value, it was held that the loss was an actual and not merely a constructive total loss, and consequently that the assured might recover without abandonment (b). The Court also laid down the following general propositions :-If goods once damaged by the perils of the sea, and necessarily landed before the termination of the voyage, are, by reason of that damage, in such a state, though the species be not utterly destroyed, that they cannot with safety be re-shipped into the same or any other vessel; or if it be certain that, before the termination of the original voyage, the species itself would disappear, and the goods assume a new form, losing all their original character; or, if the goods, although imperishable, are in the hands of strangers not under the control of the assured; or if by any circumstance over which he has no control they can never, or within no assignable period, be brought to their original destination; in all these cases, the circumstance of their existing in specie at that forced termination of the risk is of no importance. The loss is, in its nature, total to him who has no means of recovering his goods, whether his inability arises from their annihilation or from any insuperable obstacle (c). But if the ship, although materially damaged, has not ceased to be a ship (d), or if the goods, although greatly deteriorated in value, still retain their original character (e), the assured must abandon. Where the underwriters have paid on a total loss they are entitled to the benefit of all the rights and remedies which the assured possessed (ƒ). (b) Roux v. Salvador, 2 B. N. C. 266, in Cam. Scacc., overruling the decision of the Common Pleas in the same case, 1 B. N. C. 526; see also the judgment of Lord Ellenborough in Hunt v. The Royal Exchange Assurance Company, 5 M. & S. 55. In Farnworth v. Hyde, 18 C. B., N. S. 856, the Court said that the rule laid down in Roux v. Salvador extends "to all cases where the adventure is brought to an end by a peril, and the goods are taken out of the power of the assured in the course of their voyage, either by physical laws working decomposition, or by political laws working detention and sale by a Court, or by circumstances of distress and danger, creating what may be described as a mercantile necessity for a sale." (c) See the judgment in Roux v. Sal- (d) Martin v. Crokatt, 14 East, 465; (e) Anderson v. The Royal Exchange As- (f) See Simpson v. Thompson, 3 App. Cas. 279; The North of England Iron Steamship Insurance Association v. Armstrong, L. R., 5 Q. B. 81; Burnand v. Rodocanachi, 5 C. P. D. 424; W. N. 1881, p. 37; see also Darrell v. Tibbits, 5 Q. B. D. 560. Proceedings by the underwriters to reimburse themselves, if taken against third parties, must be taken in the name of the assured. Simpson v. Thompson, ubi supra. Rights of underwriters on payment on total loss. Constructive total losses. A policy which is expressed to be confined to "total loss only," does not exclude a constructive total loss (g). Losses are constructively total when the subject-matter of the insurance, although still in existence, is either actually lost to the owners, or beneficially lost to them, and notice of abandonment has been given to the underwriters (h). Thus, where the ship, although existing as a ship, is captured or laid under an embargo, and has not been recaptured, or restored before action brought, so that she is lost to the owners (i), or where she is so damaged by a peril insured against as to be innavigable, and is so situated that either she cannot be repaired at the place where she is (k), or cannot be repaired so as to be made seaworthy without incurring an expense greater than her value when repaired (1), or has sunk in deep water, so that she cannot be raised without incurring an inadequate expense (m), the assured may abandon and treat the loss as total loss. And if a ship be so damaged during the voyage covered by the policy, the assured may abandon; although the ship afterwards complete her voyage, discharge cargo and earn freight (n). A ship insured by a time policy was captured by pirates and re-taken as prize and taken into port by a Queen's ship. The assured, on learning these facts, gave notice of abandonment after the expiration of the policy, but within a reasonable time. (g) Adams v. Mackenzie, 13 C. B., N. S. 442; 32 L. J., N. S. 711. (h) See the cases cited on p. 529. As to the notice of abandonment and the effect of abandonment, see post, pp. 538, 539, 541; and as to constructive losses on policies on freight, see post. The doctrine of a constructive total loss does not apply to an insurance on bottomry. Broomfield v. The Southern Insurance Company, L. R., 5 Ex. 192. (i) See the judgment of Lord Mansfield in Goss v. Withers, 2 Burr. 694, 696; Hamilton v. Mendes, ib. 1198; and the judgment in Roux v. Salvador, 3 B. N. C. 266; see also, with respect to cargo, Stringer v. The English and