owner has this inchoate right, directly there is an inception of performance by the ship under the charter-party. When it is the price to be paid for the carriage of goods in the ship, then this inchoate right accrues directly the goods of the merchant are actually put on board, or are even contracted for and ready to be put on board, and the ship is ready to receive them. In either case the ship-owner has put himself in a condition to earn freight, and he will earn it, provided either the ship, which he has thus let out to the freighter, or the goods, which he has thus engaged to transport for the merchant, arrive safely at their destination. If, by the perils of the sea, they are prevented from thus arriving, the ship-owner has no claim to freight from the merchant, in other words, he is prevented, in that case, by the perils of the sea, from realizing that which, but for the intervention of those perils, he would certainly have earned. It is but fair and reasonable, therefore, that he should have the means of protecting himself, by a policy of Marine Insurance, against the loss he is thus exposed to."

"Such are the general principles upon which, in England, in America, and in many of the Continental States, the ship-owner is allowed to effect an insurance on that freight which he expects to earn, and which he is only prevented from earning by the perils insured against."

"But the French Legislature, proceeding rather on scholastic refinements than mercantile considerations, have prohibited all insurance of expected or future freight on the ground that expected freight is a mere contingency in which there is no present existing interest; that it is

*

*Fret à faire. Ord, de la Marine, Liv. III. Tit. VI. Art. 15. Fret des merchandises existant à bord. Code de Comm. Art. 347.

but a gain which the assured may miss making, not a property which he can risk losing."

"But, although the prohibition is absolute against the insurance of expected freight (fret à faire), yet the French Legislature permits the insurance of freight actually earned (fret acquis). The French jurists have refined much in explaining the meaning of this term; but upon the whole, by fret acquis may, it seems, be understood, either sums paid in advance by the charterer or his agents as a part of the freight; or freight which, by the terms of the charterparty, is payable in all events. But in these cases the charterer, and not the ship-owner, can alone insure, as he alone runs the risk of loss. The term appears also to extend to freight actually earned by the unloading of a portion of the cargo at a port of delivery, short of the port of ultimate destination."

*

"There can be no doubt that sums paid by the charterer or his agent, as an advance of part of the freight, are also insurable by him in this country. The only question is, whether he can insure them under the general term freight, or must describe them specifically in the policy, and this depends on the particular terms of the charter-party.'

"It was laid down by Lord Kenyon, at Nisi Prius, that freight could not be insured for part of the intended voyage; but this position, unjustified by principle, was subsequently overruled by Lord Ellenborough and the Court of King's Bench, and it is now quite clear that freight, like any other subject, may be insured either for part or the whole of the voyage or of the time over which it is likely to extend.'

*The "Freight due to the ship, ship lost or not lost" clause.

.

"Freight must be insured eo nomine in the policy, either by inserting the words 'on freight' in the margin, or appending them at the foot of the instrument. Such a policy would cover not only freight in its strictest acceptation, but the chartered hire of the vessel, the increased value to the owner from carriage of his goods in his own ship, and, we have very little doubt, payments made in advance on account of either the first or the second of these classes of freight."

"It has been doubted in the United States whether a charterer who hires a vessel for a voyage at a certain rate per month, payable on completion of the voyage, can insure the benefit he derives by the employment of the ship in carrying the goods of other persons on freight, under a general policy on freight; it has also been there doubted, whether such general policy will cover the interest of a party who has sold his vessel, reserving to himself a right to receive the freight for the voyage insured. The ground of this doubt is the same in both cases; that in neither has the assured the same stake in the safety of the ship as though he were owner; and that, therefore, his effecting a general insurance on freight is an imposition on the underwriters, who, when they are asked to insure freight generally, must presume that they are dealing with the owner of the ship."

"The objection, however, does not appear to be well founded; for the interest of the assured in both the cases supposed seems, as far as the freight is concerned, to be precisely equivalent to that of the owner; in fact, charterers so circumstanced must be regarded as owners pro hâc vice, having, at least, as much interest in the ship arriving so as to earn freight, as the owners would have, if insured to the full value of the

.

freight to be earned. No doubt, as Mr. Phillips has observed, when the charterer is bound to pay a fixed or lump sum to the owner, and is himself entitled to receive freight from the shippers of goods by the chartered vessel, the amount of his insurable interest in freight would only be the difference between what he has to pay and what he has to receive, i. e., in case both sums are subject to the same contingency."

XIII.-Average. †

Principles.

§ 63. Under the term Average are included all General extraordinary expenses incurred for the good of the ship and the cargo together or separately, and all damage caused to the ship or goods, during the time fixed for the beginning and ending. of the voyage or during the term covered by an insurance policy.

If not otherwise agreed upon between parties, average may be adjusted according to the following rules.

1o. There are two kinds of average: Gross or General Average, and Simple or Particular Average. General Average is assessed on the ship, the freight and the cargo, and contributed, pro ratâ, according to the respective values of the associated interests, forming a common marine adventure, "in order that no particular individual amongst them, who may have been forced to make a sacrifice for the preservation of the ship or cargo, or both, should lose more than his own share." I

*ARNOULD. Marine Insurance, Edit. Maclachlan, 1877, p. 31 et seq. Regarding the origin, meaning and history of the term Average, as used in Maritime Law, see the excellent note of David Maclachlan of the Middle Temple, Barrister-at-law, Editor of Arnould's Law of Marine Insurance, in the edition of 1877, p. 880 et seq.

LEONE LEVI. Intern. Comm. Law. Edit. 1863, Vol, II. p. 870.

General Average.

the

par

Particular Average falls entirely upon ticular owner of the property lost or deteriorated by the damage or benefited by the expenditure, and such owner, if insured, has a claim against the underwriter in proportion as stated in subsection 12. *

2o. General Average includes the followiug contingencies:

a. Whatever has been given to the enemy, or to pirates, for the release or ransom of ship and cargo. In case of doubt, the ransoming is always held to have taken place for the benefit of both ship and cargo.

b. What has had to be jettisoned for the preservation or the common good of ship and cargo.

c. Cables, masts, sails, and other stores, which have been cut or broken, for the same purpose.

d. Anchors, cordage and other articles which, for the same purpose, it was necessary to slip, or part with.

e. The damage caused, by the jettison, to the goods remaining on board.

f. The damage purposely done to the body of the ship, to facilitate the jettison and lighterage or saving of the goods, or to promote the getting rid of water, and the damage then caused to the cargo by such acts.

g. The attendance, cure and maintenance and the indemnification of all persons

on board, who have been wounded or maimed in defending the ship.

* LEONE LEVI. Vol. II. page 878..