and duty paid beforehand; provided that in the SECT. 72. gross value. "Gross proceeds" mean on sale are paid by the sellers.1 (5.) Where any sale or other charges on damaged goods or merchandise are paid or payable by the buyers, such charges must be added to the gross proceeds before establishing the ratio of damage, as above provided, and in the event of a claim being established, such charges are subsequently recoverable from the insurer as "Extra charges. "2 Illustrations. 1. Unvalued policy on coffee from Jamaica to London. The insurable value, i.e. the invoice cost, plus shipping expenses and charges of insurance, is £200. Half the coffee is damaged on the voyage. The value of the damaged coffee in London is half that of the undamaged coffee. The selling price in London fixes the measure or percentage of depreciation, but not the amount the insurer has to pay. That must be determined by applying the depreciation to the insurable value, so that in this case the insurer has to pay £50.3 2. Policy on 40 bales of cotton, which are shipped as part of a cargo of 1600 bales of cotton belonging to different owners. Owing to sea perils 200 bales have to be jettisoned, and the rest are damaged and the marks wholly obliterated. The 1400 bales are sold for the benefit of whom it may concern. This is a partial loss, and the assured is entitled to recover, as if five of his 40 bales had been jettisoned, and the rest damaged to the extent shown by the sale of the whole.4 1 McArthur, Ed. 2, p. 253; cf. Gow on Insurance, p. 198; Rules of Practice of Association of Average Adjusters, 1900, post, p. 157. 2 McArthur, Ed. 2, p. 271; cf. Gow on Insurance, p. 125; Francis v. Boulton (1895), 65 L. J. Q. B. 153 (conditioning charges). 3 Usher v. Noble (1810), 12 East, 639, and § 16, ante. The test adopted excludes the rise or fall of the London market. 4 Spence v. Union Mar. Ins. Co. (1868), L. R. 3 C. P. 427. SECT. 72. Apportionment of 3. Policy on 1700 packages of tea, valued at £6000. Part of the tea is sea-damaged, and the remainder, which arrives undamaged, sells in consequence for a smaller price. The insurer is not liable for the depreciation so caused. 1 4. Policy on cargo of sheet iron in separate packages, average payable" on each packet separately or on the whole." Damage is sustained before the termination of the risk. The whole of the iron is unpacked and examined. The damaged iron is sold, and the rest is repacked and sent on. The insurer is not liable for the expenses incurred in examining and repacking the packages which were not damaged.2 NOTE.-The policy of the rules contained in subsects. (3) to (5) has often been criticized, but they are only primâ facie rules, applicable to ordinary merchandise. There are many matters to which they could not apply, e.g. loss of part of a machine, rendering the whole valueless.3 Such cases are usually provided for by special clauses. See, further, § 76, post. § 73. Where different species of property are insured valuation. under a single valuation, the valuation must be apportioned over the different species in proportion to their relative insurable values, as in the case of an unvalued policy. The insured value of any part of a species is such proportion of the total insured value of the same as the insurable value of the part bears to the insurable value of the whole ascertained in both cases as above.4 General average § 74. Subject to the limit of the sum insured and any contribu- express provision in the policy, where the assured has paid, or is liable for, any general average contribution, the measure of indemnity is the full amount of such con tions. 1 Cator v. Great Western Ins. Co. (1873), L. R. 8 C. P. 552, 561. There was a special warranty as to sea-damage, but the judgment establishes the general principle. 2 Lysaght v. Coleman (1895), 1 Q. B. 49, C. A. 3 Cf. British Columbia Co. v. Nettleship (1868), L. R. 3 C. P. 499 (measure of damage against shipowner); and see § 76, post. ♦ McArthur, Ed. 2, pp. 244-246; Gow on Insurance, p. 191; Rules of Practice of Association of Average Adjusters, 1900, post, p. 157; and see § 77, post. tribution if the subject-matter liable to contribution is SECT. 74. insured for its full contributory value; but if such subject-matter be not insured for its full contributory value, or if only part of it be insured, the indemnity payable by the insurer must be reduced in proportion to the under insurance.1 NOTE. This section deals with adjustment. As to liability, see § 67, ante. Suppose goods are insured for £1500 by a valued policy. General average is incurred, of which £80 is found to be the proportion payable by the owner of the goods, their contributory value being taken at £1600. The insurer is liable for 15–16ths of £80, viz. £75. But if the contributory value of the goods be £1200, the insurer is liable for the whole £80. to third § 75. Where the assured has effected an insurance in Liabilities express terms against any liability to a third party, the parties. measure of indemnity, subject to the limit of the sum insured and any express provision in the policy, is the amount paid or payable by him to such third party in respect of such liability.2 NOTE.