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man v. E. I. Co. (K. B. 1822) 5 B. & Ald. 617; Tronson v. Dent (P. C. on appeal from Hong Kong, 1853), 8 Moore P. C. 419; Acatos v. Burns (C. A. 1878), 3 Ex. D. 282, 47 L. J. Ex. 566; Atlantic Mutual Ins. Co. v. Huth (C. A. 1880), 16 Ch. D. 474. The leading authority in affirmance of the master's power under such conditions is The Gratituline (Adm. 1801), 3 C. Rob. 196. That was a question of hypothecating the cargo, but it impliedly covers the case of a sale, and imports the motive of prosecuting the voyage where that is possible, as entering into the question of necessity.
Upon a constructive total loss happening to an insured ship, where notice of abandonment is given by the owners to the original insurers, there is no necessity for the latter to give notice to the insurers upon a policy of reinsurance. Uzielli v. Boston Marine Ins. Co. (C. A. 1884), 15 Q. B. D. 11, 54 L. J. Q. B. 142.
The decision in Stringer v. English, &c. Assurance Co. was followed in 1885 by MATHEW J., in Lery v. Merchants' Marine Ins. Co., 52 L. T. 263.
A ship insured against (inter alia) barratry of the master and crew, is by their barratrous act left derelict; and subsequently brought in by salvors and sold, under decree of a competent court, for less than the actual cost of salvage services. Such a sale constitutes an actual, and not merely constructive, total loss; and the claim as for a total loss is good although no notice has been given of abandonment. Cossman v. West (P. C. 1887), 13 App. Cas. 160, 57 L. J. P. C. 17.
Without an abandonment, there can be no recovery for a mere constructive total loss arising from an injury to more than half the value of the vessel. Peirce v. Ocean Ins. Co., 18 Pickering (Mass.), 83; 29 Am. Dec. 567. Here Shaw, Ch. J., observed : “A question has been made, whether a claim for a total loss does not necessarily imply an abandonment. It is difficult to answer a question thus nakedly presented. Upon principle it would seem that a mere claim for a total loss does not necessarily imply an abandonment, because in some cases a total loss may be recovered without abandonment. Idle v. Royal Exch. Ass. Co., 8 Taunt. 755. But commonly a claim for a total loss will be accompanied by a statement of facts and circumstances, by the reasons and grounds of claim upon which the assured proceeds, and such statement of the grounds of claim may perhaps carry as plain an implication of actual abandonment as could be done by express words; though it was stated by Lord Ellenborough that an implied parol abandonment is too uncertain, and cannot be supported. Parmeter v. Todhunter, 1 Campb. 541."
But where a sale is necessarily made on account of injury, abandonment is not necessary to enable the insured to recover for total loss. Prince v.
Ocean Ins. Co., 40 Me. 481; 63 Am. Dec. 676; Howland v. India Ins. Co., 131 Mass. 254.
“When a steamboat, injured at or near a home port by a peril insured against, remains in specie, the assured cannot, without abandoning the vessel to the underwriter, claim indemnity as for a total loss, although the cost of repairing the vessel may exceed its value when repaired.” Globe Ins. Co. v. Sherlock, 25 Ohio St. 50. The principal case was cited by counsel on both sides.
No. 7. - RANKIN v. POTTER.
(H. L. 1873.)
POTTER v. RANKIN.
No abandonment is necessary where there is nothing which, on abandonment, can pass to be of value to the underwriters.
By a charter-party entered into respecting a ship on her outward voyage to New Zealand, the ship, after discharging in New Zealand, was to sail to Calcutta, and “ being there tight, staunch, and strong, and every way fitted for the voyage,” the charterer was to put on board a specified cargo for England at a stipulated freight. The owners shortly afterwards effected a policy on homeward chartered freight valued at £ The ship was damaged by perils of the sea on her voyage to New Zealand, and was patched up as well as could be done in a New Zealand port for her voyage to Calcutta. The ship was overhauled at Calcutta, and it was found that the expense of repairs would exceed the value of the ship when repaired plus the difference between the chartered and the current freight to England. The owners then gave notice of abandonment to the insurers of the ship. It was admitted that the damage to the ship was such as to amount to a constructive total loss if the notice had been given in time; but in an action against the underwriters on the ship it had been decided that the notice was not given in time:
No. 7.- Rankin v. Potter.
Held, that, as regards the underwriters on freight, it was immaterial whether the notice of abandonment to the underwriters on ship had been properly given or not; and that, as a prudent uninsured owner would not have incurred the cost of repairing the ship, the earning of the chartered freight bad become impracticable, and that there was a total loss as regards the policy on freight.
Held, further, that, although the owners had tendered the ship in her unrepaired condition to the agents for charterer, and they had declined to load a cargo, on the ground that the charterer had become bankrupt, the loss of freight was a loss occasioned by the perils of the sea.
Rankin v. Potter.
L. R., 6 H. L. 83-108 (s. C. 42 L. J. C. P. 27).
Potter v. Rankin. L. R., 3 C. P. 562–574; 5 C. P. 341-379 (s. C. 39 L. J. C. P. 147). This was an action by a mortgagee in possession of the ship Sir William Eyre against an underwriter on chartered freight to recover as for a total loss.
