of his goods at destination? Considerations of a similar kind arise again and again in the treatment of cargo claims; but this instance seems to make it clear that the prudentuninsured - owner theory is not adequate to the solution of several important problems in marine insurance.

CHAPTER X

TOTAL LOSS OF FREIGHT

THE third great maritime interest, freight, remains to be dealt with. The word " freight" does not appear in the text of the policy as it existed before May 1749. It is not easy to see how it came to have its present signification, namely, hire for carrying goods. Etymologically it should mean simply load or cargo, and it is still used in the United States in this sense (e.g. freight train, fast freight train, the equivalent of the English goods train and express goods train). But it has lost that meaning altogether in England, and now stands simply for hire for carrying goods, and on the United States' sea-board the word is used in nautical affairs in that sense.1

In regard to this interest there is a most important and, in fact, an essential difference between the law of England and that of most other ocean-carrying nations; and this difference has important consequences on the relations of assured and underwriter on freight. English law takes the contract under bill of lading between shipowner and merchant to be that if the freight is payable at destination, then no part of it is earned by a partial performance of the contract, that is, by delivery of the cargo at any port short of destination. If an English ship takes

1 In German there is a somewhat similar confusion between Fracht and Frachtgeld, in Dutch between Vracht and Vrachtpenning; in Italian the words nolo and noleggio are those ordinarily used to mean freight, while in French the word fret is pushing out nolis, and in Spanish flete is the only form now in common use.

in cargo at Liverpool for delivery at Calcutta in return for so much freight, delivery of the cargo at Colombo or Madras will not entitle the shipowner to any freight. Almost all the maritime countries except England have adopted a custom entirely contrary to this: they regard the freight as a liability from the cargo accruing as it were mile by mile as the vessel proceeds and culminating at its full bill of lading amount at port of destination on safe delivery. If a German vessel undertook the voyage from Hamburg,1 and tendered the cargo at Colombo, being herself unable to proceed farther on the voyage, the owner would be entitled, under the law of his flag, to claim the same proportion of the full freight as the distance from Liverpool to Colombo bears to that from Liverpool to Calcutta. This is called distance freight or freight pro rata itineris peracti. In this country it has been considered contrary to public policy to permit any such partial and proportionate discharge of a freight contract: it has been thought that such permission might tend to encourage masters and crews to look for reasons to close the freight contract elsewhere than at the intended destination of the adventure. There is certainly good reason for thinking that many condemnations of foreign vessels at intermediate ports of their voyages would never occur were it not for the distance freight.

In consequence of the view of freight adopted in English law, payments made towards freight hold a curious position in English maritime commerce. If the full freight as per bill of lading is, in consequence of some cause or other preventing the ship's arrival at destination, never earned, what becomes of amounts which the cargo-owner may have prepaid? are they recoverable by the cargo-owner or do they remain the property of the shipowner? That depends entirely on the intention of the parties; if the intention is to provide an amount on account of freight as it may ultimately be found to be due, then the prepayment is simply a loan; if, on the other hand, it is meant to be a payment of part of the 1 See Industrie, Shipping Gazette, 30th Nov. 1893.

M

freight, due when the cargo was loaded, on signing bills of lading or immediately on sailing, then it is a payment to the shipowner absolute and irrevocable, but to be deducted from the bill of lading freight if and when earned. The latter kind of payment is termed "advance freight." If a payment on account is meant to be merely a loan against freight as ultimately due, it should be described in such words as will make its character clear and prevent its being considered advance freight.

To turn to the insurance side of freight, it is plain that when the carrying ship is completely destroyed by any of what may be called the eminent perils (foundering, burning, etc. etc.) there is an end of the carrying power of the ship, and equally an end of what she was carrying, so that in such cases there is what may be termed a "double qualification" of claim for total loss of freight. In his judgment in Scottish Marine v. Turner, 1853,1 Lord Truro said: “The expression 'loss of freight' has two meanings, and the distinction between them is material:

"(1) Freights may be lost in the sense that, by the perils insured against, the ship has been prevented earning freight.

"(2) Freight may be lost in the sense that, after it has been earned, the owner has been deprived of it by some circumstance unconnected with the contract between the assured and the underwriter on freight. For a loss of freight, in the first sense, the underwriter on freight is responsible; for a loss of freight in the second sense he is not.”

Short of such complete total loss, we may have two cases of total loss of freight :

(1) Where owing to perils insured against the cargo is incapable of being carried to destination.

(2) Where owing to perils insured against the ship is unable to carry the cargo to destination.

(1) By "incapable," in the first case, is meant not only physically incapable but also commercially incapable. That is to say, the description covers not only goods

altered by perils insured against into something different in specie from what was shipped or deteriorated so as not to be able to bear forwarding and consequently totally lost, but also goods burdened, in consequence of perils insured against, with such charges as make their forwarding to destination impossible except at a loss, i.e. goods which have suffered constructive total loss in the sense already explained.

Suppose that an English vessel has put into a port of refuge for repairs and has discharged her cargo, and that her cargo is found to be in such a condition that it cannot be carried forward to destination with safety to the venture, or so as to be delivered in specie, or in any but a worthless state. If this cargo is sold at port of refuge, there evidently has gone with it the right on the part of the ship to obtain a certain amount of freight at the end of the voyage, i.e. at destination when reached. The cargo may be sold in this way (a) whole, (b) in part.

(a) If the whole cargo is sold, the possibility of earning any part of the freight has vanished; and if the damage giving rise to the sale has been caused by perils insured against, there will be a claim for total loss on the freight policies, the shipowner not being able to collect any freight from the consignee. (b) When only a portion of the cargo is sold, and the rest is forwarded, the amount of freight due by the consignee is the excess of the bill of lading freight on the portion delivered beyond the amount of advance freight. If the full freight of the delivered portion does not exceed the advance freight the consignee has nothing to pay. This follows from the decision in Allison v. Bristol Marine, House of Lords, 1876,1 in which a ship took a cargo of coal from Greenock to Bombay; the charter-party provided that half the freight was to be paid on signing bill of lading, and the remainder on right delivery of the cargo. The vessel was lost before entering

1 I App. Cas. 209