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A practical treatise on the law of marine insurance online

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warranted free from average under three pounds per
cent, unless general, or the ship he stranded^ There
are^ variations of detail in many policies, and it is now
very common to add the words "sunk or burnt" after
" stranded."

§ 318. — " Corn," it has been decided, includes malt {e),
peas, and beans (/), but not rice {g) ; and " salt " does
not include saltpetre Qi), In other words, neither the
scientific nor the popular sense, but that usual in the
trade, is to determine such points.

§ 319. — " Unless general or the ship be stranded," has
been construed to mean, " Except general, or unless the
ship be stranded ; " that is, underwriters are free from all
average which is not general average, and they are liable
for all average in case the ship be stranded, — no matter
whether the stranding caused the damage or not (^). The
damage may even have been discovered and repaired
before the stranding takes place : a stranding, during the
term insured, operates as a condition, and has the effect of
effacing the remainder of the clause.
Stranding, § 320. — A ship is said to be "stranded," for the present

what is.

(e) Moody Y.SurridgejVoxkljiB,, {h) Jovrnu v. Bourdieu, Park,

p. 245. Ins. 245.

(/) Mason v. SJcurray, ib, (?•) Burnett v. Kensington, 7 T.

(V) ScoU V. Bourdillon, 2 B. & P. E, 210.
213.



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Particular average: the memorandum. 179

purpose, -when she is on the strand out of the common
course of the voyage. On the strand implies a resting
on it, not a mere striking and passing over. The straTvd
is the ground or that which rests on the ground, — e.g.,
piles driven into it, or the wreck of some other stranded
ship. And it is no stranding to take the ground in the
precise place and manner intended in the ordinary course
of the navigation.

As to how long the ship is to rest on the ground, in
order to be stranded, it cannot be said that there is any
rule, except that she must stop long enough to be hard
and fast aground, or so as to cease to be waterborne : if in
motion, her way must be deadene'd. A stoppage long
enough for a kedge to be carried out and the ship hove oflF,
or for her engines to be reversed and the steamer backed
off the shoal, would no doubt be enough. Baily suggests
that she ought to be so far on the ground that her centre
of gravity should be resting on it, so that she shall be in
no sense afloat; but this is perhaps too seveTe ; in practice
it is taken to suflBce that she is fixed on the ground and
motionless, though fixed only by one end. But to strike
and pass on, or to have her motion retarded by the ground,
yet to be always moving, is not enough (ii).

As for grounding in the ordinary course of navigation,
as in a tidal river or harbour, or when placed alongside a
dock wall to discharge cargo, though this itself is of course
no stranding, yet a very little change of position, if re-
sulting from an accident, will suffice to make it such. The
breaking of a rope, or the mere stretching of it in a
breeze, if it has the effect of tilting the vessel's bow off
the bank she was lying on to a heap of stones or uneven
ground not fit for lying on, has been held sufficient for the
purpose {j)» And even where the ship takes the ground
in the place intended, yet if this intention be the result of

(w*) McDougU v. Boy, Exch. Co,y Ad< 20 ; BisTiop v. Pentland, 7 B»
4 Camp. 283. & Cr. 219,

ij) iVelU T. Hopmod, 3 B. &

n2



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180 Particular average: the memorandum.

an accident, so that the necessity for going there is out of
the common course, as when a ship in distress runs into a
tidal harbour for safety, there is little doubt this would be
a stranding. Of course it is so, if the ship, being leaky,
or on fire, or without anchors, is purposely run aground
for her safety (j[/). In short, " if the ground is taken
under any extraordinary circumstances of time or place,
by reason of some unusual or accidental occurrence '* (4),
this is a stranding.
Average § 321. — In order to mitigate the severity of the memo-

c auses. r^ndum in excluding damage under five or three per cent.,
it is usual to insert what are called " average clauses," the
effect of which is to subdivide the subject-matter insured,
for the purposes of this calculation, into smaller parcels,
so as to give the assured a chance of recovery, in case
this or that portion be seriously damaged whilst the bulk
is sound. In insuring steamers, for instance, it is usual
to value the hull and the machinery separately, with a
clause, " average on each valuation [as if separately in-
sured." Sometimes the division is carried further, the
" masts, spars, rigging, boats and materials," being valued
separately from the hull. With merchandize the same
end is attained by clauses such as " average payable on
every ten bales of cotton, running landing numbers," or
the like.

