain, but he is thereupon subrogated to all rights and remedies 
 of the assured in and in respect of the subject-matter insured as from the 
 time of the casualty causing the loss, in so far as the assured has been 
 indemnified, according to this Act, by such payment for the loss. 
 
 80. Right of contribution. — (1) Where the assured is over-insured by 
 double insurance, each insurer is bound, as between himself and the other 
 insurers, to contribute rateably to the loss in proportion to the amount for 
 which he is liable under his contract. 
 
 (2) If any insurer pays more than his proportion of the loss, he is entitled 
 to maintain an action for contribution against the other insurers, and is 
 entitled to the like remedies as a surety who has paid more than his pro- 
 portion of the debt. 
 
 81. Effect of under insurance. — Where the assured is insured for an 
 amount less than the insurable value or, in the case of a valued policy, for 
 an amount less than the policy valuation, he is deemed to be his own insurer 
 in respect of the uninsured balance. 
 
 Return of Premium. 
 
 82. Enforcement of return. — Where the premium, or a proportionate 
 part thereof, is by this Act, declared to be returnable, — 
 
 (a) If already paid, it may be recovered by the assured from the insurer ; 
 
 and 
 (6) If unpaid, it may be retained by the assured or his agent. 
 
 83. Return by agreement. — Where the policy contains a stipulation for 
 the return of the premium or a proportionate part thereof, on the happening 
 of a certain event, and that event happens, the premium, or, as the case may 
 be, the proportionate part thereof, is thereupon returnable to the assured. 
 
 84. Return for failure of consideration. — (1) Where the consideration 
 for the payment of the premium totally fails, and there has been no fraud 
 or illegality on the part of the assured or his agents, the premium is there- 
 upon returnable to the assured. 
 
 (2) Where the consideration for the payment of the premium is appor- 
 tionable and there is a total failure of any apportionable part of the con- 
 sideration, a proportionate part of the premium is, under the like con- 
 ditions, thereupon returnable to the assured. 
 
 (3) In particular — 
 
 (a) Where the policy is void, or is avoided by the insurer as from 
 the commencement of the risk, the. premium is returnable. 
 
282 APPENDIX A 
 
 . provided that there has been no fraud or illegality on the part 
 of the assured ; but if the risk is not apportionable, and has 
 once attached, the premium is not returnable. 
 (6) Where the subject-matter insured, or part thereof, has never 
 been imperilled, the premium, or, as the case may be, a propor- 
 tionate part thereof, is returnable 
 
 Provided that where the subject-matter has been insured 
 
 " lost or not lost," and has arrived in safety at the time when 
 
 the contract is concluded, the premium is not returnable 
 
 unless, at such time, the insurer knew of the safe arrival ; 
 
 (c) Where the assured has no insurable interest throughout the 
 
 currency of the risk, the premium is returnable, provided that 
 
 this rule does not apply to a policy efEected by way of gaming 
 
 or wagering ; 
 
 {d) Where the assured has a defeasible interest which is terminated 
 
 during the currency of the risk, the premium is not returnable ; 
 
 (e) Where the assured has over-insured under an unvalued policy, 
 
 a proportionate part of the premium is returnable ; 
 (/) Subject to the foregoing provisions, where the assured has over- 
 insured by double insurance, a proportionate part of the 
 several premiums is returnable : 
 
 Provided that, if the policies are effected at difEerent 
 times, and any earlier policy has at any time borne the 
 entire risk, or if a claim has been paid on the policy in respect 
 of the full sum insured thereby, no premium is returnable in 
 respect of that policy, and when the double insurance is 
 efEected knowingly by the assured no premium is returnable. 
 
 Mutual Insurance. 
 
 85. Modification of Act in case of mutual insurance. — (1) Where two or 
 more persons mutually agree to insure each other against marine losses 
 there is said to be a mutual insurance. 
 
 (2) The provisions of this Act relating to the premium do not apply to 
 mutual insurance, but a guarantee, or such other arrangement as may be 
 agreed upon, may be substituted for the premium. 
 
 (3) The provisions of this Act, in so far as they may be modified by the 
 agreement of the parties, may in the case of mutual insurance be modified 
 by the terms of the policies issued by the association, or by the rules and 
 regulations of the association. 
 
 (4) Subject to the exceptions mentioned in this section, the provisions 
 of this Act apply to a mutual insurance. 
 
 Supplemental. 
 
 86. Ratification by assured. — Where a contract of marine insurance is in 
 good faith efiected by one person on behalf of another, the person on whose 
 behalf it is effected may ratify the contract even after he is aware of a loss 
 
MAEINE INSUEANCE ACT, 1906 283 
 
 87. ImTplied obligations varied by agreement or usage.— (1) Where any 
 right, duty,^ or liability would arise under a contract of marine insurance 
 by implication of law, it may be negatived or varied by express agreement, 
 or by usage, if the usage be such as to bind both parties to the contract. 
 
 (2) The provisions of this section extend to any right, duty, or liability 
 declared by this Act which may be lawfuUy modified by agreement. 
 
 88. Reasonable time, &c., a question offaa. — Where by this Act any 
 reference is made to reasonable time, reasonable premium, or reasonable 
 diligence, the question what is reasonable is a question of fact. 
 
 89. Slif as evidence. — Where there is a ddy stamped policy, reference 
 may be made, as heretofore, to the slip or covering note, in any legal 
 proceeding. 
 
 90. Interpretation of terms. — In this Act, unless the context or subject- 
 matter otherwise requires, — 
 
 " Action " includes counter-claim and set off : 
 
 " Freight " includes the profit derivable by a shipowner from the 
 
 employment of his ship to carry his own goods or moveables, as 
 
 well as freight payable by a third party, but does not include 
 
 passage money : 
 " Moveables " means any moveable tangible property, other than the 
 
 ship, and includes money, valuable securities, and other documents : 
 " Policy " means a marine policy. 
 
 91. Savings. — (1) Nothing in this Act, or in any repeal effected thereby, 
 shall afEect — 
 
 (a) The provisions of the Stamp Act, 1891, or any enactment for the 
 
 time being in force relating to the revenue ; 
 (6) The provisions of the Companies Act, 1862, or any enactment 
 
 amending or substituted for the same ; 
 (c) The provisions of any statute not expressly repealed by this Act. 
 (2) The rules of the common law including the law merchant, save in 
 so far as they are inconsistent with the express provisions of this Act, shall 
 continue to apply to contracts of marine insurance. 
 
