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disposal of the property was justifiably determined before the opportunity to give notice occurred. For instance, where the news of the loss of the ship and of her sale reached the assured at the same time, it was held that the underwriters were liable for a total loss without notice of abandonment;1 and the same conclusion was arrived at under similar circumstances in an action upon a policy of insurance on cargo.2

In all other circumstances, however, the giving of a notice of abandonment is a necessary preliminary to a right to recover for a constructive total loss.

There is a difference between an abandonment and a notice of abandonment. If a marine insurer pays for a loss as if it were an actual total loss, it is held in England that he' is entitled to whatever may remain of the thing insured or its proceeds or salvage as if there had been a formal abandonment.3

A notice of abandonment is a notification by the assured to the underwriters that he elects to treat the case as one of total loss made while the happening of the loss is prospective.

An abandonment must be made within a reasonable time after information of the loss, and after the commencement of the voyage, and before the party abandoning has information of its completion. It is reasonable that the assured should, on deciding to claim for a total loss, promptly give notice of his intention to the underwriters in order that the latter may be given the opportunity to take any steps which they may deem advisable for the recovery of the property or for the realization of salvage if the property is recoverable. No specific form is necessary for giving notice of abandonment, nor is it essential that it should be made in writing, though it is customary and advisable so to give it. But the abandonment tendered must be neither partial nor conditional.1

§ 109. Effect of Abandonment.-The abandonment, if accepted by the underwriters, or if justified by the facts of

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the case, is equivalent to a transfer of his interest by the insured to the insurer with all chances of recovery and indemnity.1

An acceptance of an abandonment is not to be presumed from the mere silence of the insurers upon receiving the notice, but may be inferred from their acts as well as their words, as where the insurers take possession and do not return within a reasonable time.3

If the insurers accept the notice of abandonment, the rights of the parties are fixed by the acceptance, and neither of them can draw back, whatever may be the event.'

If an insurer refuses to accept a valid abandonment, he is liable as upon an actual total loss, deducting from the amount any proceeds of the thing insured which may have come to the hands of the insured.

After an abandonment, acts done in good faith by those who were agents of the insured in respect to the thing insured subsequent to the loss are at the risk of the insurer and for his benefit.

A freight earned previous to the loss belongs to the insurer thereof, but freight subsequently earned belongs to the insurer of the ship.5

Whenever a loss is paid, whether total or partial, the underwriter who has paid it acquires a right by subrogation to whatever may be recovered by the assured from third parties with respect to the loss; but in the absence of an abandonment the right is limited to the recovery by the underwriter of the sum which he has paid."

This right of subrogation, which in the case of partial loss operates merely to the extent of his loss, is made absolute by abandonment, so that the insurer is entitled to whatever may be recovered with respect to the thing insured, though it exceed the amount paid by him.7

If there are several underwriters, they share in the transfer of the interest in proportion to the amount of their several 5 Stewart v. Greenock Mar. Ins. Co.,

' Eagle v. Bucher, 6 Ohio St. 295; s.c., 67 Am. Dec. 342.

? Provincial Ins. Co. v. Leduc, L. R., 6 P. C. 224.

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2 H. L. Cases, 159.

Burnand v. Rodocanachi, L. R.,

7 App. Cases, 339.

7 North of England Iron Steamship Ins. Asso. v. Armstrong, L. R., 5 Q. B. 244.

subscriptions.1 By an abandonment the insurer can have no greater rights than the insured had."

§ 110. Measure of Indemnity.-A marine insurer, as has been previously stated, is liable upon a partial loss only for such proportion of the amount insured by him as the loss bears to the value of the whole interest of the insured in the property insured. But in a valued policy the value of the interest is agreed upon in advance, and is conclusive in the absence of fraud.4

Where profits are separately insured in a contract of marine insurance, the insured is entitled to recover in case of loss the proportion of such profits equivalent to the proportion which the value of the property lost bears to the value of the whole.

§ 111. Valuation Apportioned.—In case of a valued policy of marine insurance on freight or cargo, if a part only of the subject is exposed to risk the valuation applies only in proportion to such part.5

Where profits are valued and insured by a contract of marine insurance, a loss of the profits is presumed from a loss of the property out of which they were expected to arise, and the valuation of the policy fixes their amount.

