By the law of England barratry is a breach of duty on the part CHAP. VI. of the master or mariners, in respect to the owners, with a criminal intent or ex maleficio: in other words, any fraudulent or criminal conduct, against the owners of ship or goods, by the master or mariners, in breach of the trust reposed in them, and to the injury of the owners, is barratry, although it be not done with intent to injure them, or to benefit, at their expense, the master or mariners.a It is not necessary, in order to entitle the insured to recover for barratry, that the loss should happen in the act of barratry; that is, it is not material whether it take place during the fraudulent voyage or after the ship has returned to the regular course; for the moment the ship is carried from its right track, with a fraudulent or criminal intent, barratry is committed. But the loss, in consequence of the act of barratry, must happen during the voyage insured, and within the time limited by the policy, otherwise the underwriters are discharged. Thus, if the captain be guilty of barratry by smuggling, and the ship afterwards arrive at the port of destination, and be there moored at anchor 24 hours in good safety, the underwriters are not liable, if, after this, she should be seized for that act of smuggling.b To constitute barratry, it must be without the knowledge or consent of the owners: hence a master, being owner, cannot be guilty of it, because nothing can be so clear as this, that no man can complain of an act done to which he himself is a party. But it is material to consider in what sense the word owner is to be understood in this definition. It has been argued that if A. be the owner of a ship, and let it out to B. as freighter, who insures it for the voyage, and if the deviation be with the knowledge of A., though unknown to B., the insurer is discharged. But the court overruled that argument, and said that, in order to discharge the insurer from the loss by barratry, it must appear that the act done was by the consent or with the privity of the owner, pro hac vice, that is, the freighter, the person insured.d In a court of equity the mortgagor is deemed owner of the thing mortgaged within the meaning of this rule. Proof of the master being owner lies on the underwriter.f A loss by barratry is well alleged, though the proof be that it happened by the act of an enemy and by barratry jointly. Even if the parties insert in the policy the words in any lawful trade, if the captain commit barratry by smuggling, the underwriters are answerable. For otherwise the word barratry should be struck out of the policy; and most clearly the stipulation in the policy, respecting the employment of the ship in a lawful trade, must mean, as was said by Lord Kenyon in delivering the unanimous opinion of the Court, the trade on which she is sent by the owners.h a Earle v. Rowcroft, 8 East, 125; Vallejo v. Wheeler, Cowp. 154; Nutt v. Bourdieu, 1 T. R. 328. b Lockyer v. Offley, I T. R. 252. e Nutt v. Bourdieu, 1 T. R. 323; Lewin v. Suasso, Ch. 16, Geo. 2. Postleth. Dict. vol. i. p. 147. d Cowp. 144. e Lewin v. Suasso, supra. D Park on In surance. Hitherto, we have considered barratry only as it affects the rights of the insurer and insured, which is certainly the material point of view in our present inquiry: but, before we come to the conclusion of this chapter, it will be proper to take notice of those positive regulations which exist in this and other countries, for the punishment of those who are guilty of some of the more heinous acts of barratry. By the ordinances of Middleburg, Rotterdam, and Hamburgh, if any act of barratry be committed by the master, various degrees of punishment, sometimes amounting even to death, are inflicted upon him, proportioned to the enormity of his guilt.a We do not find that any punishment was expressly provided by the law of England for offences of this nature till the reign of Q. Anne, at which time, as may be collected from the preamble of the statute, the wilful casting away, burning, or destroying of ships by the master or mariners, was become very frequent. In her reign, and in that of her successors, the Legislature interfered; but it is useless to refer more to them, as the law now stands upon the 7 & 8 Geo. 4, c. 30, and 7 Wm. 4, and I Vict. c. 89. The latter enacts, "That whosoever shall unlawfully and maliciously set fire to or in any wise destroy any ship or vessel, whether the same be complete or in an unfinished state, or shall unlawfully and maliciously set fire to, cast away, or in any wise destroy any ship or vessel with intent thereby to prejudice any owner or part owner of such ship or vessel, or of any goods on board the same, or any person that hath underwritten or shall underwrite any policy of insurance upon such ship or vessel or on the freight thereof, or upon any goods on board the same, shall be guilty of felony, and, being convicted thereof, shall be liable, at the discretion of the Court, to be transported beyond the seas for the term of the natural life of such offender, or for any term not less than fifteen years, or to be imprisoned for any term not exceeding three years." And sect. 4 enacts, That whosoever shall unlawfully or maliciously set fire to, cast away, or in any wise destroy any ship or vessel, either with intent to murder