acter.

To secure an indemnity against these is the purpose

and object of a policy of marine insurance."

Since the Inchmaree, case there has been no further litigation on the general words: the judgment of the House of Lords was decisive and unmistakable. But the immediate practical consequence was the invention of a special clause of such a tenor as to get completely round the House of Lords' judgment which was given on an ordinary policy. The use of that clause has become almost universal in policies on steamers, particularly in time policies. It reads as follows:

This insurance also specially to cover (subject to the free-ofaverage warranty) loss of or damage to hull and machinery through the negligence of master, mariners, engineers, or pilots, or through explosions, bursting of boilers, breakage of shafts, or through any latent defect in the machinery or hull, provided such loss or damage has not resulted from want of due diligence by the owners of the ship, or any of them, or by the manager.

This clause is often, for the sake of brevity, called the "Inchmaree, clause." The words "subject to the free-ofaverage warranty" are a recent addition: their effect will become clear when that warranty comes to be discussed.

CHAPTER VII

THE POLICY: PART II-continued

Sue and Labour Clause, Waiver Clause, Force and Effect of Policy, Consideration, Attestation

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, safeguard, and recovery of the said goods and merchandises and ship, etc., or any part thereof, without prejudice to this insurance; to the charges whereof we, the assurers, will contribute each one according to the rate and quantity of his sum herein assured.

This clause appears in the London policy of 1613, and would seem to be indigenous to England, as no clause corresponding to it is found in the Florentine form of 1527. It is striking that the first mention in the policy of payments, charges, and expenses does not occur in reference to loss of, or damage to the subject insured, but in connection with efforts made to defend, safeguard, and recover ship or goods, or any part thereof, after a loss or misfortune has occurred.

This portion of the policy is known as the "sue and labour clause." It is, in fact, a supplementary side-contract dealing with one separate class of expenses known as "particular charges.” Its operation is limited and completed by what is termed the "waiver clause,” which in some policies is printed in the margin, but in the ordinary modern Lloyd's form follows the sue and labour clause as part of the text, viz.—

And it is expressly declared and agreed that no acts of insurer or assured in recovering, saving, or preserving the property insured, shall be considered as a waiver or acceptance of abandonment.

CHAP. VII SUE & LABOUR AND WAIVER CLAUSES 121

If the two are taken together their intent is clear: it is plain that if either party to the insurance contract takes steps to defend, safeguard, or recover property covered by the policy, these steps shall not be taken to prejudice or alter the respective positions of the parties concerned, and that when the assured, either in person or through factors, servants, or assigns, does his best to avert loss, his expenses incurred in doing this are guaranteed to him by the underwriter in proportion to the sum insured. In fact the object of the sue and labour clause is to encourage the assured, his employees, and all to whom the benefit of the insurance may have been passed, to take all possible steps to save property in danger: the object of the waiver clause is to enable the assured (and those deriving rights from him), and also the underwriter, to undertake operations and incur expenses meant for the safeguard of the property insured, without any fear of thereby introducing some new element into the contract or nullifying some step of commercial or legal procedure already taken. Abandonment, acceptance of abandonment, and waiver or revocation of abandonment will be treated at some length below.

It is to be observed that the clause providing for "suing and labouring" takes no effect until a loss or misfortune has actually occurred: it does not cover expenses incurred or operations undertaken with the object of averting the occurrence of a peril. Such expenses and operations are the elements forming another nexus between assured and underwriter.

There is no suggestion in the sue and labour clause of the possibility that the underwriter may take steps for the defence, safeguard, etc., of the property insured. That may be either because in the days when the policy was drawn up such a thing was unheard of, or because the right of the underwriter to take such steps was considered so unmistakable that it was unnecessary to specify it. But by the time that the parties to the contract found the necessity of devising the waiver clause, it had become apparent that the assurer as well as the assured might and did take steps to save the property in question, so that in modern policies

the right of the underwriter to step in is indirectly secured.

Of the persons whose action is in the sue and labour clause admitted as equivalent to that of the assured we may put down first the captain of the ship. His duty as respects the saving of the ship herself has never been a matter of doubt; but as to cargo there has been a certain amount of difficulty. Formerly, when the custom was for merchants to travel in the carrying ship and take charge of their goods (cf. Laws of Oleron, $$ 8, 9; circa 1195; quoted by Lowndes, General Average, p. 6), the captain did not represent the cargo owners. Even later, when merchants did not accompany their wares to sea, they usually delegated their authority to a special representative of their own, the supercargo. But as loading on the berth grew commoner and the conditions of oversea trade were changed, it became unusual for the cargo to be accompanied either by its owner or by any special representative of him. Consequently, nowadays, the only person who can in most cases take such steps as are contemplated in the sue and labour clause is the captain of the ship. In the case of the Gratitudine, 1801,1 Lord Stowell decided that in case "of instant, unforeseen, and unprovided necessity," the master whose only duty to the cargo in ordinary circumstances is to keep and convey it in safety, is bound by the general policy of the law to assume the character of supercargo and agent for the cargo owner. Consequently a shipmaster is now bound to do all he can to complete the venture so far as both ship and cargo are concerned, and must act on his own responsibility, to the utmost of his skill and power, and in absolute good faith in furtherance of the interests of the principals. If he has the means of communicating with them he ought to communicate, and as agent he must carry out any instructions he gets from them so far as this is possible and compatible with that better knowledge of the actual position of affairs which he of necessity possesses. He may even in case of necessity

hypothecate not the ship only but the cargo also in order to raise money for the repairs of the ship (the Gratitudine, 1801).1 In case of absolute necessity where he, after disaster, cannot find reasonable means of conveying goods to destination, he may sell the goods (cf. Mr. Justice Willes in his judgment in Notara v. Henderson, 1872).2 For instance, if he has a cargo of fruit when his ship meets with disaster, and he finds that it will perish before he can manage to deliver it at the place of destination, he is entitled to sell the fruit at a place short of destination. But it is only when there is necessity for the sale of the cargo that the master of a ship has authority to act as agent for the sale of the cargo, and without such necessity the sale may not be binding on the owners of the goods (see Atlantic Mutual Insurance Company v. Huth, 1880,3 and Australasian Steam Navigation Company v. Morse, 1872). Consequently where the captain can communicate with the cargo owners he should do so.

The extension of the operations of wrecking organisations and salvage associations has in some waters greatly diminished the number of cases in which captains have to take these responsibilities. But there are still immense portions of the world where it takes months to get instructions sent in reply to the report of an accident, so that there are still only too frequent occasions for the captain to exercise the latent authority and agency vested in him. In European and North American waters, in the Bay of Bengal and on the eastern and southern coast of Australia, the work and responsibility contemplated in the sue and labour clause is generally undertaken by special corporations sending out experts who have had experience in operations at wrecks, and who have at their disposal diving-gear, tugs, pumps, and other necessary plant. The practice in such cases is for the corporation or salvage company to get written authority or instructions from the shipowner to take the necessary steps to save

1 3 Rob. 240.

3 16 Ch. D. 474.

2 L. R. 7 Q.B. 235.

4 4 P.C. 222.