an express decision, that where the subject-matter insured has by a peril of the sea lost its form and species-where a ship, for example, has become a wreck or a mere congeries of planks, and has been bona fide sold in that state for a sum of money, the assured may recover a total loss without any abandonment. So Chief Justice Tindal, in the recent case of Benson v. Chapman (a) (which was referred to in a former part of this section), says—“It is unnecessary to cite authorities, to prove that where damage to the ship is so great, from the perils insured against, as that the owner cannot put her in a state of repair necessary for the pursuing the voyage insured, except at an expense greater than the value of the ship, he is not bound to incur that expense, but is at liberty to abandon and treat the loss as a total loss." But in the case of Doyle v. Dallas, tried before Lord Tenterden at Guildhall, on a policy of insurance on the ship Triton, averring a total loss by perils of the sea. The ship had been wrecked, and was sold by the owner, and soon afterwards got off by the purchaser, though at a great expense: Lord Tenterden, in summing up to the jury, said, "The only question is, whether this amounts to a total loss? The ship is not bodily and specifically lost; but circumstances may have occurred, which, according to the law established in cases of marine insurance, are equivalent to a total loss. I think the circumstances in this case will have that effect, if, at the time of the sale, that measure, on the sound exercise of the best judgment appeared most beneficial to all parties. It is not enough that the owner acted honestly in the sale, and intended to do for the best, the underwriters are not liable unless he formed a correct judgment, that is to say, the best and soundest judgment which could be formed under the circumstances which then existed. Nothing less than this will make a total loss, while the ship continues in existence. "If the ship could have come to England even in ballast (certainly with any cargo), so that on her arrival (a) 7 Scott's N. R. p. 641, and ante, p. 394. she would have been worth the money expended on her, she ought to have been repaired for the purpose. The loss of the voyage will not, in my opinion, make a constructive total loss of the ship. Some cases have been so decided; but as the thing remained in specie, I do not think that it amounted to a total loss. The best thing for the underwriters must be done not merely for the owner, and as they indemnify only against the loss of the ship, the loss of the voyage would not injure them. Taking all the circumstances into your consideration, if you are of opinion that the plaintiff, acting as he did, exercised a sound judgment as well for the benefit of the underwriters as for his own interest as owner, did, what at the time was best for all parties-your verdict will pass for the plaintiff—if otherwise, for the defendant." Verdict for the defendant. A motion was afterwards made for a new trial which was refused. After these observations with regard to average losses, and with the reference which I have made to a few of the leading cases which draw the line of distinction between them and total losses, either constructive requiring abandonment to the underwriters, or absolute total losses, when the thing insured has actually lost its form and species which require no abandonment; we will now confine our attention to the subject of average losses in particular, and, as the principles of law on this head are, as upon most other heads of marine insurance law, to be gathered from the words of that great Judge, Lord Mansfield, I shall at once refer the reader to the very important case of Lewis and another v. Rucker (a), fully treated of in a former part of this Treatise (b). In a subsequent case of Le Cras v. Hughes (c), Lord Mansfield said, that the case of Lewis v. Rucker should be the rule in all similar cases, viz., wherever there was a specific description of casks or goods: but in Le Cras v. Hughes, the property which consisted in various goods taken (a) 2 Burr. 1167. (b) Ante, p. 263, (c) B. R. East, 22 Geo. 3. Park Ins. p. 233. from an enemy, was valued at the sum insured, and part was lost by the perils of the sea; consequently the same rule could not be adopted, on account of the nature of the thing insured. The only mode was to go into an account of the whole value and take a proportion of that sum, as the amount of the goods lost. In the case of Dick and another v. Allen (a), which was an action before Mr. J. Buller, upon a policy of insurance to recover an average loss upon goods, the learned Judge observed, that in such cases, whether the goods arrived at a good or bad market, was immaterial, for the true way of estimating the loss, was to take them at the fair invoice price. And in Thelluson v. Bewick (b), it was held by Lord Kenyon, that in a policy of insurance the underwriter does not insure against any loss that may arise from the difference of the exchange. In Amery v. Rodgers (c), which was an insurance on the ship Dart from St. Kitts to London, on which the defendant had underwritten 2007., the plaintiff had written to his agent in London to effect a policy on ship and cargo, calculating the ship at 1,500l. of that sum. No goods were ever loaden on board. Lord