11E.L.C.

, 158

STEWART V. GREENOCK MARINE INSURANCE CO,

[1848f

very day (the 24th) that Mr. Tooke received back the draft fmni Mr. Tidd; so tHat
Mr. Mellish died without knowing that it had been approved.
I have put the case of the non-completion of an agreement o r contract. But
Mr. Tooke, with every disposition-and very naturally-to support Lord Glengalls
claim from his (Mr. Tookes) knowledge of his clients intentions, does not take upon
himself to my (which would have made & material difference in the case) that Mr.
M e l l i ~ iever said that he wag to be Cl681 c~nsideredas a4sen~ing~
p r ~ ~ Mr.
i d ~
Tidd should approve of the draft. He aays no such thing. This view of the case
makes the suppwed partrperformance, upon which all the reliance is placed, wholly
immaterial; f o r part-performance, to take the case out of the Statute of Frauds,
always suppose a completed agreement, There can be no part performance where
there is no completed agreement in existence. It must be obligatory, and what if3
done must be under the terms of the agreement, and by force of the agreement.
The case therefore appears to me to be free from all doubt, I regard the whole as
an incomplete agreement, and I agree with the Master of the Rolls, tha$ the part of
the bill which referred to i t ought to be dismissed. Therefore the decree appealed
from should be affirmed, as my noble and learned friend has mwed.
This makes way for the consideration of the appeal, in which Lady Edward
Thynne is the appellant. I entirely agree with the Master of the Rolls, and wiwl my
noble and learned friend, that the appellant must be put to her eilection, and that
she and the issue of her marriage, if anyr do elect to take under the will of Mr.
Mellish, the bequests of which operate as a satisfact~onof the bond of the 8th of
July 1830, and not, as a cumulative gift for further advancemenb-not as a double
portion-and therefore that this part of the decree also should be affirmed. Then
we give the cost0 of the original appeal to the Respondent6 therein ; and the costs
of the c r p s appeal to the Respondent in that appeal.
[The decree and orders, so far as they were complained of in the two appeaIs,
were then affirmed with costs, respectively.]

The GREENOCK h H I N E INSURANCE COMPANY, and the DIRECTORS of that C o m p & n y , - ~ e s ~ o n d e ~ t

[June 15, 17, 18-17; September 1, I84SJ.

[16Q] ANN STEWART and Others,--AppeZZants;

~ in
[Mews Dig. xiii. 1234, 1296, 1313, 1333. S.C. 1 Macq. 328. C o m m ~ n ton
RaiLkin v. Potter, 1873, L.R. 6 H.L. 130; L.R. 5 C.P, 379; Zieith V. B W ~ W S ,
1877, 2 A.C. 657; Hidland Znsztramce Co. v. Smith, 1881, 6 Q.B.D. 567; Sea
Insurance Go. v. Hadden, 1884, 13 Q.S.D. 717; and cf. Scottwh Marine Insurance Co. of Glasgow v. Turner, 1853, 1 Macq. 334.1
Insurance-Freight--Abandonment.
I n all cases of insurance on ship, in which the subject is n,ot actually annihilated,
the assured claiming as for a total logs must give up to the underwritem all
the remains of the property recovered, together with all benefit or advantage
incident to it, or rather, such property vests in the underwriters.
Freight, while the ship is in the courae of earning it, i s a benefit or advantags
incident ta tlie ship, and, therefore, becomes the property of the underwriters,
paying for a total loss.
A vemel, in the course of a voyage, stxuck upon an iceberg on the 27th of July,
and was considerably injured, but reached Liverpool, and while in the river
there, grounded outaide the docks on the 11th of August, was aftsrwards
taken into dock, the cargo discharged, and was then aurveyed, and, after the
survey, namely, on the 1st of September, the ownw abandoned to the underwriters on ship, and claimed as for a total loss :
Held, that the underwriter on ship was entitled, on settling as for a total 108% to
have the benefit, in account, of the freight which had been received by the
owner on the discharge of the cargo.
Two policies were entered into by the defenders, as underwritem, on the ahip
hare$, of Greenock, one for A31500, the other for A3500. Besides the A32000 t h u ~
1052

U
. WG ~
~ E~ E ~~ ~ KA ~ N S~ U ~ A~NCO.
C ~[I8481
E

I1 H.L.C,, 160

insured with the defenders, insurances were effectd with other companies to the
vafue of ~ 4 5 0 0 or
, $
~ in 6au. ~As the vessel was valued in the policies a t $7500,
the pursue^ stood in the position of their own insurers for the remaining &lOOO.
[MO]The vessel was i n ~ r e da t and from Liverpool ta New York, and thence to
any other port in the United States or to Quebec, &hence to a port of d ~ s c h a r ~ine
the United ~ ~ ~ g d oand
m ,thereafter, until she hath moored a t anchor in good
safety a t her place of dest~nation,and $or such period a f ~ ~ a r as
d sshe shall be
there occupied in discharging her cargo, not exceeding ten days from the date of
reporting a t the Custom House. There WIIS a policy on freight execuhd in similar
bXTXtS.

