try by every means in his power to complete the voyage, either-first, by borrowing the money on his owner's credit; second, by bottomry: or third, by selling a part of the cargo. If the master, in a case of extreme necessity, sells the ship, the person who purchases her is bound to see that the master is justified in selling, as he may afterwards have to prove that he was justified in doing it.

CONSTRUCTIVE TOTAL LOSS.

If the ship is so much damaged that she is no longer a ship, but merely a wreck, or a collection of planks; or if by reason of the perils insured against it, is wholly out of the power of the assured to get the ship to her destination, that is a total loss, and the assured is entitled to be paid the sum insured on the ship, without giving any notice of abandonment of her to the underwriter; but if she still exists as a ship, and capable of repair, (although she may not be worth repairing) it is not an absolute total loss, for she still remains a ship; but inasmuch as the amount of the loss is as great as a total loss, it is considered a constructive total loss."

The difference between an actual total loss and a constructive total loss has been explained as follows by Lord Abinger in giving judgment in the well-known case of Roux v. Salvador :

"The underwriter engages that the subject of insurance shall arrive in safety at its destined termination. If, in the progress of the voyage it becomes totally destroyed, or annihilated, or if it be placed, by reason of the perils against which he insures, in such a position that it is wholly out of the power of the insured, or of the underwriter, to procure its arrival, he is bound by the very

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letter of his contract to pay the sum insured. But there are intermediate cases; there may be some peril which renders the ship innavigable, without any hope of repair, or by which the goods are partly lost, or so damaged that they are not worth the expense of bringing them (or what remains of them) to their destination.

“In all these, or any similar cases, if a prudent man, not insured, would decline any further expense in prosecuting an adventure, the termination of which will probably never be successfully accomplished, a party insured may, for his own benefit, as well as that of the underwriter, treat the case as one of a total loss, and demand the full sum insured. But if he elects to do this, as the thing insured, or a portion of it still exists, and is vested in him, the very principle of indemnity requires that he should make a cession of all his right to the recovery of it, and that, too, within a reasonable time after he receives the intelligence of the accident, that the underwriter may be entitled to all the benefit of what may still be of any value, and that he may, if he pleases take measures at his own cost for realizing or increasing that value. In all these cases, not only the thing insured, or part of it, is supposed to exist in specie, but there is a possibility, however remote, of its arriving at its port of destination, or at least of its value, being in some way affected by the measures that may be adopted for the recovery or preservation of it. If the assured prefers to take the chance of any advantage that may result to him beyond the value of the thing insured, he is at liberty to do so, but then he must also abide the risk of the arrival of the thing in such a state as to entitle him to no more than a partial loss. If in the event, the loss should become absolute, the underwriter is not the less liable on his contract, because the assured has used

his own exertions to preserve the thing insured, or has postponed his claim till the event of a total loss has become certain, which was uncertain before."

If the owner wishes to claim for a constructive total loss he must give the notice of abandonment to the underwriters, as soon as ever he has received certain intelligence of the casualty which renders it improbable that the ship will ultimately be recovered. If the information received by the owner is doubtful, he may wait a reasonable time before giving the notice, to enable him, if possible, to obtain more certain information.

If the notice of abandonment is not given within a proper time, the owner will be considered to have waived his right to abandon, and he cannot afterwards do it.

The assured has the right to abandon, and treat the loss as a constructive total loss-1st. If the ship cannot be repaired at any cost where she lies (either in consequence of the want of materials or the captain's inability to obtain money or credit to pay for the repairs at any rate of interest), and he is compelled to sell her as she lies, as the best and only thing that can be done. 2nd. If the ship is in such a state that a prudent owner, if on the spot, and uninsured, would rather sell her as she lies than attempt to extricate or repair her. In the latter case, a sale is only justifiable, either when there is no reasonable chance of ever extricating her at all, or when she could only be extricated or repaired so as to make her a seaworthy ship again at a cost which would exceed her fair marketable value after she is repaired. In either of these cases the loss amounts to a constructive total loss, which will entitle the assured to abandon and recover for a total loss (unless the policy

* Without deducting one-third new for old.

only insures him against "actual total loss"). It is not absolutely necessary, however, that the master should sell the ship to enable the owner to claim for a constructive total loss.

If the shipowner, on hearing of the disaster, abandons her to the underwriters, still it is the duty of the master to continue his exertions to save as much as possible, and do the best for all concerned, the same as if no abandonment is made. Anything which he does after the ship is abandoned to the underwriters, is considered to be done as agent for them for their benefit.

In abandoning no formal protest is required, it is sufficient for the shipowner merely to give a written notice to the underwriters of his intention to abandon the ship to them.

The effect of the abandonment is to transfer all the interest of the assured in the ship and salvage to the underwriters from the time of the loss.

If the abandonment is accepted by the underwriters, they become liable to pay all future outgoings, and are entitled to the salvage, and all the future earnings of the ship, and if the damage has been caused by a collision, for which another ship is to blame, the underwriters become entitled to receive the damages to be recovered from the other ship.

In writing home to his owners, after any accident, the captain should give full particulars of the damage done, and the chances of getting it repaired, so that they may be able to decide whether they will give notice of abandonment or not. The letters sent home by the captain will have to be produced to the underwriters, to inform them of the position of the ship, and to enable them to decide what course they should take.

BOTTOMRY.

In proper cases of necessity, when money is required to enable the ship to complete her voyage, the master has power to borrow money under a bottomry bond, on security of the ship, freight, and cargo. If the money is borrowed as a bottomry loan, the money is only repayable to the lender in case the ship ultimately arrives at her destination. To make himself safe, therefore, the lender should insure. But if the ship deviates from her course during the voyage, then the shipowner is liable to pay the money secured by the bond, even if the ship is lost.

To make the transaction a bottomry loan, it is not necessary that the bond should expressly state that the money is only to be payable if the voyage terminates successfully, it is sufficient if that appears to be intended. If the instrument expressly states that the money is to be repaid in any event, whether the ship completes her voyage or not, the security will not be considered a bottomry, and the lender will not be entitled to that prior claim on the ship which a regular bottomry bond would have given him.

The master should not give a bottomry bond except in case of absolute necessity; and before borrowing on bottomry, he should endeavour to obtain the money by pledging his owner's personal credit; and it is his duty, also, to endeavour to communicate with his owner, if that can be done.

The person lending money on bottomry is bound to satisfy himself that the money cannot be obtained on the personal credit of the owner, and also that the captain had endeavoured to communicate with the owner, and if it should turn out that proper efforts have not been made