Kenyon, though he first doubted, afterwards adopted the rule which the special jury assured him was established at Lloyd's Coffee-house for settling losses of this kind, namely, that as the policy never attached, the assured was entitled to recover such a proportion of the sum which the defendant had underwritten, as the property on which the policy attached bore to the whole. Mr. Justice Park observes (d), "that as clearness and precision are necessary upon all subjects, and more especially upon this, that it is to be borne in mind, that when we speak of the underwriter being liable to pay, whether for total or average losses, they are liable only in proportion to the sums (a) At Guild. after Mich. Term, 1785. Park Ins. 226. (b) Sit. after Mich. 34 Geo. 3, 1 Esp. 77. (c) 1 Esp. 207. The under writer is not which they have underwritten. Thus if a man underwrite 100%. upon property valued at 500l., and a total loss happen, he shall pay 100%., that being the amount of his subscription: and if only an average loss amounting to 60%. or 70%. per cent., then he shall pay only 60%. or 70%., being his proportion of the loss.” The learned Judge has left this passage without the qualification which more recent experience should have suggested; he was aware of the case of Le Cheminant v. Pearson (a), for it appears in the last edition by him in a note at page 49, but it ought to have been referred to at the part of his Treatise from which I have copied his general observations of the payments to which the underwriter's liabilities are limited. However, dismissing this remark, I must refer to the subject, to shew that those observations of the learned author must be taken now with several grains of allowance. The liability of the underwriter is not restricted to the single amount of his subscription, but he may be subject either to several average losses, or to an average and total loss, or to money expended (in the words of the policy which form part of the head of this section) "in and about the defence, safeguard, and recovery of the ship," to a much greater amount than his subscription. (b) I shall first refer to the case I have just mentioned, and afterwards to some other authorities. In that case, which was on a policy of insurance on a ship, "at and from Jersey to a port or ports in Norway," the first restricted to the amount of his count of the declaration averred that during the voyage the subscription, but he may ship, by force of the winds and the waves, and by the perils pay for an average and a total of the sea, was damaged to the amount of 373l. 13s. 10d., loss in the same and that thereupon the assured, their factors, servants, and several average assigns, did sue, labour, and travel for, in and about the defence, safeguard, and recovery of the ship, and thereby incurred charges and expenses, to wit, to the amount of 3737. 13s. 10d.; and averred that the proportion contributable by the defendant, according to the rate and amount of voyage; or for losses amount ing to more than his subscription. (a) 4 Taunt. 367. (b) See also per Lord Abinger, in Brooks v. M'Donnell, 1 Y. & C. 515. 18 his subscription, amounted to 127. 9s.; and that afterwards the vessel sailed from Jersey, on the voyage insured, and during the voyage was captured and wholly lost, by reason whereof the defendant became liable to pay the plaintiff 2121. 9s., according to the effect of his policy. The second count proceeded on the total loss only; and there were also the common money counts. The fact was, that the vessel had been injured by a gale of wind while lying in the port of Jersey, previous to her voyage, and had sustained the average loss, which was admitted and was repaired by the plaintiff; afterwards the vessel was captured. The question upon this part of the case was, whether there was any legal objection to the plaintiff's recovering an average loss arising in the former part of the voyage, and for a total loss afterwards. Upon this point C. J. Mansfield said, "a policy of insurance is a very strange instrument, as we all know and feel; in practice, I know of cases in the Court of King's Bench where such expenses have been recovered as an average loss, without making any distinction, whether it was recoverable as an average loss from damage repaired, or within the words of the permission to "sue, labour, travel, &c.," and as no such distinction has been made, we find it safer to adhere to the common practice, which has obtained, and to call it all average damage." The plaintiff, therefore, recovered both sums. But the assured cannot recover for more than bendam he has, in fact, But as we must never lose sight of the main principle of law, that the assured upon a contract of indemnity is not to recover for what he has not in fact been actually damnified, a most important distinction is, in this place, to be drawn fied. between a case of the above description, and one in which, by the intervention of subsequent circumstances, the previous deterioration of the subject-matter is ultimately a matter of perfect indifference to the assured's interests. And this is the great principle contained in the case of Livie v. Janson, which was referred to in a former section, for the position "causa proxima non remota spectatur." (a) In that case the (a) 12 East, 648. Ante, p. 271. |