Phe outward voyage was p e r f o ~ e din safety. A t Quebec the vessel took in a
cargo, chiefly of timber, and left that port on the lkth of July, bound for L ~ v e r ~ l ,
On the 27tb of July, and before it had quite c o m p ~ e ~half
d the p w a g e homeward,
it came in violent c o n ~ with
t
an iceberg, which carried away the bowspr~t,stove in
ly
and
the bows, and occasioned other serious dsmage. !Phe vessel i n i ~ e d i a ~ filled,
~
a water~ log^^,
e but the cargo kept it aAmt; and the weather being favourable,
it was able, by great exertions on the part of the master and crew, to proceed on the
voyage: ~ e ~ h Point
~ n gLynas, 8 short way from ths river Mersey, a pilot was
taken in, and %e vessel then p ~ ~ upe thed river to Liverpool, and arrived off
the ~ r u n s w i c kpier-head on the 1 l t h of August. It was flood tide a t the time ;and the
desire of the pilot and master was, to have the vessel i m m e d i a ~ ~taken
y
into dock,
but from the state it was in, the dock-master refused to allow this to be done without
the order of the harbour-master. The master of the ship accordingly went to him.
m e n &e condition the vessel was in, however, was explained to him, he would not
a ~have
s
it moored outside the dock
oonse~tto ita being docked, but gave d ~ r e c t ~ to
gates, that it [J.61] might be Bcut$led when the tide left. These directions were
~ccordinglyfuuowed, and the ship, instead of
into harbour, was Isid
was, that as the water
alongside the pierhead in the open river. The
left, it grounded, and listed or fell outwards, and sustained much additiona~
damage, many of the timbers being broken, and other i n j t ~ r ~ edone.
s
When the
ciently receded, holes mere bored in the ships bottom, and the water
allowed to run out. The openings were closed before the tide returned, and the ship
when floated was carried through the dock gates into the ~ r u n s w j cbasin,
~
where it
was moored for the remainder of the night. Next day it walis moved from the basin
into $he dock, and then d ~ ~ h a r g eno
d , part o f the cargo having been removed till the
ship was ultimately placed in the dock.
After,the cargo waB discharged, the vessel WBB put into, a graving dock, and there
examined by several Liverpool ahip c a ~ e n t e r sand surveyors. These g e n t l e ~ e n
reported that it would cosh 300~to repair %heinjurim done to the vessel by &e
c~~i0~
with
0 n the iceberg on the 27th JuIy, sad &he~ o u n ~ in
~ ntheg river on the
~ r ,
11th August. On xeceiving this report, the owners, on the 1st ~ e p ~ r n 1842,
wrote to the defenders, i n t ~ ~ a t i nang abandon~ent. T h i s the de~endersrefused to
accepts9on the ground that the injuries done to a vessel valued a t ~ 7 ~ in
0 0the
policies, were not to that extent which could entitle the owners to claim for a total
loss. Some further correspondence took place, the owners having, in the meantime,
got ad~itjonalsurveys, by which the a ~ o u n tof d a m a ~ ewas declared to exceed
I

e4000.
The pursu~rs,in October, ~ r o u g h tan action again& %he defenders, in which
they daimed as for a total loss. [362] In their summons, the pursuers rested their
claim solely on the injuries done to the vessel by the iceberg, which they maintained,
of themselves amounted to a total loss; but afterwards amended the libel, so as to
ernbrace $190 the injuries the vessel had received in the river. A record was then
er8 are ent~tled,in their
made up, the pu~suersfirst al~egationbsing, the p
ull s u ~ ~nsured,
8
as for
c i r c u ~ ~ ~ to
n crecaver
~ , under the policies libdbd,
a loss; and no relevant ground haas been stated, or exist%, in the cir~ u m $ t a n c ~to, exclude the claim for these suw. The defenders pleaded
that 8s the damage sustained by the Zazcrel did not mount, either
actuatlJr o r c o n ~ ~ c t i v e l y to
, s Wd, but only to a partial lws, the
pursuere are not entitled to abandon and claim for a. total loss ;I and also, that
ive
even s u p p ~ ~ n
the
g pursue= entitled to abandon, and to claim a c ~ ~ s t r u c ~ total

1053

I1 E.L.C.,163

STEWART U. GREENOCK MARINE INSURANCE CO.

[18483

loss, tshey could only do so subject to the condition of their accounting, by way of
compensation, to the respondents, as abandonees of the ship, for their proportion of
the amount of freight earned, after th0 accident or accidents through which such
constructive loss was occasioned; and the respondents would be further entitled t o
deduction of a rateable contribution for the value of the stores expended for the
geueral safety.
The freight actually earned and paid to the owners, amounted to A1402 2s. 2d.
The case went to trial upon the following issue: Whether the, said ship, by
and through injury sustained on or about the 27th July, 1842, and on or about the
11th August, 1842, or one or other of these dates, and during the currency of the
said policies, became a wreck, and was totally lost? and whether the defenders,
under the said policies, are indebted and [1637 resting owing to the pursuers in the
sums of 21500 and 2500, contained respectively in the said policitx, or any part
thereof, with interest thereon as libelled.
The jurors returned the following verdict :- That in respect of the matters
proven before them, they find for the pursuers, in respect that the Laurel was properly abandoned and not worth repairing: that the damage arose from caming in
contact with an iceberg, and also from grounding a t the dock a t Liverpool. Also
find $hat the ship was perfectly seaworthy; rwerving for the decision of the Court
the point raised by the defendera, of their title to a proportion of the freight. Also
find that the vessel was a$total 1088, independently of the decayed timber and deficient
sails.
The question of the abandonw right to freight thus reserved for the consideration of the Court, afterwards came on to be argued in thO Inner House, when a
difference of opinion occurred among the, Judges (cases in the Court of Session, Vol.
vi., p. 359).
The Lord President and Lord Mackenzie h d d that abandonment transferred to
the insurers all the rights of the assured as to freight: Lord Fullerton and Lord
Jeffrey were of an opposite opinion, holding that the underwriters were not entitled
to any part of the freight.
~ , were ordered to be laid before the Lords of the
Under these c i r c u m s ~ n c cases
Second Division, and the permanent Lords Ordinary, for their opinions. The Judges
thus consulted, likewise differed among themselves (id., Vol. viii., p. 323).
The Lord Justice Clerk, Lord Moncreiff, Lord Medwyn, Lord Robertson, and Lord
Wood, were of opinion, that by the abandonment, the freight belonged to the underwriters; while Lord Ivory, Lord Cunninghame, [I641 Lord Cockburn, and Lord
Murray, were of opinion that the underwriters were not entitled to take credit for
any freight, but were bound to settle as for a total lose, leaving the freight to be
recovered by the owners.
The k d g e s of the First Division, on considering these opinions, on the 13th
of January, 1846, .pronounced &he following interlocutor :- The Lords, having
advised the cases with the opinions of the consulted Judges, find, that the defenders,
the Greenock Marine Insurance Company, with whom insurance was effected only
on the ship, are entitled, in accounting with the pursuers, to have placed to their
credit their due proportion of the freight, amoun~ingto 21402 2s. 2d., subject to
such deduction as may be found competent to affect their interest in said freight; snd
remit the cause to the Lord Ordinwy, to hear parties on such deductions, and to
take such steps as may be requisite for the investigation and determination of the
same, and of the defenders proportion of the freight; as also to dispose of the whole
other matters remaining to be determined under the conclusions of the libel ;reserving the ededt of this judgment in the question between the pursuers and those of
the underwriters on the ship, who are also underwriters on the freight; reserving
also the expences of the discussion of the question of freight, to be disposed of
along with the expences already reserved, and all other expences in the cause.
The appeal was against this decision.
Sir F. Thesiger and Mr. Wataon (Mr. Anderson was with them) for the
appellants :
The judgment of the Court below must be reversed. It introduces a new principle
of insurance law, entirely in contrast to those OR which the rights of insurers and
[1%] assured have hitherto been deemed to be founded. It gives a r&rospective
effect to an abandonment, $0 as to enable an insurer to obtain an advantage such
1054

