and duties. But these expenses not being payable by the merchant until after the voyage is closed, are never incurred in case the vessel is totally lost before arrival. The shipper of goods has, therefore, no reason to insure these amounts against total loss of the ship or cargo. It is consequently only against the risk of the vessel's arrival with cargo so damaged as to give rise to a particular average claim that the shipper need insure the freight, landing charges, and duties. This is not a customary insurance in England, so that cases sometimes arise in which the application of Mr. Justice Lawrence's decision is felt by the merchant to involve him in some hardship. But in French policies on goods it is quite usual to find special provision for the insurance of freight payable abroad, warranted free of claim in case of the total loss of the ship; in return for this warranty the premium is generally made one-half of the rate on the goods.

In the case of goods manufactured for the consumption of one firm and adopted only for their trade, it may be impossible to arrive either by sale or by assessment at a true idea of the damage sustained by them. In such cases the damage is measured by the cost of reconditioning the goods at destination, the claim on the policy being in other respects treated in the same way as if the goods had been sold or the damage assessed.

Expenses of proving and adjusting Claim for Particular Average.—In determining whether a claim for particular average attains the franchise or not, no account is taken of anything but the actual physical damage. The clearness with which this is brought out in the French phrase, avarie particulière matérielle (material particular average), renders that designation superior to our shorter name "particular average." So far, expenses of survey, etc. etc., remain at the charge of the merchant himself. But if it is found that the actual material damage (diminution and deterioration) exceeds the stipulated franchise, there being evidently by that time a liability on the part of the underwriter, then the underwriter allows to the assured the sums spent in survey fees, etc., as being expenses incurred in the claim, which

were essential to the existence of the claim and therefore became part of it. On the same ground the cost of making-up or, as it is termed, adjusting the claim, is admitted when the assured employs an adjuster to make it up; but it is not (as a rule) admitted when the statement is prepared by the assured himself or by a member of his regular office staff.

On examination of adjustments of particular average on goods it will be found that these statements are simply applications of the principles explained above. The adjuster first determines from invoices and policy the insured value of the goods whose damage he is dealing with; then from account-sales or surveys he arrives at the proportion of loss sustained by the damaged goods: if this proportion exceeds the stipulated franchise he applies this proportion to the insured value he has calculated, and to the result he adds the various costs incurred in ascertaining the amount of damage and his own fee for adjustment. It follows from what has already been said respecting costs of surveys, etc., that if there is found to be a claim on only some series of the damaged goods, the proportion of the costs attaching to the goods whose damage does not attain the franchise, falls to the assured's burden not being recoverable by him from his underwriter.

Particular Average on Freight. The most frequent occasion of claim for particular average on freight is the loss of some portion of a cargo by one of the perils insured against in the policy. For instance, take a cargo of sugar carried from Java to New York in return for freight of so much per ton payable when the cargo is delivered at New York. If the vessel meets with some disaster at sea or with bad weather it may happen that a portion, say onehalf, of the cargo is lost. In such a case there is evidently a good ground for claiming from the underwriter on freight the half of the amount he has insured.

A claim may arise on a policy covering the freight of certain goods without the occurrence of a claim on the policy covering the goods themselves. For it might happen that the goods were insured f.p.a. unless the ship

be stranded, and the freight on ordinary memorandum terms. In such case, if the vessel did not strand no loss on cargo except total loss could be claimed from the underwriter, while any loss on freight exceeding 3 per cent proceeding from sea perils of any kind could be recovered from the underwriter on freight.

The ordinary terms on which freight is insured are those laid down in the memorandum, but occasionally freight is insured f.p.a. unless the ship be stranded. This holds specially of freight of salt, and it is easily understood ; if it is not possible to insure the salt except f.p.a. (and this holds true of insurance on salt effected on the ordinary form of policy), it is only to be expected that the freight which can be earned only when the salt is delivered in specie cannot be more favourably insured.

In the discussion of total loss of freight, it was remarked that mere delay on a voyage will not constitute a claim on an ordinary policy on freight. regards particular average. some peril insured against.

