There is, however, one exception, or rather one apparent exception to this rule, which rests, so far as authority is concerned, on one case only. This exception occurs, when there is a general average loss which is adjusted abroad, and in that adjustment certain contributory claims are denied to the party suffering the loss, which claims would be allowed to him at home. When he returns and demands indemnity of the insurers, they cannot say that his whole loss was adjusted abroad, and that this adjustment of the loss is conclusive against the insured; and that he cannot demand indemnity from them for any items of loss, denied him by that adjustment. Thus, if an American ship puts into a foreign port for repair or refitting, by reason of sea damage for which the insurers are responsible, and the wages and provisions from the time of bearing away until the repair is made, should go into average by the American rule, but do not by the rule where the adjustment of the loss is made, yet in applying the policy to the case, at home, these wages and provisions will be considered as properly an average loss, and the insurers will be held to pay the ship's proportion of them.1 We shall however speak, hereafter, of the adjustment of a policy of insurance, generally. in general average (see cases in preceding note), and their liability where the adjustment is made up in a different manner at the place of the contract, and the port of distress. In the latter case the underwriters have been held liable. See Strong v. New York Firem. Ins. Co., 11 Johns. 323; Depau v. Ocean Ins. Co., 5 Cow. 63; Loring v. Neptune Ins. Co., 20 Pick. 411. But there seems to be no valid reason why the insurers should not be as liable in the one case as in the other. 1 Thornton v. United States Ins. Co., 3 Fairf. 150. There seems, however, to be no reason why the adjustment should be binding when it is in favor of the insured, and not binding when it is in favor of the underwriter. CHAPTER XII. OF PARTIAL LOSS. THIS is often called particular average; but this phrase is so obviously inaccurate, that, although sanctioned by very frequent use, we prefer to employ the other.1 As a partial loss differs from a total loss, because it is a loss of a part and not of the whole, so it differs from a general average loss, in that it does not give any claim for contribution on other interests. The insurers of the interest partially damaged, are liable under somewhat different rules in reference to different interests. For repairs on the ship they are liable, although the old parts were deteriorated by age and decay, the vessel being seaworthy,2 the deduction of one third, new for old, meeting all this question, whatever be the youth or the age of the ship; and 1 See ante, Vol. I. p. 284, n. 1. 2 Fisk v. Commercial Ins. Co., 18 La. 77; Depeyster v. Col. Ins. Co., 2 Caines, 85; Depau v. Ocean Ins. Co., 5 Cow. 63. 8 In England, it is not customary to make this deduction of one third, new for old, when the ship is new and on her first voyage. Weskett, tit. Repair, n. 1. Some question has arisen, whether a voyage out and home is to be considered as one voyage within this rule. See Fenwick v. Robinson, 3 Car. & P. 323; Pirie v. Steele, 8 Car. & P. 200, 2 Moody & R. 49. In Thompson v. Hunter, cited 2 Moody & R. 51, insurance was effected in Dublin for a voyage from the Humber to the Baltic and back. The insured relied on a usage which prevailed on the Humber to consider all vessels as new until they were twelve months old; but the court held, that this usage could not be set up, as the policy was an Irish one. In Poingdestre v. Royal Exch. Ass. Co., Ryan & M. 378, a vessel, ten years old, had been thoroughly repaired and was afterwards damaged, chiefly in the part which had been repaired. The insured was about to call witnesses to prove a usage, to consider a vessel which had been thoroughly repaired, as a new vessel, but Best, C. J., said, that as the jury was a special one, they were competent to judge of the usage, and whether any existed, and instructed them whether the repairs are more or less expensive at the place where they are properly made;1 and the repairs are to be made and the new work added in a style conformed to the original style and character of the ship. The liability of the insurers extends to any extraordinary expenses necessarily incurred in consequence of a peril insured against,3 as in raising funds for repairs; but not to the expense of wages and provisions of the crew while employed on the repairs; nor while the vessel is detained, as by an embargo.7 5 that the general rule should govern, unless they saw something in the case to take it out of that rule. In this country, one third is deducted in all cases, whether the ship is old or new. Nickels v. Maine F. & M. Ins. Co., 11 Mass. 253; Sewall v. United States Ins. Co., 11 Pick. 90; Dunham v. Commercial Ins. Co., 11 Johns. 