~ 9.~~ V~ ~ ~ ~R ~A~ R
O ~ I C ~S K~ ~ CO.~ C1848f
A
~ I1 B.L.G.,
C
166
~

as was never before c o n ~ m p l a ~Here

.
the f r e ~ g h twas in fact earned before
e ~
notice of abandonment was given, for the voyage was a t an end, ~ n ~ ~ rv.s BeEl
(Park on Ins, 54 (8th ed.); ~ a r s h a l on
l Ins., 263), though the risk cont~nued,yet
it i s contend^ that that notice relates back to the period of the act which occasioned the loss, and tha6 the insurer on ship h o m e s , by such retroact~veeffect of
the notictt, entitled to the freight. Such a doctrine is alike u n s u p p o ~ dby principle
or authority.
Notice of abandonment is not necessary in all case&,in order to entitle an assured
to recover as for a total loss; am^^^^^ v. &&&on. (2 Barn. and Cress. 691);
R o w v. ~ a ~ v a(3 ~Bing.
T
N. C. 266). Where the ship is really lost it is not
~ e c e s s s r yit~ is so only ia t w o cases, that of an emba~goand that of a capture, for
in these C ~ E Wthe ship exists in specie unharmed, and msy still c o m p i e ~the
voyage, The abandon me^ then throws the risk o.B the abandonee, and notice of the
i n ~ n t ~ otondo so must be given tx, him. But in ordinary cases, when the ship is
very much damaged, such a notice is not required. The owner must, indeed, cede
all the property insured, or all that remains of it, to the underwriter, and this
cession of the thing insured is prel~minaryto his right to recover, But cession,
and notice of abandonment, are two dist~nctthings, and much of the error of
the argument on the other side may be traced to confounding them toget~er. When
the ~ssuredabandons during the continuance of the voyage, and the underwriter
is, that. the under~cCeptsthe abandonment, the e@ectof the abandonment [1%]
writer becomes the carrier of the goods, takes all she risk, and earns the freight.
t , vessel. This was
He earns it, in fact, with what has b m e , by the a b a n d o ~ m ~ nhis
n
Cases were
the principle on which all the cas% known a s the ~ u s s ~ aEmbargo
~ v: ~ 0a
~ (4~ ~East,r s34)~ was
~~thet first
~ of these, though there
decided. ~
the ~ u e s t ~ owas
n not expressly decided, for the assured having a~andonedto each set
~ a ~
of underwri~rs,indorsed s ~ e ~ o r a n d uonmewh policy, by which he ~ ~ p u thak
he would assign all his in
s t in ship o r freight to the particular underwriters on
tbe respective policies. Ee received from each the fuX1 amount of ~nsurance,after
which, the vessel being relieved from the embargo, completed the vograge and earned
reig~t. The Court them held, that however the question m i g h ~ have
bean between the d~fferent sets of underwriters~ litigating out of
the same fund, and however the weight of argumen% in such a case might prer s ship, yet, in that ind~vidualaction which
p o n ~ e r in
a ~favour of the u n d e r w r ~ ~on
was brought by the underwriters 'on freight, aga~nstthe assured upon his memorandum, they were entitled to recover as against him on his own memorandum,
LeatiLam v. Terry (3 Bos. and P. 479) was to the same effect; so was ~ c C ~v. r t
AbaE (5 East, 388); but this last case settled the rule which had, in ~ ~ ~ v. o
~
o
~been~ hinted
~ at,
r namely,
~
~ %ha%
~ an ,sbandonment pending 8 voyage, carried
to the u n d e r ~ r ~
on~ ship
r
the right to recover the fre~ght. All these, however,
were cases in which the abandonmer~ttook place during tlp currency of the voyage,
i ~the
g u n d e r ~ r ~on~ ship,
r
in ~ h i c h , eref fore, the assured gave up e v e r ~ ~ to
who Gonsequent~ybecame his E1671 exact substitute^ and who, in virtue of being
the actual carrier of the goods, the person whose vessel earned the freight, wag the
person entitled to receive it. But these decisions do not affect the question herel
for here the abandon~entdid not take place till after the vo-yage had ended, t h ~ u g h
e s o~servat~on,
which
during the continuance of the risk. %is last case f ~ r n i s ~one
i s i m p o ~ n to
6 be ~ t ~ n d to
e dhere, namely, that the date of the accepted a ~ ~ n d o n
ment is a material cireumstanee in settling the rights of the parties. Then came the
and Sel. 79 ; s. c. in Error, 5 Moore, 117 ; 2 Brod.
case of Case v. Llavidson (5
rrray be
and Bing. 379; 8 Price, 542), with respect to which the same o~serva~ion
to
made as with respect to those already cited, and which, therefore, is not app~~cable
the present case, for the purpose for which it has already been used,
and for which it will again be r e l i d on by the other side. In that
case there had bwn two separate insurarrces on a general seeking
ship, the one on the ship and the other on tbo freight. The vessel was captured,
s , each
and the d i p and freight were abandoned t o the respective u n d e r ~ r i ~ rwho
paid a total loss. The vessel was re-e~ptured,and ~ i l t i m
p e~ r ~~ ~~ the
~~ evoyage
d
and earned freight ;and under these circu~stances,i t was held by the Court, that
the u n d e r w ~ ~on
r s ship, under the a b a n d o n ~ e of
~ ~the
t ship to them, were, entitled
to such ~ r e ~ g hfor
t , that an abandon~entto u n ~ ~ r w r i on
~ r sship, t r a ~ s f e r sto
1055

