No. 87. - Dickenson v. Jardine, L. R. 3 C. P. 639. — Rule.

construing the engagement of the underwriters in a policy to be that they will pay whatever the insured in a policy is compelled to pay as a general average, arising from the risks insured against."

In Lenox v. United Ins. Co., 3 Johnson Cases (N. Y.), 178, and Shiff v. Louis. State Ins. Co., 6 Martin (Louisiana, N. S.), 629, it was held that the parties were not bound by an adjustment at a foreign port, because they must be presumed to have contracted with reference to the law of their own country. So in Thornton v. U. S. Ins. Co., 3 Fairfield (Maine), 153. But the Lenox case is considered in Lewis v. Williams, 1 Hall (N. Y. Super. Ct.), 430, to have been overruled by subsequent decisions. (Strong v. N. Y. F. Ins. Co., 11 Johnson, 323, holding that "a settlement of the general average at the foreign port, when fairly made according to the laws of the country to which the port belongs, is binding upon the parties, and that it is the duty of the master to cause an adjustment to be made on his arrival at the port of destination, and to enforce the payment of the contribution, and that he has a lien upon the cargo for its proportion.")

In case of a general average loss, the insurer is directly liable for the whole of the insured value of the property sacrificed for the general benefit; and upon payment is subrogated to the rights of the insured for contribution.

Dickenson and others v. Jardine and others.

L. R. 3 C. P. 639-644 (s. c. 37 L. J. C. P. 321; 18 L. T. 717; 16 W. R. 1169). Insurance. - Jettison.

General Average. - Liability of Underwriters. [639]
Custom.

A. insured goods at Canton by a policy which included jettison among the perils insured agaiust. The goods were jettisoned under circunstances which entitled A. to a general average contribution from the owners of the ship and of the rest of the cargo, which arrived safely at London, the port of discharge. A. having sued the underwriters for the whole amount insured, without having first collected the contributions to which he was entitled from the other owners of the ship and cargo:

Held, that he was entitled to recover; and that the underwriters having paid hit would be then entitled to stand in his place with respect to the general average contribution.

Held, also, that the liability of the underwriters under the policy could not be varied by a custom, alleged to exist in the port of London between mer

No. 87. – Dickenson v. Jardine, L. R. 3 C. P. 639, 640.

chants and underwriters, to hold the latter liable only for the share of the loss cast upon the owner of jettisoned goods in the general average statement.

Special case stated for the opinion of the Court, without pleadings.

In August, 1864, the plaintiffs shipped 641 packages of tea on board the ship Canute, to be carried from Foochow to London. The goods were insured with the defendants for £3987 10s. by a valued voyage policy in the usual form, the goods being valued at the sum insured, and jettisons being included among the perils insured against.

The Canute sailed from Foochow with the tea and other goods on board, and in the course of her voyage she struck on a reef. A portion of the cargo, consisting of 607 out of the 641 abovementioned packages of tea, was properly thrown overboard to lighten her. Subsequently she got off the reef, and reached London safely with the rest of the cargo. The insurable value of these 607 packages was £3776 6s. The net value of the jettisoned tea, had it arrived safely at its destination, would have been £3305 Os. 2d., being a sum less than the insured value.

The loss of the tea so jettisoned constituted a general average loss, giving to the plaintiffs a right to contribution from the various owners of the other interests at risk in the usual way to the amount of the above sum, £3305 Os. 2d., of which the plaintiffs

*

themselves had to contribute the sum of £995 12s. 2d., be[* 640] ing their proportion of the whole general average by the vessel. The defendants paid to the plaintiffs the sum of £995 12s. 2d., and the plaintiffs brought this action to recover £2780 13s. 10d., the difference between that sum and the sum for which the goods jettisoned were insured. There are certain cases in which goods are thrown overboard, but not for the safety of the whole adventure; and in such cases, although they do not give rise to general average contribution, the goods, nevertheless, are said to be jettisoned.

It was contended, on behalf of the defendants, that it was an established custom between merchants and underwriters in the business of marine insurance in London, that under a policy of insurance covering loss by jettison, in case the insured goods were lost by jettison under such circumstances as to constitute a general average loss as between the owners of such goods and the owners

No. 87.-Dickenson v. Jardine, L. R. 3 C. P. 640, 641.

of the other interests at risk, the underwriters were liable under the policy only in respect of such share or proportion of the loss as was cast upon the owner of the jettisoned goods in the general average statement.

The evidence adduced in support of this contention was given at length in the case.

The questions for the Court were: 1st. Whether the plaintiffs were entitled to recover in the action the whole of the insurable value of the cargo jettisoned? 2ndly. If the Court should be of opinion in the negative, then whether the plaintiffs were entitled to recover anything more than their general average proportion calculated upon the net arrived value of the goods?

Sir G. Honyman, Q. C., for the plaintiffs. The plaintiffs are entitled to recover the full value of the goods which they insured, independently of the question of any rights they may have against third parties; the defendants, when they have paid, will stand in the plaintiffs' place in respect of such rights. If the plaintiffs had issued their writ the day after the loss of the goods, the defendants would have had no defence, as the rights of general average contribution do not arise till the ship arrives at her port of destination, and the liability of the defendants can hardly have ceased from the mere fact of a right of action against third parties having subsequently arisen. The custom relied on by the defendants was not proved, and if it had been so, it would have [* 641] been inadmissible as contradicting the policy, and would have been invalid on the ground of unreasonableness, and would have had no application to this policy, which was made at Canton, while the custom is confined to the port of London.

