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SECT. 63.

2. Chartered freight on homeward voyage is insured by policy on prior outward voyage. On the outward voyage the ship becomes a constructive total loss, so freight on homeward voyage is lost. No notice of abandonment need be given.1

3. A ship is captured by the enemy. The owner, hearing of this capture, gives notice of abandonment. The ship is recaptured and restored to her owner before action brought. The notice of abandonment is ineffectual. This is only a partial loss.2

4. A ship insured against war risks is captured, and the assured gives notice of abandonment. The insurer declines to accept it. The assured commences an action. After the issue of the writ, the Prize Court, on the termination of the war, decrees the restoration of the ship. This is a valid abandonment, and the assured can recover for a total loss. 3

5. A ship is sunk in deep water in harbour. Notice of abandonment is given, but not accepted, and then the insurer, on his own initiative, and at great expense, recovers the ship before action brought. The notice is valid, and the assured can recover for a total loss.4

6. Policy on freight from New Zealand to San Francisco. The ship strands near Honolulu, and the cargo, which consists of coal, gets wetted. Ship and cargo are both sold at Honolulu. If the coal had been dried and sent on, the cost would have been more than its worth. There is a total loss of freight, and no notice of abandonment is necessary."

NOTE. The term "abandonment" is used in three different, but allied, senses. First, and strictly, it denotes the voluntary cession by the assured to the insurer of whatever remains of the subject-matter insured in case of a constructive total loss. Secondly, but incorrectly, it is used as equivalent to notice or tender of abandonment, that is to say, the act by which the assured signifies to the insurer his election to abandon what remains and claim for a total loss. Thirdly, it denotes the cession which takes place, by operation of law, of whatever remains of the subject-matter insured when the insurer settles for a total loss; see Note D, post, p. 146.

1 Rankin v. Potter (1873), L. R. 6 H. L. 83.

2 Bainbridge v. Neilson (1808), 10 East, 329; cf. Dean v. Hornby (1854), 3 E. & B. 180, 190.

3 Ruys v. Royal Exchange (1897), 2 Q. B. 135, reviewing previous

cases.

4 Sailing Ship Blairmore v. Macredie (1898), A. C. 593.

3 Trinder v. Thames and Mersey Mar. Ins. Co. (1898), 2 Q. B. at p. 119, C. A.

It is an open question whether notice must be given if the subject- SECT. 63. matter must inevitably perish before notice could be received and acted on, though the subject-matter exists when the election to abandon is made.1

Notice of abandonment can only be given by or on behalf of the owner of the subject-matter insured, e.g. it cannot be given by a pledgee of the policy, but it can be given by a joint owner who manages for the rest.2

It seems that where due notice of abandonment has not been given, the right to give notice of abandonment may revive on change of circumstances.3

According to the law of most foreign countries, the validity of a notice of abandonment must be determined by reference to the state of facts at the time when notice is given, but in England, as Lord Herschell says, the rule is "that if in the interval between the notice of abandonment and the time when legal proceedings are commenced there has been a change of circumstances reducing the loss from a total to a partial one, or, in other words, if at the time of action brought the circumstances are such that a notice of abandonment would not be justifiable, the assured can only recover for a partial loss," but this rule does not extend to a change of circumstances when brought about by the action of the insurer. The issue of the writ is therefore all important in England. Until that be done, the notice of abandonment is liable to be defeated.

abandon

§ 64.—(1.) Where there is a valid abandonment, Effect of whatever remains of the subject-matter insured is there- ment. upon [transferred] to the insurer, and the insurer is 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.5

1 Kaltenbach v. Mackenzie (1878), 3 C. P. D. at p. 475, per Brett, L.J.

2 Arnould, Ed. 6, p. 956; Jardine v. Leathly (1863), 32 L. J. Q. B. 132.

3

p. 604.

Stringer v. Eng. Mar. Ins. Co. (1870), L. R. 5 Q. B. 599, at

Sailing Ship Blairmore v. Macredie (1898), A. C. at p. 610.

5 Arnould, Ed. 6, p. 973; McArthur, Ed. 2, p. 157; Stewart v. Greenock Ins. Co. (1848), 2 H. of L. Cas. at p. 183; Rankin v. Potter (1873), L. R. 6 H. L., at pp. 118, 144; and § 80.

SECT. 64.

(2.) Upon abandonment, any act or thing done subsequent to the casualty causing the loss by the assured or his agents for the protection of the subject-matter insured, is at the risk of the insurer and for his benefit, provided such act or thing be done in good faith and reasonably.1

(3.) 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, but with this exception he acquires no rights in respect of any contract of affreightment which the assured may have.2

(4.) Where the ship is carrying the owners' goods the insurer is entitled to a reasonable remuneration for the carriage of them subsequent to the casualty causing the loss.3

Illustrations.