any person, or whereby the life of any person shall be endangered, shall be guilty of felony, and, being convicted thereof, shall suffer death." And the stat. 7 & 8 Geo. 4, c. 30, s. 10: "That if any person shall unlawfully and maliciously damage, otherwise than by fire, any ship or vessel, whether complete or in an unfinished state, with intent to destroy the same or to render the same useless, every such offender shall be guilty of felony, and, being convicted thereof, shall be liable, at the discretion of the Court, to be transported beyond the seas for the term of seven years, or to be imprisoned for any term not exceeding two years, and, if a male, to be once, twice, or thrice publicly or privately whipped, if the Court shall think fit, in addition to such imprisonment. a 2 Magens, 77, 112, 215. b 1 Ann, st. 2, c. 9, s. 4; 4 Geo. 1, c. 12, s. 3; 11 Geo. 2, c. 29, s. 6. And felonies, &c., within the jurisdiction of the Admiralty may be tried at the assizes by the 7 & 8 Vict. c. 2. CHAPTER VI. PARTIAL LOSSES AND ADJUSTMENT. CHAP. VI. HAVING, in the preceding chapters, treated fully of the different kinds of losses for which the underwriters are answerable, the subject naturally leads one to consider when losses shall be said to be total, and when partial or average, as they have been most commonly denominated. When we speak of a total loss, we do not always mean Total loss. to signify that the property insured is irrecoverably lost or gone, but that, by some of the perils mentioned in the policy, it is in such a condition as to be of little use or value to the insured, and so much injured as to justify him in abandoning to the insurer, and in calling upon him to pay the whole amount of his insurance, as if a total loss had actually happened. But the idea of a total loss, in this sense of the word, is so intimately blended and interwoven with the doctrine of abandonment, that it will add much to clearness and precision to refer what may be said on this subject till we come to the chapter on abandonment. In this place it will be sufficient to remark, that in case of a total loss, properly so called, the prime cost of the property insured, or the value mentioned in the policy, must be paid by the underwriter; at least, as far as his proportion of the insurance extends. This is evident from the nature of the contract; for the insurer engages, as far as to the amount of the prime cost or value, in the policy, that the thing insured shall come safe: he has nothing to do with the market; he has no concern in any profit or loss which may arise to the merchant from the sale of the goods. If they be totally lost, he must pay the prime cost, that is, the value of the thing he insured at the outset; he has no concern in any subsequent value. So likewise, if part of the cargo, capable of a several and distinct valuation at the outset, be totally lost, as if there be one hundred hogsheads of sugar, and ten happen to be lost, the insurer must pay the prime cost of those ten hogsheads, without any regard to the price for which the other ninety may be sold. Thus much at present for total losses. The subject of this and the following chapter is intricate and perplexing; and one source of perplexity upon this subject is, the irregularity and confusion which we meet with in the present form of policies of insurance. Ambiguities frequently arise in them, by using the same words in different senses; and in no instance is this Average, absurdity more glaring than in the use of the word average. This what is. word in policies has two significations; for it means a contribution to a general loss, and it also is used to signify a particular partial loss. In commercial affairs, indeed, it has no less than four different meanings, and therefore it cannot be wondered at if much confusion of ideas has arisen upon the subject. In order to prevent that, if possible, in the subsequent part of this work, I shall here endeavour to distinguish between the four different senses of the word "average;' General average. Small or petty average. b Park on In- and wherever I shall have occasion in future to speak of a damage surance. arising to goods or other property not total, except when I am reciting the words of a policy, I shall take the liberty of calling it, as I have already done at the head of this chapter, a partial, not an average loss. When goods or merchandises carried by sea are thrown overboard in a storm, for the purpose of lightening the ship, the owners of the ship and of the goods saved contribute for the relief of those whose goods are ejected, in such a manner that all who profited by the lightening of the ship may bear a proportional loss of the goods thus thrown overboard for the common safety. This contribution is what is called general or gross average, the full discussion of which will be the business of the next chapter. Small or petty averages are the next species; and, as these never fall upon the underwriters, I shall here set down all that is necessary upon that subject. Petty average consists in such charges and disbursements, as, according to occurrences, and the custom of every place, the master necessarily furnishes for the benefit of the ship and cargo, either at the place of loading or unloading or on the voyage. These charges are lodemanage, which, as it appears by