 92. Repeals. — The enactments mentioned in the Second Schedule to 
 this Act are hereby repealed to the extent specified in that schedule. 
 
 93. Commencement. — This Act shall come into operation on the first 
 day of January one thousand nine hundred and seven. 
 
 94. Short title. — This Act may be cited as the Marine Insurance Act, 
 1906. 
 
284 APPENDIX A 
 
 SCHEDULES. 
 
 FIRST SCHEDULE. 
 
 Form of PoiiicY. 
 
 Lloyd's S.O. policy. — Be it known that as well in 
 
 own name as for and in the name and names of all and every 
 other person or persons to whom the same doth, may, or shall appertain, in part 
 or in all doth make assurance and cause 
 and them, and every of them, to be insured lost or not lost, at and from 
 
 Upon any kind of goods and merchandises, and also upon the body, tackle, apparel, 
 ordnance, munition, artillery, boat, and other furniture, of and in the good ship 
 or vessel called the whereof 
 
 is master under God, for this present voyage, / or 
 
 whosoever else shall go for master in the said ship, or by whatsoever other name or 
 names the said ship, or master thereof, is or shall be named or called ; begiiming 
 the adventure upon the said goods and merchandises from the loading thereof 
 aboard the said ship, 
 
 upon the said ship, &c. 
 
 and so shall continue and endure, during her abode there, upon the said ship, 
 &c. And further, until the said ship, with aH her ordnance, tackle, apparel, &c., 
 and goods and merchandises whatsoever shall be arrived at 
 
 upon the said ship, &o., until she hath moored at anchor twenty-four hours in 
 good safety ; and upon the goods and merchandises, until the same be there 
 discharged and safely landed. And it shall be lawful for the said ship, &c., 
 in this voyage, to proceed and sail to and touch and stay at any ports or places 
 whatsoever 
 
 without prejudice to this insurance. The said ship, &c., goods and merchandises, 
 &c., for so much as concerns the assured by agreement between the assiu'ed and 
 assurers in this policy, are and shall be valued at 
 
 Touching the adventures and perils which we the assurers are contented to 
 bear and do take upon us in this voyage : they are of the seas, men of war, fire, 
 enemies, pirates, rovers, thieves, jettisons, letters of mart and counter-mart, 
 surprisals, takings at sea, arrests, restraints, and detainments of all kings, princes, 
 and people, of what nation, condition, or quality soever, barratry of the master 
 and mariners, and of all other perils, losses, and misfortunes, that have or shall 
 come to the hurt, detriment, or damage of the said goods and merchandises, and 
 ship, &c., or any part thereof. And in case of any loss or misfortune it shall 
 be lawful to the assured, their factors, servants and assigns, to sue, labour, 
 and travel for, in and about the defence, safeguards, and recovery of the said 
 
MAEINE INSUEANOE ACT, 1906 285 
 
 goods and merchandises, and ship, &c., or any part thereof, without prejudice 
 to this insurance ; to the charges whereof we, the assurers, wUl contribute 
 each one according to the rate and quantity of his sum herein assured. And 
 it is especially declared and agreed that no acts of the insurer or insured 
 in recovering, saving, or preserving the property insured shall be considered 
 as a waiver, or acceptance of abandonment. And it is agreed by us, the 
 insurers, that this writing or policy of assurance shall be of as much force and 
 effect as the surest writing or policy of assurance heretofore made in Lombard 
 Street, or in the Royal Exchange, or elsewhere in London. And so we, the 
 assurers, are contented, and do hereby promise and bind ourselves, each one for 
 his own part, our heirs, executors, and goods to the assured, their executors, 
 administrators, and assigns, for the true performance of the premises, confessing 
 ourselves paid the consideration due unto us for this assurance by the assured, 
 at and after the rate of 
 
 In Witness whereof we, the assurers, have subscribed our names and sums 
 assiured in London. 
 
 [Memorandum.'^ N.B. — Corn, fish, salt, fruit, flour, and seed are warranted free 
 from average, unless general, or the ship be stranded — sugar, tobacco, hemp, 
 flax, hides and skins are warranted free from average, under five pounds per cent., 
 and all other goods, also the ship and freight, are warranted free from average, 
 under three pounds per cent, unless general, or the ship be stranded. 
 
 Euks for Construction of Policy. 
 
 The folloioing are the rules referred to by this Act for the construction of a policy 
 in the above or other like form, where the context does not otherwise require :— 
 
 1. Lost or not lost. — ^Where the subject-matter is insured " lost or not lost," 
 and the loss has occurred before the contract is concluded, the risk attaches unless, 
 at such time the assured was aware of the loss, and the insurer was not. 
 
 2. From. — ^Where the subject-matter is insured " from " a particular place, 
 the risk does not attach until the ship starts on the voyage insured. 
 
 3. At and from. — (a) [Ship.} Where a ship is insmed " at and from " a 
 particular place, and she is at that place in good safety when the contract is con- 
 cluded, the risk attaches immediately. 
 
 (6) If she be not at that place when the contract is concluded the risk attaches 
 as soon as she arrives there in good safety, and, unless the policy oth&wise provides, 
 it is immaterial that she is covered by another poUoy for a specified time after 
 arrival. 
 
 (c) [Freight.] — ^Where chartered freight is insured " at and from " a parti- 
 cular place, and the ship is at that place in good safety when the contract is con- 
 cluded the risk attaches immediately. If she be not there when the contract is 
 concluded, the risk attaches as soon as she arrives there in good safety. 
 
 {d) Where freight, other than chartered freight, is payable without special 
 conditions and is insured " at and from " a particular place, the risk attaches 
 pro rata as the goods or merchandise are shipped ; provided that if there be cargo 
 in readiness which belongs to the shipowner, or which some other person has 
 contracted with him to ship, the risk attaches as soon as the ship is ready to 
 receive such cargo. 
 
286 APPENDIX A 
 
 4. From the loading thereof. — ^Where goods or other moveables are insured 
 " from the loading thereof," the risk does not attach until such goods or moveables 
 are actually on board, and the insurer is not liable for them while in transit from 
 the shore to the ship. 
 
 5. Safely landed. — ^Where the risk on goods or other moveables continues until 
 they are " safely landed," they must be landed in the customary manner and 
 within a reasonable time after arrival at the port of discharge, and if they are 
 not so landed the risk ceases. 
 
