Page images
PDF
EPUB
[ocr errors][ocr errors][merged small][ocr errors][ocr errors]
[ocr errors][ocr errors][merged small]

expense of his owners, but every wilful act on his part of known illegality, gross malversation, or criminal negligence, by whatever motive induced, whereby the owners or the charterers of the ship are, in fact, damnified.”” As coming under barratrous acts may be mentioned the scuttling of a ship, wilfully destroying or injuring a ship by running it ashore, setting it on fire, or abandoning it, or selling a vessel or deviating it from the true course of travel with the object of obtaining gain in some way. To constitute barratry, however, it is essential that these acts should be done against the better judgment of the shipmaster and without the knowledge and consent of the owner. Turning now to the terminal expression “covering all other perils, losses, and misfortunes, etc.,” it would seem that the underwriter is liable for losses arising from all causes not specifically mentioned. Apparently the phraseology includes all possible perils. Yet the real intent of the policy is to limit the liability of the insurer to losses reSulting from causes similar to those enumerated before, i.e., to those losses which are due only to accidental causes connected with the sea, and which result from the action of the elements or from other overpowering and unavoidable occurrences, and not from any inherent defect of the subject insured, or from natural causes, such as deterioration, wear and tear, etc., in so far as they are inevitably associated with the usual prosecution of the journey.

"Joseph Arnold, “On the Law of Marine Insurance,” Vol. II, p. 952, Sec. 839.

CHAPTER XXVI

THE TYPES OF LOSSES ARISING FROM MARINE PERILS

HAVING discussed the nature of the perils against which protection is granted, we may next inquire into the form which the losses arising from such perils may take, and the extent which the underwriter’s liability may assume. Here we meet with a number of terms which appear again and again in the discussion of marine policy provisions. These terms refer (1) to “total loss,” which may be either “actual total loss” or “constructive total loss,” and which involve a discussion of “abandonment”; (2) “general average”; (3) “particular average”; and (4) “Salvage.”

1. Total Loss.-‘‘Actual total loss,” as the term suggests, has reference to those cases where the subject matter of the insurance is completely destroyed or “missing,” or is so badly damaged as to be of little or no value to the insured, or is taken out of the possession of the insured so as to completely deprive him of its use. “Constructive total loss,” on the other hand, has been defined as occurring “when the subject matter insured, though existing in specie, is justifiably abandoned on account of its destruction being highly probable, or because it cannot be saved from actual total loss, unless at a cost greater than its value would be if such expenditure were incurred.”" To illustrate this definition we need only refer to a vessel which, having run upon

"Frederick Templeman, “Marine Insurance: Its Principles and Practice,” p. 45.

rocks, has been but slightly injured, and only requires to be released. Yet the cost of freeing this vessel from its position may be so large when compared to its value afterwards that the attempt can only be characterized as a commercial failure. Hence it is that this and all similar cases are technically termed “constructive total losses”; and, if the facts of the case warrant it, the interests of the insured demand that he should give the underwriter of the risk what is called a “notice of abandonment.” By this is meant that the insured claims payment for a total loss, and is willing to surrender to the underwriter all that remains of the property insured. If the underwriter accepts this notice of abandonment, he will pay the total valuation stated in the policy, and will seek, if practicable, to reimburse himself, at least in part, by recovering as much as possible of the property thus abandoned. In the case of the vessel, “constructive total loss” exists whenever the cost of saving her from her position, plus the cost of repairing her damages, would exceed the value of the vessel when thus restored. In the case of a cargo, such a loss may be declared when the goods fail to arrive at the port of destination, and when the cost of restoring any loss or damage, and of forwarding the cargo to its final destination, amounts to more than the goods are worth after thus being repaired and forwarded. Lastly, in the case of freight, “constructive total loss” exists when the vessel or cargo is in such a condition that to save the freight from actual total loss would require an outlay greater than the value of the freight after such expenditure is incurred. In all these cases it must always be remembered that both the insured and underwriter must act without undue delay in giving and accepting the notice of abandonment, and that neither may wait to form an opinion by observing developments. 2. General Average.—Turning next to a consideration of partial losses, the subject which claims our special attention

« PreviousContinue »