§ 322. — ^These clauses, being inserted for the benefit
of the assured, are in no case to be used to his disad-
vantage ; therefore the assured always has the option of
claiming a loss which amounts to the requisite per-centage
on the whole sum insured, notwithstanding that if broken
up into smaller parcels, under the conditions of the average
clause, some part of it might be excluded (i).

In distributing a cargo under series, regard must be
had to the rule of law which treats each distinct com-

(jf}') De Mattos v. Saimders, L. R. v. Hopwood, 3 B. & Ad. 20, at 34.
1 C. P. 570. (Z) Hagedoni v. Whitmore,! Stark.

(k) Per Lor J Tenter Jen, in Jrells 157.



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Particular average: the memorandum. 181

modity as a separate whole, — as a something which can
be totally lost, notwithstanding that the remainder is
saved. One such commodity must not be run into the
same series with another ; since, independently of any
average clause, each distinct commodity is to be treated as
if it were separately insured (m).

§ 323. — From the principle that the whole thing in- Tail series,
sured must be divided into series, it follows that, unless
the number of packages insured is divisible without re-
mainder by the number which constitutes the series, there
must be a remainder, or '' tail series." The rule of prac-
tice, which seems to be fair enough, is that the under-
writer is liable for the damage on this tail series should it
amount to the required per-centage on the value of that
series itself. If, for example, 105 bales of cotton are
shipped, and the average clause is every ten bales, it suffices
if the damage on the last five bales amounts to three per
cent, on the value of those five.

§ 324. — With regard to the words '* running landing Running
numbers," these words are in practice treated as referring ^^Jfs

' , ^ A ^ o numbers.

to the order in which the bales are entered in the dock
landing book. A practice prevails in some ports to enter
the sound packages at the beginning of the book and the
damaged ones at the end, working forwards and backwards
till they meet. somewhere in the middle. This, of course,
is very much against the underwriters ; but where it is
the custom of the port, they must submit to it.

(m) A similar precaution is of separate persons, happen to be n-
course to be observed if two distinct sured in the same policy*
interests, or the properties of two



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CHAPTER VII.

OTHER LIABILITIES OF THE INSURER.

§ 325. — We have now, in the chapters on Total Loss
and Particular Average, dealt with every kind of loss
or damage directly suflfered through the perils insured
against by the thing insured. What remains, in order
to complete the account of an insurer's liabilities, may be
brought under two principal heads : either they are, like
total loss and average, liabilities under that engagement
which forms the main and proper scope of the contract,
namely, the indemnifying of the assured against loss sus-
tained in respect of the subject-matter insured, or they are
accessory or supplemental liabilities which the insurer takes
upon himself by some clause added to the policy. We
begin with the former kind.

Here, from the nature of the case, the subject of enquiry
may at once be narrowed thus : since we have to do only
with some loss which has relation to the thing insured,
and some loss other than a loss or damage actually and
du'ectly done to that thing itself, our enquiry now must
have reference to some loss or damage which the thing
insured might have, but has not sustained, and which has
yet resulted in some pecuniary loss on the part of the
assured. In other words, we have to do with the cost
of measures taken to prevent or diminish some greater
mischief.

Concerning this, there are in the policy two engage-
ments or promises, to one or other of which the insurer's



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Other liabilities: sue and labour clause^ 183

liability must in each particular case of this kind be
traced. These are, the " sue and labour clause," and the
engagement to pay general average.

The Sue and Labour Clause,

§ 326. — This clause, which is in the body of the policy, Tbe *'suo
and is one of great antiquity, is as follows : '*A7id in case ]^\^^^'
of any loss or raisfortune it shall he lawful to the as- clause.
sured, their factoids, servants, and assigns, to sue, labour
and travel for, in and about the defence, safeguard, and
recovery of the said goods and merchandises and shij),
ice, or any part thereof (a), without prejudice to this
insurance ; to the charges whereof we, the assurers, will
contribute, each according to the rate and quantity of his
sum herein assured"