This holds equally true as

The loss must arise from

It was also noticed that as English law takes no notice of a partial performance of a freight contract, a freight must either be earned in full by the shipowner or not earned at all. There cannot, consequently, be any claim on a freight policy for particular average arising from closing a marine venture short of destination. The nearest approach that can be got to that is a salvage loss; and such a settlement can only occur when an underwriter on the freight of cargo carried in a foreign ship1 pays a total loss, the ship failing through perils of the sea to deliver her cargo at destination, and is in consequence substituted in the rights of the foreign shipowner to receive distance freight pro rata itineris peracti. Such a case was decided by the Court of Queen's Bench in the sense indicated, and was confirmed by the Court of Appeal (The Canute, London Assurance v. Williams, 1893).2

1 Or on a British ship which has conferred on it pro tempore the rights of a foreign vessel as to distance freight.

2 9 Times Law Reports, 96, 257. In this case the vessel was

It is to be observed that when a vessel fails to deliver portion of her cargo, what the shipowner fails to collect is the corresponding proportion of gross freight, i.e. of bill of lading freight. Consequently, if the system applied to cargo is applied to freight, the proper plan of adjusting a claim on freight is to find what proportion of the total gross freight at risk is lost, and to take that proportion of the insured value as the amount payable by the underwriter. The adoption of gross value is as correct for freight as it has been found to be for cargo. For the value of the net freight on a voyage (i.e. the bill of lading freight less expenses of earning) depends on the length of the vessel's passage. Consequently, there would be in adjustments on net values an introduction of the very elements of time and detention which have been in other respects excluded from the contract. Besides, it is easy to conceive a case in which by the loss of a comparatively small portion of the cargo the net freight would be reduced to nothing, or even to a minus quantity. It would certainly seem absurd that a total loss could be claimable on any real interest when by far the greater part of the goods on which that interest was based completed the venture in safety.

In treating cases of loss of freight and claims on policies covering that interest, there ought to be constant reference to the contract of affreightment. In case of lump sum charters, it may be that freight is payable in full only when the whole cargo is delivered at destination, or that it is payable in full when part is delivered, provided the failure to deliver the rest has arisen from perils excepted in the charter-party. It is therefore possible that, in consequence of the terms of the charter, what would under a charter of another form constitute a claim against underwriters on freight on the ordinary policy, would not in the particular case in hand give rise to such a claim.

Similar complications may arise in connection with

British, but received distance freight in consequence of an agreement that the adjustment of liabilities between ship and cargo should be made according to the law and usage of Havannah, where the venture was broken up.

freight partially prepaid, resulting in cases such as that of Alison v. Bristol Marine, 1875-6,1 discussed above (p. 163).

Passing from freight at risk to chartered freight, we enter on the consideration of one of the most difficult subjects in marine insurance. This will be better appreciated after examination of two important cases of recent occurrence.

In Inman v. Bischoff, House of Lords, 1882,2 the policy on which action was taken was a policy on chartered freight. The facts of the case were as follows: "On 20th February 1879 the Inman Steamship Company chartered the City of Paris, to the Admiralty to convey troops to the Cape; the arrangement was to hold for three months certain, commencing 18th February 1879, and was at the Admiralty's option prolongable after the expiry of that period. One month's freight was payable on signature of the charter, and at the end of the second and of every subsequent month's service one-half of that month's freight was payable. On 22nd February the Inman Company effected an insurance on freight outstanding, risk commencing 20th February 1879 and expiring 19th May 1879, both days included. On 21st March the vessel struck a rock near the Cape of Good Hope and sustained serious injuries, resulting in her being put out of pay in terms of her charter. On 17th April the vessel was discharged from Her Majesty's service, and it was not till 14th May that she was granted a certificate of efficiency. The Inman Company made a claim on their freight policies for the freight between 21st March and 19th May, alleging that perils insured against in the policy prevented them from earning the freight that would have been earned between these dates had the vessel not been put out of pay and discharged from Her Majesty's service. The Government time charter stipulated that if the vessel became inefficient the Admiralty could make 'abatement by way of mulct out of the hire or freight.' At the first trial Lord Justice Brett decided in favour of the plaintiffs; on appeal this decision was reversed, the court being of opinion that none of the perils insured against was the proximate cause of the 1 1 App. Cas. 209. 2 6 Q. B. D. 648; 7 App. Cas. 670.