judgment of the Queen's Bench Division, should be reversed; that the judgment of the Court of Appeal, in so far as it dismissed the appellant's appeal against the judgment of the Queen's Bench Division, be affirmed; and that your Lordships should declare that the cross-appeal to the Court of Appeal ought to have been dismissed with costs, and order costs to be paid accordingly; and that there should be no costs of the appeal to this House.

Lord HATHERLEY:

My Lords, I only desire to say that I entirely concur in the opinions which have been expressed by my noble and learned friends. I have had an opportunity of perusing the opinion which has just been delivered by my noble and learned friend opposite (Lord BLACKBURN), and having read it carefully, I may say that upon both the points of the appeal upon which he has touched I concur in the view he has taken, namely, that it is very clear that the damage done extends to 100 per cent, that is to say, extends to the whole amount of the money insured; and that it is equally clear, as it seems to me, that the suing and labouring clause was inserted by the underwriters for the purpose of securing the benefit of any pains that the shipowner might be inclined to take in preserving, for their benefit, as much as he possibly could preserve. But that does not apply to a case like the present, where the salvage seems to have been an ordinary sort of salvage; namely, a ship perceiving another at a distance and in a state of distress comes to the rescue, no bargain being made. We were expressly told in the case that no bargain was made as to any remuneration which should be given, but it was rescued upon the simple and common principle of salvage. There does not appear to be any authority showing it to be a case coming within the suing and labouring clause. I think, therefore, that the separation of the two points has been correctly made, and that your Lordships should concur on the one point in the judgment pronounced by both the Courts below, and on the other point in the judgment pronounced by the Queen's Bench Division, as distinguished from that pronounced by the Court of Appeal.

*Lord O'HAGAN:

[*769]

My Lords, I also have had the advantage of perusing the very careful and exhaustive opinion which has been read by my noble and learned friend (Lord BLACKBURN). I entirely con

No. 90. Pitman v. Universal Marine Insurance Co., 9 Q. B. D. 192.

cur in the substance of that opinion, and I feel that I could add nothing of material value to the reasonings and conclusions it has so well expressed.

I have had some grave doubts as to the second point with reference to the operation of the suing and labouring clause, but, upon the whole, I do not see sufficient reason to differ from the views which have been adopted by your Lordships.

Ordered: That the judgment of the Court of Appeal in so

far as it varied the judgment of the Queen's Bench Division be reversed.

That the judgment of the Court of Appeal in so far as it dismissed the appellant's appeal against the judgment of the Queen's Bench Division be affirmed.

Declared that the cross-appeal to the Court of Appeal ought to have been dismissed with costs; costs ordered to be paid accordingly.

No costs of appeal to this House.

Lords' Journals, 31st July, 1879.

Pitman v. Universal Marine Insurance Company.

9 Q. B. D. 192-219 (s. c. 51 L. J. Q. B. 561; 46 L. T. 863; 30 W. R. 906).

[192] Insurance. Partial Loss. - Insurance on Ship.— Injury by Perils insured against. Owner selling instead of repairing. Mode of estimating Liability of Underwriters.

-

Where a ship that is insured is injured by perils insured against, and the owner, instead of repairing, sells her during the continuance of the risk, the loss to be made good by the underwriters depends on the depreciation in the value of the ship, and not on the amount that it would have cost to repair her with an allowance in respect of new materials for old.

The estimated cost of repairs, though rejected as a direct measure of loss, might be the measure of the difference between the ship's sound and damaged values, if no other means can be found for arriving at the loss really sustained.

The depreciation in value is to be ascertained by taking the value of the ship, if sound, at the port of distress, and her value there in her damaged condition. To ascertain the liability of the insurers, the proportion so arrived at should be applied to the real value of the ship at the commencement of the risk, if the policy be open, or to the agreed value if the policy be valued.

So held, by LINDLEY, J., affirmed (except as to the mode of ascertaining the depreciation in value) on appeal by the majority of the Court, JESSEL, M. R., and COTTON, L. J.; BRETT, L. J., dissenting.

Held, by BRETT, L. J., that the matter against which the owner was indem

- Pitman v. Universal Marine Insurance Co., 9 Q. B. D. 192, 193.

nified was the cost of repairs and not any diminution in the saleable value of the ship, and that therefore loss or gain by the sale of the ship was outside the contract of insurance and was not a matter to be considered between the assured and the underwriter in adjusting either a total or partial loss on ship.

Further consideration.

The plaintiffs were the owners of the barque Thracian, and by a policy of insurance bearing date the 3rd of June, 1875, caused themselves to be insured for twelve calendar months upon the ship, valued at £3700. The defendants subscribed the policy for £1000, and it was agreed by memorandum that the insurance should commence from the 23rd of March, 1875.

The vessel sailed under charter from Singapore to Moulmein on the 24th of July, 1875, and arrived off that port on the 10th of August, 1875, and, in passing up the river to the port of Moulmein, took the ground, and remained aground until the 14th of the same month, when she was got off and towed up to Moulmein. *The plaintiffs determined to [* 193] abandon the vessel, and gave notice of abandonment, but the underwriters declined to accept it. The plaintiffs then, having made some slight repairs, sold the ship and stores for £3897.