§ 327. — This clause is to be treated as an engagement is a
distinct from the main body of the policy (6), and, there- engagement
fore, not subject to the restrictions contained in the ^y i*self.
memorandum. The liability under it is not a liability
for particular average (c). It is distinct from the rest of
the policy in this further sense, that, although the under-
writer's liability for a loss of the thing insured, resulting
from a single casualty, is restricted to the amount of his
subscription, yet he may be liable beyond that amount for
such a loss when coupled with a claim under the sue and
labour clause ; as, when expense is incurred in an unsuc-
cessful attempt to save a ship which nevertheless is totally
lost (d).

f 328. — The words " defence, safeguard, and recovery," General
imply the danger of some mischief greater, or supposed ^^^

(a) Sometimes, instead of "the D., at 509; Dixon v. Whitworth,

said goods, etc.,*' the words used 4 C. P. D., at 378.

are '*the subject-matter of this in- (c) Kidston v. Empire Mar, Ins,

surance.'* The meaning, as ex- Co., L. R. 1 C. P. 635.

plained in § 90, is the same in {d) Lohre y, Aitchison, in App.,

either case. 3 Q. B. D. 558.

{b) Lohre v. Aitchison, 2 Q. B.



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184 Other liabilities: sue and labour clause.

to be greater, than the cost of the means used to avert it.
This is not necessarily a danger of total loss. Expense
incurred in drying goods which have been wetted, in order
to prevent the damage from growing worse, certainly comes
within the terms of this clause (e). Nor are the words
"sue, labour, and travel," to be used in too narrow a
sense ; it is all one whether the assured labours himself,
or employs his servants to labour, or hires others to labour
for him. Whether he employs his own barge to save or
carry the goods, or hires a lighter or a forwarding sliip
for the purpose, each is alike a " labouring " within the
clause (e).
Conditions: § 329. — Two conditions, however, are requisite to con-
stitute a claim under the sue and labour clause : the
apprehended mischief must be something for which the
underwriters would have been liable, and the measure
which gives rise to the expense claimed must be the act
of the assured himself or of his agent or servant. If, for
Must be, example, goods are insured "free of capture,'* it is clear
danger that an expense incurred to prevent a capture could not
insured \y^ claimed under this clause : nor, if " against total loss

against. , ...

only," an expense incurred merely to diminish damage or

avert a loss other than total. The question always must

be, whether, if the detriment escaped by means of timely

care had come to a head for want of it, the loss would

Must be have fallen on the underwriters (/). And iji the second

assured or place, this clause, which is inserted in order to encourage

his agent ^^ assured to make timely efiforts and incur needful

expenses, applies only to efiforts made and expenses

authorized by him personally or by his servants or agents.

Hence, where salvors pick up a ship derelict at sea, or as

volunteers bring property into safety without being in

any sense hired by an agent of the assured, the payment



(e) Kidston v. Empire Mar, Ins. Ins. Co., L. B. 1 C. P. at 543 ; 2
Co., L. R. 1 C. P. 535. C. P. 357, at 364.

(/) See Kidston v. The Empire



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Other liabilities: sue and labour clause.



185



for salvage is not a claim under the sue and labour
clause (gr).

§ 330. — The fundamental principle, that a claim under Must be,
this clause supposes some worse evil averted, enables us to greater
distinguish with confidence between expenses which fall ^^i^
within the clause and some others which at first sight
seem to come near it. Thus the cost of repairing a
damaged ship is not — the cost of earning freight by a
transhipment is — a claim under the sue and labour clause.
Why ? Because, in the latter case there is, while in the
former there is not, a worse evil in the background. If
the cargo is not transhipped, and that without delay, the
original ship having been disabled, the owner of the goods
may be entitled to resume possession, and the freight will
be wholly lost to the assured (A). On the other hand, the



{g) AUchisan v. Lohrey 4 Ap. Ca.
755.