 6. Touch and stay. — In the absence of any further license or usage, the liberty 
 to touch and stay " at any port or place whatsoever " does not authorise the 
 ship to depart from the course of her voyage from the port of departure to the 
 port of destination. 
 
 7. Perils of the seas. — The term " perils of the seas " refers only to fortuitous 
 accidents or casualties of the seas. It does not include the ordinary action of 
 the winds and waves. 
 
 8. Pirates. — ^The term " pirates " includes passengers who mutiny and rioters 
 who attack the ship from the shore. 
 
 9. Thieves.- — ^The term " thieves " does not cover clandestine theft or a theft 
 committed by any one of the ship's company, whether crew or passengers. 
 
 10. Restraint of princes. — The term " arrests, &c., of kings, princes, and 
 people " refers to political or executive acts, and does not include a loss caused 
 by riot or by ordinary judicial process. 
 
 11. Barratry. — The term " barratry " includes every wrongful act wilfully 
 committed by the master or crew to the prejudice of the owner, or, as the case may 
 be, the charterer. 
 
 12. All other perils. — ^The term " aU other perils " includes only perils similar 
 in kind to the perils specifically mentioned in the policy. 
 
 13. Average unless general. — ^The term " average unless general " means a 
 partial loss of the subject-matter insured other than a general average loss, and 
 does not include " particular charges." 
 
 14. Stranded.^-Wheie the ship has stranded, the insurer is liable for the 
 excepted losses, although the loss is not attributable to the stranding, provided 
 that when the stranding takes place the risk has attached and, it the policy be 
 on goods, that the damaged goods are on board. 
 
 15. Ship. — ^The term " ship " includes the huU, materials and outfit, stores and 
 provisions for -the ofi&cers and crew, and, in the case of vessels engaged in a special 
 trade, the ordinary fittings requisite for the trade, and also, in the case of a steam- 
 ship, the machinery, boilers, and coals and engine stores, it owned by the assured. 
 
 16. Freight. — The term " freight " includes the profit derivable by a ship- 
 owner from the employment of his ship to cairy his own goods or moveables, 
 as well as freight payable by a third party, but does not include passage money. 
 
 17. Goods. — The term " goods " means goods in the nature of merchandise, 
 and does not include personal effects or provisions and stores for use on board. 
 
 In the absence of any usage to the contrary, deck cargo and living animals 
 must be insured specifically, and not under the general denomination of goods. 
 
MAEINE INSUEANCE ACT, 1906 
 
 287 
 
 SECOND SCHEDULE. 
 Enactments Repealed. 
 
 Session and 
 Chapter. 
 
 Title or Short Title. 
 
 Extent of Bepeal. 
 
 19 Geo. 2, c. 37. 
 
 28 Geo. 3, c. 66. 
 
 31 & 32 Vict. 
 0.86. 
 
 An Act to regulate insurance on ships 
 belonging to the subjects of Great 
 Britain, and on merchandises or 
 efEeots laden thereon. 
 
 An Act to repeal an Act made in the 
 twenty-fifth year of the reign of 
 his present Majesty, intituled " An 
 Act for regulating Insurances on 
 Ships, and on goods, merchan- 
 dizes, or effects," and for substi- 
 tuting other provisions for the like 
 purpose in lieu thereof. 
 
 The Policies of Marine Assurance Act, 
 1868. 
 
 The whole Act. 
 
 The whole Act so far as 
 it relates to marine 
 insurance. 
 
 The whole Act. 
 
APPENDIX B 
 
 INSTITUTE VOYAGE CLAUSES, 1915 
 Freight. 
 
 1. Including risk of craft ™'^/or lighter to and from the ship. Each craf b 
 ""iJ/or lighter to be deemed a separate insurance if desired by the assured. 
 
 2. General average and salvage to be adjusted according to the law and 
 practice obtaining at the place where the adventure ends, as if the contract 
 of afireightment contained no special terms upon the subject ; or, if the 
 contract of afireightment so provides, according to York- Antwerp Kules, 
 or, in the case of wood cargoes, York-Antwerp Eules omitting the first 
 word of Eule 1 (" No "), but in all matters not specifically referred to in 
 York-Antwerp Rules i.-xvii. inclusive, the adjustment shall be in accord- 
 ance with the law and practice obtaiaiag at the place where the adventure 
 ends and as if the contract of affreightment contained no special terms 
 upon the subject. 
 
 3. Warranted free from particular average under 3 per cent, unless 
 the ship be stranded, sunk, or on fire, underwriters notwithstanding this 
 warranty to pay for any damage or loss caused by fire or collision with 
 another ship or vessel. 
 
 4. In the event of the total loss, whether absolute or constructive, of 
 the vessel, the amount underwritten by this policy shall be paid in full, 
 whether the vessel be fully or only partly loaded or in ballast, chartered 
 or unchartered. 
 
 5. In ascertaining whether the vessel is a constructive total loss the 
 insured value in the policies on ship shall be taken as the repaired value, 
 and nothing in respect of the damaged or break-up value of the vessel or 
 wreck shall be taken into account. 
 
 6. In calculating the amount due under this policy in respect of any 
 claim except under clauses 2 and 4, all insurances on freight (including 
 honour policies on freight) shall be taken into consideration, and when the 
 total of such insurances exceeds in amount the gross freight actually at 
 risk only a rateable proportion of the gross freight lost shall be recover- 
 able under this policy, notwithstanding any valuation therein. 
 
 7. Warranted free from any claim consequent on loss of time, whether 
 arising from a peril of the sea or otherwise. 
 
 8. It is further agreed that should the within-named vessel receive 
 salvage services from another vessel belonging wholly or in part to the same 
 owners, or under the same management, the assured shall have the same 
 rights under this policy as they would have were the other vessel entirely 
 the property of owners not interested in the within-named vessel ; but in 
 
 288 
 
INSTITUTE VOYAGE CLAUSES, 1915 289 
 
 such cases the amount payable for the services rendered shall be referred 
 to a sole arbitrator to be agreed upon between the underwriters and the 
 assured. 
 
 9. Warranted free of capture, seizure, and detention, and the conse- 
 quences thereof, or any attempt thereat, piracy excepted, and also from all 
 consequences of hostilities or warlike operations, whether before or after 
 declaration of war. 
 
 10. Held covered in case of deviation or change of voyage, provided 
 notice be given and any additional premium required be agreed immediately 
 after receipt of advices. 
 
