+(,121/,1(

Citation: 41 Tul. L. Rev. 359 1966-1967

Content downloaded/printed from

HeinOnline (http://heinonline.org)
Fri Jul 4 04:42:44 2014
-- Your use of this HeinOnline PDF indicates your acceptance
of HeinOnline's Terms and Conditions of the license
agreement available at http://heinonline.org/HOL/License
-- The search text of this PDF is generated from
uncorrected OCR text.
-- To obtain permission to use this article beyond the scope
of your HeinOnline license, please use:
https://www.copyright.com/ccc/basicSearch.do?
&operation=go&searchType=0
&lastSearch=simple&all=on&titleOrStdNo=0041-3992

THE HULL POLICY: SUE AND LABOR, GENERAL

AVERAGE, SALVAGE AND SPECIAL CHARGES
JAS. Hy. BRUNS*
SUE AND LABOR CLAUSE

The origin of the present Sue and Labor Clause under consideration here" is said to be the "Tiger" policy, dated 1613.2 The
last sentence, which contains what is commonly called the "Waiver"
Clause,3 was added later.4

In Lloyd's Marine Insurance Policy

(Hull Form) this clause is written in practically the same terms

and in England, in the statutes, decisions and text-books, it is called
the "Suing and Labouring Clause." Our American Institute Clause 5
now reads as follows:
'.And in case of any loss or misfortune, it shall be lawful
and necessary for the assured, their factors, servants and
assigns, to sue, labor and travel for, in and about the defense, safeguard and recovery of the said vessel, etc., or
any part thereof, without prejudice to this insurance, to the
charges whereof the underwriters will contribute their proportion as provided below. And it is expressly declared and
agreed that no acts of the underwriters or assured in recovering, saving or preserving the property insured shall
be considered as a waiver or acceptance of abandonment."
The purpose of the clause is to encourage the assured to take
all reasonable steps that a prudent uninsured owner would take,
once a misfortune has overtaken the venture, to protect the property insured and to save it from further damage after a loss has
been incurred. 6
While the clause is of ancient origin, the jurisprudence construing it is surprisingly sparse. We venture the guess that the
*Of Counsel, Phelps, Dunbar, Marks, Claverie & Sims, New Orleans.
'American Institute Time (Hulls) Policy, Form 6-Y, lines 101-06
(Jan. 1, 1964).
2Reliance Ins. Co. v. The Escapade, 280 F.2d 482, 488 n.11 (5th Cir.
1960); Gow, Sea Insurance 181-82 (1914); Winter, Marine Insurance
195 (3d ed. 1952) [hereinafter cited as Winter].
3American Institute Time (Hulls) Policy, Form 6-Y, lines 104-06
(Jan. 1, 1964).
4
Gow, op. cit. supra note 2, at 182; Winter 195.
5
Supra note 1.
OReliance Ins. Co. v. The Escapade, 280 F.2d 482, 488 (5th Cir. 1960);
Home Ins. Co. v. Ciconett, 179 F.2d 892, 895 (6th Cir. 1950); Berns &
Koppstein, Inc. v. Orion Ins. Co., 170 F. Supp. 707, 719 (S.D.N.Y. 1959),
aff'd mem., 273 F.2d 415 (2d Cir. 1960); White Star S.S. Co. v. North
British & Mercantile Ins. Co., 48 F. Supp. 808, 812-13 (E.D. Mich. 1943) ;
Aitchison v. Lorne, 4 App. Cas. 755, 4 Mar. L. Cas. (n.s.) 168, 171
(1879); Winter 195.

TULANE LAW REVIEW

[Vol. XLI

reason for this is because the clause is clearly drafted to accomplish its purpose of benefiting both the assured and his underwriter and a practical construction usually has been placed upon
it by settlements between them, thus avoiding litigation. The leading American cases are collected by Judge John R. Brown of the
7
Fifth Circuit in Reliance Ins. Co. v. The Escapade.
The English
8
cases are collected by Arnould, and Templeman and Greenacre 0
The English law is now codified in section 78 of the Marine Insurance Act of 1906,10 and a reading of that act will disclose the
fact that the decisions reached by the English and American courts
on the subject are largely embodied therein.
Since the clause has remained constant over the years the best
approach to its construction and meaning will be a review of the
important and recent cases on the subject. As pointed out above,
the clause in use in England and America is very much the same,
thus we can consider the English and American cases together,
and from a digest of them the following principles may be derived
for the construction and understanding of this clause in the policy
under consideration.
The clause is applicable only to the specific property or interest
insured and at risk, and it is because of the benefits to be gained
by the underwriter of that property or interest that the underwriter agrees to contribute to the expenses incurred by the assured
in saving it and protecting it from further loss or damage. If the
property or interest is not covered by the policy for the peril and
risk involved and hence the underwriter would not be liable for its
7280 F.2d 482, 489 (5th Cir. 1964).
8
Arnould, Marine Insurance 861-69 (15th ed. 1961) [hereinafter cited
as Arnould].
9
Templeman & Greenacre, Marine Insurance - Its Vrinciples and
Practice 113-19 (1950) [hereinafter cited as Templeman & Greenacre].
1O"78. (1) Where the policy contains a suing and labouring clause,
the engagement thereby entered into is deemed to be supplementary to the contract of insurance, and the assured may recover
from the insurer any expenses properly incurred pursuant to the
clause, notwithstanding that the insurer may have paid for a total
loss, or that the subject-matter may have been warranted free
from particular average, either wholly or under a certain percentage.
"(2) General average losses and contributions and salvage
charges, as defined by this Act, are not recoverable under the
suing and labouring clause.
"(3) Expenses incurred for the purpose of averting or diminishing any loss not covered by the policy are not recoverable under
the suing and labouring clause.
"(4) It is the duty of the assured and his agents, in all cases,
to take such measures as may be reasonable for the purpose of
averting or minimizing a loss." Marine Insurance Act, 1906; 6 Edw.
7, c. 41, 78.