(h) This distinction, it is true, is
open to the theoretical objection
that such a total loss would not be
the necessary or natural conse-
quence of the perils insured against,
but merely of the negligence of the
assured, and therefore might not be
recoverable from the underwriter ;
whence it might be argued that
there is no real distinction between
the two cases, and that the cost of
forwarding is really only the measure
of the detriment done to the freight,
precisely as the cost of repairing is
the measure of the damage done to the
ship. The answer is, however, that
such a construction, applied con-
sistently, would leave the sue and
labour clause absolutely without a
meaning, which is not allowable.
For, if the basis of any argument
is to be, that the underwriter must
in no case be liable for more than
what the loss would have been had
the assured done his utmost to
prevent or dimi^'^h it, and that



the underwriter is in no case to pay
for an expense incurred by suing
and labouring, unless it can be
shown that he, the underwriter,
has been a gainer through it
having been incurred, this is what
could not be shown in any case, —
for if the expense had not been
incurred, the underwriter would
stUl be entitled to insist on a settle-
ment as if it had been. Take, for
example, the case decided in Kidston
V. The Empire Ins. Co. : an expense
of, suppose, 200^. is incurred in for-
wai-ding a cargo, by means of which
a freight of 500?. is saved. When
this 200?. is claimed from the in-
surer, whose policy is free of parti-
cular average, he might answer :
This expense was incurred, no
doubt, but not for my benefit ;
since, if it had not been incurred 1
should not have been liable for
yonr loss of 600?., because you lost
it through your own folly. And
80 of every other conceivable
claim under the sue and labour
clause. But then the assured has



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186 Other liabilities : sue and labour clause.

cost of repairing the ship is the measure of the damage
done to the ship by the accident. If the expense in
question were not incurred, the damaged ship would still
be there, repairable whenever the assured might please ;
so that the assured could not properly allege that in re-
pairing his ship he was labouring on its " defence, safe-
guard, or recovery." The same distinction is illustrated
by a case in which a cargo of rye, being heated through
sea-damage, and in danger of becoming totally worthless
if left in the confined hold of the ship, was landed and
placed in warehouses in order to separate the damaged
portion from the sound, and dry and cool what was heated ;
after which the sound rye was kept in the warehouse for a
further period, until the ship was repaired and ready to
take it on board. The rye was insured with the warranty
" free of particular average." In this case it was decided
that the underwriters were liable, under the sue and
labour clause, for so much of the expense of landing and
warehousing the lye as was necessary for separating the
sound portion from the damaged, — in other words, for
averting the danger of total loss, — but that, so soon as
this end had :been attained, the subsequent hire of the
warehouse, being incurred merely as the result of an acci-
dent not exposing the rye to any danger of total loss, must
fall on the assured (i).
Is the §.331. — ^A question, of some practical importance, not

^^t of y^t determined by the Courts, is, whether the master of
the cargc- ^^ gj^jp jg ^q \^q considered, for the purposes of the sue
and labour clause, the servant or agent of the owner of the
cargo, in incurring expenses either exclusively for the
benefit of the cargo, or for its benefit or preservation



the unanswerable retort : What did assured for doing that which cer-

you mean, then, by putting this tainly in some sense he was bound

clause into my policy ? The clause to do. By this both parties are

purports to be, and is, a privilege, gainers, but principally the under-

OT bonus, intended to encourage writers,
personal exertions by rewarding the (*) Meyer v. Rcdli^ 1 C. P. D. 358.



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Other liabilities: sue and labour clause. 187

conjointly with that of the ship. Some power of agency
on behalf of the cargo, under circumstances of unforeseen
necessity, when there is no time or opportunity for con-
sulting the owner, the master of a ship undoubtedly has.
Whether this extends so far as to confer on his actions
that privilege,- in some sense personal to the assured,
which is given by the clause in question, seems to be a
doubtful point. There are difficulties on either view. If
we may take it that the master is for this purpose the
agent of the cargo-owner, then the underwriter's liability
to pay general average is almost completely merged in his
liability under the sue and labour clause. If the master
incurs expense in drying the cargo at a port of refuge to
prevent its total destruction or greater damage, if he
engages salvors or tugs to avoid some danger, by which
the cargo together with the ship is threatened, or if for
the same purpose he throws cargo overboard, slips from an
anchor, cuts away a mast, or bears up for a port of refuge,
all this, so far as the cargo's share is concerned, is suing
and labouring for its defence, safeguard, or recovery. The
cargo's share of general average, therefore, is on this view
recoverable under the head of the sue and labour clause,
with one exception only, namely, when the general average
consists of salvage paid to persons not engaged by the
master, but who have come on board as volunteers, or of
sacrifices made for the common safety by such persons,
supposing the master to be absent or the ship to be for
any reason not under the command of the master or any
deputy of his authorized by the owners ( j). To this there