 11. With leave to sail with or without pilots, and to tow and assist 
 vessels or craft in all situations, and to be towed. 
 
 12. With leave to dock and undock and go into graving dock. 
 
 INSTITUTE TIME CLAUSES, 1915. 
 Freight. 
 
 1. In port and at sea, in docks and graving docks, and on ways, grid- 
 irons and pontoons, at all times, in all places, and on all occasions, services 
 and trades whatsoever and wheresoever, under steam or sail, with leave to 
 sail with or without pilots, to tow and assist vessels or crafts in all situations, 
 and to be towed and to go on trial trips. 
 
 2. Including risk of craft ^^^loi lighter to and from the ship. Each craft 
 *°%r lighter to be deemed a separate insurance if desired by the assured. 
 
 3. General average and salvage to be adjusted according to the law and 
 practice obtaining at the place where the adventure ends, as if the con- 
 tract of affreightment contained no special terms upon the subject ; or, 
 if the contract of affreightment so provides, according to York-Antwerp 
 Rules, or, in the case of wood cargoes, York-Antwerp Rules omitting the 
 first word of Rule 1 (" No"), but in all matters not specifically referred to in 
 York-Antwerp Rules i.-xvii. inclusive, the adjustment shall be in accord- 
 ance with the law and practice obtaining at the place where the adventure 
 ends and as if the contract of affreightment contained no special terms upon 
 the subject. 
 
 4. Warranted free from particular average under 3 per cent., unless 
 the ship be stranded, sunk, or on fire, underwriters notwithstanding this 
 warranty to pay for any damage or loss caused by fire or collision with 
 another ship or vessel. 
 
 5. In the event of total loss, whether absolute or constructive, of the 
 steamer the amount underwritten by this policy shall be paid in full, 
 whether the steamer be fully or only partly loaded or in ballast, chartered 
 or unchartered. 
 
 i.P. u 
 
290 APPENDIX B 
 
 6. In ascertaining whetlier the vessel is a constructive total loss the 
 insured value in the policies on ship shall be taken as the repaired value 
 and nothing in respect of the damaged or break-up value of the vessel or 
 wreck shall be taken into account. 
 
 7. In calculating the amount due under this policy in respect of any 
 claim except under clauses 3 and 5, all insurances on freight (including honour 
 policies on freight) shall be taken into consideration, and when the total of 
 such insurances exceeds in amount the gross freight actually at risk only a 
 rateable proportion of the gross freight lost shall be recoverable under this 
 policy, notwithstanding any valuation therein. 
 
 8. Warranted free from any claim consequent on loss of time, whether 
 arising from a peril of the sea or otherwise. 
 
 9. Should the vessel be sold or transferred to new management, then, 
 unless the underwriters agree to such sale or transfer, this policy shall 
 thereupon become cancelled from date of sale or transfer, unless the vessel 
 has cargo on board and has already sailed from her loading port or is at 
 sea in ballast, in each of which cases such cancellation shall be suspended 
 until arrival at final port of discharge if with cargo, or at port of destination 
 if in ballast. A pro rata daily return of premium shall be made. 
 
 10. It is further agreed that should the within-named vessel receive 
 salvage services from another vessel belonging wholly or in part to the same 
 owners, or under the same management, the assured shall have the same 
 rights under this policy as they woidd have were the other vessel entirely 
 the property of owners not interested in the within-named vessel ; but in 
 such cases the amount payable for the services rendered shall be referred 
 to a sole arbitrator to be agreed upon between the underwriters and the 
 assiired. 
 
 11. Held covered in case of any breach of warranty as to cargo, trade, 
 locality, or date of saihng provided notice be given, and any additional 
 premium required be agreed immediately after receipt of advices. 
 
 12. Should the vessel at the expiration of this policy be at sea or in 
 distress or at a port of refuge or call, the interest hereby insured shall, 
 provided previous notice be given to the underwriters, be held covered 
 at a fro rata monthly premium to her port of destination. 
 
 13. Warranted free of capture, seizure and detention and the con- 
 sequences thereof or any attempt thereat, piracy excepted, and also from 
 all consequences of hostihties or warlike operations, whether before or after 
 declaration of war. 
 
 14. (■ per cent, for each uncommenced month if it be 1 
 
 To return ^^t^^% ^^^f *« «^^«el t^is poUcy. 1 ^^^ ^^.^^j 
 
 I per cent, tor each consecutive thirty days /' 
 [ the vessel may be laid up in port. J 
 
 Provided always that in no case shall a return be allowed when the 
 within-named vessel is lying in a roadstead or in exposed and unprotected 
 waters. 
 
INDEX 
 
 ABANDONMENT, 
 
 general doctrine of, 220 
 
 difference between abandonment and subrogation, 220 
 effect of, to underwriters on freight, 220 
 
 underwriters entitled to freight received by assured subsequent to casualty^ 
 220 
 also to benefit of transhipment, 220 
 deductions for expenses, 222 
 
 may be affected by abandonment of ship, 167, 220 
 underwriters on ship entitled to freight pending, 157, 158, 220, 224, 225 
 rule in America, 225 
 
 not entitled to benefit of transhipment, 131, 220 
 where abandonment of ship justified, 127, 129, 158, 221 
 vessel irreparably damaged, 221 
 captured, 158, 221 
 where abandonment of ship not justified, 133, 221 
 
 freight has previously been received, 221 
 
 where ship carrying shipowner's own goods, 225, 226 
 
 underwriters on ship forego freight, 222 
 
 Right to Abandon, 
 where vessel lost, 105, 111, 112, 113 
 although cargo can be transhipped, 107, 111, 114, 119 
 no, if vessel can be repaired to carry the cargo, 138, 145 
 where voyage prevented by embargo, 156 
 
 or by capture, 156 
 where cargo lost, 160, 161 
 
 or becomes dangerous, 163 
 where cargo cannot be reconditioned, 163 
 
 chartered vessel cannot carry intended cargo, 172 
 
 ACTUAL TOTAL LOSS, 
 
 where vessel and cargo lost, 105 
 
 where vessel lost and cargo cannot be transhipped, 107, 120, 144, 145 
 
 or cargo cannot be transhipped within reasonable time, 109 
 
 or at cost less than original freight, 110 
 
 where vessel cannot be repaired or cargo transhipped, 144, 145, 153 
 
 where cargo lost and other cargo cannot be obtained, 160, 170 
 
 of chartered freight where vessel lost, 170 
 
 or irreparably damaged, 170 
 where voyage frustrated, 170 
 
 [ 1 ] 
 