1967]

THE HULL POLICY

loss or damage, the underwriter thereon would not be liable for

any sue and labor expenses. The Sue and Labor Clause, therefore,
is tied inexorably to the insured perils coverage and it should be
noted that it is in the same paragraph with the historic description of the perils insured against and follows immediately the
enumeration of those perils.1 This point in our consideration of
the clause is so important that it had best be illustrated by an
analysis of the following cases.
The most recent case in which this phase of the clause is discussed fully is Reliance Ins. Co. v. The Escapade.2 In that case
a yacht stranded and sustained severe damages. It was insured
under an apparently standard yacht hull policy, which contained
the usual Perils and Sue and Labor Clauses. The policy carried a
private pleasure warranty under which the yacht was to be used
for private pleasure only and was not to be chartered to third
persons. It was admitted this warranty was breached by the
charter of the yacht and that the damage, which occurred during
the breach, was due to a peril insured under the policy. The underwriter declined liability, but this was done only after the underwriter had appointed a surveyor to attend and advise the assured
as to salvage and repair of the yacht and the underwriter specifically insisted that the assured expend nearly $1000.00 to remove,
clean and preserve valuable machinery from further damage by
salt water and insisted the assured write a letter to the shipyard
guaranteeing such charges. The court held that coverage under
the policy might have been suspended or forfeited while the breach
of warranty was in effect, but the underwriter was estopped from
denying coverage at such late date after he had insisted on the
assured taking such salvage and sue and labor actions and incurring expenditures in connection therewith. The court stressed
the point that the Sue and Labor Clause comes into play only when
the underwriter is liable for the peril involved under the policy
and to insist on the assured suing and laboring is entirely inconsistent with a denial of liability for the damage caused by that
peril because of lack of coverage. The court said:
"Munson v. Standard Marine Ins. Co., 156 Fed. 44, 48 (1st Cir.),
cert. denied, 208 U.S. 543 (1907); Reliance Ins. Co. v. The Escapade,
280 F.2d 482, 489 (5th Cir. 1960); Home Ins. Co. v. Ciconett, 179 F.2d
892, 895 (6th Cir. 1950) ; White Star S.S. Co. v. North British & Mercantile Ins. Co., 48 F. Supp. 808, 812-13 (E.D. Mich. 1943) ; Charleston Shipbuilding & Drydock Co. v. Atlantic Mut. Ins. Co., 1946 Am. Mar. Cas.
1611, 1617 (Arbitration N.Y.); Cunard S.S. Co. v. Marten, [1902] 2
K.B. 511, 9 Mar. L. Case (n.s.) 452, [1902] 2 K.B. 624, 9 Mar. L. Cas.
(n.s.) 342 (C.A. 1903); Kidston v. Empire Marine Ins. Co., L.R. 1 C.P.
535 (1866), L.R. 2 C.P. 357 (1867); Arnould 867-68; Winter 196.
12280 F.2d 482 (5th Cir. 1960).

TULANE LAW REVIEW

[Vol. XLI

"Taking the analysis through the next step, it is obvious

that since the clause is to reimburse the assured for expenses incurred in satisfying the assured's duty to the
underwriter, there is no such duty where the policy, for
one reason or another - either basic lack of coverage or
an unwaived defense, forfeiture, etc. - does not apply. The
underwriter has no right to demand that the assured take
the sue and labor steps unless the policy is applicable. An
assertion of any such demand is therefore consistent only
with continued existence of the coverage. This is made all
the clearer by the very nature of sue and labor as a supplementary coverage. While it is true that it is often spoken
of in such terms, and certainly where applicable does obligate the underwriter over and above the specified dollar
limits of the policy, this expression must be used with caution. The obligation comes into being only when the action taken is to minimize or prevent a loss for which the
underwriter would be liable. If the underwriter would not
be liable at all - here because of breach of the personal use
warranty- there would be no contractual obligation to repay sue and labor. The sue and labor 'coverage' is therefore tied irrevocably to the insured perils coverage. By the
same token, where such demand reflecting continued coverage is made by the underwriter, action taken pursuant to
it by the assured works to his detriment when liability is
8
thereafter declined."'3
In Charleston Shipbuilding & Drydocking Co. v. Atlantic Mut.
Ins. Co., 14 the arbitrator, the late Russell T. Mount,15 had before
him a case involving a marine railway insured under a drydock
form of policy. The policy covered the marine railway (drydock)
itself against loss and damage and contained the usual Perils and
Sue and Labor Clauses. While a vessel was being launched on the
insured marine railway an accident happened and the cradle of
the marine railway moved and the vessel stuck. The marine railway was damaged and thereafter expenses were incurred in completing the launching of the vessel. The insurance company paid
in full for the damage to the marine railway and the suit was for
the expense of completing the launching of the vessel. The arbitrator held the policy did not insure such expense, and it was claimed
the expense came under the Sue and Labor Clause. The arbitrator
denied recovery under the following theory:
' 3Reliance Ins. Co. v. The Escapade, 280 F.2d 482, 489 (5th Cir. 1960).
141946 Am. Mar. Cas. 1611, 1617 (Arbitration N.Y.).
15An experienced and distinguished late member of the New York
Admiralty Bar.

19671

1HE HULL POLICY

"The marine railway was here the subject of the insurance, but in my opinion, the steps taken by the assured to
complete the launching were not in any sense directed to
avert damage to the marine railway, nor directed to the
'defense, safeguard and recovery' of the marine railway.
They were undertaken with the sole purpose of fulfilling
the assured's contract obligation with the Department of
Commerce to repairand launch the Relief. If those expenses
be considered as sue and labor, they were necessarily incurred in order to prevent a claim by the Department of
subject
Commerce against the assured for liability,-a
which is not covered by the policy.
"In my opinion those expenses do not fall under the sue
and labor clause of the policy involved."' 16
Mr. Mount cited as authority the case of Munson v. Standard
Marine Ins. Co.,1 7 in which there was a policy on a tug indemnify-

ing against liability to her tows. One of the barges in tow was
lost and suit was filed against the tug therefor and the tug was
held not liable. Suit was brought to recover the expenses incurred
in defending the first suit under a Sue and Labor Clause in the
policy. The court denied recovery and said:
"It is sufficient for us that we determine that the sue and
labor clause has relation only to the subject matter of insurance, which in the present case was the liability of the tug
to the stranded tows, and nothing else. The cause of the
legal expenses involved here arose, not out of the fact that
the policy attached, but out of the fact that somebody
18
claimed that it attached when in fact it did not."'
The Court cited Tyser's Marine Insurance Losses as follows:
"The underwriter is not liable under this clause [the Sue
and Labor Clause] unless he would be liable for the loss to
avert which the labor or expense is incurred."'19
There is an old decision of the Supreme Court of the United
States which clearly supports this principle. In Biays v. Chesapeake Ins. Co. 20 the insurance covered a total loss only and the
'6 Charleston Shipbuilding & Drydock Co. v. Atlantic Mut. Ins. Co.,

1946 Am. Mar. Cas. 1611, 1617 (Arbitration N.Y.).

Fed. 44, 48 (1st Cir.), cert. denied, 208 U.S. 543 (1907).
11d. at 48.
17156
8

19Tyser, Marine Insurance Losses 51 (1894).

