SECT. 56. operation of a peril insured against, and the apprehension of its operation. As Willes, J., says in one case, the insurer is not liable for a loss caused by the prudence of the master or owner.1 "It has often been observed," says Blackburn, J., "that a sale by the master is not one of the underwriter's perils, and is only material as showing that there is no longer anything which can be done to save the thing sold for whom it may concern." 992

Partial and total loss.

§ 57.—(1.) A loss may be either total or partial. Any loss other than a total loss, as hereinafter defined, is a partial loss.3

(2.) A total loss may be either an actual total loss, or a constructive total loss.4

(3.) Unless a different intention appears from the terms of the policy, an insurance against total loss includes a constructive, as well as an actual, total loss.5

(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.6

NOTE.-A loss must be either total or partial. A total loss of part is a partial loss. For example, if 100 bags of seed be insured, and 10 be destroyed by perils insured against, this is a partial loss. Cf. Arnould, Ed. 6, p. 1017. An apparent, but not a real, exception to this rule occurs when two or more distinct interests are covered by a single valuation. This is provided for by §§ 73 and 77 (1).

Primâ facie, and the presumption is a strong one, an insurance against total loss covers a constructive, as well as an actual, total loss. But the presumption may be rebutted, see McArthur, Ed. 2, p. 312.

1 Philpott v. Swann (1861), 10 C. B. (N. S.) at p. 282.

2 Rankin v. Potter (1873), L. R. 6 H. L. at p. 122.

3 McArthur, Ed. 2, p. 242; Arnould, Ed. 6, p. 1016.

4 Arnould, Ed. ¤, pp. 951, 988; Roux v. Salvador (1836), 3 Bing. N. C. at p. 285, Ex. Ch.

5 Adams v. Mackenzie (1863), 13 C. B. (N. S.) 446; Sailing Ship Blairmore v. Macredie (1898), A. C. at p. 598; and see Forwood v. North Wales Ins. Co. (1880), 9 Q. B. D. 732, C. A. as to by-laws of a mutual society.

• Arnould, Ed. 6, p. 1163; Benson v. Chapman (1849), 2 H. L. C. 696; King v. Walker (1864), 2 H. & C. 384.

§ 58.-(1.) Where the subject-matter insured is SECT. 58. destroyed, or irreparably damaged, or where the assured Actual is irretrievably deprived thereof, there is an actual total total loss. loss.1

(2.) Insurable property is deemed to be irreparably damaged where it is so damaged as to cease to exist in specie, or as that it cannot be rendered capable of arriving at its destination in specie. Insurable property ceases to exist in specie when it no longer answers to the denomination under which it was insured.2

(3.) In the case of an actual total loss no notice of abandonment need be given.3

Illustrations.

1. Hides are insured from Valparaiso to Bordeaux. In consequence of sea damage they arrive at Rio in a state of incipient putridity, and are sold there. Their state is such that they would be wholly putrid if carried on to Bordeaux. This is an actual total loss.1 2. Insurance on goods in barges, as interest may appear. A cargo of rice valued at £450 is declared. The barge is sunk, and the rice remains under water for two tides. The rice is so damaged that the consignee refuses to accept it. Afterwards it is kiln-dried at a cost of £60, and then sold for £110. The rice still remains in specie, so this is only a partial loss.5

3. A ship is deserted in a sinking condition. She is towed into port by salvors and sold, by order of the Court, for less than the salvage costs. This is an actual total loss.6

1 Arnould, Ed. 6, pp. 951, 988; McArthur, Ed. 2, p. 145; Fleming v. Smith (1848), 1 H. of L. Cas. at 535; Cossman v. West (1887), 13 App. Cas. 160; Rankin v. Potter (1873), L. R. 6 H. L. at p. 127.

2 McArthur, Ed. 2, p. 146; Roux v. Salvador (1836), 3 Bing. N. C. 266, 287, Ex. Ch.; Asfar v. Blundell (1896), 1 Q. B. at p. 127, C. A.

3 Kaltenbach v. Mackenzie (1878), 3 C. P. D. at p. 471, C. A.; cf. Rankin v. Potter (1873), L. R. 6 H. L. at p. 106.

Roux v. Salvador (1836), 3 Bing. N. C. 266, Ex. Ch.; cf. Farnworth v. Hyde (1865), 18 C. B. (N. S.) 835, as dealt with L. R. 2 C. P. at p. 226. 5 Francis v. Boulton (1895), 65 L. J. Q. B. 153.

• Cossman v. West (1887), 13 App. Cas. 160, P. C. reviewing the cases.

SECT. 58.

Missing ship.

Effect of tranship

4. Insurance on "profit on charter" warranted free from all average. The assured, having chartered a ship for a lump sum, puts her up as a general ship. The bill of lading freight exceeds the chartered freight, but in consequence of sea damage to cargo only a portion of it becomes payable, and the portion payable is less than the charter freight which assured has to pay. This is a total loss of profit on charter.1

NOTE.-Where by a peril insured against the goods of different owners are damaged and become so inextricably mixed as to be incapable of identification (e.g. marks obliterated), the loss is partial, not total. See further, the note to § 61.

§ 59. Where the ship concerned in the adventure is missing, and after the lapse of a reasonable time no news of her have been received, an actual total loss may be presumed.3

NOTE.-Under the Continental Codes, arbitrary limits of time are fixed, after the expiration of which a missing ship may be presumed to be lost.