II R.LC., iss

E v.~ GREENOCK
A ~ ~ MBRXNE~

s CO.u [1848]
~ N

them the right to the freight earned s u b s ~ u e n t ~toy such abandonment, as incident
to the ship. The Court then acted avowedIy on this principle, that the ship, from the
moment of abandonment, becomes the property of the abandonee, and the property
in t h e ship determines the right to freight, as an incident te the right of property
in the ship. In other words, it is [I@] contended that the freight belongs generally
to the owner of the ship, and that the owper becomes such by the act of abandonment~
Now this doctrine may be admitted by the plaintiff in &mr, and yet the Consequence sought. in this case to be drawn from it will not follow ; for here the ship
did not become the property of the underwriter, by abandonment to him, until
,
vessel had
after the freight had been earned. A t the time of the a b a n d o ~ e n t this
become a wreck, and could not earn freight. The voyage was a t an end, though
the risk of the vessel still continued. That freight was not therefore earned by the
vessel sailing as the underwriters vessel, and the very principle on which Case v.
~ a ~ wasi decided,
d ~ cons~uently
~ ~ ~ raises an a r g u ~ e n by
t way of analogy against
the defendant in error here. The cwe of Deas v. ikicahie (2 Car. and I?. 387 ; 12
goore, 185; 4 Bing. 45) does not carry the a r ~ m e n one
t step further in favour
of the underwriter, but show8 that i t is the poesession of the 8hip during the time
of earning freight, that gives the right to freight. In that case, an owner of a
ship mortgaged it by bill of sale while a t 8%. The agents of the ship took possession
of it on its homeward voyage, and before arrival in port, and afterwards received
sums on account. of freigh%,and paid seamens wagea and port charges, amount~ngto
a larger sum than the freight received. The mortgagor became bankrupt; and it
was held, that the assigneea could not sue the mortgagees for money had and received
by them for freight, as by the mortgage of the ship, freight accruing due passed
to the mortgagee, as incident to the ship, and that he had .a right t o set off I.he
charges made on account of the ship against the sums received oh account of the
freight.
E1691 But then, it i s said on the other side, that the plaintiff in error ought not,
in the caae of a cons~ruct~ve
loss, to bei in a better s ~ t u ~ t i othan
n if the ship had
actuall~gone %,the bottom of the sea. Be will not; or if the ship had gone to the
bottom while sailing on the open sea, there can be no doubt that he would have
recovered on both insurances. On the other hand, the attempt now made to set up
this claim for the insurer on ship, tends to place him in a much better situation
than if the ship had gone to the bot.tom of the sea; for, whersaca then he would
have had to pay for a total loss, without receiving anything whatever in the way of
deduction from that 1088, he now has all that remains of the ship which has been
abandoned to him. The law never ccruld have intended that he should, in addition
receive all the freight that the vessel had earned, and certainly never could have
intended i t when that freight had been earned previous to the date of the
abandonment.
The freight here was so earned, and the mere fact of an abandonment having
been made cannot give the insurer a right which he could not have had without
it, for abandonment is not n ~ e s s a r y . Now s u p p o ~a d i ~ e r e n state
t
of things. Suppose the vemel in dock, but with the policy still continu~ng,and a fire to happen,
by which the vessei was wholly destroyed, but the goods were saved, the owner
would have a right to recover as for a total loss, and yet the insurer on the ship
would have no right to freight. The case would have been the same if the ship
had suddenly gone to pieces outside the docks, but the goods had been saved and
delivered to their consignees. Taking the time of the loss here to be the ground~ng
in the docks, there was no subsequent use of the vessel for the purpose of [lTiJ] earning
freight, and consequently, it was not the vessel of these underwr~terswhich earned
the height.
I n the argument in the Court below, some American and French law authorities
were relied upon as guides in this mattm ; but they wiIl not assist the respondents,
For, in the first place, they refer to cases of abandonment pending a risk, and, in the
next place, the law of the United States 8s to freight is different from the law of
al
for it admits what we refuse, nameIy, a talEngland in a most m a t ~ r ~ respect,
culation of freight on the princip~eof pro rata itiser& (3 Kent Comm. 319, 4th
ed. ; 2 Phill, on Ins. 234). On another ground the French authorities are likewise
1056

