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if he has given the underwriter notice of abandonment. Where the ship being wrecked, part of the goods are lost and the remainder are destroyed or plundered by a mob after being conveyed to shore, this will be a total loss of all the goods, and no abandonment will be requisite (c).
Again, where a cargo insured is wrongfully condemned, and the sentence of condemnation reversed on appeal, and the property ordered to be restored, or its value paid to the owner, the insured can recover as for a total loss without giving notice of abandonment (a).
If sea-damaged goods (e) are sold during the voyage, because they would be completely useless on reaching their destination, or if a ship is so injured that it could not be repaired, and if it be accordingly sold (f), such will be considered a total loss, and the insured need not give notice of abandonment.
If perishable goods are damaged, but, nevertheless, arrive at their destination in specie, there will not be a total loss, and the underwriter will not be liable in respect of them (g).
Where, by the terms of the policy and by the bye-laws of an insurance company, who are the underwriters, the insurance is limited to "absolute damage caused by the perils insured against,” a constructive total loss will, nevertheless, be covered by the policy (h).
Where a ship, being wrecked, is sold by the owner and afterwards got off by the purchaser and repaired, though at a great expense, the owner cannot treat this as a total loss, unless the sale, in the exercise of a sound judgment,
(6) Bondrett v. Hentigg, Holt, 149.
(d) Mullett v. Shedden, 13 East, 304.
(c) Roux v. Salvador, 3 Bing. N. C. 266 (S. C.); see “Casos" (1) at end of this ; Saunders r. Baring, 34 L.T., N. S. 419; see "Cases” (2) at end of this $; Dyson v. Rowcroft, 3 B. & P. 474.
(f) Idle v. Royal Ex. Ass. Co.,
8 Taunt. 755; Cambridge v. Anderson, Ry. & Moo. 60.
(9) M' Andrews V. Vaughan, 1 Park, Ins. 186; Mason v. Skurray, ib. 191; Glennie v. London Ass. Co., 2 M. & Sel. 371 ; see “ Cases" (3) at end of this g.
(1) Forwood v. North Wales Mar. Ins. Co., 9 Q. B. D. 732 (C. A.); 49 L. J., Q. B. 593; 42 L. T. 837.
appeared, at the time, most beneficial for all parties (i). Again, supposing the ship could, in all probability, be repaired so as to return to this country with any class of cargo, so as on her arrival to be worth the cost of her repairs, it cannot be treated as a total loss, though she cannot be made fit to carry the cargo originally intended for her (i). But if, on her arrival here, the ship would be worth less than the cost of her repairs, the underwriters will be liable for a total loss (k). In fine, a shipowner insured is not bound to repair his ship, if she be so damaged, that a prudent owner uninsured would not repair her (1); but he can recover in such a case as for a total loss.
Where a demand has been made as for a total loss, of a ship insured, and the underwriters have paid the amount of the demand, but the ship subsequently reaches port, she will be deemed to have been abandoned, and will belong to the underwriters (m).
CASES. 1. Hides insured from Valparaiso to Bordeaux free of particular average unless the ship were stranded, arrived in Rio Janeiro on their way to Bordeaux in a state of incipient putridity, brought about by a leak in the ship. As the hides would by the process of putrefaction have been destroyed before they could have arrived at Bordeaux, they were sold at Rio, but for not more than one-fourth of their value. The insured learnt at the same time of the damage to and the sale of the hides. Held, that the insured could recover for a total loss without abandonment (n).
2. A ship, laden with a cargo of coals (insured) for Yokohama, received such damage during the voyage as to necessitate her putting into Hong Kong to repair. The cargo was there, on the advice of competent persons, sold, as there would have been great danger of spontaneous combustion, had it been conveyed to its
(i) Doyle v. Dallas, 1 Moo. & Rub. 48; Idle v. Royal Ex. Ass. Co., 8 Taunt. 755.
(k) Cambridge V. Anderson, 1 Ry. & Moo. 60.
(1) Scottish Mar. Ins. Co. v. Tur. ner, 1 Macq. H. of L. Cas. 334.
(m) Houstman v. Thornton, Holt, 242,
(n) Roux v. Salvador, 8 Bing. N. C. 266 (S. C.).
original destination. The coals were publicly sold at Hong Kong; but no notice of abandonment was given to the underwriters till the claim as for a total loss was made. The proceeds of the sale had been offered, subject to a deduction of a sum for freight pro ratâ itineris, to the charterers, on condition that they should sign a receipt in full of all demands. This the charterers declined to do. In an action against the underwriters, who refused to pay on the ground that the charterers had not abandoned the cargo : Held, that the public sale per se vested the proceeds in the underwriters, and that the charterers had not subsequently elected to take the proceeds (1).
3. Goods were insured from C. to Liverpool until safely discharged and landed, rice free of particular average.
The ship arrived in the port of Liverpool, but before she could be brought to her moorings or be at all unloaded she ran aground and was wrecked. The cargo was greatly damaged, and being removed from the wreck was sold by the consignees at Liverpool, and produced in the aggregate a little more than sufficient to pay the freight and salvage. The rice, howerer, did not realize even sufficient to pay the freight. Held, that this was a case of particular average only; and that, therefore, as to the rice the underwriter was exempted by the warranty (m).
