the construction of the policy, whatever effect it may have had to shew a mistake on both sides as to the subject-matter of the valuation, and so to open the policy. The communications, however, of the assured with Berry and with his agent, coupled with the fact of the large number of coolies on board, and the necessary provisions for their sustenance, are clear to shew that the cargo of rice put on board was not a full or substantially a full cargo, and that there was no total loss of "freight," understood as freight of merchandise, to sustain the claim to recover absolutely the 1,000l. upon the valuation. A valuation of freight refers prima facie to the freight of a full cargo, or the charter of the entire ship, and in this case there was nothing to shew the underwriters that the valuation was of less than such full freight. If there had been no passengers or so few as not substantially to interfere with the amount of the cargo, and the ship had been fully loaded with as much rice as would fetch a sum equal to the total of freight and passage money upon the voyage in question, namely, 3,356., and the whole had been lost, the 1,000l. only would have been payable. If only so many bags of such full cargo had been lost as would produce a freight of 1461. 168., the defendants' mode of calculation would have been applicable, and they would have been liable to the loss multiplied by 1,000 and divided by 3,356=439 and a fraction.

The diminution of the liability for a partial loss under a valued policy, where the actual value of the total exceeds the valuation, is, however, by an artificial rule which can only be applied where there is a total with which to establish the proportion. Where no such total is given the calculation must proceed as upon an open policy, except in respect of the maximum for which the underwriter is answerable and the portion for which he insures. In the present case, assuming that there is a valuation by agreement of the same subject-matter, there is no total of full freight of merchandise with which to institute the proportion. It is not stated, and we must conclude could not be stated with certainty, what the total freight would

have been had the vessel been filled up with cargo, or that there might not possibly have been a full cargo, the freight of which would not have exceeded 2,000l.

We must, therefore, whilst, on the one hand, we decide in favour of the assured that the passage money of the coolies was not freight within the policy to make up a full freight upon which to work out this proportion, on the other hand hold in favour of the underwriters that the policy, as applicable to a partial cargo, was an open policy for half the loss of freight not exceeding, in any case, 1,000l., and as only 1,4127. freight was lost the underwriters are liable for 7061., for which sum, less the 4401. 1s. paid into Court, namely, 2657. 198., the plaintiff is entitled to judgment. In arriving at this conclusion as to the operation of the policy in case of the total loss of a partial cargo, we act in accordance with the decision in Forbes v. Aspinall (13) as to freight, and that of this Court in Tobin v. Harford (14) as to goods.

Judgment for plaintiff.

ship had to put into ports of distress, and the master had to charge the ship, freight and cargo by bottomry bonds. On arrival at Bremen, B. & Co., purchasers of the cargo, had to pay the bonds to get the cargo. A foreign adjustment was made, apportioning this charge between ship and freight and cargo. The shipowner and master, being unable to pay the part apportioned to the ship and freight, and the ship on sale only realising part thereof, and a supple mental adjustment having been made, including the residue as against cargo, the plaintiffs, as trustees for B. & Co., sought to recover payment thereof from the defendants:-Held (on Special Case stated), that the plaintiffs were entitled to recover, per BOVILL, C.J., and KEATING, J., because the defendants had bound themselves to repay whatever had to be paid by the owners of the and was general average according to the foreign statement, whether or not it were really general average by English or Bremen law, or arose from perils (not being those specially excepted) insured against, and in their view of the particular findings of the case, such a statement had been made as to the sum in question; and per BREIT, J., because, in his view of the findings in this case, not only had there been such a statement, but also the sum was general average by the Bremen law; and as the defendants under an ordinary policy would have been liable to pay if the loss had arisen from perils insured against, the only way to give effect to the marginal note was to hold it to extend the liability to losses not occasioned by perils insured against, and not within the special exceptions.