1. Ship insured from Quebec to Liverpool. She is first damaged by an iceberg, and again damaged in entering the dock at Liverpool. The cargo is delivered and freight paid. After survey the ship is found to be not repairable, and the owner abandons her to the insurer. The freight belongs to the insurer on ship.4

2. Policy on ship. The ship half-way on the voyage becomes a total loss and is abandoned to the insurers, but the cargo is landed, and sent on by the master in another ship to its destination. The insurer on ship is not entitled to the freight so earned.5

3. Policy on ship, which has been chartered. The ship is injured

1 Rankin v. Potter (1873), L. R. 6 H. L. at p. 119.

2 Sea Ins. Co. v. Hadden (1884), 13 Q. B. D. 706, C. A.

3 Miller v. Woodfall (1857), 27 L. J. Q. B. 120; see at p. 123 as to the American rule of apportionment.

4 Stewart v. Greenock Ins. Co. (1848), 2 H. of L. Cas. 159; on these facts there is no loss of freight for which assured can claim against insurer on freight, Scottish Mar. Ins. v. Turner (1853), 1 Macq. H. L. 334. 5 Hickie v. Rodocanachi (1859), 29 L. J. En. 273. But the insurer is entitled to pro rata freight earned under a foreign contract of affreightment; see London Assurance v. Williams (1893), Times L. R. 97, affirmed ibid., p. 257, C. A.

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by collision and cannot earn freight. Her injuries are such that she SECT. 64. is abandoned to the insurer. The insurer on ship is not entitled to the damages which assured may recover from the ship in fault for loss of freight.'

4. Policy on ship from Pensacola to Hartlepool. Part of the freight is prepaid. The ship is stranded getting in to Hartlepool, but the cargo is delivered, and freight earned. Assured abandons the ship. The insurer is not entitled to the prepaid freight, but only to the balance payable on arrival.2

NOTE. For further illustrations, see notes to § 80, post, p. 102. Ail authorities agree that abandonment operates as a cession or transfer of whatever remains of the subject-matter insured, from the assured to the insurer. But is the transfer absolute or conditional? In the first place, a valid abandonment may be defeated by a subsequent change of circumstances before action brought, e.g., in the case of capture and recapture, see § 63 (11) and notes. In the second place, can the insurer disclaim an onerous property which is properly abandoned to him? See that question discussed in the note to § 80. See further, Note D on abandonment, post, p. 146.

Partial Losses (including Salvage and General Average).

average

§ 65.-(1.) A partial loss of the subject-matter Particular insured may be either a particular average loss or a loss. general average loss.3

(2.) A particular average loss is a loss, caused by a peril insured against, which is not a general average loss, and which falls exclusively on the owner or other person interested in insurable property, giving him no right of contribution against other persons who may be interested in the common marine adventure.1

1 Sea Ins. Co. v. Hadden (1884), 13 Q. B. D. 706, C. A.

2 The Red Sea (1896), P. 20, C. A.

3 McArthur, Ed. 6, p. 163, but cf. § 67 (4) as to jettison.

♦ Arnould, Ed. 6, p. 927; Gow on Insurance, p. 189; McArthur, Ed. 2, pp. 163, 212, 241; Kidston v. Empire Ins. Co. (1866), L. R. 1 C. P. at p. 544; Price v. A 1 Small Damage Assn. (1889), 22 Q. B. D. at p. 590, C. A.

G

SECT. 65.

Salvage

NOTE. The expression "particular average loss" involves a redundancy, but the use of the term among lawyers is inveterate. "A general average differs from a particular average in its nature and incidence. The former is a partial loss, voluntarily incurred for the common safety, and made good proportionably by all parties concerned in the adventure; the latter is a partial loss, fortuitously caused by a maritime peril, and which has to be borne by the party upon whom it falls." 1

The distinction in English law between "particular average" and "particular charges" corresponds with the distinction in French law between "avarie particulière matérielle” and “avarie particulière en frais."2 As to particular charges, see § 77 (2) and § 79; and as to particular average warranties (or franchises, as they are sometimes inaccurately called), see § 77.

See further, Note C on definition of "average," post, p. 145, and the illustrations to §§ 70, 72, and 77.

§ 66.—(1.) Subject to any express provision in the charges. policy, salvage charges may be recovered in like manner as a particular average loss.3

(2.) "Salvage charges" mean the charges recoverable by a salvor, under maritime law. 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.1

1 McArthur, Ed. 2, p. 163.

2 Gow on Insurance, p. 221.

* McArthur, Ed. 2, pp. 171, 312; Aitchison v. Lohre (1879), 4 App. Cas. at p. 765; cf. Steamship Balmoral v. Marten (1900), 2 Q. B. 748, as to effect of valuation in policy.

• McArthur, Ed. 2, pp. 171, 261; cf. Anderson v. Ocean Mar. Ins. Co. (1884), 10 App. Cas. 107. As to the meaning of "salvage," see Aitchison v. Lohre (1879), 4 App. Cas. at pp. 765, 766; Carver's Carriage by Sea, §§ 361-445.

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