§ 112. Loss under an Open Policy.-A loss under an open policy of marine insurance is ascertained as follows: (1) The value of a ship is its value at the beginning of the risk, including all articles or charges which add to its permanent value or which are necessary to prepare it for the voyage insured. (2) The value of cargo is its actual cost to the insured when laden on board; or, where that cost cannot be ascertained, its market value at the time and place of lading, adding the charges incurred in purchasing and placing it on

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Davy v. Hallett, 3 Caines, 16; s.c.,

Lamar Ins. Co. v. McGlashen, 2 Am. Dec. 241. 54 Ill. 513; s. c., 5 Am. Rep. 162.

Patapsco Ins. Co. v. Coulter, 3 Peters, 222.

board, but without reference to any losses incurred in raising money for its purchase, or to any drawback on its exportation, or to the fluctuations of the market at the port of destination, or to expenses incurred on the way or on arrival. (3) The value of freight is the gross freight exclusive of primage, without reference to the cost of earning it.1

And in each case the cost of insurance is to be added to the value then estimated.

§ 113. Damaged Cargo.-If cargo insured against partial loss arrives at the port of destination in a damaged condition, the loss of the insured is deemed to be the same proportion of the value which the market price at that port of the thing so insured bears to the market price it would have brought if sound.2

§ 114. Labor and Expenses.-A marine insurer is liable for all the expenses attendant upon a loss which forces the ship into port to be repaired; and, where it is agreed that the insured may labor for the recovery of the property, the insurer is liable for the expenses incurred thereby, such expense in either case being in addition to a total loss if that afterwards occurs.3

§ 115. Liable for General Average Losses.-A marine insurer is liable for a loss falling upon the insured through a contribution in respect to the thing insured required to be made by him toward a general average loss called for by the peril insured against.*

§ 116. Insured may Claim whole Loss from Insurer, leaving Latter to enforce General Average Contribution.-Where a person insured by a contract of marine insurance has a demand against others for general average contribution, he may claim the whole loss from the

1 Stevens v. The Columbian Ins. Co., 3 Caines, 43; s. c., 2 Am. Dec. 247. 2 Pars. Mar. Ins., 406-412.

Orrok v. Commonwealth Ins. Co., 21 Pick. 456; s. c., 32 Am. Dec. 271. Dunham v. Commercial Ins. Co.,

Lamar Ins. Co. v. McGlashen, 54 11 Johns. 315; s. c., 6 Am. Dec.

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insurer, subrogating him to his own right of contribution; but no such claim can be made upon the insurer after the separation of the interests liable to contribution, nor when the insured, having the right and opportunity to enforce contribution from others, has neglected or waived the exercise of that right.1

§ 117. One-third off New for Old.-In the case of a partial loss of a ship or its equipments, the old materials are to be applied toward payment for the new, and a deduction of one-third from the cost of repairing or replacing the damage is made after deducting the value of the old materials, and the marine insurer is liable for the two-thirds of the cost of the repairs.2

But certain exceptions to this rule are allowed by custom, and as inserted in the policies the rule is generally modified in certain particulars.

Anchors, cannon, and sometimes other articles which are supposed to incur no depreciation in value up to the time of loss are allowed for in full; for metal sheathing a deduction of one-fortieth from the expense of repairing or replacing (after first deducting the value of the old metal and nails) is generally made for every month since the vessel was last sheathed until the expiration of forty months, after which time the cost of remetaling or repairing the same is borne by the assured.

The deduction of one-third off new for old does not generally apply in England in the case of a new ship on her first voyage, and a deduction of one-sixth is sometimes applied to chain cables.

It is difficult to give an authoritative definition of the extent of a first voyage, and this may be explained by mercantile usage. The charter party may be so worded as to make the outward and homeward passage only one voyage.*

This point is sometimes regulated by special provisions of the policy.

1 Maggrath v. Church, 1 Caines, Johns. 315; s. c., 6 Am. Dec. 374. 196; s. c., 2 Am. Dec. 173. Orrok v. Commonwealth Ins. Co., 21

2 Eager v. Atlas Ins. Co., 14 Pick. Pick. 456; s. c., 32 Am. Dec. 277.

141.

3 Dunham v. Com. Ins. Co., 11 323.

Fenwick v. Robinson, 3 C. & P.

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