(/) Another way of putting the danger between the owner of tlie

argament, to prove that general ship and the several owners of cargo

average is a liability under the sue o,n board, whereby those whose pro-

and la1;)0ur clause, as being virtually i)erty is sacrificed consent to give

the act of the assured, is this : — it, and those whose property is

The right to general average con- saved consent eventually to conr

tribution is often said to be founded tribute towards replacing what is

on an implied contract, supposed to thus given. Originally, when the

be entered into at the moment of merchants sailed with their goods.



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188 Other liabilities : sue and labour clause.

is perhaps no serious objection, except that it seems novel
and somewhat needlessly complicated. On the other
view, if the master is not to be regarded as the servant
or agent of the cargo-own^r, he certainly is the servant of
the shipowner. If, therefore, he incurs expense about the
defence, safeguard, or recovery of the ship, is not the ship-
owner entitled, under the terms of the sue and labour
clause, to recover the whole of this expenditure, in the
first instance, from his underwriters on ship and freight,
leaving them to recover any contribution that may be due
from the cargo? Such is, it appears, the law in the
United States; and in a recent case, Lindley, J., ex-
pressed a strong opinion in favour of this view (fc). This,
however, would be a still greater novelty in our practice.
At present, the question can only be noted as one that
requires further discussion in the Courts.
Mode of § 332. — ^Another question, which can hardly be con-

ciaim on"^ sidered as finally settled, has reference to the mode of
policy. calculating the claim under the sue and labour clause.
"To the charges whereof," the clause runs, "we, the
assurers, will contribute, each one according to the rate
and quantity of his sum herein assured." This does not
define what is to be the gross contributing capital. This
question may come in two, or rather three, forms : either
the " charges *' here referred to may be charges for saving
the thing insured, and that only, or, in saving it, they may
procure the safety of something else, — and this either a

snch contracts were actually made ; sequently to the master of the ship,

and we have in some of the older Thus, not merely as a matter of

sea-laws directions as to the very theory or speculation based on the

formula of words to be used in necessity of the case, but histori-

making them. (See, for example, cally and in fact, the master of the

a curious instance in the Laws of ship has been clothed with the

Oleron, cited in my book on character of agent for the owner of

" General Average," p. 267.) Later, the cargo. (See Schmidt v. Eoyal

this authority was delegated, first Mail S. S. Co., 45 L. J. (Q. B.) 646 ;

to a supercargo on behalf of all the Crooks v. Allan, 6 Q. B. D. S8.)
merchants,— an institution intro- (k) Whitworth v. Dixon, 4 C. P.

duced by the Venetians,— and sub- D., at 378.



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Other liabilities : sue and labour clause. 189

dififerent thing, or an accretion on the thing insured, such
as a profit not anticipated at the time of insuring. In
the first of these three cases, it seems clear on principle
that the basis of the contribution must be, the value in
the policy ; for here there are only two parties concerned,
the assured and the underwriter, and, as between them, it
is not open to either to say that the real value of the
thing insured is greater or less than the agreed valua-
tion (Q. In the second case, where some other thing
besides that insured is saved in saving the latter, as, for
example, where a ship is saved from peril by a tug, which
in the same act saves the cargo, it would seem reasonable
— apart from the doubt suggested in § 331 — to hold that
the other thing saved should come in as a contributor,
and so the share of each individual underwriter be
diminished (m). With regard to the third case, that in
which an uninsured profit is likewise saved by the
measures which save the goods insured, there is more
doubt ; but in practice, hitherto, the same rule has been
applied to this as to the second case, that is, the profit has
been brought in as a contributor. This is plainly equit-
able, and the only question is, whether it is consistent
with the language of the clause. The clause appears to
leave the matter absolutely undetermined. The value in
the policy, as has been seen, represents the expectation
such as it was at the time of insuring. Both parties
know that there is a chance the market may go higher
before the goods can arrive : thus there is, to the know-



Online LibraryRichard LowndesA practical treatise on the law of marine insurance → online text (page 19 of 29)