STEWAET 'V. GREENOCK U R I N E ~

~ GO. E18481
~

11 H.L.C.,
~ 171

incapable of being appealed to in the argument, for the French law does not hold
e
freight to be an ~ n s u r a b ~interest.
The only remaining question is, whether an abandonment c%n have a retrospective effect. It i s submitted that it cannot. B notice of a b ~ n d o ~ ~ m
is eun~~t
necessary, and an u n n e c ~ s ap r~o c ~ d i n gcannot have any effect on the substantive
rights of partiw, and least of all an e@e& of s retrosp~tivekind. The use of the
ship for the purpose of earning freight i s the only ground on which freight can be
demanded, and here, the voyage having terminated before the notice of abandonment, and no ufie of the ship for the purpose of earning it having taken place after
that notice was given, the insurer has no title by the mere act of abandonment of
ship to claim the freight,
The righb of the parties are therefore the same, so far a&freight is concerned,
as if the vessel had been absoluteIy lost by the perils of the sea, but the goods had
been saved and delivered to their owners, in which case it is undoubt~dlyclear
thtut the undermriters on ship would have had no claim whatever to freight.
[I711 Sir F. Kelly and Mr. Wickens for the respondents:The decision of the Court below is correct, and cannot be ~ u e s t i o nwithout
~
overturning some of the great principles of insurance law,
The first of these principles is, that the policy i s a contract of i n d e ~ n i t y . It
follows from this, that where the assured obtains from the insurer the full vaIue of
t.he ship, the underwriter is entitled to the ship, and all that properly is incident ta it.
He must be put into the situation (so far as natural events permit) in which the
owner stood before the abandonment. This was in effeot the decision in the cafie of
Case v. so^ (5 Maule and Sel. 79 ;S.C. in Error, nom. ~ a v ~ v.sCase,
o ~ 5 Moore,
117 ; 8 Price, 542 ; 2 Brad. and E. 379). If the ship had not reached its destined
port in safety, but had broken up, the value of w~iat~ver
remained of it would
have belonged to the underyriters. 3y the payment of full value for i t they acquired
a complete right to the ship.
The facts as specially stated in this case shew that after the 11th of August the
ship existed in specie, but in construct~onof law it was, fio far as the owner was
concern^, totally lost. It was abandoned by &e owner to the insurer, and by that
abandoninent the underwriter became entitled not only to the ship but to its i n c i d e n ~ ,
d ~possibly
o ~
of which freight was one. The only question that Case v. ~ u v ~ can
be said to have left undecided is, whether in such a case as this the ship i s completely vested in the u n d e r w r i t ~ ra~t the time of the cause of tha loss or of the
abandonment. Here the ship, after an injury which caused a constructive total loss,
carried a cargo and delivered i t ; and the E1721 act of abandonment came between
the period when that injury, the cause of the total loss, occurred, and the period
when the cargo was actually delivered. The argument in Scotland was, that there
was a total loss on the 11th of August, yet the fact was that the ship still existed
in specie, conveyed goods, and delivered them, and so freight was earned. After a11
waa made, and yet th0
this occurred, the survey took place, and then the aband~nn~ent
a~gumentof the pursuer in the Court below was, that the right to the ship and to what
the ship might earn took egect from the time of the ab%ndon~ent
only, and not from
the time of the cause of the lofis. But that argument cannot be s u p p o ~ d . The
injury gives the right to abandon, and the abandonment must be referred to that
event which aIone gives the assured the right to abandon.
It has been c o n ~ n dhere
~ that a b ~ d o n m e n ti s not naceasary, but i t must be
remembered that this is not an actual, but only a const.ruct~~e
total loss, and that
abandonment i s only unnecessary in the former case.
[Lord Campbell.--A
constructive total loss may be described as a, total ~ O S S ,with
a right of salvage.]
And as a consequence of that, it may be argued that when the assured, by a notice
of abandor~ment,converted this c o ~ t r u c t i ~
into
e a total loss, e v e r ~ i n gin the ship
v w t d in the insurers from the moment at which that constructive .total losp, occurrd.
Suppos0 a ship to be injured on t.he 1st of January at Van Dieman's hid, and the
owner to hear of it in this country and to abandon, but that while the i n h z i p n c e was
coming to him here, the ship was repaired, and sailed, and actually arrived here on
the 1st of July, it could not be c o r ~ ~ t ~ that
d e d the title would .rest only from the
x.1,.IS.
1057
34

If H.L.C., 173

STEWART 2)' GREENOCK MARINE INSURANCE CO. [I8481

moment of abandonment, it must [173] vest from the time of the happening of that
matter which the owner had treated as a total loss.
[Lord ~ampbell.-But the ship and the freight are d i ~ e r e n subjects,
t
and are
capable of distinct insurances, and the question is, whether the total loss of &ip
is the total loss of freight.]
The decision in Case v. Duvidson shews that whether there is insurance on freight
or not, the underwriter on ship is entitled to receive the freight.
F o r d Brougham.-Suppo~ the freight and the ship insured with the same parties,
what would be the consequence?]
It has been held that where the ship is lost, but not the freight, the underwriter
on freight is not liable to pay. But that question does not arise here. This is a
simple case of a constsuctjve total loss of ship, in which the underwriters on ship
have paid a total loss, and therefore claim that, from the moment of the constructive
loss, which, by the owner"s abandonment, they have been obliged to treat as an actual
totxalloss, the vessel with all its incidenb should be theirs.
s sthe ship
The argument on the other side is, that the title of the u ~ d e r w r i ~to
vests, not from the time of the loes, but from the time of &e abandon men^ It is
curious that the law an this point should not have been expressly laid down in any
English authority, but is very dist'inctly stated in an American writer. In Phillips '
on Insurmce (2 Phillips on Insurance, 417, 418, Boston edit., 1840), it ia said, " It
is the'eEect of a vaIid abandoii~entto transfer the property in the subject. The
payment of a total loss by the insurers, or their ability to pay such a loss, in consequence of an abandon~ent,,gives them a title to the property, or [174] what remains of it, 8s far as i t was covered by the policy. An abandonment, considered as
an asgignment of property, must have reference to the time of the loss, for only khat
which is oonstructively lost can be abandoned, and to know what is lost, reference must
necessarily be had to the time of the loss. From that time the insurers are, to most
purposes a t least, entitled to the advantages, and wbjec to the liabilities of ownership. This is not inconsis~ntwith the principle, tshat the sight of abandon~ent
depends upon the state of the existing facts, which means, as we have seen, that the
facts of which the assured i s informed, and which he makes known to the underwriters as &e ground of his abandonment, must constitute a total loss, and also,
that the loss must not have ceased to be total in the mean time. The abandonment
must be aut,horised by the existing facts, but, as an assignment, it has reference to
the time of the loss. In France an abandonment of the ship, considered as a transfer
of the property, Ems been construed to relate to the time of the risk. Emerigon,
223, c. 17, s. 9. Rut in the ~ n g l i s hcases, it seems to be taken for granted, that an
a b ~ n d o n ~ eof
n tany subject relates to the time of the loss."
In France the effect c3if the abandonment 'has a still further retrospective
effect., for it goes back to the time of the commencement of the risk itself. But taking
the English rules here, it is clear that the abandonment must relate to the time of
the loss which occasions it. If that was not so, the underwriter would not be entitled to salvage, nor be liable to repairs m d expenses of voyage. Be is entitled to the
one, he i s liable to the other; and therefare he is entitled to the freight, for his
right to the vessel and its incident^ is [I?&] complete from that time. The case of
Poung v. ~
u (2 Man.
~
and
~
Gr.
~ 593;
g 2 Scott't's N.B. 752), and several others,
&em, that so far as the rights of the parties are concerned, a constructive i s equivalent
to an actual total loss. In these cases the assured c d d 09 course recwer; but there is
110 case of that kind where a d i p remains in specie, capabla of fulfilling the purpoms
of a ship, in which, if the owner means to treat the voyage as totally lost, he is not
bound to give notice of abandor~mentto the underwriter. In ~ o d v. ~~ s Z ~ ~~
(1 Park on Ins. 400 n, 8th edit.) it was held that notice of a b a n d o n ~ ~ iwas
e ~ ~neceet
sary, though the ship and cargo had been sold and converted into money when the
notice of the loss was received.
There is no distinction between the present case and that of Cose v. Davidson
(5 Maule and S , 79; 2 Brod. and B. 379; 5 Moore, 117; 8 Price, 542). The only
question that was not there distinctly and in terms decided was, whether the ship
vested in the underwrit~rfrom the time of the a ~ a n d o n I ~ eorn ~from the date of
the occiirre~cewhich c o n s t i t u ~ da total 108s. Nothing depnds on the acceptance
or non-a~ceptanceof the abar~don~ent.If the underwrikr refuses to accept the
7 058
I