Scottish Marine Insurance Company, L. R., 5 Q. B. 599, where a policy contained a stipulation that the insurers should pay "a total loss thirty days after receipt of official news of capture or embargo, without waiting for condemnation." It was held that the claim for a total loss became vested on the expiration of the thirty days, though it turned out that there was only a temporary embargo, and no condemnation. Fowler v. The English and Scottish Marine Insurance Company, 18 C. B., N. S. 818; 34 L. J., C. P. 253; see also Rodoconachi v. Elliot, L. R., 9 C. P. 518. (k) See the ruling of Tindal, C. J., in Somes v. Sugrue, 4 C. & P. 283. See also Reed v. Bonham, 3 B. & B. 147. (1) Allen v. Sugrue, 8 B. & C. 561; and the cases cited on the next page. (m) Kemp v. Halliday, L. R., 1 Q. B. 520, where the Court of Exchequer Chamber said that it was a total loss if deducting a general average in respect of the cargo (if any), the cost of raising the ship, plus the sum to be spent in repairing her when raised, would exceed her full value when repaired. (n) Stewart v. The Greenock Marine Insurance Company, 2 H. L. Cases, 159; S. C., 1 Macq. 328; The Scottish Marine Insurance Company v. Turner, ib. 334. Freight earned after the abandonment belongs to the underwriter, ib.; Barclay v. Stirling, 5 M. & S. 6. The ship was sent home for adjudication, but on her voyage, meeting with bad weather, she was taken into port and sold by the prize master who had charge of her. It was held, under these circumstances, that the assured were entitled to recover for a total loss (0). rest or deten In like manner, if the goods, although they exist in specie, Seizure, arare prevented by embargo, capture, or the like, from reaching tion. their port of destination, so that the voyage is not merely retarded, but its objects are entirely lost (p), or if, owing to an injury to the vessel, and there being no other means of transport, they cannot be forwarded at all (q), or if they are so damaged by a peril insured against that if sent on they would be worth nothing, or less than the expense which must necessarily be incurred in forwarding them, the assured may, by abandoning, treat the loss as constructively total (r). So, where advances made for the transport of Chinese emigrants upon a particular voyage were insured, and the emigrants piratically ran away with the ship, and, landing, deserted her before the voyage was ended, this was held to amount to a total loss of the sums insured (s). If however, the ship, although once captured, is re-taken or restored before action brought (t), or if, in cases (0) Dean v. Hornby, 3 E. & B. 180. See also Lozano v. Janson, 2 E. & E. 160. (p) Barker v. Blakes, 9 East, 283; Cologan v. The London Assurance Company, 5 M. & S. 447; Lozano v. Janson, 2 E. & E. 160; Rodoconachi v. Elliot, L. R., 9 C. P. 518. See also Wilson v. Jones, L. R., 1 Ex. 193; S. C., Cam. Scacc., L. R., 2 Ex. 139, where the breaking of the Atlantic Cable was held to be a total loss. (a) Anderson v. The Royal Exchange Assurance Company, 7 East, 38; Wilson v. The Royal Exchange Assurance Company, 2 Camp. 623. (r) Gernon v. The Royal Exchange Assurance Company, 6 Taunt. 383; Parry v. Aberdein, 9 B. & C. 411; Navone v. Haddon, 9 C. B. 30; Rosetto v. Gurney, 11 ib. 176; Farnworth v. Hyde, 18 C. B., N. S. 835. If goods of the same kind, belonging to different owners, become so mixed up during a voyage, owing to perils insured against, that it is impossible to distinguish the several owners' property, they are not to be considered as totally lost, either actually or constructively; and the owners consequently will be considered tenants in common of the whole; Spence v. The M.P. Union Marine Insurance Company, L. R., (8) Naylor v. Palmer, 8 Ex. 739; S. C., (t) See the judgments in Goss v. Withers, 2 Burr. 694, and in Hamilton v. Mendes, ib. 1211; Bainbridge v. Neilson, 10 East, 329; Falkner v. Ritchie, 2 M. & S. 290; Brotherston v. Barker, 5 M. & S. 418. If the ship is restored after abandonment in such a condition that the owners cannot reasonably be expected to take her back, as where, for instance, she is offered to them charged with expenses of salvage and repairs equalling or exceeding her value, this will not have the effect of making the loss merely partial. See the judgment of Bayley, J., in Holdsworth v. Wise, 7 B. & C. 799, and of the Court in Lozano v. Janson, 2 E. & E. 176. If once there has been a total loss by capture, that is construed to be a permanent total loss, unless something occurs afterwards by which the assured either has the possession restored or has the means of obtaining such restoration. Per Lord Campbell, C. J., in Dean v. Hornby, 3 E. & B. 190. M M Test of constructive total loss. of salvage, the owners could by payment of such a sum of money as it is in their power to procure, obtain possession of her (u), or if the ship, although much injured by a peril insured