2011 U.S. (7 Cranch) 415 (1813). This is one of the few cases decided by the Supreme Court involving the Sue and Labor Clause. In
Washburn & Moen Mfg. Co. v. Reliance Marine Ins. Co., 179 U.S. 1, 18
(1900), a more recent case, the Court said:
"The sue and labor clause expressly provided that acts of the

TULANE LAW REVIEW

[Vol. XLI

suit concerned only a part of the hides insured; there being lost
and damaged less than one-third of the cargo. The Court refused to
allow recovery under the policy for the partial loss. A claim was
made under the Sue and Labor Clause for the expense of saving
some of the hides which had been sunk on a lighter. The Court
refused recovery under the Sue and Labor Clause, saying:
"If this clause be construed with reference to what is most
evidently its subject matter, that is a loss within the policy,
and in connection with other parts of the instrument, it
seems impossible to misunderstand it, or that it should receive so extensive an application as the plaintiff is desirous
of giving to it. The parties certainly meant to apply it only
to the case of those losses or injuries for which the assurers,
if they had happened, would have been responsible. Having,
in such cases only, an interest in rescuing or relieving the
property, it is reasonable that then only they should defray
the charges incurred by an effort made for that purpose;
but when a loss takes place, which cannot be thrown on
them, it would require a much stronger and more explicit
stipulation than we find in the policy to render them liable
to contribute to such expenses ....
The court cannot subscribe to such an interpretation, when a more natural, rational, and obvious one, and that without departing from
the letter of the instrument, presents itself, which is, that
this clause can never apply but in such cases as would, if
they happen, be losses (either partial or total) within the
meaning of the policy. We are therefore of opinion, that the
underwriters not being answerable for the principal loss in
this case, they cannot be so for the subsequent expenses
which were incurred in recovering the property." 1
insurer in recovering, saving and preserving the property insured,
in case of disaster, were not to be considered an acceptance of
abandonment. Whether regarded as embodying a common-law
principle, or as new in itself, the clause must receive a liberal
application, for the public interest required both insured and insurer to labor for the preservation of the property. And to that
end provision is made that this may be done without prejudice.
"The Circuit Court of Appeals well points out that at Key
West there was no agent of the assured, no adequate means of
protection, and no market; while at Velasco there were excellent
facilities for protection and handling of cargo, easy access to the
company's head agency, and a good market; and it was the port
of destination.
"If, then, it was the insurer that carried the property, to be
preserved and carried, to Velasco, where it was offered to the
consignees, such labor and care rendered in good faith did not
operate as an acceptance of abandonment, and especially as there
was no right to abandon and a distinct refusal to accept."
21Biays v. Chesapeake Ins. Co., 11 U.S. (7 Cranch) 415, 419 (1813).

1967]

THE HULL POLICY

The English authorities support this principle. Their law is

expressed in Templeman and Greenacre, as follows:
"[I]t is, however, only in cases where the provisions of the
sue and labor clause are applicable to the subject-matter
of the insurance that effect can be given to its terms ....,,22
These authors cite the case of Cunard S.S. Co. v. Marte?03 in
support of their position. There the insurance was against liability
for negligent loss on a shipment of mules. The suit was for the
recovery of expenses incurred in landing, feeding and saving the
mules, under the Sue and Labor Clause. The court denied recovery
because the subject-matter of the insurance was not the mules, in
connection with which the expenses were incurred, but liability
therefor.
Kidston v. Empire Marine Ins. Co.,24 established the rule that
where the expenses are incurred in order to avert a loss of the
subject-matter insured, for which if it had happened the underwriter would have been liable, .then such expenses are recoverable
under the Sue and Labor Clause. In Kidston, charter freight,
payable on arrival, was insured and the vessel became a constructive total loss. The cargo was landed and warehoused and
afterwards forwarded to destination on another vessel and the
plaintiffs received their full charter freight, but they incurred
2,467 expenses in shipping on the other vessel. The policy contained the usual Suing and Labouring Clause and a warranty
against particular average. The court allowed recovery of such
expenses under the Suing and Labouring Clause and held that
these were particular charges and that particular average applied
to damage of the goods themselves and not to such expenses.
It should be noted next that, as pointed out above in The Escapade25 case, the Sue and Labor Clause is "tied irrevocably to the
insured perils coverage," and does not extend to special risks covered in addition to the ordinary standard marine perils. In Xenos
v. Fox 26 the owners of a vessel successfully defended a collision
case and then claimed against their underwriter, under the Suing
and Labouring Clause, the expenses of such defense. The court
said the Suing and Labouring Clause was not applicable to expenses
under the Collision Clause of the policy, but only to the ordinary
insurance perils.
22

Templeman & Greenacre 117.

23[1902] 2 K.B. 511, 9 Mar. L. Cas. (n.s.) 452; [1902] 2 K.B. 624,
9 Mar.
24 L. Cas. (n.s.) 342 (C.A. 1903).
L.R. 1 C.P. 535 (1866); L.R. 2 C.P. 357 (1867).
25
Reliance Ins. Co. v. The Escapade, 280 F.2d 482, 488 (5th Cir. 1960).
26
L.R. 4 C.P. 665 (1869).