abandonment, that will not in the least degree prevent the assured from recovering.
The ground on which the appel~antsare compelled to insist that there is no necessity
for a notice of abandonment is insu~cient. The damage done ia the vcsssel in the
dock at Liverpool is not noticed in the original summons, but the damage done to it
by the iceberg i s alone set forth; so that as f a r as that ~ ~ 0 is 1concerned,
~
s the
underwriters would be en~l76I-titledto freight from that time, because, even 0x1
the argument now put forward, the freight would have been earned by the underwriters vessel. It was so earned in any view of the facts of the case.
Here is a total loss, in respect of which t.he underwriters have been content to pay
the full value of the vessel. That ainounts to a sale of the ship, and the buyers
of the ship are clearly entitled to all that the thing bought afterwards obtains. If
the underwriters had paid the value of. the ship on the 11th of August, there can
be no doubt that the vessel would have been in every respect theirs from that ve-ry
night. They could not do that at the moment ; for neither owners nor underwriters
then knew what had occurred ;but they have since paid as for a total loss in respect
of the injury which then took place6 They are therefore in the same situation as
if they had made the payment a t that moment. It has been contended that a t the
time of the abandonment this vessel was a wreck, and could not earn freight; but
a that argument is, that the voyage here wag not at an end till the dethe answer t
livery of the cargo, and that in fact the vessel, whatever description niay be given
to it, did, after the period when this total loss occurred, and after the time when the
property passed from the owner to the underwriter, actually deliver the cargo and
earn freight. A hul1 of a vessel, a mere wreck, may, if i t can, bring the goods into
port and, by delivering them, earn freight, the condition of the vessel not having any
effect on the question, of title to freight. A t the time when the total Im
happened here, the ship had not earned freight, because the goods had not been
delivered, but, the freight was earned when they were delivered.
11711 The ship here was abandoned, and the effect of an abaI~~onment
is thus
described in Marshall on Insurance (page 612, 3rd edit.): By the abandonment,
the insured, as we have seen, yields up to the insurers all hie right, title, and interet
in the ship or goods insured, or what may be saved of them, which, from the notice
of abandonment, become tAheproperty of the insurers. It operates as TL transfer to
them, in proportion to their respective s ~ b ~ r ~ p t i owithout
ns,
any regard to the
priority of t8hepolicies, if more than one, even t ~ o u g hthe ship or g o d s should
appear by the several policies to be over-insured. And this transfer has a sort
of retrospective relation in reference to the insurers, who, to the extent of the sum
insured, are presumed to have been, from the beginning, owners 0.f the things insured,
a ~~~ ? . ~, non fuisse
s
~
a c c o r d i ~to~the rule of the ~ o m a nlaw, Quod r e ~ ~ ~ ~retro
~
can be clearer or
p a l a ~est. Ff. lib. 38, tit. 5, S i quid & ~ r a u d e .~Nothing
more conclusive, and all the ruIes of law, and all the decided cases justify the s h t e
ment of the law, which is itself a conclusive ~ n s w e do
r the claim of the appellant^.
The right to freight could not be abandoned. It did not exist. It was not an inof the act of carrying
choate right. The law doas not recognize it. The ~omplet~ion
cargo, namely, the delivering of it., alone gives the right to freight. The moment
before actual delivery, nothing can be claimed. Then how can it be said here that
the shipowner did t h i s act? that he completed the voyage with a ship which was not
his property, but had become the property of the underwriters? Be who is the
owner of the ship during the last portion of the yoyage is the owner of E1781 the
ship during the whole voyage, so far as the right ta freight i s concerned. Ne alone
can deliver the goods, and obtain payment for the carriage of them.
The only question here on which any doubt can be raised is therefore, whether
the voyage was at an end when this accident happened. It was not. he ship had
If the cargo had been of a perishable nature,
120t arrived & its place of destination.
and had been insured, and if the grounding of the ship at the docks had partially
injured or wholly dwtroyed the cargo, there can be no question that the u n d e r ~ r i ~ ~
on cargo would have been liable to make good the damage.
It is therefore submitted that, admitting the doctrine that the freight belongs to
the person whose vessel earns it, the vessel here was the vessel of the u n d e ~ r i ~ r
t
when the freight was earned. It had bwome 80 by the act of a b a n d o n m ~ which,
whenever given, related to and had effect. from the loss that occasioned it. The
1059
I

