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1820.

DAVIDSON

v.

CASE.

of necessity, that if he be liable on the one hand, so, as the ship must be considered as his property, he must be entitled to the freight subsequently earned by her as against the owner, as though he were in fact the owner of the ship himself. It must be inferred, that when parties enter into a contract, they must be aware of all the legal consequences attached to it; for instance, if a vessel be captured and restored to its former owner, he must be aware that he is liable to the expences of salvage. It is peculiar to this country, that insurances on ship and freight form distinct subjects of insurance. In Camden v. Anderson (a) it was held, that the right of freight results from the right of ownership, and that it was not only incident to a ship, but inseparable from her, as rent is to that of land; and the principle there laid down was carried to its most rigorous extent. So, in Morrison v. Parsons (b) it was determined, that if the owner of a ship, having chartered her for a voyage, assigns her before the voyage, though he afterwards assign the charter-party to another, if she earns freight, the assignee of the ship is entitled to the freight, as incident to the ship, although he could not sue on the charter-party otherwise than in the name of the assignor. But it was expressly decided in that case, that payment of freight to the assignee of a chartered ship must be considered as payment to the original owner. If this doctrine be applied to the case of an abandonment, the case of Morrison v. Parsons is deci

sive of the present. This question will not affect any rights of the underwriters on freight and the assured, and the cases of Thompson v. Rowcroft (c), Leatham v. Terry (d), M'Carthy v. Abel (e), Sharp v. Gladstone (ƒ), as well as Splidt v. Bowles (g), are not only applicable to the present, but are decisive to shew, that the defendant in error is entitled to recover. Although in Green v. The

(a) 5 Term Rep. 709.-
(d) 3 Bos. & Pul. 479.-
(g) 10 East, 279.

-(b) 2 Taunt. 407. -(e) 5 East, 388.

(c) 4 East, 34.

-(ƒ) 7 East, 24..

Royal Exchange Assurance Company (a), and Idle v. the
Same (b), it was held, that under the circumstances, there was
no necessity for an abandonment of the freight ;-still, a ship
and cargo may be abandoned because they are both in esse at
the time of the abandonment. It therefore follows, that
abandonment can only be made of that which is capable of
being taken possession of by the person to whom it is aban-
doned. Freight may or may not be earned, and the right to
it stands in the same situation as the right to the perform-
ance of a personal contract, which, as it is not reduced
into possession, must be considered as a chose in action, and
not capable of assignment. If, therefore, freight be not
assignable, it follows of necessity, that an abandonment
of it to an insurer on freight, will not affect the rights of an
insurer on ship, to whom an abandonment has also been
made of ship, for abandonment is merely a species of
assignment between the assured and the underwriters. Here,
the owners having abandoned to the underwriters on ship,
conveyed to them not only their interest in the ship itself,
but her future earnings, which were not effected by the aban-
donment to the underwriters on freight, for the latter could
not be assignable without a special contract or an actual agree-
ment. The underwriters on ship, may, immediately after the
abandonment, turn her to any advantage they may think
proper, but how can freight be earned subsequently to such
abandonment, if the abandonee be not entitled to take pos-
session of the ship, so as to be enabled to endeavour to
obtain it. As, therefore, the possession of the ship, is on
the abandonment of the owners, vested immediately in the
underwriters on ship, the rights of the underwriters on
freight cannot alter their property. If there be an insurance
on ship by one set of underwriters, and on freight by an-
other, and the owner assign her during her voyage to others,
who change her destination, the policy on freight is dis-
charged; and the same rule applies if the underwriters on
-(b) Ante, vol. iii. p. 115.

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(a) 1 Marsh, 447.

1820.

DAVIDSON

v.

CASE.

1820.

DAVIDSON

v.

CASE.

ship were to alter the course of the voyage after an abandonment to them. They must be considered so far in possession of her that they may be empowered either to alter the destination of the voyage, or break her up, or if she pursues the same voyage, still, the property in her is vested in them. Neither, therefore, on principle, nor by previous decisions, can the plaintiffs in error as underwriters on freight, have any claim to such freight against the defendant in error as an underwriter on ship, and more especially so, as he has paid a total loss.

