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§ 155. Abandonment If freight be insured, the freight can be justifiably in policies on abandoned by the assured, if there has been a constructive
total loss of the ship; but not if the ship has been repaired, and completed her voyage (a).
Detention, capture or any other peril insured against, which determines the voyage or suspends it for a long period, will entitle the assured to recover as for a total loss of the freight; unless the freight be earned before action brought. For under a policy on freight the underwriters will generally be discharged from liability, if any freight at all be earned (). Therefore, supposing on learning of a hostile embargo in a foreign port the owner abandon to the underwriters the ship and freight, and the underwriters accept the abandonment, but, after the embargo is taken off, the ship completes her voyage and earns freight, the insured cannot recover as for a total loss of freight (c).
In cases where both the ship and cargo are justifiably sold abroad, the insured can recover for a total loss on freight, without giving notice of abandonment. If the sale be
. not justifiable, he cannot recover for a total loss on freight, and any notice of abandonment will be inoperative (d).
The mere fact of the shipmaster being unable to forward the whole cargo at a sum less than the value of the freight will not justify him in selling it, nor entitle the shipowner to claim as for a total loss on freight (e). The rule in the case of policies on freight is, that where the ship is capable of carrying the goods, the underwriter will not be liable if the master sell them or abandon them on account of the cost of conveying them (f); unless the
(a) Benson v. Chapman, 6 M. & (c) M'Carthy v. Abel, 5 East, Gr. 792, 810; 2 H. of L. Cas. 696; see “ Cases" (1) at end of (d) Parmeterv. Todhunter, 1 Camp. this 6.
541; Idle v. Royal Ex. Ass. Co., 8 (6) Everth v. Smith, 2 M. & Sel. Taunt. 755; see “Cases" (3) at end 278; Benson v. Chapman, 2 H. of L. of this § ; Moss v. Smith, 9 C. B. 94. Cas. 696 ; see “ Cases" (1) and (2) (@) Moss v. Smith. 9 C. B. 94. at end of this s.
(5) Mordy v. Jones, 4 B. & C.
goods have been damaged, by a peril of the sea during the voyage, to such an extent that the carriage of them to their port of destination would cost more than they would realise there. For in that case the insured may recover from the underwriter the freight (g). Again, if in the case of a policy on freight the loss be caused not by the perils of the seas, but through the charterers availing themselves of some particular right given them by the charterparty, the underwriters will not be liable (1).
Where profits or commissions have been insured, but the In policies on goods are prevented from arriving, so as to earn the profits
commissions. or commissions through the perils insured against, the insured will be entitled to recover for a total loss without giving notice of abandonment.
CASES. 1. Freight was insured at and from Pernambuco to Liverpool, valued at 2,0001. The ship struck on a rock when coming out of Pernambuco harbour, and was damaged to such an extent as to necessitate her putting back for repairs. In order to pay for the repairs, which amounted to 7,1321. 3s. 8d., the master executed a bottomry bond, by which the ship, freight and cargo were pledged for that sum, and a bottomry premium at the rate of 201.
The ship subsequently reached Liverpool with her original cargo. The insured, on learning of the damage to the ship, gave notice of abandonment of the ship and freight to the respective underwriters, and also repudiated the bond. The bondholders thereupon took possession of and sold the ship under an order of the Admiralty Court. The proceeds, amounting to 1,6751., were, with the freight, paid to the bondholders. Held, that tho master might have abandoned at Pernambuco, and that then the insured might have recovered as for a total loss; but that the master having elected to repair there, the insured could not recover (i).
2. A valued policy was effected on freight at and from Riga, On the ship's arriving at Riga, she was detained for five weeks.
394 ; see “Cases” (4) at end of this ; Philpott v. Swan, 11 C. B., N. S. 270.
(9) Michael v. Gillespy, 2 C. B., N. S. 627.
(1) Inman SteamshipCo. v. Bischoff, 7 App. Cas. 670.
(i) Benson v. Chapman, 2 H. of L. Cas. 696.
and prevented from loading by order of the Russian government. The freighter never loaded her. A few days after the termination of the detention, the frost set in and detained the ship at Riga till the spring, when a freight was procured and earned. The freight, however, wus less than the costs occasioned by the detention. Held, that though the policy had attached at the time of the detention, the underwriters were not liable, freight having been subsequently earned (1:).
3. An insurance was effected on freight and cargo from Quebec to London. After leaving Quebec the ship sprung a leak, was run aground on a reef of rocks, and was in imminent peril of being carried away and destroyed. Acting on the advice of a surveyor, and of the owners' agent, the master sold the ship while on the rocks. Subsequently the ship, being saved and repaired by the purchasers, brought a cargo to London. Held, that the sale was justifiable, and that therefore the insured could recover as for a total loss, no abandonment of the freight being requisite (?).