INDEX 
 
 ADJUSTMENT, 
 
 insurable value gross freight at risk, 200 
 where all freight intended to be insured is at risk, 201 
 part only is at risk, 202, 
 
 has been withdrawn from the risk, 203 
 vessel only partly loaded, 202 
 time for, at expiration of the risk, 203 
 principles in oases of valued policies, 204, 211 
 where part only is at risk, 211 
 
 has been withdrawn from the risk, 211 
 where policy covers successive freights, 213 
 principles adopted by Continental writers, 214 
 
 discussed, 214 
 each voyage should be treated as distinct, 216, 217 
 underwriter liable for losses during successive voyages, 217 
 during each voyage only liable for freight of that voyage, 218 
 
 ADVANCE FREIGHT, 
 
 formerly not considered freight, 10 
 insurable interest in, 10, 57 
 no loss of, if cargo transhipped, 134 
 general average in the case of, 196 
 expenses of reloading charged against, 197 
 insurable value of, 200 
 
 ALTERATION OP RISK, 
 
 assured must not alter risk to prejudice of insurer, 8 
 
 ANIMALS, 
 
 freight for, not covered by poUcy on freight, 73 
 
 ASSIGNEE, 
 
 insurable interest of, 54 
 
 interest covered by policy on freight, 77 
 
 ASSURED, 
 
 meaning of term, 81 
 
 AVOIDANCE OP POLICY, 
 for unseaworthiness, 69 
 change of voyage, 69 
 
 CANCELLING CLAUSE, 
 need not be disclosed, 102 
 effect of, 179 
 warranty against claims arising from cancellation, 181 
 
 CAPTURE, 
 
 may frustrate adventure, 154 
 
 dissolve contract of affreightment, 155 
 although cargo is on board, 155 
 loss of freight if contract dissolved, 156 
 assured should give notice of abandonment, 156 
 no loss if freight earned before action brought, 156 
 effect of abandonment of ship, 158 
 if justified will cause loss of freight, 158, 159 
 
 L 2 ] 
 
INDEX 
 
 CARRIED OR NOT CARRIED, 
 meaning of, 99 
 
 CESSER OP HIRE CLAUSES, 
 effect of, 174 
 where clause brought automatically into operation, 174, 178 
 
 some act of volition intervenes, 178 
 warranty against loss consequent on loss of time, 181 
 
 CHARTERED FREIGHT, 
 meaning of, 40, 41 
 
 not limited to freight payable under charterparty, 40 
 includes freight engagements for specified goods, 42 
 
 under contract made after policy is effected, 101 
 loss of, before cargo loaded, 170, 172 
 
 CHARTERED OR AS IP CHARTERED, 
 meaning of, 99, 101 
 does not cover freight not contracted for, 99 
 
 CHARTERER, 
 
 insurable interest of, 51, 53, 54 
 
 extent of interest, 51, 53 
 
 interest covered by policy on freight, 75, 77 
 
 CHARTERPARTY, 
 defined, 7, 41 
 
 may relate to portion of a vessel, 7, 41 
 no particular form necessary, 8, 40 
 assured need not disclose existence of, 101 
 unless it contains unusual clauses, 102 
 
 CONCEALMENT, 
 
 assured need not disclose existence of charterparty, 101 
 
 unless it contains unusual clauses, 102 
 
 need not disclose existence of cancelling clause, 102 
 
 CONSTRUCTIVE TOTAL LOSS OP PREIGHT, 
 
 if vessel lost but cargo can be transhipped, HI, 114, 119 
 
 if vessel captured or seized, 156 
 
 where cargo lost but other cargo can be obtained, 160 
 
 where cargo becomes dangerous, 163 
 
 or cannot be carried in specie, 163 
 
 where chartered vessel cannot carry the intended cargo, 172 
 
 CONSTRUCTIVE TOTAL LOSS OP VESSEL, 
 
 may involve constructive total loss of freight. 111, 114, 117 
 if vessel cannot be repaired, considered a total loss, 120 
 no loss of freight if vessel repaired by owners, 120, 121 
 costs of repairs may sometimes be recoverable, 121 
 where vessel repaired by underwriters on ship, 122, 221 
 conflicting views, 122 
 
 submitted that assured can recover, 123, 221 
 
 [ 3 ] 
 
INDEX 
 
 CONSTRUCTIVE TOTAL LOSS OF Y'ESSEL,— continued. 
 freight subsequently earned not the original freight, 130, 131 
 where cargo transhipped by underwriters, 124, 131 
 where ship abandoned after freight is earned, 127, 221 
 unjustifiably abandoned, 133, 221 
 
 CONTINGENCY FREIGHT, 
 policy on, 54 
 
 COSTS, 
 
 of earning freight, underwriter not liable for, 145, 201 
 
 DECK CARGO, 
 
 freight of, not covered by policy on freight, 73 
 
 DEDUCTIONS, 
 
 from freight for loss or damage to cargo, 9 
 
 salvage for cost of earning freight, 94, 222 
 
 DEFINITION, 
 of freight, 6 
 
 DELAY, 
 
 underwriter not liable if voyage delayed, 133, 166, 167 
 or for increased costs due to, 145 
 
 loss of profit due to prolongation of voyage, 145 
 
 DESIGNATION OF SUBJECT-MATTER, 
 subject-matter must be specified, 73 
 reasonable certainty necessary, 73 
 nature and extent of interest need not be specified, 74 
 what is included in designation " freight," 72, 77 
 does not include passage-money, 73 
 or freight of live animals, 73 
 or of goods on deck, 73 
 originally only covered interest of owner, 75 
 where assured has only a limited interest, 77, 82 
 or has interests in different capacities, 82, 84 
 
 policy must not be construed as covering portion of interest of assured, 84 
 where several freights are in existence, 85 
 
 poKoy should be construed as covering freight of earlier voyage, 88 
 where policy covers freight of successive voyages, 89 
 only covers freight pending during each voyage, 89 
 where cargo loaded, policy covers freight of this cargo, 91, 92, 105 
 substituted freight, 93, 94, 96 
 freight on board or not on board, meaning of, 97, 99 
 
 chartered or as if chartered, meaning of, 99, 101 
 does not cover freight not contracted for, 99 
 