TULANE LAW REVIEW

[Vol. XLI

In Berns & Koppstein, Inc. v. Orion Ins. Co., 27 the district court
followed Xenos and held that the Sue and Labor Clause was not
applicable to a loss and damage claim arising under a "special full
rejection insurance," which was in addition to the standard form
of Lloyds' marine cargo policy. The court said:
"The rejection clause covered a special and specific risk
other than and in addition to the standard marine cargo
risk and is not to be circumscribed to the standard 'sue and
labor' clause.
"The standard 'sue and labor' clause covers a voluntary
expenditure on the part of the insured to protect the goods
against the standard risks covered by the policies." 28
This case is interesting to us in another respect. The policy
had a specific warranty that when a peril arose the assured was
under an immediate -duty to notify the insurer's agents and to follow their instructions and requests. The assured was forbidden to
take any voluntary steps in connection with the property and would
have breached the warranty if he had attempted any sue and labor
efforts in connection therewith.
One of the earliest and most important English cases concerning this clause must be taken into consideration here for it too
emphasizes the fact that the assured and his agents must be the
ones to sue and labor voluntarily. In Aitchison v. Lorne,2 9 the
House of Lords held that where a tug rendered services to a vessel
in distress, not as an agent of the vessel and without any agreement, but only as salvors under the maritime law, the salvage
charges could not be recovered as sue and labor charges because
they were not incurred for services rendered by the assured or his
agents.
It is true that the Sue and Labor Clause is a separate insurance and recovery may be had thereunder over and above the
losses and damages to the property insured recovered under the
Perils Clauses; always provided, of course, the expenses have been
reasonably and properly incurred. Such a recovery was allowed
in the case of Home Ins. Co. v. Ciconett,30 where the court quoted
with full approval the case of White Star S.S. Co. v. North Britisk
& Mercantile Ins. Co., 3' as follows:
27170 F. Supp. 707 (S.D.N.Y. 1959), aff'd mem., 273 F.2d 415 (2d
Cir.281960).
ld. at 719.
292 Q.B.D. 501 (1877); 3 Q.B.D. 558 (1878); 4 App. Cas. 755, 4 Mar.
L. Cas. (n.s.) 168 (1879).
30179"F.2d 892 (6th Cir. 1950).
3148 F. Supp. 808 (E.D. Mich. 1943).

19671

THE HULL POLICY

"The rule is well stated as follows in the White Star S.S.

Co. case: 'The law is well settled that the sue and labor
clause is a separate insurance and is supplementary to the
contract of the underwriter to pay a particular sum in
respect to damage sustained by the subject matter of the
insurance. Its purpose is to encourage and bind the assured
to tiake steps to prevent a threatened loss for which the
underwriter would be liable if it occurred, and when a loss
does occur to take steps to diminsh the amount of the loss.
Under this clause the assured recovers the whole of the sue
and labor expense which he has incurred, subject to the
expense having been proper and reasonable in amount under
all the circumstances, and without regard to the amount of
the loss or whether there has been a loss or whether there
is salvage, and even though the underwriter may have been
paid a total loss under the main policy.' -32
However, in the policy under consideration here will be found
two clauses which read:
"In the event of expenditure under the Sue and Labor
Clause, this Policy shall pay the proportion of such expenses
that the amount insured hereunderbears to the insuredvalue
of the Vessel, or that the amount insured hereunder, less
loss and/or damage payable under this Policy, bears to the
actual value of the salved property; whichever proportion
shall be less.
"If claim for total loss is admitted under this Policy and
sue and labor expenses have been reasonably incurred in
excess of any proceeds realized or value recovered, the
amount payable under this Policy will be the proportion
of such excess that the amount insured hereunder (without
deduction for loss or damage) bears to the insured value
or the sound value of the Vessel at the time of the accident,
whichever value was greater."m
These paragraphs are for the purpose of providing a proportionate reduction of the amount recoverable for sue and labor expenses in the event of under-insurance. They do not affect the
32
Home Ins. Co. v. Ciconett, 179 F.2d 892, 895 (6th Cir. 1950). See
also Lorne v. Aitchison, 3 Q.B.D. 558, 567, 4 Mar. L. Cas. (n.s.) 11, 14
(1878); New York Trap Rock Corp., 1956 Am. Mar. Cas. 469 (Arbitration).
33
American Institute Time (Hulls) Policy, Form 6-Y, lines 189-95
(Jan. 1, 1964).

TULANE LAW REVIEW

[Vol. XLI

right. There has been no judicial

interpretation of them as yet,
3 4
but examples are noted below.
The reason behind the words in the second paragraph, "sue and
labor expenses have been reasonably incurred in excess of any
proceeds realized or value recovered,"3 5 is that, as held in the
White Star S.S. Co. case:
"Where salvage is realized from the insured property and
the assured has the salvage in his possession or under his
control, the underwriter is entitled to have the value of
the salvage applied in reduction of sue and labor expense
incurred by the assured; or to put it this way, that sue and
labor expense incurred by an assured is a charge against
salvage."3 6
There is a discussion of these clauses by Buglass, 37 and of the
38
analogous London Institute Clauses by Arnould.
It might be well to add two comments. First, the words in
the customary form of Sue and Labor Clause used in America are
341d. lines 189-91. Assume a vessel is actually valued at $10,000 and
is insured for $10,000. Assume that there was an expenditure under the
policy of $5,000 for sue and labor expense. Inasmuch as the proportion
of the amount insured to the insured value is the same as the proportion
of the amount insured less loss and/or damage to the actual value of the
salved property, it would appear that the assured would collect sue and
labor expenses in full. On the other hand, as a further example, assume
that the actual value was $20,000 instead of $10,000. In this instance
the proportion of the amount of insurance less loss and/or damage to the
actual value of the salved value would have to be less than the proportion
of the amount insured to the insured value. It would therefore follow
that in this instance the assured would participate accordingly in the payment of sue and labor expenses.
Id. lines 192-95: Again assume a vessel is insured for $10,000 and
that the actual and/or sound value is also $10,000; that the total loss is
admitted and paid and the assured reasonably incurred sue and labor
expenses of $1,500. Further assume that following payment of a total
loss of $10,000 to the assured there was a recovery of $1,000 in some
manner, perhaps by selling the wreck "where is as is" for $1,000. This
means that sue and labor expenses exceed the proceeds realized or value
recovered by $500. The clause indicates that inasmuch as the proportion
of the amount of insurance to the insured value and the sound value are
the same the assured would collect 100% of his sue and labor expenses
over and above a total loss. On the other hand, if the sound value of
the vessel at the time of the accident were $20,000 as compared with
$10,000 insured value, the clause states that the assured would be a 50%
co-insurer so far as the $500 excess of sue and labor expense over the
amount of recovery is concerned.
35Id. lines 192-93.
36
White Star S.S. Co. v. North British & Mercantile Ins. Co., 48 F.
Supp.
37 808, 813 (E.D. Mich. 1943).
Buglass, Marine Insurance Claims 68 (1963) [hereinafter cited as
Buglass].
3BArnould 866.