4. The plaintiff, who had insured goods shipped to the Baltic, on the 8th January, 1811, received notice that the ship's papers had been taken away on the 7th December by the Swedish government, within whose port she was. The plaintiff gave no notice of abandonment to the underwriters till the 17th January. Held, that though such notice was too late supposing an abandonment to be necessary, yet, as the goods were finally seized by the Swedish government on the following 30th April, the ineffectual notice did not preclude the insured from recovering as for a total loss without any abandonment (n).
5. A ship and cargo insured from Sierra Leone to a port of discharge in Great Britain were barratrously taken out of the ship's proper course by the crew, who then sold the ship and part of the cargo at Barbadoes. The remainder of the cargo was sent home by another vessel. The insured gave notice of abandonment to the underwriters. Held, that this constituted a total loss of the cargo from the date of the act of barratry (o).
(1) Saunders v. Baring, 34 L. T. 419.
(m) Glennie v. London Ass. Co., 2 M. & S. 371.
(n) Mellish v. Andreus, 15 East, 13.
(0) Dixon v. Reid, 5 B. & Ald. 597.
§ 152. If the loss be merely constructive and not total per se, Notice of notice of abandonment must be given by the insured to the abandonment underwriter, in order that the insured may recover as for a total loss.
Notice of abandonment means notice that the insured will cede all his claims to and rights in the subject-matter of the insurance, or in what of it may remain, in favour of the underwriter, provided the underwriter will pay him the value of the thing insured (P). Merely requiring an underwriter to settle as for a total loss and to give directions for the disposition of the property insured will not constitute a valid notice of abandonment (p).
In all cases where a ship insured is abandoned to the Its effect. underwriter, not only the ship herself or what remains of her, but also the use of the ship, and any freight which is in the course of being earned when the loss occurs (9), will pass to the underwriter.
When notice of abandonment is required by law, not When not only the subject-matter of the insurance or part of it must required. exist in specie, but there also must be a prospect, however remote, of its reaching its destination, or at least a prospect of its value being affected by the measures which may be adopted for its recovery or preservation (). Thus, notice of abandonment is not required where nothing remains which can pass to or be of value to the underwriters. For instance, where there is a policy on the ship, and also on the charterparty freight (i.e. freight to be earned by the homeward carriage of a cargo chartered to be put on board at a distant port), and the ship is so injured on her outward voyage
that the owner abandons her to the underwriter on ship, and so there can be nothing to pay to the underwriter
(P) Thelluson v. Fletcher, 1 Esp. 72; Parmeter v. Todhunter, 1 Camp. 541.
(2) Stewart v. Greenock Mar. Ins. Co., 2 H. of L. Cas. 159; see
“Cases” (2) at end of this ş; Scottish
(r) Per cur. in Roux v. Salvador,
Notice to be given in a reasonable time.
Notice inoperative, when.
on charterparty freight, notice of abandonment need not be given to him ($).
The insured, though he may be entitled to abandon, is never compelled to do so. If the insured be entitled to abandon, he must give notice of abandonment within a reasonable time, after receiving reliable information of the loss, and having had an opportunity of estimating the damage done (t). If he omits to do so, his right to abandon will be deemed waived, and the underwriter will not be liable for a total loss.
The insured will not be excused from giving notice of abandonment by the fact that such notice may turn out of no advantage to the underwriters; unless at the time when he elects to treat the loss as a constructive total loss, there is no possibility of the underwriters deriving any advantage from the notice (u).
If in the result the information which induced the insured to give notice of abandonment turns out to be entirely false and unfounded, or if it be not justified by the circumstances which existed both when it was given, and when the action was brought, the notice will be null and inoperative (-). Therefore, where a ship insured is captured and afterwards recaptured, but in the interval the insured gives notice of abandonment, and the ship subsequently arrives in safety, the insured will not be entitled to recover for a total loss, but only for a partial, in respect
(s) Potter v. Rankin, L. R., 6 kenzie, 3 C. P. D. 467 (C. A.); E. & I. App. Cas. 83.
Anderson v. R. E. Ass. Co., 7 East, (1) Mitchell v. Edie, 1 T. R. 608 ; Potter v. Rankin, L. R., 6 E. & I. (u) Kaltenbach v. Mackenzie, 3 C. App. Cas. 83; Fleming v. Smith, 1 P. D. 467 ; 26 W. R. 844; 39 L. H. L. Cas. 513; Barker v. Blakes, T., N. S. 215 (C. A.); see“Cases" 9 East, 283 ; see “ Cases" (3) at end (1) at end of this į. of this s; Aldridge v. Bell, 1 Stark. (x) Bainbridge v. Veilson, 10 East, 498; see “ Cases" (4) at end of 329 ; 1 Camp. 237, 240, per Ellenthis ș ; Read v. Bonham, 3 Bro. & borough, C. J.;
alkner v. Ritchie, Bing. 147; Gernon v. R. E. A. Co., 2 M. & S. 290 ; Brotherston v. 6 Taunt. 383 ; see “Cases” (6) at Barber, 5 M. & S. 418; Naylor v. end of this $ ; Kaltenbach v. Mac- Taylor, 9 B, & Cr. 718.