 DURATION OF RISK, 
 
 under ordinary policy begins when freight commences to be earned, 14, 31 
 
 60 
 in case of ordinary freight when goods on board, 43, 65 
 or carriage ready to begin, 45, 66 
 readiness of cargo, 67 
 ship, 67 
 
 [ 4 ] 
 
INDEX 
 
 DURATION OF UISK,— continued. 
 
 where sliipowner carrying his own goods, 49, 66 
 
 may depend on happening of an event, 61 
 
 termination of risk, 68 
 
 in the case of a time policy, 69 
 
 policy may cover portion of freight-earning voyage, 15 
 
 or of period during which freight is at risk, 69 
 
 EMBARGO, 
 
 effect of, 93, 133, 154 
 
 may dissolve contract of affreightment, 154 
 loss of freight where contract dissolved, 156 
 assured should give notice of abandonment, 156 
 
 EXPECTATION OP FREIGHT, 
 not insurable as freight, 12, 13 
 but may perhaps be insured, 13 
 not covered by freight chartered or as if chartered, 99 
 
 FREIGHT, 
 
 ordinary meaning of, 1, 2 
 
 strict significance of the term, 2, 15 
 
 several may exist at same time, 3 
 
 where shipowner carries his own goods, 4, 46 
 
 definition of, 6 
 
 does not include passage-money, 6, 73 
 
 results from some contract, 6, 12 
 
 contracts of affreightment discussed, 7 
 
 how made payable, 9 
 
 may be subject to deductions for damage to cargo, 9 
 payable in Mnd, 9 
 
 where no rate agreed, 9 
 
 may be payable in advance, 10 
 formerly advance freight not considered freight, 10 
 payment in advance affects insurable interest, 10 
 always been lawful subject of insurance, 12 
 if definitely engaged, 12 
 expectation of, not insurable as freight, 13 
 but may be insured, 13 
 
 ordinary policy only covers freight being earned, 14, 34, 60, 69 
 doctrine of inchoate right to freight, 13 
 how it originated, 15, 16, 17 
 
 in England referred to inception of risk, 17, 20, 34, 60 
 in America to inception of insurable interest, 17, 20, 34, 60 
 both views misleading, 20, 60 
 when did inchoate right commence, 22 
 as soon as freight began to be earned, 22, 60 
 not necessary for vessel to break ground on voyage, 22, 23, 61 
 where vessel chartered for outward and homeward voyages, 24 
 important point whether contract entire, 24 
 where subsequent voyage fixed under separate contract, 28 
 must vessel be ready to receive cargo, 28, 29, 30 
 
 [ Sf] 
 
INDEX 
 
 VREIGRT— continued. 
 
 question whether freight is being earned one of fact, 31, 60 
 
 insurable interest exists before inchoate right arises, 35, 43, 49 
 
 exists as soon as contract for freight is made, 34, 35 
 
 meaning of chartered freight, 40 
 
 engagements relating to specified goods, 42 
 
 insurable inte'rest in ordinary freight, 43, 45 
 
 when inchoate right to ordinary freight arises, 45, 66 
 
 where ship carrying shipowner's goods, 46, 49 
 
 freight engagements for unnamed ship, 50 
 
 what is included in designation freight, 72, 77 
 
 where several freights are at risk, 85 
 
 where policy covers freight of successive voyages, 89 
 
 construed as covering freight pending during each voyage, 89 
 
 where cargo loaded, pohey covers freight of this cargo, 91, 92, 105 
 
 substituted freight, £3, 94, 96 
 
 on board or not on board, meaning of, 64, 97, 99 
 
 chartered or as if chartered, meaning of, 99, 101 
 
 does not cover freight not contracted for, 99, 
 
 insurable value of, 200 
 
 FRUSTRATION OP ADVENTURE, 
 
 where vessel justifiably abandoned, 130, 133 
 
 or cannot be repaired in reasonable time, 135, 137 
 
 meaning of reasonable time, 135, 136 
 
 where cargo would perish before ship can be repaired, 137, 143 
 
 be damaged, 138 
 interest of one party not considered, 143 
 where vessel cannot be repaired at reasonable cost, 148 
 or is seized under an embargo, 154 
 or is captured, 155 
 where cargo cannot be reconditioned, 163 
 
 vessel cannot proceed on chartered voyage, 170 
 
 GENERAL AVERAGE, 
 
 interests to be considered, 198, 199 
 where goods jettisoned, 186 
 
 or sold to defray general average expenses, 187 
 or destroyed by water used to extinguish fire, 187 
 where vessel voluntarily stranded, 187 
 loss must be due to the stranding, 188 
 amount to be made good, 189 
 whole unpaid freight less expenses saved, 189 
 expenses of completing voyage not deducted, 189 
 where cargo is transhipped, 190 
 
 vessel and cargo subsequently lost, 190 
 if fresh cargo taken on board, 190 
 contributory value of freight, 190 
 gross amount earned less expenses of earning, 190 
 cost of discharge and of coUeotion to be deducted, 190 
 also wages and port charges since general average act, 190 
 but not provisions and coals laid in previously, 190 
 
 [ 6 ] 
 
INDEX 
 
 GENERAL AV'ERAG'E,— continued. 
 
 as to provisions and coals laid in subsequently, quaere, 191 
 
 in the case of chartered freight, 191 
 
 where chartered freight entire and no other freight at risk, 191 
 
 immaterial whether vessel loaded or not, 191 
 
 or whether charter covers several voyages, 191 
 
 where charter for several passages at separate freights, 193 
 
 only pending freight taken into account, 193 
 
 where goods-being carried under bills of lading, 193 
 
 only bill of lading freight taken into account, 193 
 
 where such freight lower than charter freight, 193 
 
 it is higher, 194 
 where charter is for a homeward voyage, 195 
 
 there are several charters, 195 
 only freight being earned taken into account, 195 
 freight paid in advance, 196 
 expenses of reloading charged against freight, 197 
 
