incurred in recovering or preserving the subject-matter of insurance; and, that expenses incurred in warehousing and forwarding goods were not "particular average," but were termed "particular charges" (q). With respect to that finding, the Court in banc held that, although the usage did not control or vary the terms of the policy, as it was in accordance with the common law, they would, if necessary, have been prepared to hold that "the evidence established such an understood meaning, according to which 'particular average' does not include 'particular charges,' and to act upon such usage as equally sacred with the express part of the contract" (").

If the cost of forwarding the cargo be less than the original freight payable to the shipowner at the port of destination, the forwarding charges are paid in full by the shipowner, and are recoverable by him from his underwriters on freight, in proportion to their subscriptions; but, if the forwarding charges exceed the original freight, they are payable by the owner of the cargo, and the shipowner loses his freight. In that case, the net loss sustained by the owner of the cargo is the excess of the forwarding expenses over the original freight; and this he can recover from his underwriters as an expense incurred under the suing and labouring clause (s).

In case of a lump sum being paid by the charterer on account of freight, which is not to be returned in the event of loss, the rule of practice is that the charterer is not to bear any portion of the forwarding freight and charges, when the same are less than the balance of freight payable to the shipowner at the port of destination under the original charter-party. To put it shortly, the freight at the risk of the shipowner must be exhausted before the freight at the risk of the charterer can be affected by the cost of forwarding.

No greater expenditure in forwarding can be recovered from underwriters than it was reasonably necessary to incur under the circumstances for the purpose of averting a loss under the policy.

(q) Kidston v. Empire Marine Insurance Co., L. R. 1 C. P. 535; 2 C. P. 357.

(r) Per Willes, J., ibid.

(s) See Shipton v. Thornton, 9 Ad. & Ell. 336, 337.

Thus, a ship with a cargo of palm-oil from Cameroons for Liverpool, stranded on the Welsh coast, near Pwllheli, and it became necessary to land the cargo, which was accordingly done. The ship, after some temporary repair on the beach, was towed to Carnarvon, where she was repaired so as to be made thoroughly seaworthy for the completion of the voyage. In the meanwhile, the oil was forwarded to Liverpool by rail, at a cost to the shipowner of £212 15s. 1d.; and, the freight was received by him. The oil might have been kept at Pwllheli until the ship was repaired, and then reshipped at a cost of £70; and this would have been a reasonable course for the shipowner to have adopted. In an action against the underwriters on freight, it was held that the shipowner was entitled to recover the expense which it was reasonably necessary for him to incur, in order to prevent a total loss of freight, and this under the circumstances was £70 (t).

XIV-LUMP FREIGHT.

Contracts of affreightment made for a gross sum vary considerably in their terms. In some cases, they are so framed that payment is not to be made, excepting upon complete performance; and, in others, that the full sum is due, notwithstanding imperfect delivery owing to excepted perils. When cargo is carried upon the terms last mentioned for a lump sum, the charterer is not entitled to make any deduction therefrom on account of a partial non-delivery of the cargo consequent upon perils of the sea, as the payment stipulated is one gross sum for the use of the entire ship, and not a sum which can be distributed over the cargo carried (u).

(t) Lee v. Southern Marine Insurance Co., L. R. 5 C. P. 397.

(u) Robinson v. Knights, L. R. 8 C. P. 465.

XV. DEDUCTION FOR SEA-DAMAGE.

In general, an insurance upon freight attaches to the whole of the interest of the assured in that subject; and, in the event of loss, the underwriters pay in the proportion of their subscriptions to the gross amount or policy value. A policy may, however, be so framed as to limit the subject-matter insured to the amount of the deduction to which the gross freight is to be subjected in the event of sea-damage. A charter-party provided for payment of freight at a specified rate, and contained a clause that, “If any portion of the cargo be delivered sea-damaged, the freight on such sea-damaged portion to be two-thirds of the above rate." The charterers effected an insurance for one-third of the estimated freight, with the clause, "To cover only the onethird loss of freight in consequence of sea-damage, as per charterparty." A portion of the cargo was delivered sea-damaged, and one-third of the freight payable in respect of that portion was deducted in the freight settlement. In an action upon the policy by the charterers, to recover for this loss, it was held, that the policy confined the subject-matter insured to the one-third of the freight which might be lost in consequence of seadamage; and, that the plaintiffs were entitled to recover from each underwriter such proportion of the loss of freight as the amount of his subscription bore to the one-third of the total freight which formed the subject of the insurance (x).