-An insurance against liability to a third person is a distinct engagement added to the ordinary policy. In a case where it was held that the "sue and labour" clause in the policy could not be read in with the running-down clause, so as to supplement it, the Court, speaking of the latter, say: "It is in each case a special contract, very different from the contract of insurance in its ordinary form ; and the liability under it does not depend upon the ordinary 1 See McArthur, Ed. 2, pp. 206, 210; Gow on Insurance, p. 301; Rules of Practice of Association of Average Adjusters, 1900. As to the effect to be given to the foreign general average clause, see McArthur, Ed. 2, p. 208, and Greer v. Poole (1880), 5 Q. B. D. 272; The Mary Thomas (1894), P. 108, C. A. As to effect of valuation in policy, see Steamship Balmoral v. Marten (1900), 2 Q. B. 748. As to contribution by goods where ship is a constructive total loss, see Henderson v. Shankland (1896), 1 Q. B. 525, C. A. 2 Arnould, Ed. 6, pp. 23, 24, and 730; McArthur, Ed. 2, pp. 320, 370, and the ordinary forms of running-down clauses; The Niobe (1891), A. C. 401, H. L. (collision); cf. Joyce v. Kennard (1871), L. R. 7 Q. B. 78 (lighterman's liability). SECT. 75. perils covered by the policy, but upon the special matters mentioned in the clause itself."1 General provisions measure of indemnity. Running-down clauses were introduced into policies in consequence of the decision in Devaux v. Salvador,2 that the insurer under the ordinary form of policy was not liable for the balance which one ship had to pay to the other when both were to blame for a collision. The forms at first introduced have again been modified to meet other decisions.3 The insurer is liable under the ordinary form of policy for injury caused by collision to the assured's ship, whether she be in fault or not.4 The construction of a collision or running-down clause depends entirely on the language used by the parties in the particular clause in question.5 Though the shipowner's liability for collision is limited by statute, he is expressly authorized to insure, see Merchant Shipping Act, 1894 (57 & 58 Vict. c. 60), § 506, post, p. 141. § 76.—(1.) Where there has been a loss in respect of as to any subject-matter not expressly provided for in the foregoing provisions of this Digest, the measure of indemnity must be ascertained, as nearly as may be, in accordance with those provisions, in so far as applicable to the particular case, but if there be no provision applicable to the case, then in accordance with usage." 1 Xenos v. Fox (1868), L. R. 3 C. P. at p. 635, affirmed L. R. 4 C. P. 665. 2 Devaux v. Salvador (1836), 4 Ad. & E. 420. 3 See Tatham v. Burr (1898), A. C. at p. 385. Davidson v. Burnand (1868), L. R. 4 C. P. at p. 121, per Willes, J. As to the scope to be given to the term "collision," see Chandler v. Blogg (1897), 1 Q. B. 32 (collision with sunken barge); The Niobe (1891), A. C. 401 (collision with tug). 5 The undermentioned recent cases may be referred to:-The Niobe (1891), A. C. 401 (tug and tow regarded as identical); The Munroe (1893), P. 248 (meaning of sunken wreck); Union Mar. Ins. Co. v. Borwick (1895), 2 Q. B 279 ("piers or similar structures" include artificial bank); Shelbourne v. Law Investment Ins. Corpn. (1898), 2 Q. B. 626 (loss by detention during repairs not recoverable); Tatham v. Burr (1898), A. C. 382 (removal of obstructions under statutory powers); Burger v. Indemnity Mutual Mar. Ins. Co. (1900), 2 Q. B. 348, C. A. (injury to ship or vessel itself). • See notes to §§ 72 and 75, and such cases as Baring v. Marine Ins. Co. (1893), W. N., p. 164 (stock sent abroad by registered letter). (2.) Nothing in the provisions of this Digest relating SECT. 76. to the measure of indemnity affects the rules relating to double insurance, or prohibits the insurer from disproving interest wholly or in part, or from showing that at the time of the loss the whole or any part of the subjectmatter insured was not at risk under the policy.1 warranties. § 77.-(1.) Where the subject-matter insured is Particular warranted free from particular average, the assured average cannot recover for a loss of part, whether the policy be valued or unvalued, unless the contract contained in the policy be apportionable; but if the contract be apportionable, the assured may recover for a total loss of any apportionable part. The contract is apportionable where the policy itself provides for apportionment, or where by usage the contract is treated as apportionable.2 (2.) Where the subject-matter insured is warranted free from particular average, either generally or under a certain percentage, the insurer is nevertheless liable for salvage charges, and for particular charges and other expenses properly incurred pursuant to the provisions of the suing and labouring clause in order to avert a loss insured against.3 1 See § 33 (double insurance), and note to § 28 as to short interest. 2 McArthur, Ed. 2, pp. 242, 341; Gow on Insurance, p. 191; Ralli v. Janson (1856), 6 E. & B. 422 (bags of seed), read with Duff v. Mackenzie (1857), 3 C. B. (N. S.) 16 (master's effects), and Cator v. Great Western Ins. Co. (1873), L. R. 8 C. P. at p. 559. In Duff v. Mackenzie it was held that where the goods were different in specie the contract was apportionable, but it is submitted that this is only one test of severability. For cases on the F. P. A. warranty, see Hagedorn v. Whitmore (1816), 1 Stark. 157; Navone v. Haddon (1850), 9 C. B. 30; Kidston v. Empire Ins. Co. (1866), L. R. 1 C. P. at p. 548 (reviewing cases); De Mattos v. Saunders (1872), L. R. 7 C. P. 570. McArthur, Ed. 2, p. 312; Kidston v. Empire Ins. Co. (1866), L. R. 1 C. P. 535; and § 79. H |