cargo

cept that the margin contained the note "to pay general average as per foreign statement if made," and certain special warranties as to particular average and capture or seizure. The ship by stress of weather had to put in at Constantinople and Malta, and at both places the master had to charge the ship, freight and cargo by bottomry bonds, for the purpose of repairs. On the arrival of the ship at Bremen, Messrs. Bolte & Co., purchasers of the cargo, in order to get it, paid the bonds. An average statement was made at Bremen, apportioning the amount of the bonds between the ship and freight and the cargo. The ship, on being sold by the Tribunal of Commerce, realised only a part of the sum apportioned to ship and freight, and a supplemental average statement was then made, including this residue as against cargo, as to which statement (apart from other questions) it was matter of dispute between the parties on the findings in the case, as to whether the statement stated this sum as general average, and as to whether the sum was general average by the law of Bremen. The action was by the plaintiffs as trustees of Messrs. Bolte & Co., to recover the residue of the sum apportioned by the first statement to ship and freight.

Sir George Honyman (M'Leod with him), for the plaintiffs.-The cases as to the liability of underwriters on a foreign adjustment of general average are collected in 2 Arnould on Insurances, 4th edit., by Maclachlan, p. 812, et seq. It is there stated that " as a general rule the place for the adjustment of general average is the ship's port of destination or discharge; when this happens to be a foreign port, the general average loss is adjusted there, according to the law and usage of the country to which such foreign port belongs; and the adjustment so made is called a foreign adjustment," citing Sim onds v. White (1); and it is shewn there that the underwriter is bound by a foreign adjustment made according to foreign usage,-"Thus," in Newman v. Cazalet (2), "the assured (owner of goods) had been

(1) 2 B. & C. 805. (2) 2 Park Ins. 900.

compelled to pay under a foreign adjustment, settled at Pisa in respect of losses which would not have been general average in this country, and upon contributory values differently computed from what they would have been here, yet as it clearly appeared in evidence that all the losses allowed were general average at Pisa, and that the apportionment was correct according to the mercantile usage of that place, the assured was allowed to recover against his underwriter the full amount of his claim." So to the like effect in Walpole v. Ewer (3), the underwriter was held liable where the adjustment was settled in accordance with the law and practice in Denmark.

[BRETT, J.-In the earlier edition of Arnould it is stated that "Lord Kenyon, in deciding this case, put it on the principle that the underwriter was bound by the law of the country to which the contract relates (2 Arn. Ins. 963, 2nd edit.)].

Where there was no sufficient evidence of the foreign usage, the underwriter was held in Power v. Whitmore (4) not to be bound by a foreign adjustment. That case will be probably relied on by the other side. In commenting on that case it is well said in 2 Arn. Ins. 964, 2nd-edit., that "it by no means follows" from it,

66

as it has been sometimes supposed, that underwriters in this country can in no case be bound by a foreign adjustment, for Lord Ellenborough puts his judgment entirely on the ground that the case contained no allegation of fact as to its being the law or usage at Lisbon to treat losses and expenses of this kind charged for as the subjects of general average." Here, however, it clearly appears that it was general average according to the law and usage of Bremen. Moreover, by the terms of this policy, the underwriter is to pay as per foreign statement, so if this is made out he is liable whether it be according to the law of that foreign place or not. At all events, by the perils insured against, the cargo had got into such a condition that the plaintiffs could not get it again without paying the money secured by the bottomry bond, and therefore, according

(3) 2 Park Ins. 828. (4) 4 M. & S. 141.

to Dent v. Smith (5), they are entitled to recover what they now seek in this action from the underwriters.

