SECT. 77. (3.) Unless the policy otherwise provides, where the subject-matter insured is warranted free from particular average under a specified percentage (a.) A general average loss or liability cannot be added to a particular average loss to make up the specified percentage;1 (b.) In the case of a voyage policy, successive losses may be added together to make up the specified percentage; 2 (c.) In the case of a time policy, successive losses on the same voyage may be added together, but losses occurring on different voyages cannot be added together to make up the specified percentage.3 For the purpose of ascertaining whether the specified percentage has been reached, regard shall be had only to the actual loss suffered by the subject-matter insured. Particular charges and the expenses of and incidental to ascertaining and proving the loss must be excluded. But conditioning charges and other expenses incurred at the port of destination, which diminish the loss to an extent exceeding the said charges and expenses, may be added to the loss eventually ascertained.4 1 Price v. A 1 Small Damage Assn. (1889), 22 Q. B. D. 580, C. A.; and cf. Oppenheim v. Fry (1863), 3 B. & S. at p. 884. The decision has been criticized as being contrary to the mercantile understanding. See McArthur, Ed. 2, pp. 135, 386. 2 McArthur, p. 295; and illustration 3. 3 Stewart v. Merchants' Mar. Ins. Co. (1885), 16 Q. B. D. 619, C. A.; see this case criticized, McArthur, Ed. 2, p. 297. • As to two last paragraphs, see Rules of Practice of Association of Average Adjusters, 1900. The expenses of protest, survey, and other proofs of loss are not included in the 3 per cent. See post, p. 157. Illustrations. 1. Policy on master's effects, "free of all average." The effects include articles of different species, e.g. feather bed, chronometer, spyglass, etc. Some of the effects are totally lost by perils of the seas, others are saved. The assured can recover for those which are totally lost.1 2. Policy on iron rails, warranted "free from particular average unless the ship be stranded." The ship is not stranded, but becomes a constructive total loss. The rails are saved, landed, and sent on to their destination in another ship at an increased freight. The assured cannot recover the extra freight he has had to pay.2 3. Policy on ship from London to Calcutta warranted "free from average under 3 per cent., etc." The ship loses a boat, and afterwards sustains other sea-damage, which, if added to the loss of the boat, brings up the total to more than 3 per cent. The losses can be aggregated.3 4. Time policy on ship warranted "free from average under 3 per cent., etc." The ship makes several distinct voyages during the currency of this policy, and on the several voyages incurs small lamages. These cannot be added together to make up the 3 per cent.4 5. Policy on ship waranted "free from average under 3 per cent., etc." The ship goes into dock to have her bottom cleaned in ordinary course. It is then discovered that her stern post has been broken while at sea. This takes eight days to repair. The cleaning would have taken only three days. The dock dues can be apportioned, so as to bring up the particular average loss to more than 3 per cent." 995 SECT. 77. § 78.-(1.) Unless the policy otherwise provides, and Cumulasubject to the provisions of this Digest, the insurer is liable 1 Duff v. Mackenzie (1857), 3 C. B. N. S. 16. 2 Great Indian Peninsula Railway v. Saunders (1861), 1 B. & S. 41; affirmed 2 B. & S. 266; discussed and explained Kidston v. Empire Ins. Co. (1866), L. R. 1 C. P. at p. 548. 3 Blackett v. Royal Exchange (1832), 2 Cr. & J. 244. 4 Stewart v. Merchants' Mar. Ins. Co. (1885), 16 Q. B. D. 619, C. A. 5 Marine Ins. Co. v. China Trans-Pacific Co. (1886), 11 App. Cas. 573; discussed Ruabon Steamship Co. v. London Assurance (1900), A. C. 6, H. L. See Rules of Practice of Association of Average Adjusters in this connexion, post, p. 155. tive losses. SECT. 78. for successive losses, even though the total amount of such losses may exceed the sum insured.1 (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 affect the liability of the insurer under the suing and labouring clause.2 Suing and clause. Illustrations. 1. A ship is insured against perils of the seas, but not against fire. She is sea-damaged, but the sea-damage is not repaired. Afterwards she is destroyed by fire. The assured cannot recover anything on this policy.3 2. A ship is insured by her owners by a time policy. After insurance she is chartered. On the voyage out the ship is damaged, and the repairs are paid for by the charterers, and the cost specially insured. On the voyage home she is totally lost. The shipowner can only recover for the total loss.4 NOTE.