XI H.L.C.,

179

S ~ ~ W A RV.T ~

~ ~

A~ I ~ S~U ~~ A ~~CO.
C E~Cl8481
N
~O

u n d e r w r i ~ rwas s u b ~ t ~ t u t efor
d and became the owner of the vessel. By him the
voyage was completed, and the cargo delivered, and the freight was earned, and
~ ~ n s ~ u e this
n t ~claim
y
of the insurer cannot be supported, and the judgment of
the Court below, by which it is negatived, must be afiirmed.
Sir F. Thesiger, in reply.
The doctrine that a contract of insurance is a contract of indemnity will be dea [ 2 Xan.
~ and Gr.
~ 593 ;~2 Scott o
N.R. 7521
~ can
feated, if the case of Case v. ~
be applied to the extent! to which it is now soughtxto be applied. For example, if
the owner of the ship had insured the ship for ~ 5 0 0 0 and
,
[I791 the freight for
36000, and was compelled by some accident during the voyage ta abandon the ship,
the freight would be received by the underwriters on ship, and the owner would
not be indeninified. The argument that the voyage continued till the cargo was
dischar~ed,is e r r o n ~ u s and
,
can only be m a ~ n ~ i n ebyd confounding the duration
of the voyage with the duration of the risk. Here tshepolicy on freight is to continue
till the ship i s m ~ r e in
d good safety at itx place of d#tination7 and then for a period
not exceeding ten days from the date of reporting at the custom house. This is
not an extension of the voyage, but of the risk, and the two things &re entirely
d i ~ e r e n from
t
each other. When the vessel drops its anchor at the place of dsstination, the voyage is a t an end. The freight would then be w r e d though it would
not be payable; and another fallacy in the argument on the other side arises from
confouIzd~ngthe earning of freight with the payment of it. Suppose they had been
obliged to put the goods into lighters to convey them to the shore. If, while on
board the lighters, the goods had been lost, the completion of the voyage would have
happened, but not the completion of the risk, and the freight would have been earned
by the ship, but would not have been payable by the owner of the goods. This shews
the distinction between the two things.
The a r ~ u ~ eofn the
t ~ respoIident, at the bar of this Bouse and in their printed
case, are inconsistent with each ot>her. There they repudiate the necessity of
~ Cr.o ~
a b a ~ d o i ~ ~ e nHere
t . they insist upon it. C ~ ~ ~ v. ~~ ~ ~ d ag(2e~Barn.e and
691) and Rozrx v. ~ ~ a ~ (3~ Bing,
a ~ oN.C.
r 266) shew that there is no n e c ~ s i for
t~
abandonment in eases where, [lao] ss here, the facts shew that i i total loss has
occurred.
As to the effect of notice of aba~d~nmeRt,
the 0 8 8 of
~ ~
~ v. ~ e ~~ (10
s o ~
E&, 329) and Pattersm v. Ritchk (4 Mau. and S. 393), the former of which was
acted on by Lord Eldon in this Bouse, in the case of ~~~t~v. R o ~ e r (2
~ oQow,
~
4741, shew that a notice of aba~donmentmay be rendered utterly valueless by subsequent circu~stances. Such a notice cannot therefore have the retroactive effect
ascribed to it in this case.
It may be admitted here that the abandonment itself applies to the time of the
loss, but the argument would carry it back to the time of the darnab". If that argument was true, then if a ship received an injury a t sea from a n iceberg, land arrived
in port, and discharged its cargo, but then sank irrecoverably in the docks, the
u n d e r w x ~ would
~r
be entitled to rwover the freight. Again, if the ship while out on
a voyage suffered a serious injury, but delivered ite outward cargo, and the captain
in ignorance of the extent of the damage set s d for home, and was then lost, the
a r ~ u m e non
t the other side would go to shew that the underwr~terwould be entitled
to the outward freight, X t Is impossible to r n a i n t ~ ~an~ o c t r i n ethat leads to such
absurd consequences. But ita absurdity gom still furthsr. According to the cases
of Luke v. Lyde (2 Burr. 852; X Sir W. B1. 190, TZOTL Luke v, ~
o ~ ~t ~ V.
~ ~
Gray ( ~ o l l op.
~ ,259, 6th ed.; Abbatt on ship ping^ 316, 4th edit.), and
v,
~h~~~~~ (9 Ad. and El. 314), the master i s bound, if he can prudently do so, to
tran-ship the goods, and to carry them to [I811 their port of consi~nment. But if
he did 80, the argument on the other side would lead to the conclusion ?Aat the freight
thus earned would become the freight of the underwriter on ship, and not of the
assured. This would be a dangerous conclusion, for it would give the master an
interest in allowing a lossi of goods to be a total loss, instead of giving him an interest
to use ep-sry means in his power b prevent its becoming m.
rs
[Lord C a m p b e l ~ . - ~ e n did the title of the u n d e ~ r i ~begin?]
At the time of the total loss. At the time when the ovner, by abandon~ng,declared &@ total loss. There was no necessity for abandonment here. But i %here
1060
~~~~~

STEWART z1. GREENOCK MARINE INSURANCE CO.

[18481

11 H.L.c., 1132

was, there was no acceptance of it before the 1st of September, and the acceptance
is that by which the partiw are bound; Bainbidge v. Neilsom (10 East, 329),
~Yrnithv. Robertson (2 DOW,414), and Patferson v. Ritehie (4 Nauie and S. 393). The
rights of the underwriter only arise from that time. The judgment of the Court
below is therefore erroneous, and must be reversed.
The Lord Chancellor.---My Lords, in considering the question reserved by the jury
for the decision of the Court, the facb, as found by the verdict, must be the ground upon
which such consider~tionmust proceed, and if these are properly attended to, much
of the apparent difficulty of the case will, I think, disappear,
The verdict finds, first, that there was a total loss, of the Lazwel; secondly, that
the Laurel was properly abandoned, and not. worth repairing. The latter in-[182]deed, is a consequence of t h e first, rather than a distinct finding. The verdict finds
for the plaintiff, which involves a finding that the tptal loss was within the period
covered by the policy.
The verdict finds the total loss t,o have arisen from the ship having come in
contract with an iceberg, on the 21th of duly, and also from its having grounded
outside the docks a t Liverpool, on the 11th of August.
In my view of this case, it is not material whether the total loss is to be considered as having been completed on the 2?th of July, or on the 12th of August,
for the voyage wa&not completed at either of these two dates, It was indeed argued
that the voyage had been completed a t the latter date, and the freight earned a t
that time: the freight was, in fact, subs~uexitlyearned by the delivery of the goods,
but at the last date to which the total loss can be referred, namely, the 12th of August,
it had not been earned. If, instead of timber, the cargo had been of a perishable
quality, and therefore destroyed by the ships filling with water on the 12th of
August, could it have been contended that the freight had been earned?