Watkin Williams, for the defendants. The principal question is, whether the defendants are bound to pay the plaintiffs at once the whole value of the goods insured, or only to indemnify them for what they contribute by way of general average, leaving them to recover the remainder of the loss from the other parties who are liable to contribute by way of general average. In a word, the question is, whether the loss is a total loss, or a loss of a different kind? whether, if a bale of goods worth £1000 be thrown overboard, under circumstances which entitle the owner to be repaid £900, it is a total loss?

[WILLES, J.-The right to be repaid in part only arises if the ship or cargo arrives safely.]

VOL. XIV. - 28

No. 87. - Dickenson v. Jardine, L. R. 3 C. P. 641, 642.

If they do not, but are themselves lost, the loss of the goods jettisoned becomes total, but not before. As a matter of common sense, would a merchant write off the value of the bale as totally lost?

[WILLES, J. — If a pirate had boarded the vessel, and thrown the goods overboard, the plaintiffs would have had a right of action against him for the value; or if the master had thrown them overboard wrongfully, the plaintiffs could have sued the shipowner; but would the loss in either case not have been total?]

It cannot be denied that it would. There are, however, some authorities for the view that the loss is not total in such a case as the present. The principal one is Roccus on Insurance, n. 62, who, though he does not state the amount for which the underwriters would be liable, whether to make good the value insured, or only the value upon which the general average would be calculated, yet certainly does not treat the loss as a total loss. In Marshall on Insurance, 4th ed., p. 434, it is said that the assured should proceed first against the parties who are liable to contribute by way of general average, and only sue the underwriters for the residue. There is a case in the American reports, Lapsley v. Pleasants, 4 Binn. 502, in which the same rule was laid down, though there are also cases to the contrary.

[* 642] * [BOVILL, Ch. J.

That case is referred to in Phillips on Insurance, vol. ii. p. 122, and the author adds a note citing Emergion, c. 12, s. 44, Pothier on Insurance, c. 52, that the claim. may be first made against the underwriters.]

The amount recovered under the average loss is sometimes greater and sometimes less than the insurable value. In the former case, would not the assured be entitled to recover the larger amount?

[WILLES, J.-He would, but it would be upon a different claim, viz. for indemnification for his loss from having to pay the general average contribution, which is quite distinct from the claim for indemnification for the loss of the goods themselves, and arises only on the ship or other goods reaching the port of destination safely.] BOVILL, Ch. J. I am of opinion that the plaintiffs are entitled to recover the whole of the amount claimed by them.

I think the rule is correctly stated in Phillips on Insurance, 3rd ed., vol. ii. s. 1348, as follows: "It is not a condition that the assured on goods must claim contribution of the other parties for

No. 87.-Dickenson v. Jardine, L. R. 3 C. P. 642, 643.

a jettison before he can demand indemnity from his underwriters. He may demand it of them in the first instance." There seems to have been a decision in the Courts of Pennsylvania, Lapsley v. Pleasants, 4 Binn. 502, to the contrary effect; but there had been an earlier decision in the Court of New York, Maggrath v. Church, 1 Caines, 196, in which the underwriters had been held liable for the whole amount insured; and in a later case in the Circuit Court of the United States, Potter v. Providence Washington Insurance Company, 4 Mason, 298, STORY, J., delivering the judgment of the Court, after citing both cases, followed the earlier decision, and laid down the law in the same way as Mr. Phillips has done. Pothier's Traité du Contrat d'Assurance, s. 52, is to the like effect. In this case the goods were insured against jettison, amongst other risks, and the goods were jettisoned, and I think the plaintiffs are entitled, therefore, to recover the sum insured. It is true that there is a remedy against the owners of the ship and the remainder of the cargo, if they ultimately arrive safely at their destination, for part of the loss. But this does not affect the plaintiffs' right against the underwriters, who will then be entitled to stand in their place, and recover contributions [* 643] from the other parties who are liable. A further question has been raised, whether the underwriters are not released by a custom alleged to exist at the port of London; but this custom was not made out, and if it had been so, would not have availed the defendants, being unreasonable and contrary to the express agreement of the parties, as was the custom set up in the case of Grissell v. Bristowe, L. R. 3 C. P. 112.

WILLES, J.I am of the same opinion. Mr. Williams argued the case in the only way which was possible when he said that a case of jettison under the circumstances here detailed did not constitute a total loss of the goods, because in point of law the loss was less than total, by the value of the right which accrued to have compensation for part of the loss from the shipowner and the other owners of cargo. It was so in one sense, because if the vessel or any part of the cargo arrived safely in consequence of. the jettison, the owners must contribute to the loss sustained by the owners of the goods so sacrificed for the general advantage; but the goods were totally lost at the time, though their owner had a contingent right to recover from certain persons a portion of their value. The result is that the owner has two remedies,

one for