19671

THE HULL POLICY

"it shall be lawful and necessary" for the assured to sue, labor,
etc., while in the English form the words are simply "it shall be
lawful to the assured," etc. The use of the word "necessary" in
the American form has not seemed to cause the courts to construe
the two forms differently. In Republic of China v. National Union
Fire Ins. Co., 39 after quoting the English form, the court said:
"This is the customary English form of the clause, as distinguished from a form sometimes used in America, which
provides: 'It shall be lawful and necessary to and for the
assured', etc. Although the customary clause is couched in
permissive terms, an assured has always been required to
labor diligently for the recovery of the property; he must
take such action as a prudent uninsured owner would take
under similar circumstances .... ,,40
Second, the Sue and Labor Clause was first used in early days
when voyages were long and there were no ready means of communication between the owner himself or his supercargo on the
vessel and the underwriters, and by this clause they agreed the
owner and his agents should use every means in their power to
protect the property and save it from further damage after loss
had occurred. The measure of the owner's duty was to use the
same care a prudent uninsured owner would exercise in regard
to his own property under the same circumstances. Now, however,
with all the ready means of communication at hand, the owner,
whenever possible, should communicate with his underwriter and
take advice and instructions as to the steps to be taken and expenditures to be made in connection with the insured property, especially if the expenditures may equal or exceed the value of the
property. This is emphasized by the clause in the policy providing:
"In the event of accident whereby loss or damage may result in a claim under this Policy, notice shall be given in
writing to the Underwriter where practicable prior to survey so that they may appoint their own surveyor if they
so desire. ..."41
GENERAL AVERAGE
No attempt to discuss general average in its broad aspects
will be made, and this paper will be restricted to the coverage in39151 F. Supp. 211 (D. Md. 1957), modified, 254 F.2d 177 (4th Cir.),
cert.
40 denied, 358 U.S. 823 (1958).
1d. at 238.
41
American Institute Time (Hulls) Policy, Form 6-Y, lines 122-23
(Jan. 1, 1964).

TULANE LAW REVIEW

[Vol. XLI

eluded in the American policy 42 and to the relationships and dif-

ferences between the general average coverage and that given by

the Sue and Labor Clause and the salvage and special charges
coverages. The pertinent clause reads:
"General Average, Salvage and Special Charges payable as
provided in the contract of affreightment, or failing such
provision, or there be no contract of affreightment, payable in accordance with the Laws and Usages of the Port of
New York. Provided always that when an adjustment according to the laws and usages of the port of destination
is properly demanded by the owners of the cargo, General
'43
Average shall be paid in accordance with same.
One adjuster says that "This clause is self-explanatory and calls
for no special comment. '44 The clause covers both general average
sacrifices by the shipowner, and general average contributions due
45
by the shipowner.
The Supreme Court of the United States, in one of the very
few cases in which it has considered general average, defined it
as follows:
"General Average contribution is defined to be a contribution by all the parties in a sea adventure to make good the
loss sustained by one of their number on account of sacrifices made on part of the ship or cargo to save the residue
and the lives of those on board from an impending peril, or
for extraordinary expenses necessarily incurred by one or
more of the parties for the general benefit of all the interests embarked in the enterprise. Losses which give a claim
to averages are usually divided into two great classes: (1)
Those which arise from sacrifices of part of the ship or
part of the cargo, purposely made in order to save the whole
42
Supra
43

note 1.
American Institute Time (Hulls) Policy, Form 6-Y, lines 173-76
(Jan.
44 1, 1964).
Buglass 59.
45
1d. at 60; Templeman & Greenacre 236. The Marine Insurance Act,
1906, 6 Edw. 7, c. 41, 66, provides:
"(4) Subject to any express provision in the policy, where the
insured has incurred a general average expenditure, he may recover from the insurer in respect of the proportion of the loss
which falls upon him; and, in the case of a general average sacrifice, he may recover from the insurer in respect of the whole loss
without having enforced his right of contribution from the other
parties liable to contribute.
"(5) Subject to any express provision in the policy, when the assured has paid, or is liable to pay, a general average contribution,
in respect of the subject insured, he may recover therefor from
the insurer."

19671

THE HULL POLICY

adventure from perishing. (2) Those which arise out of

extraordinary expenses incurred for the joint benefit of
46
ship and cargo."
Note should be taken of the second class because it defines a
difference in our application of general average and that of England,4 7 for instance, to which attention has been called by Buglass
in the following manner:
"The last definition is particularly important because it
embraces as general average 'extraordinary expenses incurred for the joint benefit of ship and cargo.'
"Thus it will be seen that, while peril is a necessary element
in a general average act, the United States Courts have extended the consequences of the general average act to include certain expenses incurred after safety has been attained. For example, expenses incurred for the mutual
benefit of ship and cargo to enable the voyage to be completed, such as temporary repairs at a port of refuge, are
' 48
made good as general average.
The second important clause in the policy referring to general average reads as follows:
"When the contributory value of the vessel is greater than
the valuation herein the liability of these Underwriters for
46The Star of Hope v. Annan, 76 U.S. (9 Wall.) 203, 228 (1870).
See also Congdon, General Average 1 (2d ed. 1952), in which the author,
an eminent Average Adjuster, defines the term as follows:
"A General Average is a loss which arises in consequence of a
voluntary and successful sacrifice, under extraordinary circumstances, of part of the property included in a common maritime
adventure, solely for the benefit of the adventure as a whole at a
time of peril threatening physical injury to the whole, or through
reasonable extraordinary expenditure for the common benefit of
the
47 whole adventure, occasioned by a voluntary act."
Templeman & Greenacre 213-14, state the distinctibh in the English
law as follows:
"The next essential feature of general average is that the object
of the sacrifice or expenditure must be nothing other, or less,
than the preservation of the property imperilled in the common
adventure; it must not be for the safety of the ship alone, or
of the cargo alone, nor merely for the completion of the adventure.
"This last-mentioned feature differs from the laws of many foreign countries, which recognize either the 'completion of the adventure', or use the 'general benefit', as being the object which
justifies a general average act."
Marine Insurance Act, 1906, 6 Edw. 7, c. 41, 66 (2), provides:
"There is a general average act when an extraordinary sacrifice
or expenditure is voluntarily and reasonably made or incurred in
time of peril for the purpose of preserving the property imperilled
in
4 the common adventure."
8Buglass 47.