The facts of this case, upon this point, are identical with those in Samuel v.
Royal Emhmge Assurumce Cornpiay (8 B. and C. l1!3), in which a ship having been
lost whilst moored near the Dock Gates a t Deptford, waiting to be admitted, the
owner was held entitled to recover against the underwriters for a total loss, the place
where t-he vessel was moored not being the place of its ultimate destination. The
case is the same as it would have been if the ship had ceased to exkt as such on the
27th July, and the cargo had bmn brought home [1S] and delivered by other means.
This case, therefore, is one of a total loss, happening before the completion of the
voyage.
Now, to c o n s t ~ t uat ~total loss, the actual annihilation of the subject of the insurance is not necessary; it is sufticient if the expenses of repairs would exceed the value
of the ship when repaired. In all cases in which the subject is not actually annihilated, the assured is entitled to claim, and claiming as upon a total loss, must give
up to the underwriters all the remains of the property recovered, together with all
benefit and advantage belonging or incident to it, or rather, such property vests in
the underwriters. Now the freight which a ship is in the course of earning, is a
benefit or advantage belonging to it, and is as much to be given up to, or to become
the property of the underwriters, paying for a total loss of ship, as any other matter
of value belonging to or incident to the subject insured.
It cannot be of importance a t what part of the voyage the accident happens, and
the property in the vessel is changed by what is accounted in law to be a total loss,
In Belzsom v. Chapmum* the ship, soon after leaving the port of loading, sustained damage sufficient to entitle the owners to recover as for & b t a l loss, but the
captnin had repairs done a t an expense beyond what a prudent owner would have
incurred, and he brought the cargo home, and the freight was earned, but the Court
held that the total loss of the ship carried with it the total loss of the freight. Chief
Justice Tindal says, t h e assured has sustained a totaI lose of the [la]freight, if
he abandons the ship to the underwriters on ship, and is justified in so doing, for
after such abandonment he has.no longer the means of earning the freight, o r the
possibility of ever receiving it if earned, such freight going to the underwriters on
ship. The damage amounting, as between the assured and the underwriters) to a

__ -* 6 M. aud G. 792, argued in this House upon a. w r i t o f error on July 3rd axrd 4th,
I_-

1848, but not decided when the judgment in this case was given.
1061

Ir BLLC,,xw

COLE

v.

SEWELL [I8481

total loss, the a b a n d o ~ e n did

t not alter the relative rights of the parties, and the
principle of that decision was, that the plaintiff, the owner, was entitled to recover
againd the underwriters on freight as for a total loss of the freight, because the
totirl loss of the ship carried with it the total loss of the freight, and though the
f ~ ~was
~ afterwards
h t
earned, it did not belong to the owners, but to the underwr~ters
on ihe ship. If, then, in that case, the freight, though actually earned by the ship
after what amounted to a total loss as between the owner and the u ~ ~ d e ~ w r i ton
ers
freight, did not belong to the owner, but to the underwriters on the ship, how, in the
present case, can the freight earned by the delivery of the cargo after a totd l0SS of
the ship, belong to the assured?
In Case v. Davidson (5 M. and S.79, affirmed in the Exchequer Chamber, 2 Brod.
and Bing. 379; 5 Moore, 117; 8 Price, 542), the ship waron i& voyage, and in the
courae of earning freight when i t waa captured. It was abandoned, and by the
abandonmer~tbecame a total loss as between the owner and the u n d e r w r ~ ~ ~but
r a , that
abandonment, cannot hare greater effect than an actual total loss. In this State of
things the ship was re-captured, and earned freight, which was held to belong to the
underwriters on the ship, although the owner had abandoned it to the underwriters
on the freight. Lord Tenterden says, '' I have never [1@]heard of an instance in
which the assured, after a b a n d o ~ i nthe
~ ship to the underwriters, has stepped in and
claimed the freight as against the underwriters ; on the contrary, the practice has
been unco~ites~d,
that the abandonee has received the freight."
Unless the title of an ~bandonee,in cases in which ~ b a n d o ~ e ins tn ~ ~ sis a ~
better than the titfe of an underwr~ter, upon an actual total Toss not requiring
abandon~ent,which cannot be (an optional total 1088, made absolute by abandonment, cannot have a greater or a different effect than an actual total loss), these
authorities are decisive of the present case, the jury having found an actual total loss.
In-putting the case upon this ground, I must not be understood as disregardiiig
other grounds upon which the opinions of the majority of the Judgm appear to hare
t
been founded, but it is sufficient for the preaent purpose to rest the j u d g ~ e n upon
the most simple principle and most unquestioned authorities ; and being satisfied
that these grounds are sufficient to support the judgment of the Court of Session,
I think i t u n n e c m s a ~to enter into a discussion of point8 which have occasioned so
much difference of opinion in the Court below, I therefore move your ~ o r d s h i p s
to aBrm the interlocutor appealed from, with eosts.
I have to state to your Lordships, that my noble and learned friend not now present, Lord Brougham, has c # ~ u n i c a ~todme that, upon considering this case, he
appealed from
has come to the same conclusion that I have, that the inter~ocu~ors
should be affirmed.
In~rlocutQ
affirmed,
~
with costa.

[186] ~ R A ~ C ISEWELL
S
C ~ L ~ , - A ~ ~ eTEO
~ ~ ~ t ;
HENRY SEWELL, and ~ t h e r s , - R e s ~ o ~ e l z[Feb.
~ s 2, 4, 22, and 23, 1847 ;
August 21, 18481.
{ ~ e w sDig.
'
v. 420 ; vii. 23, 4.6 ; x. 1013, l P l 6 ; xii. 9931 ; xiv. 1554, 1861 ; S.C. 12
Jur. 927; and, below, 2 Con. and L. 344; 4 Dr. and War. 1 ; 6 Ir. Eq. R. 66.
Considered (i) on point as to remohness in Ahbiss v. BzLmzey, 1881,317 Ch. D. 217 ;
In re Frost, 1889,43 Ch. D. 246; ~~~t~~v. ~ ~ t ~ ~1890,44
e l Z , Ch. D.91; and cf.
~ o n y ~ e n nv,y Derinq, 1852, 2 De G. M. and G. 168 ; (ii) as to '(survivor or
survivors," in 1%re P a ~ r n ~ ~e st t ~ e mTrusts,
e ~ t 1875, L.R. 19 Eq. 325.5
Deed of S e t t E e m e n t - ~ ~ t a t i o n s - C o n ~ ~ ~ eremainder--"
nt
Survivors and
szcrviztor "4olzstruction of D e e ~ s - ~ ~ e coft Recitals.
Lands, held in fee simple, were, by settlement made in 31'152, conveyed to trustees,
to the use of the settlor f o r life; remainder to the use of his three daughters
for their lives, as tenants in common ; remainder to the use of trustees to preserve; r e ~ a i n d ~8s
r , to the share of each daughter, to the use of her first
1062