Secondly, as regards the mode of estimating the repaired value of the vessel, it is her worth to the owner which is to be taken, due regard being paid to the circumstances in which she is placed at the time of the casualty (h). In the making of the estimate, the insured value is to be entirely discarded, for “the question of loss, whether total or not, is to be determined just as if there were no policy at all" (i). To arrive at the true value of a vessel to her owner, is often a practical question of no little difficulty; but, in ordinary cases, the criterion of worth adopted is the market price. In some cases, however, the price which a ship will command in the open market is not a fair test of her value; as, for example, where the ship is of a peculiar construction, having been built for a special trade. In such a case, to obtain correct results, it would be necessary to adopt some other measure of the vessel's worth. One method would be, to take the ship's original cost, less an allowance for deterioration; another would be to take the estimated cost of replacing the ship with a new one. Further, in arriving at the repaired value of the vessel, freight which is in course of being earned must be taken into account, not as a separate item, but as forming part of the value of the vessel, which is, in theory, the capitalized amount of her future earnings, minus working expenses, and plus the value of her materials when ultimately sold for breaking up (k). Accordingly, to the value which the vessel would have, if free of engagements, must be added any increase in value which accrues from her engagements having been fixed beforehand, which will be, in general, the difference between the freight contracted for and the current freight, where the ship has been chartered to advantage (1). If the repaired value

(h) Young v. Turing, 2 M. & Gr. 593.

(i) Irving v. Manning, 1 H. of L. Cas. 309.

(k) See a pamphlet on "The Value of a Ship," by Richard Lowndes and P. H. Rathbone (Liverpool, 1876), where the subject is ably treated.

(1) Thus, in Rankin v. Potter, Lord Chelmsford, in delivering judgment in the House of Lords, observed:

"I

understand that the amount of damage was such that a prudent uninsured owner would not have incurred the expense of repairing the ship. And this appears clearly from a further admission, stated in the report of this case in the Court of Common Pleas, viz., that the cost of repairing the vessel at Calcutta, so as to make her seaworthy for carrying a cargo to England, would have exceeded the value of the vessel,

of the vessel, thus computed, is less than the estimated cost of the repairs, it is open to the assured to abandon and claim upon the footing of constructive total loss (m).

III-CONSTRUCTIVE TOTAL LOSS ON GOODS.

To ascertain whether there is a constructive total loss of cargo, the same general rule must be followed as that which has been laid down with respect to ship. There is, however, this difference between the two cases, that while the loss of the voyage does not entail a loss on ship, "it is well established that there may be a loss of the goods by a loss of the voyage in

which the goods are being transported, if it amounts,” to use the words of Lord Ellenborough, "to a destruction of the contemplated adventure." These were the words of Baron Bramwell, in delivering the judgment of the Exchequer Chamber in Rodocanachi v. Elliott (n), which was an action upon a policy of insurance to recover for a total loss in respect of goods, detained in Paris, during the siege of that city by the German armies; and the judgment was given in favour of the assured. Where the voyage has been interrupted owing to the operation of the perils insured against, and the goods are lying at a place other than the place of their destination, damaged, but in such a state that they can at some cost be brought into a condition. to be forwarded to their destination, the question to be decided is, whether it is practically possible to carry them on, that is, whether to do so would cost more or less than they would be worth on arrival. To determine that question, an estimate is to be made of all the extra expenses which will have to be incurred, such as the cost of discharging, warehousing, re-conditioning, and re-shipping (so far as those expenses would be chargeable to the goods), including the cost of transhipping the goods to a new bottom, if the original ship is condemned, and the excess in the cost of transit, if it can only be effected at a higher than the original rate of freight. To these items, the cargo's proportion of general average, or salvage, is to be added; and the loss will be total if the aggregate exceed the estimated value of the cargo on arrival at the port of discharge; but, if the aggregate do not exceed the value of the cargo, or that part of it saved, the loss will be partial only (o). Where the original ship is disabled by perils of the sea, so that the shipowner is not bound to carry the goods on, the whole cost of transit from the port of refuge to the place of destination which must be incurred by the owner of the goods if he carries them on is not to be taken into account, but only the excess of that cost over the original freight (p).

(n) Asp. Mar. L. C. N. S., vol. ii., p. 399.