315. See also, cases ante, p. 354, n. 1. But in Fireman's Ins. Co. v. Fitzhugh, 4 B. Mon. 160, it was said, that the rule of one third off, new for old, proceeded on the ground that the vessel was improved by the repairs, and it was doubted, whether it would apply to steamboats, which were not considered as improved by repairing. 1 See ante, p. 358, n. 1. 2 Center v. American Ins. Co., 7 Cow. 564, 4 Wend. 45. 3 Thus, if a vessel is obliged to be towed into port for repairs, the expense of this constitutes a particular average, if done for the benefit solely of the subject insured. Perry v. Ohio Ins. Co., 5 Ohio, 305. So also, in regard to the expense of navigating a ship from one port to another, for the same purpose. Lincoln v. Hope Ins. Co., Sup. Jud. Ct., Mass., March T., 1857. So, if a vessel runs ashore, the expense of launching it is to be borne by the underwriters. Dix v. Union Ins. Co., 23 Mo. 57. An insurance on a ship "while being safely launched," covers all expenses necessarily incurred in saving the ship from actual injury, to which she was exposed through no fault or mismanagement on the part of the persons engaged in launching her. Frichette v. State Mutual F. & M. Ins. Co., Sup. Jud. Ct., New Hampshire, June, 1858, 21 Law Reporter, 359. 4 Orrok v. Commonwealth Ins. Co., 21 Pick. 456, 469. 5 In Hall v. Ocean Ins. Co., 21 Pick. 472, the vessel, insured on a time policy, on a voyage from Frankfort, in Maine, to Porto Rico, was compelled to put into Bermuda to be repaired, and was there sold by the master. On the trial before the jury, the judge ruled, "that in a policy on time, where a vessel proceeds to a port of necessity, the clause providing that wages and provisions shall go to the general average only, applies to such charges only as accrue up to the time when the general average ceases, by a sale or other disposition of the cargo; that a reasonable allowance for portage bill, 6 Even though the vessel is insured on time. 71; Gazzam v. Ohio Ins. Co., Wright, 202. Vol. I. p. 296. 7 M'Bride v. Marine Ins. Co., 7 Johns. 431. Gazzam v. Cincinnati Ins. Co., 6 Ohio, The various questions presented by this rule of one third off, new for old, are not yet entirely settled. On the continent of Europe, the one third is deducted merely from the materials and not from the labor, differing in this respect from the law of England, and of this country. The rule is general in respect to the deduction of the one third from the materials, the only exception in practice being an anchor, all other iron work being subject to the deduction.2 In some places, the third is deducted from dockage, moving the vessel, and such other incidental expenses including wages and provisions of officers and crew, for such reasonable time as would be requisite to make the repairs, should be allowed as part of the cost of repairs." This ruling was held to be incorrect, and it was held, that the wages and provisions of the officers and crew, while the vessel was undergoing repairs, were not to be computed as part of the particular average, but as it would be necessary that some person should be employed on the part of the owner to superintend the repairs, this charge was to be considered as for part of the labor employed in the reparation. The court also said: "But the services of the officers and seamen might be rendered by them as laborers in making the repairs; and in such case, their labor would be chargeable, just as if other laborers had been employed to make the repairs." On the authority of this dictum, Mr. Phillips says: "It has been distinctly held in Massachusetts, and this seems to be the better doctrine, that the labor of the crew in repairing damage occasioned by the perils insured against is chargeable to the underwriters." 2 Phillips, Ins. 1429. We are not able to see, that the point has been so held in Massachusetts; and the authorities generally, are certainly the other way. In Giles v. Eagle Ins. Co., 2 Met. 140, where the crew assisted in company with others in getting the vessel, which had been stranded, off, it was not pretended that the underwriters were liable for the wages, etc., on the ground that these items were a particular average, but the insured endeavored to include them among the general average charges. In Sage v. Middletown Ins. Co., 1 Conn. 239, where the master and crew assisted in making the repairs, the court held, that the underwriters were not liable, as the crew, not having been discharged, were obliged to do what they could in preventing and repairing the mischiefs incident to the voyage. So held also, in Perry v. Ohio Ins. Co., 5 Ohio, 305. In Fireman's Ins. Co. v. Fitzhugh, 4 B. Mon. 160, it was held, that where a steamboat was sunk and raised and carried into port for repair, and this was done for the benefit of the vessel alone, the expenses were to be adjusted as a partial loss, and that the underwriters were liable for them, including the wages and provisions of the crew. 1 Stevens & Benecke on Av., Phillips's Ed. 385, 386. 