372

TULANE LAW REVIEW

[Vol. XLI

General Average Contribution (except in respect of amount

made good to the vessel) or Salvage shall not exceed that
proportion of the total contribution due from the vessel that
the amount insured hereunder bears to the contributory
value; and if because of damage for which these Underwriters are liable as Particular Average the value of the
vessel has been reduced for the purpose of contribution,
the amount of the Particular Average claim under this
Policy shall be deducted from the amount insured hereunder and these Underwriters shall be liable only for the
proportion which such net amount bears to the contributory
49
value."
Buglass comments on this clause as follows:
"This clause stipulates that, in ascertaining the amount of
underwriters' liability for general average expenses, regard
must be had to the insured value of the vessel. If the insured value is equal to, or exceeds, the sound value on
which the contributory value of the vessel is based, the
underwriter pays the whole amount of the general average
contribution. On the other hand, if the insured value is
less than the sound value, the underwriter pays only a proportion of the general average expenses. The clause also
provides that if the contributory value of the vessel is reduced by a damage for which these same underwriters are
liable as particular average, the amount of that particular
average claim under the policy is to be deducted from the
insured value and the underwriters are only liable for the
proportion which such net amount bears to the contributory
value. General Average sacrifices ('the amount made good
to the vessel') are not affected by this clause and are recoverable from underwriters without regard to any underinsurance." 50
Templeman and Greenacre 51 comment on section 73(1) of the
British Marine Insurance Act of 1906,52 in language similar to
49

American Institute Time (Hulls) Policy, Form 6-Y, lines 182-88

(Jan. 1, 1964).
5OBuglass 60.
51Templeman
& Greenacre 240.
52
Marine Insurance Act, 1906, 6 Edw. 7, c. 41, 73 (1), provides:
"Subject to any express provision in the policy, where the assured
has paid, or is liable for, any general average contribution, the
measure of indemnity is the full amount of such contribution, if
the subject-matter liable to contribution is insured for its full
contributory value; but, if such subject-matter be not insured
for its full contributory value, or if only part of it be insured,
the indemnity payable by the insurer must be reduced in propor-

19671

THE HULL POLICY

Buglass; section 73(1) contains practically the same provisions

as the clause in the American policy. This policy provision corrected the inequity of the 'American law requiring full contributions in general average and salvage from the underwriters where
shipowners under-insured their vessels and thus saved larger
premiums, and it thereby avoided the leading decision in favor of
such full contributions in InternationalNay. Co. v. Atlantic Mut.
Ins. Co.53
It will be noted that this treatment in cases of under-insurance
54
by the shipowner is quite similar to the provisions in the policy
applicable to under-insurance in sue and labor cases, as pointed out
hereinabove.
While efforts and expenditures must be voluntarily and purposely made on behalf of the shipowner for the protection and
safety of the subject-matter of the insurance in order to recover
under the policy for both sue and labor and general average
charges, certain important distinctions -9wst be considered in order
to determine under which clause in the policy recovery may be had.
The most important distinction is whether the efforts put forth
relate solely and only to the specific interest or property insured
and, if so, the Sue and Labor Clause comes into play. On the other
hand, even if the efforts and expenditures benefit the interest insured, but are not of exclusive value to such interest since they are
of common benefit to other interests in the adventure, then a general average act occurs and the shipowner will be protected by that
clause. 55
In a general average case success must be obtained,55 at least
some property must be saved, while sue and labor expenditures
tion to the under insurance, and when there has been a particular
average loss which constitutes a deduction from the contributory
value, and for which the insurer is liable, that amount must be
deducted from the insured value in order to ascertain what the
insurer is liable to contribute."
53100 Fed. 304 (S.D.N.Y. 1900), aff'd mere., 108 Fed. 987 (2d Cir.),
cert. denied, 181 U.S. 623 (1901). The Supreme Court of the United
States in Gulf Ref. Co. v. Atlantic Mut. Ins. Co., 181 U.S. 623 (1929),
established a different rule as to cargo contributions in general average, holding the cargo owner a co-insurer where the contributory value
was greater than the agreed insured value. The Court distinguished
the Internationalcase on the ground that in a hull damage particular
average loss the insured shipowner recovers in full under his policy,
while in a partial loss of cargo under a valued policy the insured recovers on a proportionate value basis, so that in case of an increase
in value his recovery is limited as though he were a co-insurer.
5American Institute Time (Hulls) Policy, Form 6-Y, lines 189-95
(Jan 1, 1964).
55
Winter 196; see Marine Insurance Act, 1906, 6 Edw. 7, c. 41, 66
& 78; Templeman & Greenacre 273.
56Winter 409.

TULANE LAW REVIEW

[Vol. XLI

may be recovered in some cases where there is a total loss and no

property is saved, despite incurrence of such expenditures.T
There is another clause in the policy referring to general average 58 in which occurs the words "without deduction of thirds, new
for old." There was an old custom or general rule in adjusting
general average of making some deduction for replacing old materials in a vessel with new ones when repairs were made and in the
case of wooden ships in the olden days a deduction of one-third,
new for old, was allowed. This deduction patently was not fair. in
the case of modern steel and iron vessels and hence the YorkAntwerp Rules and those of the Association of Average Adjusters
of the United States have adopted a graduated scale, based on
the age of the vessel, for depreciation from wear and use.5 9 One
average adjuster has pointed out the purpose of this clause as
follows:
"The American Institute Time (Hulls) form of policy also
stipulates that general average shall be payable without deduction of thirds, new for old. The effect of this is to make
underwriters liable for any deduction 'new for old' made by
average adjusters in stating the general average in accordance with the York-Antwerp Rules or American law and
practice." 6
Another adjuster referring to this clause says:
"Such policies provide more than an indemnity. So far
as the General Average thirds are concerned, their assumption by the vessel underwriters does not change their General Average character and they are in no way affected by
any Particular Average clauses in the policy. They may not
be added to Particular Average in computing a franchise."'
In the principal General Average Clause above quoted
the following words which should be commented on:

appear

"General Average ... payable as provided in the contract

of affreightment, or failing such provision, or there be no
contract of affreightment, payable in accordance with the
Laws and Usages of the Port of New York...."6
5
7See
5

authorities cited notes 6 & 32 supra; Winter 371.

8American Institute Time (Hulls) Policy, Form 6-Y, lines 147-48
(Jan.
1, 1964).
69
Congdon, op. cit. supra note 46, at 160-61.
6OBuglass 61.
61
Mullins, Marine Insurance Digest 174 (1951).
62
American Institute Time (Hulls) Policy, Form 6-Y, lines 173-76
(Jan. 1, 1964).
63Id. lines 173-74.