(x) Griffiths v. Bramley-Moore, 4 Asp. Mar. L. C. 66.

PARTICULAR AVERAGE ON GOODS.

XVI.-PARTICULAR AVERAGE ON GOODS DEFINED AND DISTINGUISHED FROM SALVAGE LOSS.

A particular average on goods consists in either a deterioration, or total loss of part, of the subject insured, by the operation of the perils insured against.

At the outset, it is requisite to distinguish between a particular average and a salvage loss on goods, as some confusion has occurred in the use of these terms. A salvage loss is a total loss diminished by salvage, and takes place, in relation to goods, when there is either an absolute or a constructive total loss of the subject insured, but some remains of the property have been recovered by the assured. In that case, the claim upon the underwriters is for the difference between the insured value and the net proceeds; and the latter are computed by deducting from the gross proceeds of the property saved all charges incurred in realizing the salvage. In short, as it has been concisely put by Stevens, the merchant "receives the net proceeds from the person who effects the sales, and the balance from the underwriter" (y).

Where only a part of the subject insured is sold short of its destination, the remainder being delivered there, the claim, though stated in practice after the manner of a salvage loss (2), is in principle one for particular average, which is proved by the fact that it is excluded by a warranty to be "free from average, unless general" (a). If goods arrive in specie at their port of destination, sea-damaged and with the marks oblite

(y) Stevens on Average, 2nd ed.,

p. 82.

(z) Although, as above mentioned, it is usual to state a partial loss on goods sold short of their destination, when allowable, in the form of a salvage loss, it is questionable whether the claim could be substantiated, excepting upon proof that the liability of the

ance

underwriter would have been at least as great if the goods had been forwarded, and the loss stated in accordwith the rule of adjustment applicable to the case of goods arriving sea-damaged at their destination. See Baily's Perils of the Sea, p. 171.

(a) Ralli v. Janson, 6 E. & B. 422.

rated, so that they cannot be delivered to their respective owners, there is nevertheless no claim for total loss under such circumstances, for the owners of the goods are tenants in common of the mass, and the claim is to be stated according to the rules of particular average as on goods which have arrived at their destination (b).

XVII.—TOTAL LOSS OF PART.

A total loss of a part of the subject insured is only recoverable under policies which admit the risk of particular average. This conclusion was arrived at after prolonged controversy, and considerable variation in the authorities, by the Exchequer Chamber, in the case of Ralli v. Janson (c), and is expressed in the following extract from the judgment of the Court of Exchequer Chamber, delivered by Jervis, C.J.:-"We are of opinion, that where memorandum goods of the same species are shipped, whether in bulk or in packages, not expressed by distinct valuation or otherwise in the policy to be separately insured, and there is no general average, and no stranding, the ordinary memorandum exempts the underwriters from liability for a total loss or destruction of part only, though consisting of one or more entire packages, and though such package or packages be entirely destroyed, or otherwise lost by the specified perils." In the above ruling, it will be observed that a reservation as to the indivisible character of the insurance is made when the policy covers goods of different species; and, accordingly, it has been held that where goods of different species are insured under the same policy, there is a claim for the entire loss of the goods of any single species, notwithstanding the warranty to be free from average. As to what constitutes a difference of species in this connection is a question to which it is difficult to return a definite answer. On this subject Baily remarks (d):—“ The

(b) Spence v. Union Marine Insurance Co., L. R. 3 C. P. 427. (c) 6 E. & B. 422.

(d) In his admirable and most practical treatise on The Perils of the Sea, p. 170.