Cowel's Interpreter, means the hire of a pilot for conducting a vessel from one place to another; towage, pilotage, light-money, beaconage, anchorage, bridge toll, quarantine, river charges, signals, instructions, passage money by castles, expenses for digging a ship out of the ice, when frozen up, that it may be brought into a proper harbour; and at London, by custom, the fee paid at Dover pier. These seem to be all the articles which come under the denomination of petty or accustomed average, as well in this as in foreign countries. For these charges the insurers are never answerable; but one-third of the expenses is borne by the ship, and two-thirds upon the cargo. But, in order to discharge the insurer, it must appear that the disbursements were usual and customary in the voyage; for, if they were incurred for any extraordinary purpose, or in order to relieve the ship and cargo from some impending danger, they shall then be reputed a general average, and, consequently, be a charge on the insurer. In lieu of these petty averages, it has become usual at some places to pay 5 per cent., calculated on the freight, and 5 per cent. more for primage to the captain. Another species of average in matters of commerce is that which we are accustomed to meet with in bills of lading, paying so much freight for the said goods, with primage and average accustomed. In this sense, it signifies a small duty, which merchants who send goods in the ships of other men pay to the master over and above the freight, for his care and attention to the goods so entrusted to him. This kind of average may also be laid out of the present inquiry, as it is too insignificant a charge to fall upon the underwriter. Having thus disposed of the different kinds of average, so as to prevent a confusion of ideas, we shall now proceed to the main sub Lex Merc. red. 147. b Magens, 72. c Cowel. d 2 Mag. 180, 278. e 1 Mag. 72. f See Da Costav. Newnham, 2 T. R. 407. € 1 Mag. 72. Jacob's Law Dict. title Average. ject proposed, namely, what shall be considered as a partial loss. CĦAP. VI. Ex vi termini, it implies a damage which the ship may have sus- Partial loss. tained in the course of her voyage from any of the perils mentioned in the policy: when applied to the cargo, it also means the damage which goods may have received, without any fault of the master, by storm, capture, stranding, or shipwreck, although the whole, or the greater part thereof, may arrive in port. These partial losses fall upon the owners of the property so damaged, who must be indemnified by the underwriter. For if the goods arrive, but lessened in value through damage received at sea, the nature of an indemnity speaks demonstrably, that it can only be effected by putting the merchant in the same condition in which he would have been if the goods had arrived free from damage.a The underwriters of London expressly declare, as appears from a Memoranmemorandum at the foot of the policy, that they will not answer for dum clause. partial losses not amounting to 3 per cent. This clause was introduced into English policies about the year 1749, having long before that time been generally used in almost all the trading countries in Europe; and it was intended to prevent the underwriters from being continually harassed by trifling demands. But at the same time, that they provide against trifling claims for partial losses, they undertake to indemnify against losses, however inconsiderable, that arise from a general average, because that can never happen but in cases of imminent danger, when it is for the common interest that such expenses should be incurred. lated. But in what cases, and in what manner, does the damage arising How 3 per from a partial loss exceed 3 per cent.? To answer this question, we cent. calcumust ask-Is the insurance upon each separate article or on the bulk? If it be upon each separate article, and that individual article be totally lost or destroyed, the assured may recover the particular sum insured on such article as for a total loss, and no question of the kind arises. But if a part of a separate article, say of a chest of tea, or if one of several chests of tea, when the insurance is on the bulk, be injured or lost, then the 3 per cent. means 3 per cent. of the one chest, or 3 per cent. of the whole bulk, as the case may be. In the time of Lord Mansfield, and indeed long after his time, there could not be, on a policy in this form, a total loss, where the goods still physically existed; and the American courts seem to adopt that rule still; but Roux v. Salvador,d to be presently noticed, has placed the law of this country on a different footing. C has to pay, As clearness and precision are necessary upon all subjects, and What unmore especially upon this, it will be proper to observe that, when we derwriter speak of the underwriter being liable to pay, whether for total or and mode partial losses, it must always be understood, that they are liable only of stating in proportion to the sums which they have underwritten. Thus, if a loss. man underwrite 1007. upon property valued at 500/., and a total loss a 2 Burr. 1172. b See 5 M & W. 575, and ante, p. 9. c Davy v. Milford, 15 East, 559; Hedburg v. Pearson, 7 Taunt. 154; Hills v. The L. Ass. Co. 5 M. & W. 576; Navone v. Haddon, 9 C. B. 41; in the d3 Bing, N. C. 266. |