Watkin Williams (Cohen with him), for the defendants.-It may be admitted that the captain was justified in raising the money which he did on the bottomry bonds on the ship and cargo, and that the mode of adjustment of the general average loss should be according to the law of Bremen, the port of adjustment, but the underwriters are not liable under this policy, which is an English one, for the sum sought to be recovered in this action, for that sum does not represent the amount of general average loss at all, but the difference between what the ship sold for and the proportion which the ship and freight had to pay towards the amount due on the bottomry bonds. It may be that, according to the law at Bremen, the underwriters would be liable for this loss, but this is an English policy, and the underwriters are not concerned here with the law at Bremen, except so far as it refers to the mode of adjustment of general average loss. According to Hallet v. Wigram (6) a claim for contribution to general average loss arises only when a part of a cargo is sacrificed for preservation of the ship and rest of the cargo from an impending danger; and it does not arise where a part of a cargo is sold to raise money at a port to which the ship has put back for repair of damage incurred by the ordinary perils of the sea. The sum in the present action is not therefore a loss covered by the policy, because, in the first place, it is not a general average loss as stated by the foreign statement, and, secondly, even if it be a loss so stated, it is not a loss caused by any peril insured against. Suppose the cargo had been landed and warehoused, and there was then a fire, and in order to save the cargo some of it was obliged to be injured by water, there would be a general average loss, but it would not come under this policy, because it would not be a loss arising from the perils of the sea. So in the case of goods

(5) 38 Law J. Rep. (N.s.) Q.B. 144.

(6) 9 Com. B. Rep. 580; s. c. 19 Law J. Rep. (N.S.) C.P. 281.

thrown overboard to avoid a capture of the vessel, that would not be a general average loss for which an underwriter would be liable on an ordinary policy, as capture is usually excepted. Powell v. Gudgeon (7) and Sarquy v. Hobson (8) shew that an underwriter on goods is not liable for goods sold by the master of a skip to defray the expenses of repairs rendered necessary by a tempest to which the ship and goods had been exposed, because the perils of the sea were not the proximate cause of the sale of the goods. Where the goods Where the goods had, as they had in the present case, reached a place of safety from which they might have been forwarded to their proper destination, their sale could not be said to be brought about by the perils insured. The loss was not in order to save any part of the cargo, but to pay what was due from the owner of the ship for repairs; it is therefore not a general average loss, for which the defendants can be made liable under this policy. The object of the marginal clause is not to extend the risks, but to provide that if there be a general average loss the underwriter will pay according to the foreign statement, if there be one. The Bremen statement does not say this is general average, and throws the whole on the owner of cargo. The sum in question is not stated as being Bremen general average, nor has the arbitrator stated it to be so; the case does not mean that it is a general average loss, and the Code, 8th part, Art. 702-734, the last section especially, shew this. And, further, the defendants are not bound by a statement as general average with respect to what is not general average within the risks of the insurance, but are only bound as to the fact that it is general average. But then it is said that by perils of the sea, the plaintiffs were obliged to pay to get the cargo, and that Dent v. Smith (5) shews they may therefore recover, but the policy there was different, and there was a total loss, and the cargo did not get to its destination, and again here the policy is free from particular average. In Kidstone v. The Empire Marine Assurance Com

(7) 5 M. & S. 431.

(8) 2 B. & C. 7, and in error, 4 Bing. 131; s. c. 1 Law J. Rep. K.B. 222.

pany (9) (decided after The Great India Peninsula Company v. Saunders (10) and Booth v. Gaier (11)), though there was no particular average, the plaintiff sought to recover as for particular charges, and it was held he could, but the payment in this case cannot be called particular charges, it is either only particular average or a particular charge to avert a partial loss.

Sir G. Honyman in reply.-It is said by the other side that there was not a loss within the policy, and that therefore the claim as to general average does not apply, but by the policy general average is to be paid if stated to be such by the foreign law. In Simmonds v. White (1) it was held that general average must be calculated according to the law of the port of adjustment, and in Power v. Whitmore (4) it was also held that an underwriter is liable to recoup general average decreed to be paid by a foreign court if he has contracted with reference to foreign usage, and the result of that case was due, as is pointed out in Dent v. Smith (5), by Lush, J., to the fact that it was not shewn to be, or to be decreed to be paid as foreign general average. The meaning here is that the insurer will pay according to the statement if made up in a foreign country. The insurer insures against perils of the sea and general average, and not against only perils of the sea and general average arising therefrom, and he was held liable for general average according to foreign law in Newman v. Cazalet (2), Power v. Whitmore (4), Simmonds v. White (1), and Dent v. Smith (5), and in accordance with this are the passages in Parsons on Insurance, 630, and Arnould on Insurance, 946, 947. But then it would be necessary to shew the statement was made up and made up according to foreign law, and this provision is to get rid of the last matter, and preclude the parties from disputing it. Further, the case states that this is general average by

(9) 35 Law J. Rep. (N.s.) C.P. 250; s. c. 36 Law J. Rep. (N.S.) C.P. 156.