§ 60. Where, by a peril insured against, the voyage ment, etc. is interrupted at an intermediate port or place, under such circumstances as, apart from any special stipulation in the contract of affreightment, to justify the master in landing and re-shipping the goods or other movables, or in transhipping them, and sending them on to their destination, the liability of the insurer continues, notwithstanding the landing or transhipment.1

NOTE.-The English rules as to transhipment are not very well settled. In the United States, and under some of the foreign codes, it is the duty of the master to tranship whenever it is reasonable to do so.

1 Asfar v. Blundell (1896), 1 Q. B. 123, C. A. Semble an actual total loss.

2

Spence v. Union Ins. Co. (1868), L. R. 3 C. P. 427.

3 Green v. Brown (1744), 2 Stra. 1199; McArthur, Ed. 2, p. 109.

Arnould, Ed. 6, p. 358; McArthur, Ed. 2, p. 263; cf. Bold v.

Rotherham (1846), 8 Q. B. at p. 808

Concerning the master's authority or duty to tranship as between SECT. 60, shipper and shipowner, see Carver's Carriage by Sea, Ed. 3, §§ 294, 304. The extent of his powers is determined by the law of the flag.1

tive total

§ 61.—(1.) In the case of damage to a ship, there is Construca constructive total loss where she is so damaged by a loss defined. peril insured against, that the cost of repairing the damage would exceed the value of the ship when repaired.2

In estimating the cost of repairs, the expense of future salvage operations, and any future general average contribution to which the ship would be liable (if repaired) must be taken into account.R

(2.) Where the assured is deprived of the possession of his ship or goods by a peril insured against, and (a) it is uncertain whether he can recover the ship or goods, as the case may be, or (b) the cost of recovering them would exceed their value when recovered, there is a constructive total loss.1

(3.) In any case, other than that of a ship, there is a constructive total loss when the adventure insured is wholly frustrated by a peril insured against, and in particular there is a constructive total loss where the subjectmatter insured is so damaged or affected by a peril

1 Carver's Carriage by Sea, Ed. 3, § 204; and see Cammell v. Sewell (1860), 29 L. J. Ex. 350, Ex. Ch. (power to sell).

2 McArthur, Ed. 2, pp. 147, 149; Arnould, Ed. 6, p. 1031; Moss v. Smith (1850), 19 L. J. C. P. 225, 228, approved Aitchison v. Lohre (1879), 4 App. Cas. at p. 762; Rankin v. Potter (1873), L. R. 6 H. L. at p. 116. In applying this test the real value and not the policy valuation is to be regarded, Irving v. Manning (1847), 1 H. of L. Cas. 287.

3 Kemp v. Halliday (1866), L. R. 1 Q. B. 520, Ex. Ch. Conversely, freight which has been earned is not to be taken into account, Parker v. Budd (1896), 2 Com. Cas. 133; see further McArthur, Ed. 2, p. 148.

* See Arnould, Ed. 6, pp. 1041, 1058; Shepherd v. Henderson (1881), 7 App. Cas. at pp. 69–71; Sailing Ship Blairmore v. Macredie (1898), A. C. 593; Roux v. Salvador (1836), 3 Bing. N. C. at p. 286 (goods).

SECT. 61. insured against, that, having regard to cost, it is unreasonable that the adventure should be prosecuted to its termination,1

(4.) For the purpose of determining what is reasonable, regard must be had to the course which would be pursued by a prudent uninsured owner under the circumstances of the case.2

Illustrations.

1. A ship is damaged by sea perils and puts into a foreign port. The master, after communicating with the owners, has her repaired at a cost exceeding her repaired value. After her arrival in London the owners give notice of abandonment. This is ineffectual. There is only a partial loss.3

2. Policy on freight valued at £2000. The ship strikes on a rock. The master puts into Pernambuco, and, instead of abandoning as he might have done, repairs the ship at a cost exceeding her repaired value, borrowing the money on bottomry. The ship arrives with her cargo. On arrival the ship is sold to satisfy the claim of the lender on bottomry, and the freight also is paid to him. The owner cannot repudiate the acts of the master, and, as freight has been earned, there is no loss of freight.4

3. Ship of a special class and size is valued at £17,000. In consequence of sea damage she puts into Mauritius, where she is sold for £1400. Her cost four years before the insurance was £20,000. The cost of repairing her would have been £10,500, and her selling value when repaired would have been £7,500; but a ship of that class and size, fitted for the particular trade, could not be built or bought for £10,500. The assured can only claim for a partial loss.5

1 McArthur, Ed. 2, pp. 150, 152; Farnworth v. Hyde (1866), L. R. 2 C. P. 204, Ex. Ch. (see damage to goods); Rodocanachi v. Elliott (1874), L. R. 9 C. P. 518, Ex. Ch. (goods in besieged town); Rankin v. Potter (1873), L. R. 6 H. L. 83, at pp. 102, 104 (freight); cf. Re Jamieson (1895), 2 Q. B. at p. 95, C. A. (freight).

2 Sailing Ship Blairmore v. Macredie (1898), A. C. 593; Roux v. Salvador (1836), 3 Bing. (N. S.) at p. 286 (goods). But perhaps the test is not applicable to freight, see Philpot v. Swan (1861), 11 C. B. (N. S.) at p. 282, per Willes, J.; cf. Rankin v. Potter (1873), L. R. 6 H. L. at p. 155. 3 Fleming v. Smith (1848), 1 H. L. Cas. 513.

4 Benson v. Chapman (1849), 2 H. L. C. 696, 723.

5 Grainger v. Martin (1862), 2 B. & S. 456, affirmed 4 B. & S. 9, Ex. Ch.