1967]

THE HULL POLICY

The purpose of these words is important and provides for a

general average adjustment under American law where a vessel
4
is in ballast, which is contrary to the English and other laws.
Congdon stateg, however, that where a vessel is in ballast this
principle is applied only where there is insurance on the vessel
and that the insurer is another party at interest. 65 Lowndes and
Rudolf say, in 1948, that no English court had as yet held in
accordance with this American principle. 66
It must always be remembered that general average exists independently of insurance and existed as a law of the sea prior to
the evolvement of marine insurance, but all prudent shipowners
now insure their liabilities therefor and have the coverage afforded
by the American policy. 7
SALVAGE
Again, as with general average, salvage will not be discussed
generally, the discussion shall be restricted to the coverage given
in the policy to the shipowner and his vessel for liability for
salvage charges and awards. The coverage for salvage charges is
contained in the same clause as that for general average, quoted
above.68
There are two types of salvage services. Pure or maritime
salvage where it is rendered in an emergency by a stranger to the
adventure without any contract with, or orders from, the master
or owner or agents of the vessel or property to be served. The
other is where the owner or his agents or the master makes a
contract for the salvage services to be rendered.
It is necessary to know under what circumstances salvage
services are rendered or expenditures are incurred in saving prop64

La Fonciere Compagnie D'Assurances Contre Ls Risques de Transport de Toute Nature v. Dollar, 181 Fed. 945 (9th Cir. 1910), affirming
162 Fed. 563 (N.D. Cal. 1908); Potter v. Ocean Ins. Co., 19 Fed. Cas.
1173 (No. 11335) (C.C. Mass. 1837); Buglass 59-60; Congdon, op. cit.
supra note 46, at 143-46; Lowndes & Rudolf, General Average 49-52
(7th ed. 1948); Mullins, op. cit. supra note 61, at 115. See Hahlo v.
Benedict,
216 Fed. 303 (2d Cir. 1914).
65
Congdon, op. cit. supra note 46, at 143.
66
Lowndes & Rudolf, op. cit. supra note 64, at 51, state:
"Whatever may be the law in America, it is submitted that in
England more than one interest must be imperilled if there is to
be a general average act. Whether or not the interests of the
underwriters on hull, no cargo being on board, would be held sufficient other interest is a point which may yet have to be decided by
the
English Courts . .. ."
67
Buglass 46-50; Templeman & Greenacre 209, 236; Winter 406.
OsAmerican Institute Time (Hulls) Policy, Form 6-Y, lines 173-76
(Jan. 1, 1964).

TULANE LAW REVIEW

[Vol. XLI

erty in peril at sea to determine under what provisions of the

policy recovery may be had by the insured shipowner. This is important in order to determine the extent of the recovery allowed
by the policy. Such expenditures may be recovered as (1) sue and
labor charges, (2) general average expenditures, or (3) salvage
charges. Since there is little jurisprudence in America on this
subject, resort must be had to English authorities. The clearest
exposition found on this point is that of Templeman and Greenacre, where they say:
"If a vessel without cargo on board, and not under charter,
strands in a position of peril, and the master engages a
tug to assist the vessel to refloat and undertakes to pay the
tug so much per hour or tide, the amount payable to the
tug is recoverable from the insurers of the ship as a sue
and labor charge. If the vessel has cargo on board and
similar expenditure is incurred, the amount paid for the
services of the tug is a general average expense and falls
to be dealt with accordingly. In both cases the amount due
to the owners of the tug is payable under contract, but it
may happen that services are rendered to a vessel, in an
emergency, without any contracts being first arranged.
Such services would be salvage services, and the amount
payable to the owners of the tug would come under neither
of the first two headings, but under the third heading of
'salvage charges'."''
The British Marine Insurance Act of 1906 has clarified these
differences concerning the recovery of salvage expenditures.7 0
0

Templeman & Greenacre 273.

7OThe Marine Insurance Act, 1906, 6 Edw. 7, c. 41, 65, provides:
"(1) Subject to any express provision in the policy, salvage
charges incurred in preventing a loss by perils insured against
may be rcovered as a loss by those perils. (2) 'Salvage charges'
means the charges recoverable under maritime law by a salvor
independently of contract. They do not include the expenses of
services in the nature of salvage rendered by the assured or his
agents, or any person employed for hire by them, for the purpose of averting a peril insured against. Such expenses, when
properly incurred, may be recovered as particular charges or as
a general average loss, according to the circumstances under
which they were incurred."
The Marine Insurance Act, 1906, 6 Edw. 7, c. 41, 78(2) further provides:
"General Average losses and contributions and salvage charges,
as defined by this Act, are not recoverable under the suing and
labouring clause."
This latter provision resulted from the decision of the House of Lords
in Aitchison v. Lohre, 4 App. Cas. 755, 4 Mar. L. Cas. (n.s.) 168 (1879).
For a discussion of the Aitchison case, see text accompanying note 29
supra.

1967]

THE HULL POLICY

They are important because, for instance, salvage expenses in suing

and laboring in some cases may be recoverable over and above the
principal amount of the policy where there is a total loss, while
pure or maritime salvage is recoverable as a loss by a peril insured
against, and is restricted by the amount of the policy.71
The clause providing for proportionate recovery for salvage
where the vessel is under-insured is likewise the same as that for
general average quoted above7 2 and is self-explanatory."
The only other clause in the policy specifically applicable to
salvage is what is known as the Sister-Ship Salvage Clause 74 which
needs no comment here and reads:
"And it is further agreed that in the event of salvage, towage or other assistance being rendered to the vessel hereby
insured by any vessel belonging in part or in whole to the
same owners or charterers, the value of such services
(without regard to the common ownership or control of the
vessels) shall be ascertained by arbitration in the manner
below provided for under the Collision Clause, and the
amount so awarded so far as applicable to the interest
hereby insured shall constitute a charge under this Policy."
The applicable provisions of the Sister-Ship Collision Clause
for determining the value of the salvage services in such cases
is found in the policy in lines 208-14. 75
71
72 See

note 70 supra.
American Institute Time (Hulls) Policy, lines 182-88 (Jan. 1, 1964).
73
Buglass 60; see also International Nay. Co. v. Atlantic Mut. Ins.
Co., 100 Fed. 304 (S.D.N.Y. 1900), aff'd mem., 108 Fed. 987 (2d Cir.),
cert. denied, 181 U.S. 623 (1901); Templeman & Greenacre 276.
74
American Institute Time (Hulls) Policy, lines 177-81 (Jan. 1, 1964).
See Buglass 64; Mullins, op. cit. supra note 61, at 223; Templeman &
Greenacre 277. The Salvage Act of 1912, 46 U.S.C. 727 (1964), is
interesting in this connection because it provides:
"The right to remuneration for assistance or salvage services shall
not be affected by common ownership of the vessels rendering and
receiving
such assistance or salvage services."
75
American Institute Time (Hulls) Policy, lines 208-14 (Jan. 1, 1964),
reads:
"[A]nd it is further agreed that the principles involved in this
clause shall apply to the case where both vessels are the property,
in part or in whole, of the same owners or charterers, all question
of responsibility and amount of liability as between the two vessels
being left to the decision of a single Arbitrator, if the parties
can agree upon a single Arbitration, or failing such agreement,
to the decision of Arbitrators, one to be appointed by the Managing Owners or Charterers of both vessels, and one to be appointed by the majority (in amount) of Hull Underwriters inter-