The cause was tried before Bovill, C. J., at the sittings in London after Michaelmas Term, 1867, when a verdict was entered for the defendant with leave to move to enter it for the plaintiff.
A rule having been obtained accordingly and argued, the court unanimously discharged the rule, and so decided in favor of the defendants. The judgment — that of Bovill, C. J., Willes, J., Keating, J., and Montague Smith, J. — was delivered by Willes, J., and is reported in the Law Reports (L. R., 3 C. P. 563–574). The principle on which the judgment proceeds may be gathered from the following statement towards the conclusion : "To avoid inconsistency and anomaly, either the doctrine of constructive total loss by damage to ship making repair improvident must be extended to freight, with all its conditions, including that of abandonment, when the earning of freight remains within the control of the assured, by reason of the ship being neither actually lost, sold, or abandoned, or it ought to be held that there is no total loss of freight by damage to ship in a case like the present, where the ship remains in
specie under the control of the assured, neither sold nor abandoned ; or, in other words, as already indicated, that the true character of the insurance in question was against total loss of freight by total loss of ship, actual or constructive."
An appeal was brought in the Exchequer Chamber, and was argued and considered upon a statement of the facts in a case which is set forth in the report in L. R., 5 C. P. 341. The case, omitting the documents set out in the appendix which contain the details of matters briefly stated in the case, was as follows:
1. The action was brought to recover £100 upon a policy of insurance effected by the plaintiffs in the sum of £4000 on “homeward chartered freight” by the ship Sir William Eyre.
2. The declaration contained a count on the policy for a total loss, and the common money counts. To the first count the defendant pleaded denial of the insurance, of the plaintiffs' interest, of the loss by perils insured against, of the loss of freight through the alleged total loss of the ship, and that the ship without sufficient cause did not proceed on her voyage, but deviated therefrom; and to the money counts, never indebted. Issue thereon.
3. The cause was tried before Bovill, C. J., at the London sittings after Michaelmas Term, 1866, when the following facts were given in evidence or admitted on both sides :
4. The plaintiffs are shipowners at Glasgow, and constitute the firm of Potter, Wilson & Co.; the defendant is an underwriter at Liverpool.
5. On the 7th of December, 1862, the Sir William Eyre (of which ship the plaintiffs were mortgagees in possession) left Greenock under the command of Captain Blakey on a voyage to Southland, and thence to Dunedin, in Otago, New Zealand, having a general cargo and a large number of government emigrants on board.
6. On the 9th of February, 1863, whilst the vessel was on her outward voyage, the plaintiffs entered into a charter-party with one De Mattos, according to which the Sir William Eyre, having discharged her cargo and passengers at New Zealand, was to proceed to Calcutta, and there load a homeward cargo for Liverpool or London.
7. A few days afterwards the plaintiffs caused the policy now sued upon to be effected, in order to cover for the voyage out the chartered freight to be earned under the above charter-party. The defendants underwrote the policy for £100.
It described the voy
No. 7. — Rankin v. Potter.
age insured thus: “At and from Clyde to Southland, while there, and thence to Otago (N. Z.), and for thirty days in port there after arrival,” and it described the interest insured to be “homeward chartered freight, valued at
8. On the 23d of April, 1863, the Sir William Eyre arrived at Bluff Harbour, Southland. While there, she drifted and took the ground; and the master, finding great difficulty in getting her off, sent on the emigrants and their luggage to Dunedin at the ship's expense.
9. On the 22d of May the ship floated, and on the 27th a survey was held
her. 10. The ship remained aground, with the exception of brief intervals, until shortly before the 29th of May. On that day a violent gale arose, and again caused the Sir William Eyre to take the ground. She struck fore and aft, and remained firmly fixed until the 4th of June, when she was again afloat. Before, however, she could be brought up in the channel, she grounded again, and was not finally got off till the 1st of July, when she left for Dunedin.
11. It was admitted that what occurred whilst the ship was at Bluff Harbour was correctly described in the master's protest, a copy of which was appended to the case.
12. On the 4th of July, 1863, the Sir William Eyre arrived at Port Chalmers, which is the port of Dunedin. While there, further surveys were made of the ship. The aforesaid surveys and protest were duly sent home to the assured and received by them.
13. There was no dry-dock or patent slip in New Zealand, and consequently the extent of the damage which the ship had sustained could not be more fully ascertained than appears from these surveys.
14. The Sir William Eyre remained at Port Chalmers until the 14th of April, 1864, being prevented solely from want of funds from making the necessary preparations to proceed to Calcutta. The master had not sufficient funds to defray the ship's charges and disbursements and the liabilities which he had incurred in New Zealand; and, not being able to raise such funds in New Zealand, nor Messrs. Dalgetty, to whom the ship was consigned at Otago, being willing to advance to him the money he required for the purposes aforesaid, he was obliged to wait until he obtained a sufficient remittance from the plaintiffs.
15. Messrs. Dalgetty corresponded regularly with the plaintiffs ;