 INCHOATE RIGHT TO FREIGHT, 
 
 doctrine of, 13 ' 
 
 how it originated, 15, 16, 17 
 
 in England referred to inception of risk, 17, 20, 34, 60 
 
 in America to inception of insurable interest, 17, 20, 34, 60 
 
 both views misleading, 20, 60 
 
 commencement of, 22 
 
 when freight begins to be earned, 22, 60 
 
 not necessary for vessel to break ground on voyage, 22, 23, 61 
 
 where vessel chartered for outward and homeward voyages, 24 
 
 important question whether charter entire, 24 
 
 where subsequent voyage fixed under separate charter, 28 
 
 must vessel be ready to receive cargo, 28, 29, 30 
 
 question whether freight is being earned one of fact, 31, 60 
 
 insurable interest arises although no, 35, 40, 49 
 
 in the case of ordinary freight, 43, 45, 66 
 
 arises when carriage ready to begin, 45 
 
 where shipowner carries his own goods, 49 
 
 INSURABLE INTEREST, 
 
 arises as soon as contract for freight concluded, 34, 35 
 
 where freight is payable for specified goods, 42 
 
 in the case of ordinary freight, 43, 45 
 
 where shipowner carries his own goods, 46, 49 
 
 freight contract relating to unnamed vessel, 50 
 
 of charterer, 51, 53, 54 
 
 assignee, 54 
 
 mortgagee, 54 
 
 mortgagor, 57 
 
 vendor, 57 
 in advance freight, 10, 57 
 
 INTENTION, 
 
 as to interest to be covered, 55, 77, 78, 83 
 of limited owner to insure whole subject-matter, 55, 77, 78, 82 
 
 [ 7 ] 
 
INDEX 
 
 INTENTION,— coniiraweei. 
 
 to insure interest in particular capacity cannot be shown, 82, 84 
 
 nor to insure portion only of interest at risk, 84 
 
 unless communicated to underwriter, 84 
 in the case of valued policies, 202, 207 
 
 LEAVE FOR DISCHARGE AND TAKE IN CARGO, 
 effect of, 96 
 
 LIEN FOR FREIGHT, 
 
 does not arise until ship breaks ground, 16 
 where vessel damaged but can be repaired, 134 
 provided repairs can be effected iii reasonable time, 109, 136 
 where cargo would perish before repairs completed, 137 
 cannot be carried by original vessel, 169 
 
 LIMITED INTEREST, 
 
 assured with, may insure to full value, 55, 77, 78, 82 
 
 LOSS OF FREIGHT, 
 
 recoverable although not ascertained until policy expires, 70 
 must be sustained during currency of poUcy, 71 
 where vessel and cargo lost, 105 
 
 ToTAii Loss OF Vessel, 
 total loss of vessel may cause total loss of freight, 105 
 unless cargo can be transhipped, 105 
 actual total loss if transhipment impossible, 107, 120 
 
 or delay unreasonable, 109 
 
 or cost excessive, 110 
 constructive total, in case of total loss of vessel. 111, 114, 117 
 assured may abandon. 111 
 
 may recover total loss it abandonment accepted, 114, 117 
 or it action commenced, 114, 117 
 position where freight earned by transhipment before abandonment accepted 
 
 or action commenced, 114, 117 
 in America considered a partial loss, 115 
 in England probably no loss, 115, 117 
 
 costs of transhipment recoverable under sue and labour clause, 115, 117 
 assured must tranship it practicable, 116 
 cannot recover it he neglects to do so, 117 
 where transhipment prevented by perils not insured against, 17 
 where notice of abandonment not given, 118 
 costs recoverable under sue and labour clause, 118 
 where doubtful whether cargo can be transhipped, 119 
 assured should abandon, 119 
 
 CONSTBtrCTIVE TOTAL LOSS OF. VESSEL, 
 
 if vessel cannot be repaired, considered a total loss, 120 
 no loss of freight if vessel repaired by owners, 121 
 costs of repairs may sometimes be recoverable, 121 
 where vessel repaired by underwriters on ship, 122, 127, 221 
 conflicting views, 122 
 
 submitted that assured can recover, 123, 221 
 
 [ 8 ] 
 
INDEX 
 
 LOSS OF Vn'EIGB.T,— continued. 
 CoNSTRircTiVB TOTAL Loss OP VESSEL, — continued. 
 
 freight subsequently earned not the original freight, 130, 131 
 
 where cargo transhipped by underwriters, 124, 131 
 
 where ship abandoned after freight is earned, 127, 221 
 unjustifiably abandoned, 127, 133, 221 
 Where Vessel Damaged, 
 
 no loss of freight if vessel can be repaired within reasonable time and at 
 reasonable cost, 134 
 
 reasonable time, meaning of, 135 
 
 immaterial whether cargo on board or not, 135 
 
 where cargo would perish before repairs completed, 137 
 
 shipowner must carry on cargo if practicable, 138, 143 
 
 no loss of freight if he neglects to do so, 138 
 
 shipowner not concerned with condition of cargo, 138, 143 
 or with interests of cargo owner, 143 
 
 where vessel cannot be repaired in reasonable time, 144 
 
 if vessel can be repaired assured carmot recover loss of profits or increased 
 cost of wages, 145 
 
 reasonable cost, meaning of, 147, 149 
 
 extent of repairs contemplated, 149 
 
 freight to be earned not to be taken into account, 153 
 
 where vessel cannot be repaired and transhipment impossible, 153 
 Where Vessel CAPTtnaED or Seized, 
 
 may dissolve contract of affreightment, 154, 155 
 
 constructive total loss if contract dissolved, 156 
 
 assured should give notice of abandonment, 156 
 
 where ship abandoned, 158 
 
 freight subsequently earned, 159, 221 
 Loss or Cargo, 
 
 loss of cargo will cause loss of freight, 95, 160 
 
 unless other cargo can be obtained, 96, 160 
 
 assured may give notice of abandonment, 96, 161 
 
 insurer entitled to freight earned on insured voyage, 161 
 
 but not to freight earned on a different voyage, 162 
 
 assured cannot recover if he neglects to earn freight, 162 
 
 where damaged cargo becomes dangerous, 163 
 
 or cannot be carried to destination, 163 
 Damage to Cabgo, 
 
 no loss of freight if cargo can be reconditioned at reasonable cost and within 
 reasonable time, 163 
 
 reasonable cost, meaning of, 163 
 
 meaning of reconditioning, 164 
 
 freight payable not taken into account, 165 
 
 reasonable time, meaning of, 166 
 
 shipowner must wait if cargo can be reconditioned, 166 
 
 primary duty to carry in original ship, 166 
 
 if caimot be reconditioned, no right to tranship, 169 
 Chartered Freight, 
 
 loss of, before vessel loaded, 170 
 
 total loss, if vessel lost, 170 
 
 [ 9 ] 
 