(0) Rosetto v. Gurney, 11 C. B. 190.

(p) Farnworth v. Hyde, L. R. 2 C. P. 204. In principle, the original freight should be deducted, in the esti

IV.-CONSTRUCTIVE TOTAL LOSS ON FREIGHT.

With respect to freight, in case it is impossible to earn that subject, owing to a total loss of ship or cargo, the loss is actual and can be recovered without notice of abandonment. Where, however, the loss, though probable, is not ascertained, but depends upon chances of recovery or estimates of expenditure, the claim falls within the category of a constructive total loss, and requires the same kind of proof as in the case of similar claims upon ship or cargo. To take an instance adduced by one of the learned judges in a case already cited. If the ship be damaged so far as not to be worth repairing," but cargo which was on board be saved under circumstances which leave it doubtful whether such cargo might or might not be forwarded in a substituted ship; or, if the cargo be lost and the ship may or may not probably earn some freight by carrying other goods on the voyage insured, it may be, and I think the rule is, that in order to make certain his right to recover as for a total loss on the policy on freight, the assured should give notice of abandonment of the chance of earning such substituted freight” (q). The same rule will apply in case the contract of affreightment is justifiably terminated by a delay resulting from the operation of the perils insured against. Thus, a ship which was bound from Liverpool to Newport, where she was to load a cargo of iron rails for San Francisco, got ashore in Carnarvon Bay, and although ultimately floated and repaired, was detained for so

mate, both of the extra charges and of the value of the cargo at its destination; for the question is, whether the goods can be forwarded so as to realize some portion of their value, or whether the whole value to the owner will be absorbed by the extra cost of forwarding. The value of the cargo to the owner is not the gross, but the net value on arrival, i.e., the market value at destination, less freight and ordinary sale charges. The Court of Exchequer Chamber decided, however, in the case last cited, that to give rise to

a constructive total loss, the gross value of the cargo must be absorbed by the extra cost of forwarding, i.e., the entire cost of forwarding, deducting the original freight. This decision was clearly erroneous, for the original freight may either be brought in or left out on both sides in the calculation, but cannot correctly be brought in on one side only. See Lowndes on Marine Insurance, p. 119, note.

(q) Per Brett, J., in Rankin v. Potter, 2 Asp. Mar. L. C. 67.

great a length of time, in consequence of the accident, that the charterers threw up the charter, and hired another vessel to carry the rails (which were wanted for the construction of a railway) to their destination. In an action by the assured on the policy of insurance to recover for a loss of the chartered freight, the jury found that the time necessary for getting the ship off and repairing her was so long as to put an end, in a commercial sense, to the speculation entered into by the shipowners and the charterers; and, upon this finding, it was held by the Exchequer Chamber, affirming the decision of the Court below, that the adventure having been frustrated by perils of the seas, there was a constructive total loss, within the policy, for which the assured was entitled to recover (1).

V.-NOTICE OF ABANDONMENT.

Whenever a claim is made for a constructive total loss, the timely giving of a notice of abandonment by the assured to the underwriters is a condition precedent to the right to recover, unless the assured is excused from the obligation to give notice of abandonment by the circumstances of the case (s).

The only occasion on which notice of abandonment is not necessary is where, at the time of the assured electing to treat the claim as one of constructive total loss, there is no possibility of the underwriter deriving any advantage from such notice either because there is nothing to abandon (t), or because the disposal of the property was justifiably determined before the opportunity to give notice occurred. For instance, in a case where the news of the loss of the ship and of her sale reached

(1) Jackson v. Union Marine Insurance Co., L. R. 8 C. P. 572; 10 C. P. 125. It is not to be inferred from this case that underwriters on freight are liable for a loss resulting from delay through perils of the seas, where the proximate cause of the loss is the operation of a special clause in the contract of affreightment, such as a "cancelling

option," for it has been decided otherwise in the cases of the Inman Steamship Co. v. Bischoff, 4 Asp. Mar. L. C. 419; and the Mercantile Marine Insurance Co. v. Tyser, ibid., v. 5, p. 6.

(s) Kaltenbach v. Mackenzie, 4 Asp. Mar. L. C. 39.

(t) Potter v. Rankin, see above

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