4. During a voyage a ship, being injured by a peril of the sea, had to put into a port and land the whole of her cargo. Part of the cargo had been so wetted by sea-water that it could not be reshipped without danger of ignition, unless it went through a process which would have necessarily detained the vessel for six weeks, and the expense of which would have equalled the freight. Consequently the master, acting prudently, sold the goods, and, not being able to obtain others, sailed for the port of destination with the remainder of the cargo. Held, in an action on a policy on freight, that the underwriters were not liable (m).
$ 156. A part of the thing insured cannot be abandoned, for abandonment cannot be partial, but must apply to the whole subject matter of the insurance (n). Therefore, if a ship and its cargo be insured jointly in one policy, without specifying in the policy how much is insured on each respectively, neither the ship nor its cargo can be separately abandoned (o). So, where several classes of goods forming one cargo are insured in the same policy for
Notice of abandonment its form.
(k) Everth v. Smith, 2 M. & S. 278.
(") Idle v. Royal Ex. Ass. Co., 8 Taunt. 755.
(m) Mordy v. Jones, 4 B. & Cr. 394.
(n) i Park, 229.
one gross sum, none of these classes can be separately abandoned. But where each class is insured for a specific amount, or by separate and distinct policies, each can be abandoned separately (P).
The abandonment must also be unconditional, and made in express terms, except in cases where the underwriter agrees to accept a conditional abandonment (1), or acquiesces in a defective notice of abandonment; for an insurer, who rejects an abandonment, must do so within a reasonable time (). A mere offer to abandon, which is not accepted by the underwriter, will not be sufficient.
A parol notice of abandonment will be sufficient to bind the underwriter (s). Though no precise form of words is required for it, the notice of abandonment should contain or refer to the grounds of the abandonment, and further, it must be unequivocal (1). Notice of abandonment given in any form, if accepted Notice
irrevocable. by the underwriters, will be irrevocable, unless given under a mistake of fact (u), c.g. on false information. The question whether or not the underwriters accept the abandonment is a question of fact. The circumstances of a case may, however, be such that a jury may be told, as a matter of law, that if they think the underwriters have done certain acts consistent only with their acceptance of the abandonment, then they ought to find that the abandonment has been accepted (x).
Notice of abandonment, till it is accepted, is defeasible Defeasible, by the restoration of the property, before any action is when. commenced ; or by the insured waiving his right to abandon by treating the loss as partial instead of total.
For in such cases the insured cannot, on subsequently discovering that the cost of repairs far exceeds the market value of the ship itself, convert the partial into a total loss (y).
CASES. 1. A policy of insurance was effected on a cargo of wine to be discharged partly at B., partly at D., and partly at L. The ship was wrecked near B., and three-fourths of the cargo being either lost or so impregnated with salt-water as to render it imprudent to delay the sale till the ports of D. and L. were reached, the insured on the 23rd December, the day they heard of the loss, gave notice of abandonment. On the 27th December, at a meeting of underwriters, but attended only by three of them, the insured was ordered to do the best for all parties. On the 28th of the ensuing February, but not till then, some of the underwriters interfered, forbidding a sale of the damaged wines then about to take place at B., and rejected the abandonment. Held, that the underwriters, not having taken any steps for more than two months after notice of abandonment, must be taken to have acquiesced in it (z).
2. On the 23rd of September, a ship being damaged was surveyed, and on the 18th of October the master wrote to the ship's husband at Liverpool describing the occurrence, and advising him to give the underwriters notice. On the 18th of November the master sent another letter, stating that the surveyors were of opinion that the ship could not go home with only a partial repair, and that she was not worth repairing. This letter was forwarded to the underwriters. On the 24th of November the master executed a notarial act of abandonment, and on the 9th of December sold the ship. On the 20th December the master again wrote to the ship’s husband, stating that in the interest of all parties he had sold the ship, and requesting due notice thereof to be given to the underwriters, which was done. The ship was not in fact worth repairing. Held, that the notice of abandonment was both sufficient and in time (a).
3. The Ruby was insured at and from Halifax to Plymouth, and captured on the voyage. The insured abandoned immediately on hearing of the capture, and thereupon the underwriters took some steps to settle the loss. Information subsequently being received of the ship’s recapture, the underwriters refused to settle except for
(y) Fleming v. Smith, i H. of L. Cas. 513.
(z) Hudson v. Harrison, 3 Bro. &
(a) King v. Walker, 3 H. & C. 209 (S. C.).