INDEX 
 
 LOSS OP ¥RmGB.T,— continued. 
 Charteeed Fbeight, — continued. 
 or if cost of repairs unreasonable, 170 
 
 adventure frustrated, 170 
 where vessel cannot carry intended cargo, 172 
 partial loss if other cargo is obtained, 96, 172, 173 
 or if vessel carries part of intended cargo, 173 
 
 LUMP-SUM FREIGHT, 
 nature of, 173 
 
 payable although part of cargo is lost, 173, 174 
 not payable if no cargo delivered, 174 
 may be earned by transhipping cargo, 174 
 unless dependent on arrival of original vessel, 174 
 
 MEMORANDUM, 
 
 percentage of damage, how ascertained, 185, 186 
 losses should be adjusted in respect of each passage, 186 
 
 MORTGAGEE, 
 
 insurable interest of, 54 
 
 may insure to full value, 55, 77, 82 
 
 MORTGAGOR, 
 
 insurable interest of, 57 
 may insure to full value, 57 
 
 ON BOARD OR NOT ON BOARD, 
 meaning of, 64, 97, 99 
 
 PARTIAL LOSS, 
 
 in America where cargo is transhipped, 115 
 where vessel damaged and can only carry part of cargo, 173, 185 
 only part of intended cargo is on board, 184 
 a separable part of cargo is lost, 184 
 original cargo lost, but substituted cargo carried, 93, 96, 173, 185 
 
 PASSAGE-MONEY, 
 
 not covered by insurance on freight, 6, 73 
 
 POLICY, 
 
 ordinary policy only covers freight being earned, 14, 34, 60, 69 
 may cover part of freight-earning voyage, 15 
 freight may be insured as soon as contract made, 34, 35, 45, 49 
 time policy on freight, 69 
 distinction between time and voyage policy, 69 
 may cover portion of period freight is at risk, 69 
 loss recoverable although not ascertained till policy expires, 70 
 what is covered by poUcy on freight, 73, 77 
 where assured has a limited interest, 77 
 or interests in different capacities, 82, 84 
 does not cover portion of interest of assured, 84 
 where assured has several freights at risk, 85 
 policy covers freight of earher voyage, 88 
 where policy covers freight of successive voyages, 89 
 
 [ 10 ] 
 
INDEX 
 
 POLICY, — continued. 
 
 only attaches to freight pending during each voyage, 89 
 
 where cargo loaded, policy is on freight of this cargo, 91, 92, 105, 160 
 
 substituted freight, 93, 96 
 
 where policy contemplates substituted freights, 96 
 
 freight on board or not on board, meaning of, 97, 99 
 
 chartered or as if chartered, meaning of, 99, 101 
 
 does not cover freight not contracted for, 99 
 PROFITS, LOSS OF, 
 
 insurer not liable for, due to prolongation of voyage, 145, 201 
 
 PROFITS ON CHARTER, 
 policy on, 53 
 
 READINESS, 
 of cargo, 67 
 of ship, 67 
 
 REASONABLE COST, 
 
 meaning of, 149, 163, 164, 165 
 
 REASONABLE TIME, 
 
 meaning of, 135, 136, 145, 166 
 
 SALVAGE 
 
 substituted freight regarded as, 94, 161, 227 
 
 SEAWORTHINESS, 
 
 poHcy does not attach if vessel unseaworthy, 69 
 
 SHIPOWNER 
 
 may retain cargo if vessel damaged, 134 
 provided vessel can be repaired in reasonable time, 135 
 must carry on cargo if practicable, 135, 138, 147 
 must wait until cargo can be reconditioned, 167 
 primary duty to carry in his own ship, 166 
 
 SPECIE, IN, 
 
 meaning of, 138 
 
 SUBROGATION, 
 
 difference between, and abandonment, 220 
 
 what passes to insurer by, 227 
 
 where vessel can obtain substituted cargo, 227 
 
 or pro rata freight, 227 
 
 or damages, 228 
 
 SUBSTITUTED FREIGHT, 
 
 covered by pohcy, 96, 160, 161 
 insurer entitled to, 161, 227 
 
 SUCCESSIVE FREIGHTS, 
 
 policy should be construed as covering freight pending, 88, 89 
 how losses should be adjusted, 213 
 each voyage should be kept distinct, 216 
 insurer liable for losses during successive voyages, 217 
 during each voyage only liable for freight of that voyage, 218 
 
 [ 11 ] 
 
INDEX 
 
 SUING AND LABOURING CLAUSE, 
 
 cost of transhipment recoverable under, 115, 117 
 although no notice of abandonment given, 118 
 
 TIME, LOSS OF, 
 
 clauses excluding liability for loss due to, 181 
 loss of profit due to, 145, 201 
 increased wages due to, 145, 201 
 
 TRANSHIPMENT, 
 
 shipowner may tranship, 105 
 as against freighter not bound to tranship, 106 
 freight earned by, regarded as original freight, 105, 131 
 as against insurer shipowner should tranship, 106, 116 
 
 unless transhipment impossible, 107 
 
 or delay unreasonable, 109 
 
 or cost excessive, 110 
 where underwriter tranships, 131 
 no right of, where delay due to cargo, 169 
 in case of lump-sum freight, 174 
 
 VALUATION, 
 
 to what does it refer, 204 
 
 may refer to freight of full cargo, or charter of entire ship, 205 
 
 or to freight actually obtained, 226 
 
 or, perhaps, to freight at risk, 207 
 
 refers to subject intended to be insured, 207 
 
 nor to interest of the assured, 209 
 
 principles of adjustment as in open policies, 204, 211, 212 
 
 where poUcy covers several voyages, 89, 213 
 
 VOYAGE INSURED, 
 what is, 161 
 change of voyage avoids pohcy, 69 
 
 WAGES, 
 
 increased cost of, due to prolongation of voyage, 145 
 
 WAR, 
 
 presumed to be of indefinite duration, 154 
 
 WARRANTY, 
 
 free from any claim consequent on loss of time, 181 
 against claims arising from cancelling of charter, 181 
 free from average under three pounds per cent., 185 
 percentage of damage, how ascertained, 186 
 losses should be adjusted in respect of each voyage, 186 
 
 PKINTBS BY WILLIAU CLOWES AND SONS, LIUITED, LONDON AND BBCCLBS