TULANE LAW REVIEW

[Vol. XLI

SPECIAL CHARGES
The coverage for special charges is contained in the same clause
76
as that for general average and salvage quoted above, and hence
it might be advisable to comment briefly thereon. In England
analogous charges are called "particular charges" and the definition in section 64 of the British Marine Insurance Act of 1906, is
as good as any:
"(1) A particular average loss is a partial loss of the subject-matter insured, caused by a peril insured against, and
which is not a general average loss.
"(2) Expenses incurred by or on behalf of the assured for
the safety or preservation of the subject matter insured,
other than general average and salvage charges, are called
particular charges. Particular charges are not included in
particular average."
Thus, Arnould states as to such charges:
"They are recoverable from underwriters when incurred
after the arising of a peril insured against, in order to prevent such peril causing a loss for which underwriters would
be liable if it in fact occurred. In this event they are
charges incurred 'in and about the defense and safeguard'
of the subject-matter of insurance, within the suing and
77
labouring clause.1
1
He points out that Kidston v. Empire Marine Ins. Co. first
definitely established the distinction between "particular average" and "particular charges." This was a case of transshipping
cargo by other means after the carrying vessel became disabled,
in which recovery was had against the underwriters for the expenses thereof as "particular charges" under the Suing and
Labouring Clause.

Our jurisprudence contains few cases on the subject and refer79

ence must be had to American treatises on marine insurance.
ested; and two Arbitrators chosen to choose a third Arbitrator
before entering upon the reference, and the decision of such single
or any two of such three Arbitrators, appointed as above, to be
and binding."
final
76
d. lines 173-76.
77
Arnould 865.
78L.R. 1 C.P. 535 (1866), L.R. 2 C.P. 357 (1867).
79
Mullins, op. cit. supra note 61, at 238; Templeman & Greenacre
194-95; Winter 66.

1967]

THE HULL POLICY

These are all in accord with the British act and Arnould. There
are some old cases which make the distinction between general
average, where ship and cargo are involved at the time of the
expenditures, and expenditures incurred on behalf, and for the
preservation, of the cargo only after its discharge and permanent
separation from the ship; such as warehousing and transshipment. 80 These cases involve only "special or particular charges"
on cargo with which our policy is not concerned, yet they might
be considered as examples of the principle involved, for no cases
have been found involving vessels in connection with "special or
particular charges." One of these, L'Amgrique,8 ' was decided
by a most eminent Admiralty Judge, Judge Addison Brown. This
case is referred to with approval in subsequent authorities, but
attention should be called to the fact that, although he found the
separated cargo did not have to contribute in general average to
the expenses after it was unloaded and separated from the ship,
he stated:
"The subsequent expenses on account of the cargo after it
was discharged, either on the beach or into lighters, should
be charged as particular average against the cargo alone;
and the expenditures that had sole reference to hauling the
ship off, against the ship alone ....82
Judge Brown was in error in speaking of these expenditures
made on behalf of cargo alone as "particular average" (which
denotes damage or loss to the subject-matter of the insurance)
instead of as "particular or special charges," incurred in the preservation of the cargo.
If we assume from the English definitions and from the foregoing that "special charges" as used here in this clause of the
American policy- mean only, and no more than, sue and labor expenses, then the reference to them in this clause would be redundant, for the policy already had provided in the Sue and Labor
Clause "to the Charges whereof the underwriters will contribute
their proportion as provided below ....83
8OSt. Paul Fire &Marine Ins. Co. v. Pacific Cold Storage Co., 157 Fed.
625 (9th Cir. 1907); Compagnie G~n~rale Transatlantique v. Hoguet
(L'Am~rique), 35 Fed. 835 (S.D.N.Y. 1888); Edward v. The Joseph
Farwell,
31 Fed. 844 (S.D. Ala. 1887).
81
Compagnie G~n6rale Transatlantique v. Hoguet (L'Amdrique), 35
Fed.82 835 (S.D.N.Y. 1888).
831d. at 848.

American Institute Time (Hulls) Policy, Form 6-Y, lines 103-04

(Jan. 1, 1964).

TULANE LAW REVIEW

[Vol. XLI

What has just been said will give some idea of the meaning of
the general and every day use of the words "special charges" and
how they fall one hundred per cent against the particular interest
which they have benefited, i.e., the ship or a piece of cargo, and
that the respective underwriters respond therefor. But we are
dealing with the hull policy, and the clause in which these words
appear is a joint liability or sharing clause, such as ship and cargo
sharing pro rata for general average expenses which are of mutual
benefit to them and salvage which likewise is to their mutual
benefit. But "special charges" are not of mutual benefit, but
rather singular, hence their inclusion in the policy on the ship
alongside of general average and salvage appears somewhat alien,
or creates some uncertainty, to say the least.
This clause implies that the vessel will pay its share of "Special
Charges ... as provided in the contract of affreightment," yet no
bill of lading this writer has ever seen binds two parties, i.e., ship
and cargo, to share a singular expense or a special charge incurred
for the sole benefit of either the one or the other.
The average adjusters this writer has consulted are just as
puzzled as he, and some circumvented the question by saying, "if
we don't know what it means, we throw it into general average."
The language of this clause is almost identical with that contained
in the cargo underwriters' guarantee given to the vessel-owner at
the time of a general average, wherein such cargo underwriters
guarantee to pay or reimburse the vessel-owner for any special
charges the vessel-owner may expend solely on behalf of that particular piece of cargo. Hence it could very well be that in revising
the hull policy someone simply adopted the language in the cargo
guarantee; perhaps with the thought that for some expenses which
might not be pure general average or salvage, but which equity
might demand should be shared by all parties, the term "special
charges" would provide for the hull underwriter to respond for
his share. It is most difficult to think of such an expense, and it
is doubtful that these two words ever come into play. In summarization, the words "special charges," appearing as they do in
this hull policy, would appear to be no more than a "catch all"
phrase.
It is interesting to note that in the London Institute Time
Clauses the analogous clause includes simply "general average and
salvage," and "particular charges" are not included.