Page:Encyclopædia Britannica, Ninth Edition, v. 13.djvu/199

 MARINE.] INSURANCE 187 MENT.) It is only, however, when the circumstances seem to involve a virtual loss, as distinguished from a deteriora tion of the property, that notice of abandonment can be competently given ; and, unless the abandonment be accepted, the ultimate state of the facts will alone deter mine the question whether it can be insisted on. The principle upon which losses are settled, when abandonment is validly made, is that the underwriter becomes the pro prietor of the subjects abandoned on payment of the sum insured. The effect of an abandonment of the ship is to transfer the ownership to the underwriters, so that what ever freight she may thereafter earn belongs to them; and, although such freight is thereby lost to the original owners, the insurers of the freight are not liable to them for loss in respect of it, because it is lost only by their own act of abandonment, and not by the perils insured against. When goods are so damaged by the perils insured against that they are necessarily sold at any place other than the original destination, they are constructively lost, and the underwriter is liable for their insured value, under deduc tion of the net proceeds of the sale. But this rule is not applied to goods warranted &quot;free from average unless stranded,&quot; if there has been no stranding of the ship, it being only in that event that the underwriter is responsible for damage to such goods. A constructive loss of freight occurs when the ship is prevented by any peril insured against from completing her voyage, or when the goods on which the freight is to be earned have received such damage that they cannot be conveyed to their destination ; but if the ship can proceed with other goods, the freight earned for these must be deducted from the claim for loss. Partial loss or damage, arising from the perils insured against, is usually, though somewhat loosely, designated rticu- by the term &quot; particular average,&quot; Under this head are included the damages suffered from the accidental or !ra S e - voluntary stranding of the ship, or by her getting into collision with another vessel, by lightning, fire, hostile attacks, or the violence of the sea under any extraordinary circumstances. Damages to the ship s upper works, sails, spars, and rigging are included under particular average if occasioned by the direct force of the sea ; but if caused merely by the force of the wind they are treated as wear and tear, and are not chargeable to the insurers. The loss of anchors and cables parted from by the- vessel riding hard, or by the anchor hooking to any object at the bottom, is regarded as wear and tear ; and the same rule applies to the repairs of the ship consequent on her becoming leaky through working and straining in a heavy sea. The general principle upon which damages of the nature of particular average are distinguished from those falling under the class of wear and tear is that the former must be caused by the immediate operation of some extra ordinary accident, while the latter are only the ordinary incidents of navigation, and as such are not within the scope of the underwriter s contract. But the practical application of this principle is a matter of much nicety, and must usually be left to the judgment of a professional average stater. In adjusting claims for particular average on ships, certain deductions are made for the difference between &quot; new and old,&quot; unless the ship be on her first voyage, either outward or homeward, or the repairs be only tem porary. On this footing one-third is deducted from the costs of the materials and labour required for the ship s repairs, excluding, however, the charges for dock dues, surveyor s fees, or similar accessories, which are allowed in full. No deduction is made for anchors (unless in so far as they may be fitted with wood), and the deduction for chain cables is only one-sixth. When a ship has to be recoppered at the expense of the underwriters, the practice is to allow in full the difference of price between old and new metal, to the extent of the weight of the old copper stript off; and if any sheets have been lost by being rubbed off, the cost of replacing these is further allowed, under deduction of one-third. If the ship has not been stranded, the underwriters are not liable for claims for particular average amounting to less than 3 per cent, on her insured value, independently of the accessory expenses, such as survey fees, &c., which are not taken into account in making up the 3 per cent. Two or more averages occurring in the course of a voyage may, however, be taken together to make up 3 per cent, on the value of the ship, so as to render the insurers liable. Particular average on goods occurs when they arrive at their port of destination damaged by sea-water, or by its effects in heating or otherwise deteriorating them, although in actual contact only with other portions of the cargo. The amount of compensation recoverable from the insurers for such damage is regulated by comparing the &quot; gross &quot; market price, which the goods would have produced if landed in sound condition, with the actual gross price obtained for them in their damaged state, and by chard ncr / to the insurers the same rate of deterioration on the value insured, with the addition of the extra charges specially occasioned by the damage, such as surveys, etc. By this mode of adjustment the assured recovers either more or less than the actual depreciation of the goods, according as the insured value may exceed or fall below the sound market value at the port of destination ; but as the latter value generally includes freights, duties, and other charges, besides profits, it is in most cases in excess of the insured value, and to the extent of such excess the indemnity of the assured is incomplete. The equity, however, of this mode of adjustment is obvious, when it is considered that the insurer receives his premium only on the value insured, and ought therefore to be liable only in respect of that value, while at the same time the gross market values of the goods in their sound and damaged condition furnish the only true criterion of the actual depreciation, because these are the only values with reference to which, ulti mately at least, purchasers could be influenced. It is, however, customary to adjust particular average on a com parison of bonded instead of duty-paid prices in claims for damage to tea, tobacco, coffee, wine, and spirits imported into the United Kingdom. As already indicated, claims for particular average on goods must amount to 3 per cent, or upwards, or in the case of the goods specified in the second clause of the memorandum to 5 per cent, or upwards, otherwise the underwriters will not be liable unless the ship has been stranded ; and it is only when there has been a stranding of the ship that the insurers are liable for any such claims on the goods specified in the first clause of the memor andum, or on other goods specially warranted &quot; free of particular average.&quot; The subject of general average has been treated under General the heading AVERAGE (q.v.). But it may here be remarked average, that, in the very recent case of Attwood v. Sellar (March 1880), it has been decided, contrary to the usage of seventy or eighty years, that the expenses of warehousing and reshipping the cargo at a port of refuge, and of the ship in quitting that port, are the subject of general average contribution. On the general subject of marine insurance the best book of re ference is Arnould s Treatise (5th edition), which embraces the lead ing cases decided in the law courts down to a very recent period. Amongst the minor works bearing on the subject may be mentioned Mr M. Hopkins s Manual of Marine Insurance, and Mr Charles M Arthur s Policy of Marine Insurance Popularly Explained, and especially Mr B, Lowndes s Practical Treatise on the Law of Marine Insurance (1881). (J. WA.)