In the statement of claim the plaintiffs alleged that the value of the ship at the commencement of the risk was £4000, and that she was injured by perils insured against by the policy, and claimed £781 7s. 10d. as a partial average loss under the policy. The defendants paid £245 into Court.

The case was tried in May, 1881, before LINDLEY, J., who reserved for further consideration the question upon what principle the loss was to be ascertained.

June 25, 1881. Butt, Q. C. (Pollard with him), for the plaintiffs. The question is whether the plaintiffs are entitled to the costs of the repairs, or only to the difference between the sound value of the ship and the net proceeds of the sale. The plaintiffs gave notice of abandonment, which was refused, and the defendants now ask to be placed in the same position as if they had accepted notice or to treat the loss as total with benefit of salvage. The sale and the proceeds of it have nothing to do with defendants' liability, except for the purpose of ascertaining the proportion. Arnould Marine Insurance, 5th edit., p. 901; Knight v. Faith, 15 Q. B. 649. [He referred also to Lidgett v. Secretan,

No. 90. Pitman v. Universal Marine Insurance Co., 9 Q. B. D. 193, 194.

L. R. 6 C. P. 616; Lohre v. Aitchison, 2 Q. B. D. 501; Stewart v. Steele, 5 Scott N. R. 927; and Brooks v. MacDonnell, 1 Y. & C. 500.]

Cohen, Q. C. (Hollams with him), for the defendants. The defendants in estimating the amount which they have paid into Court have followed the law. Atwood v. Sellar, 5 Q. B. D. 286 (p. 386, ante). In Lohre v. Aitchison there was more than a strict indemnity. The time at which loss is to be ascertained is the termination of the risk, not the time when the damage was done. Knight v. Faith was wrongly decided. See Potter v. Rankin, L. R 6 H. L. 83, and Kaltenbach v. Mackenzie, 3 C. P. D. 467.

Butt, Q. C., in reply. -The owner has always a right [* 194] to repair, * and whether he does so prudently or imprudently, can call on the insurers to pay up to the amount insured. The defendants say that if the vessel is worth £7000 when repaired, and the repairs cost £7500, then the insurers are not liable for anything, which amounts to saying that the assured must abandon, which they are never obliged to do. See Phillips, 1494. It is a wrong principle to compare the damaged value at Moulmein with the sound value in England, and the inconvenience of having to ascertain the sound value at Moulmein is apparent. Lowndes on Insurance, 309-310. Cur. adv. vult.

1881, July 4. LINDLEY, J.-This is an action on a time-policy for a partial loss, and the question I have to decide is the principle upon which the loss is to be ascertained, it being agreed that all questions of figures shall be referred to some gentleman versed in adjustments. The facts which are material are few and simple, and are set out in the claim. They are shortly these, that the plaintiffs were the owners of the barque Thracian, and by a policy of insurance dated the 3rd of June, 1875, they caused the vessel to be insured with the defendants for a period of twelve months from the 23rd of March, 1875, the vessel being valued at £3700, and the defendants subscribed themselves for the sum of £1000. The vessel sailed on the 23rd of March from Launceston, in Tasmania, for Newcastle, New South Wales, where she arrived on the 3rd of April. She then sailed with a cargo of coals on the 6th of May to Singapore, and she arrived and discharged her cargo in June, 1875, that is to say, she was in Singapore when

No. 90. – Pitman v. Universal Marine Insurance Co., 9 Q. B. D. 194, 195.

the policy was signed. Then the vessel was chartered to proceed to Moulmein, and take in a cargo of teak. She grounded there, and the value of the vessel at the time of the commencement of the risk was £4000. Those are, in substance, the facts. The vessel injured grounded on her way to Moulmein, and after remaining aground four days in some peril, she was got off and towed to Moulmein. She was there examined, and was found to be seriously injured. The plaintiffs resolved to abandon her to the underwriters, and gave notice of abandonment. The underwriters, however, declined to accept her, and re- [*195] quired the plaintiffs to repair her. The plaintiffs did not insist on their abandonment, but, acting on the best advice they could obtain, determined not to repair her, but to sell her, and, after making some slight repairs, they accordingly did sell her and her stores for £3897. Upon the evidence before me, and having regard to the want of proper dock accommodation and appliances at Moulmein, and the high charges there, I have come to the conclusion that the cost of repairing her so as to make her as good as she was before she grounded would have been about £5300, which is more than her value when repaired, such value being £4500 or thereabouts. I have further come to the conclusion that it was not practicable to examine her bottom and to repair her temporarily, so as to enable her to continue her voyage in safety, without docking her and spending much more upon her than such temporary repairs would justify. In other words, I find as a fact that a prudent uninsured owner would have done what the plaintiffs did, and that they did what was best for all interested in selling her in her damaged state, and substantially as she was when brought into a place of safety. Under these circumstances the plaintiffs have brought an action against the defendants to recover the amount of the loss sustained by the plaintiffs by reason of the injury to the ship by her stranding. The plaintiffs are clearly entitled to recover something, and the question is how much? The plaintiffs claim £781 7s. 10d. The defendants have paid into Court £245. The difference between the parties is attributable not to any dispute about figures, but to the circumstance that they differ entirely as to the principle upon which the calculations are to be based. The plaintiffs contend that the loss to be made good is to be measured by what it would have cost to repair the ship and make her as good as she was before