2 Mr. Benecke states, "that anchors are considered as not losing in value by being used, and no deduction is made from their cost price. But all other iron work is subject to the deduction of one third." Stevens & Benecke on Av., Phillips's Ed. 386. In Brooks v. Oriental Ins. Co., 7 Pick. 259, 269, it was held, that one third was to be deducted from the expense of a new iron strap for a dead eye. Putnam, J., said: "We do not know any thing excepted from the rule of one third, new for old, but an anchor. Perhaps, it may be true, that an old anchor which has been proved is better than a new one." as seem distinctly connected with the repair.1 And it should be deducted from the extraordinary expense of raising funds.2 Whether the value of the old materials should be deducted from the cost of repair, before the one third is deducted, may not be settled by authority; but, in our judgment, it should be deducted before; that is, it should be applied, either by a direct use of the materials, or by a deduction of their value from the cost of repairs, and then two thirds of the balance only should be charged to the insurers.3 1 This is stated by Mr. Phillips to be the custom in Boston. 2 Phillips, Ins. § 1432. In Potter v. Ocean Ins. Co., 3 Sumner, 27, 45, it was held, that one third was not to be deducted from the amount of the expense of towing the vessel across a river to a ship-yard, for the purpose of repairing her, and that of assistance in getting her across and boat hire, and that of towing her back. Story, J., said: "In regard to the deduction of one third, new for old, the true interpretation of that rule has always appeared to me to be, that it is strictly applicable only to labor and materials employed in the repairs, and to the new articles purchased in lieu of those which were lost or injured by the disaster. It would be strange to apply it to other independent expenses, which were merely incidental to the loss; for in no just sense can it be said, that the owner is benefited thereby, or that he receives an enhanced value therefrom, beyond his indemnity." In Sewall v. United States Ins. Co., 11 Pick. 90, the head note states, that one third is not to be deducted from the expense of raising a submerged vessel. But it does not clearly appear, from the report of the case, that this point was decided. 2 The deduction was made in such a case, in Orrok v. Comm. Ins. Co,, 21 Pick. 456. In Depau v. Ocean Ins. Co., 5 Cow. 63, the vessel was insured on a voyage at and from Havana to Rotterdam. She put into Halifax in distress and was there repaired, and part of the cargo was sold to pay for the repairs. Savage, C. J., said: "He (the insured) is entitled to the amount expended for repairs, deducting one third, new for old; and also, the difference between the price for which the sugars sold at Halifax and what they would have sold for at Rotterdam." It would seem from this that one third was not to be deducted from this latter amount. 8 This is so held in New York and Massachusetts, and it seems to us to be founded upon principles of justice and indemnity to the insured. The only question is, as to the cost of repairs. The old materials have never passed to the underwriters, consequently, they are not entitled to derive any benefit from them, and the one third should be deducted from the balance remaining after deducting the old from the new materials. Byrnes v. National Ins. Co., 1 Cow. 265; Brooks v. Oriental Ins. Co., 7 Pick, 259; Eager v. Atlas Ins. Co., 14 Pick. 141. See also, for a discussion of this question, 5 Am. Jurist, 252; 6 id. 45. In Giles v. Eagle Ins. Co., 2 Met. 140, 144, Putnam, J., said: "In regard to the repairs made at Gloucester, one third should be deducted, new for old. And this is to be made from the gross amount, as was settled in Brooks v. Oriental Ins. Co., 7 Pick. 259." But in this case, as we have seen, the deduction was not made from the gross amount, but from the balance remaining after deducting the value of the old materials, and the word "gross " is probably a misprint for "net." |