against, can practically be repaired, that is, can be repaired without incurring a greater expense than she would be worth when repaired, the assured is not entitled to abandon (x). So, if the goods are recaptured and arrive at their destination (y), or if the whole or any part of the cargo, although damaged, exists in specie, and can be sent to its destination in a marketable state without incurring more expense than it would be worth on its arrival there, the loss is only partial (≈). The mere loss of the voyage is never sufficient to create a constructive total loss on the ship (a). And, with respect to goods, the temporary detention of the ship, or the retardation of the voyage, so as to lose a season, or even the loss of the voyage, if the goods are not of such a perishable nature as to make the loss of the voyage a loss of the commodity itself, will not constitute a constructive total loss (b). What circumstances shall amount to a total loss from capture or embargo, is sometimes made the subject of an express stipulation in the policy (c). The ordinary test by which to decide whether the loss of the ship is constructively total or partial only, is whether a prudent uninsured owner, if on the spot, would have incurred the expense of repairing. If he would not, the loss is constructively total (d). In other words, the question in all cases is whether (u) Thornely v. Hebson, 2 B. & A. 513. (x) Doyle v. Dallas, M. & Rob. 48; Gardner v. Salvador, ib. 116; and see Chapman v. Benson, 5 C. B. 330. (y) Patterson v. Ritchie, 4 M. & S. 393. (z) Thompson v. The Royal Exchange (a) Pole v. Fitzgerald, Willes, 641; (b) Anderson v. Wallis, 2 M. & S. 240; Hunt v. The Royal Exchange Assurance Company, 5 M. & S. 47. See, however, Stringer v. The English and Scottish Marine Insurance Company, ante, p. 528, note (g). In De Mattos v. Saunders, L. R., 7 C. P. 570, it was held that a partial loss can only be converted into a total loss by the natural and necessary consequence of a peril insured against. (c) Fowler v. The English and Scottish Marine Co., 18 C. B., N. S. 818; ante, p. 528, note (h). (d) Roux v. Salvador, 3 B. N. C. 266; Manning v. Irving, 1 C. B. 168; 2 C. B. 784; 6 C. B. 391; Moss v. Smith, 9 C. B. 94; Somes v. Sugrue, 4 C. & P. 276; Domett v. Young, 1 Car. & M. 465. Freight is not totally lost by perils of the sea simply because the cost of the repairs of sea damage neces it would cost more to repair the ship so as to make her seaworthy than she would be worth when repaired. In considering the relation which the cost of repair would bear to the value of the ship when repaired, the question is not varied by the age of the vessel; if by reason of her natural decay more extensive repairs would be necessary to repair the injuries caused by the perils insured against, and from this cause the expenses would exceed the value of the ship when repaired, the assured may still abandon (e). In estimating the value of the ship when repaired her mere market value is not the proper test, but her value to her owners. Where a vessel is of exceptional size or class, and built for any special service, this distinction becomes very material. Thus, where in a special case it was found that a ship had originally been bought for 20,0007., that 20 per cent. would be a reasonable deduction in respect of wear and tear at the time when the policy attached, that the cost of building such a ship at that time would have been 20,0007., and the cost of repairing her would have been 10,5007., and that her market value after she had been repaired would have been 7,5007. as she was a vessel of exceptional size and class, but that an owner wanting such a ship for the particular purposes of his trade, and having to elect either to sell, or to repair, or to purchase, would have elected to repair her, for such a vessel could not have been built or purchased at that time for so small a sum as 10,5007.; it was held that the inference from these facts was, that the cost of repairs would not have exceeded the value of the ship when repaired, and therefore that the loss was an average loss only, and not a constructive total loss (ƒ). The same test is, however, inapplicable in some cases of damage to goods; for instance, where a cargo meets with sea damage, and the master is obliged to put into an intermediate port, it may well happen that considering the state of the market there, and the expense of taking on the cargo, an immediate sale would be more beneficial to the owner of the goods than a sary to earn it would be greater than the freight. Moss v. Smith, 9 C. B. 94, and Philpott v. Swann, 11 C. B. N. S. 270. (e) Phillips v. Nairne, 4 C. B. 343; see also Hyde v. The Louisiana State Insurance Company, 3 Mason (American) Rep. 27. (f) Grainger v. Martin, 2 B. & S. 456. This judgment was affirmed in the Exchequer Chamber; see Grainger v. Martin, 4 B. & S. 9, Martin, B., and Keating, J., dissenting. |