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Mr. Littledule, in reply. It has been said, that freight is as incident to a vessel as rent is to land, but it bears no analogy whatever to rent issuing out of land, which is incident to the reversion and never assigned. Where there are separate insurances on ship and freight, the rights of the parties are wholly distinct. The case of Spldit v. Bowles was determined under particular circumstances, and the rights of the parties to receive the freight depended on the covenant contained in the charter-party of affreightment. The case of Thompson v. Rowcroft, and those which followed it, are also distinguishable from the present, as the freight was there considered as arising from, and incident to the ship. Here, the owners gave notice of abandonment at the same time to the respective underwriters on ship and freight. They, therefore, contemplated that she was wholly lost. Whether she were re-captured or not was wholly fortuitous. It has also been contended, that if an underwriter on ship obtains her by re-capture, he may fit her out and send her on what voyage he pleases, but in that case the freight subsequently derived would not be earned according to the original contract, for the voyage would be completely altered. The true line of distinction turns on the ground, that in this country, ship and freight may be distinct subjects of insurance, and consequently the underwriters on the latter are entitled to all the rights and privileges which may accrue to

them from an insurance on freight, notwithstanding technical rules, on which the whole law of insurance is founded. Where, therefore, there is a separate abandonment of ship and freight, it does not operate as the transfer of a ship by sale. The underwriter on the one, merely insures the materials of which the vessel is composed, and on the other hand, the underwriters on freight must be deemed to be entitled to all the advantages that may accrue therefrom, as the underwriters on ship, may, after abandonment, be entitled to the body of the ship itself. Although it may be contended, that freight is not the subject of abandonment, still, in cases of a total loss, the underwriters thereon are entitled to the same privileges and advantages, as if it were a tangible material, although the party with whom the contract for the affreightment of a vessel was made, is the proper person to sue upon that contract for the non-payment of freight, notwithstanding he may have assigned his interest in the vessel to another since the making of the contract, and before the commencement of the action.

Cur. adr. vult.

Lord Chief Justice DALLAS on this day delivered the following judgment:

This case comes before the Court on error from the King's Bench, and it will not be necessary to state the facts in detail, as they will be found fully and accurately set forth in the printed report of what passed on the original hearing. It will be sufficient to observe, that there having been two separate insurances, the one on ship, and the other on freight, and the ship having been captured in the course of the voyage, and re-captured, and having ultimately earned freight, and there having been an abandonment of ship to the underwriters on ship, and of freight to the underwriters on freight, the question arises, whether upon such abandonments, the abandonment of ship includes freight, or whether the underwriters on freight are entitled thereto, as having

1820. DAVIDSON

v.

CASE.

1820. insured the freight specifically and having from the assured, an abandonment of such freight, under the insurance so made?

DAVIDSON

V.

CASE.

This question long depending, but always avoided, because in former cases it was not necessary to be decided, has at last been determined by that Court, from whose judgment error is now brought, three of the learned Judges having been of opinion, that an abandonment of ship included freight, and a different opinion having been declared by Mr. Justice Bayley, who considered that an abandonment of freight carried with it such freight, as a subject separate and distinct from ship, under and with reference to contracts of insurance. It would be an idle parade and waste of time, to go into the subject at large, fully treated of, as it is, in all the elementary works on insurance law, and more particularly, as the printed report to which I have already alluded, contains all, in point of authority and observation, that can properly belong to the question; I shall therefore merely advert to the general grounds on which the argument has proceeded, and on which the decision must now depend.

And first, it is not denied that, generally speaking, an assignment of ship includes freight, but it is said, that it does so, because such is the natural effect and consequence of such assignment, and that there is no agreement between the parties to the contrary; whereas, in cases of abandonment under insurance, such agreement is to be implied from the practice of making separate insurances, which the law of this country, different in this respect from the law of other countries, permits, and that the law will therefore keep the interest of the parties separate and distinct, giving to the underwriters on ship, the ship abandoned, and the freight to the underwriters on freight.

That this practice has prevailed is undoubtedly true, but it is a fallacy to confound the fact of such practice with the legal effect of it, for it is the practice itself that raises the legal question. To make the practice decisive of the law,

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