-In Lidgett v. Secretan,5 where the assured recovered for both a partial and total loss, the losses were covered by different and consecutive policies, and the fact that the insurer was the same person in both cases was held to be immaterial. As to suing and labouring clause, see next section. § 79.-(1.) Where the policy contains a suing and labouring 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 1 Arnould, Ed. 6, p. 985; Le Cheminant v. Pearson (1812), 4 Taunt. 367; cf. Aitchison v. Lohre (1879), 4 App. Cas. at p. 763. 2 McArthur, Ed. 2, p. 220; Livie v. Janson (1810), 12 East, 648. As to proviso, see ibid. at p. 655. 3 Livie v. Janson (1810), 12 East, 648, at p. 654, where this case is put. The Dora Forster (1900), P. 241. 5 Lidgett v. Secretan (No. 2), L. R. 6 C. P. 616.. any expenses properly incurred pursuant to the clause, SECT. 79. 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 generally or under a certain percentage.1 (2.) General average losses and contributions and salvage charges, as defined by this Digest, are not recoverable under the suing and labouring clause.2 (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.3 (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.* Illustrations. 1. Insurance on chartered freight, warranted free from particular average. The ship in consequence of sea-damage becomes a constructive total loss, but the cargo is landed and sent on in another ship. The expenses of landing, warehousing, and reloading the cargo can be recovered as particular charges under the sue and labour clause. 2. Policy containing a collision clause. The assured is sued for running down another ship, and incurs costs in defending the action. These costs are not recoverable from the insurer under the sue and labour clause.6 1 McArthur, Ed. 2, p. 262; Gow on Insurance, p. 226; Lowndes, Ed. 2, p. 202; Lohre v. Aitchison (1878), 3 Q. B. D. at p. 567, C. A. (reversed on another point); and Kidston v. Empire Ins. Co. (1866), L. R. 1 C. P. 535, affirmed L. R. 2 C. P. 357, Ex. Ch. 2 Aitchison v. Lohre (1879), 4 App. Cas. 755, especially at pp. 765, 768. For definition of salvage charges, see § 66, ante. 3 Kidston v. Empire Ins. Co. (1866), L. R. 1 C. P. at pp. 546, 547, per Willes, J.; Meyer v. Ralli (1876), 1 C. P. D. 358. McArthur, Ed. 2, p. 263; Kidston v. Empire Ins. C. (1866), L. R. 1 C. P. at p. 544; Currie v. Bombay Ins. Co. (1869), L. R. 3 P. C. 72. 5 Kidston v. Empire Ins. Co. (1866), L. R. 1 C. P. 535; affirmed L. R. 2 C. P. 357, Ex. Ch. 6 Xenos v. Fox (1869), L. R. 4 C. P. 665, Ex. Ch. SECT. 79. Right of subrogation. 3. Policy on freight. A ship bound for L. is stranded at P. The cargo is landed, and, in order to earn freight, is sent on by rail to L. at a cost of £200. It might have beer sent on by ship at a cost of The insurer on freight is liable for £70 only, under the sue and labour clause.1 £70. 4. Policy for £1000 on ship and cargo valued at £4000. Expenses are incurred under the sue and labour clause to the extent of £2000. The insurer is liable to contribute £500.2 5. Live cattle are insured against all risks. The ship, owing to sea perils, is detained in a port of refuge for some weeks. The cost of extra fodder supplied to the cattle during the detention is recoverable under the sue and labour clause.3 NOTE.-The assured and his agents are bound by law to use all reasonable efforts to avert or minimise a loss.4 The suing and labouring clause enables the assured to recover the expenditure involved in those efforts from the insurer. The Continental Codes embody the conditions of the suing and labouring clause, so that under those codes the liability of the insurer is determined by law, whereas in England it rests on contract. The sue and labour clause is usually supplemented by the "waiver clause" (see Lloyd's policy, post, p. 120), which provides that "no acts of the insurer or insured in recovering, saving, or preserving the property insured shall be considered as a waiyer or acceptance of abandonment."5 Rights of Insurer on Payment. § 80.—(1.) Where the insurer pays for a total loss, whatever may remain of the subject-matter insured is thereupon [transferred] to him, and he is thereby subrogated to all the rights and remedies of the assured in 1 Lee v. Southern Ins. Co. (1870), L. R. 5 C. P. 397. 2 Dixon v. Wentworth (1879), 4 C. P. D. at pp. 377, 378. The case is over-ruled only so far as it decided that salvage expenses were recoverable under the clause. 3 The Pomeranian (1895), P. 349. 4 Benson v. Chapman (1849), 2 H. L. C. 496; Notara v. Henderson (1872), L. R. 7 Q. B. 225, Ex. Ch. (shipper v. shipowner). 5 McArthur, Ed. 2, p. 272; Lowndes, Ed. 2, p. 165. |