(10) 1 B. & S. 41; (in error) 2 B. & S. 266; s. c. 30 Law J Rep. (N.s.) Q.B. 218; (in error) 31 Law J. Rep. (N.S.) Q.B. 206.

(11) 15 Com. B. Rep. N.S. 291; s. c. 33 Law J. Rep. (N.s.) C.P. 99.

the law of Bremen. Even if it be true that the liablity is limited to the perils insured against, as respects salvage, general average is not the same, and, as shewn in Power v. Whitmore (4), a plaintiff may declare for it as such. In Dent v. Smith (5) the gold was not totally lost, and because, in consequence of the wreck, the owner could not get it without a particular payment, the Court held the payment recoverable as a loss by the perils of the sea; and Dickenson v. Jardine (12) shews an action lies against the underwriters.

Cur., adv. vult.

The judgment of the Court was (on June 3) delivered by

BOVILL, C.J.-This action was brought to recover from the underwriters on goods the amount of an alleged general average loss sustained by the plaintiffs as owners of a cargo of rye by The Bella Leandra, insured on a voyage from Taganrog to Bremen. Upon that voyage, the vessel, with her cargo on board, having reached Bremen, that was the proper port for the adjustment of any claim or liability for general average, and the adjustment would have to be made there according to the law of Bremen, and would be binding as between the shipowner and the owners of the cargo.

It does not, however, necessarily follow that an underwriter upon an ordinary form of policy would be liable for the whole or even any part of the general average so adjusted.

If the sacrifice or loss which occasioned the general average arose from any of the perils insured against, or the consequences of them, or from proper endeavours to avert such perils or their consequences, to that extent the underwriters would, under the terms of an ordinary policy, and according to well known maritime usage, be liable to indemnify the assured, though, as between the shipowner and the owner of the cargo, matters might be introduced into the statement of general average for which the underwriters, upon the ordinary form of policy, would not be liable.

(12) 37 Law J. Rep. (N.s.) C.P. 321.

There are also many differences in the laws of various countries as to what are to be deemed the proper subjects of general average, as well as with respect to the proportions or value in or upon which the apportionment should be made, and under these circumstances the present policy was entered into with a special memorandum as to general average.

By that memorandum, in addition to the ordinary insurance in the body of the policy, the underwriters agree "to pay general average as per foreign statement, if so made up," with certain special warranties as to particular average and capture

or seizure.

It seems to me that the general effect of the memorandum is to make the underwriters liable as for general average for whatever the assured owner of the goods might be called upon to pay on that account by the foreign statement of adjustment. This memorandum was probably introduced in order to avoid all questions, not only as to the propriety of particular items being treated as the subjects of general average, but also as to the correctness of the apportionment, and I find it difficult to place any other reasonable construction upon the terms of the policy and memorandum.

If it be open to this Court to consider and determine the question whether the 6631. 28. 10d. claimed in this action, or any part of it, was properly the subject of general average, according to the law of England, I should be of opinion that it was not, and that this was not a loss covered by an ordinary policy in the usual form. So if we had to determine whether this sum was strictly general average, according to the law of Bremen, as set forth in the special case, it might well be argued that it is not strictly general average, but is merely to be treated in a similar manner by the law of that place.

It seems to me, however, that under the terms of this policy the underwriters and the assured have both agreed to accept the adjustment and statement of the average stater in the foreign port, if and when made, as conclusive between them, both in principle and in details, as to the loss which the underwriters are to undertake in respect of general average,