kind, the difference between the respective gross proceeds (33) of the damaged goods, and of the goods if they had arrived sound at the port of delivery, must first be ascertained. Then, whatever aliquot part of the gross proceeds of the sound commodity at the port of delivery such difference constitutes, the same aliquot part of the original value will be the sum for which the underwriter will be liable: e. g. Suppose a hogshead of sugar is insured on a voyage from London to Hamburgh: the original value is 301.; being deteriorated by sea damage, the gross proceeds at Hamburgh amount to 40%.; whereas, if the sugar had not been damaged, the gross proceeds would have amounted to 50l. The difference is 10. or one fifth part of 50l. The sum, then, which the underwriter must pay will be one fifth of 30l., the original value, or 61. In cases where the sums are more complicated than in the preceding instance, the calculation may be made as follows: as the gross proceeds of the sound : the gross proceeds of the damaged : a fourth quanthe original value : tity, which being found by the rule of three, must be subtracted from the prime cost, and the difference will be the average loss or sum for which the underwriter is chargeable. The proportion of loss is calculated through the same medium (that is, by comparing the selling price of the sound commodity with the damaged part of the same commodity at the port of delivery,) whether the policy be valued or open'. But the proportion of loss, when ascertained, is applied to different standards of value. For the original value in the case of a valued policy is the valuation in the policy; but in the case of an open policy, the original value is the invoice

q Lewis v. Rucker, 2 Burr. 1167.

:

r Usher v. Noble, 12 East, 639.

(33) It was solemnly determined in Johnson v. Sheddon, 2 East, 581. recognized in Hurry v. R. Ex. Ass. 2 Bos. and Pul. 308. that the gross proceeds, and not the net proceeds, must be taken as the basis of the calculation. A cargo insured by a valued policy was confiscated abroad and sold;* but the enemy permitted the foreign consignee to retain from the proceeds the amount of his acceptances which he had previously paid; the assured not having abandoned, the loss became partial only, and the assured was holden to be entitled to recover from the underwriter a sum bearing the same proportion to his subscription as the loss ultimately sustained bore to the whole value in the policy.

* Goldsmid v. Gillies, 4 Taunt. 80.

price at the port of delivery, including premiums of insurance and commission. A ship received considerable damage from tempestuous weather, and the crew, completely exhausted, deserted the ship on the high seas, for the mere preservation of their lives; and the ship was then taken possession of by a fresh crew, who succeeded in conducting her safely into port; it was holdens, that such desertion of the crew did not of itself amount to a total loss; and secondly, that the ship having been sold under the decree of the Admiralty Court to pay the salvage, and it not appearing that the assured had taken any means to prevent such sale, that they were not entitled to abandon, and that there was only a partial loss. In an action on a policy on ship and goods, warranted free from American condemnation, it appeared, that the ship and goods were damaged by the perils of the seas, and were afterwards seized by the American government, and condemned. It was holdent, that the total loss by subsequent seizure and condemnation took away from the assured the right to recover in respect to the previous partial loss by sea damage: inasmuch as the immediately operating cause of total loss was one from which, and its consequences, the underwriter was by express provision in the policy exempted; and as the other antecedent causes of injury never produced any pecuniary loss to the plaintiff; and as there never existed a period of time prior to the total loss, in which the assured could have practically called on the underwriter for an indemnity against the temporary and partial injury. The liability of the underwriter is not restricted to the single amount of his subscription", but he may be subject either to several average losses, or to an average loss and total loss, or to money expended and labour bestowed about the defence, safeguard, and recovery of the ship, to a much greater amount than the subscription; and it shall be recoverable as an average loss. Upon a policy on hogsheads of sugar, warranted against particular average, some part of the sugar in every hogshead being preserved, though less than three per cent. on the cargo; it was holden that this could not be a total loss. On the memorandum "free from average under 37. per cent.," the underwriter is liabley for the amount of the aggregate of several partial losses, each less than 37. per cent., but amounting together to more.

s Thornely v. Hebson, 2 B. & A. 513. t Livie v. Janson, 12 East, 648.

u Le Cheminant v. Pearson, 4 Taunt.

x Hedburg v. Pearson, 7 Taunt. 154. y Blackett v. R. E. A. Comp. 2 Cr. & J. 244. 2 Tyrw. 266.

VII. Of Adjustment.

The adjustment of a loss is the settling and ascertaining the amount of the indemnity which the assured, after all allowances and deductions are made, is entitled to receive under the policy, and fixing the proportion which each underwriter is liable to pay. An adjustment being indorsed on the policy, and signed by the underwriter, with a promise to pay in a given time, is to be considered as a note of handa, but it does not require a stamp. The adjustment is only prima facie, and not conclusive evidence against the underwriter. Hence where the witness, who proved the adjustment, swore that soon after the underwriters had signed it, doubts arose in their minds as to the honesty of the transaction, Lord Kenyon, C. J. was of opinion, that in such case the plaintiff should produce other evidence; and that shutting the door against inquiry, after an adjustment, would be putting a stop to candour and fair dealing amongst the underwriters. The court afterwards, on a motion for a new trial, concurred in opinion with the chief justice. The production of the policy by assured, with adjustment on it and name of defendant struck off, does not provee payment of the sum adjusted; for it frequently happens, that the name is struck off, on the faith of an adjustment, where nothing is paid, but an arrangement made to pay at a future time. In Herbert v. Champion, 1 Campb. 134, Lord Ellenborough expressed a clear opinion, that an adjustment is merely an admission on the supposition of the truth of certain facts stated, that the assured are entitled to recover; and although it is incumbent on an underwriter, who has once admitted his liability by an adjustment, to make out a strong case, yet, until actual payment of the money, he may avail himself of any defence, which either the facts or the law of the case will furnish. In Shepherd v. Chewter, 1 Campb. 274, it was holden, that an adjustment was not binding, although the underwriter, at the time of signing it, had an opportunity of becoming acquainted with the history of the voyage, and the circumstances attending the loss, his attention not having been drawn to the fact

z Marsh. 529.

a Hog v. Gouldney, Beawes, 310. Lee, C. J.

b Per Kenyon, C. J. in Wiebe v. Simpson, London Sittings after M. T. 41 G. 3. MSS.

c Per Kenyon, C. J. in Rodgers v. Maylor, Park, 191.

d De Garron v. Galbraith, Park, 194. Peake's Additional Cases, 37. S. C.

e Adams v. Sanders, M. & Malk. 373. Ld. Tenterden, C. J.

which discharged his liability to the assured; Lord Ellenborough, C. J. observing, that the adjustment was prima facie evidence against the defendant, but it certainly did not bind him, unless there was a full disclosure of the circumstances of the case: unless they were all blazoned to him as they really existed. But see Sir J. Campbell's note on this case, in which he has shewn, that, upon principles of law, a mere adjustment is not in any case or under any circumstances conclusive, and that the utmost effect which can be given to it, is to transfer the burthen of proof from the assured to the underwriters. A ship was insured, warranted free of capture, in port. A letter announcing her capture stated it to be in port, on which the underwriter and assured adjusted; the former returned, and the latter received back the premium. It afterwards appeared the capture was not in port. It was holden, that the assured was not precluded by the adjustment and repayment from recovering on the policy; whether the underwriter's name had been struck off the adjustment only, or off the policy alsoh. An underwriter has never been considered discharged as against the assured, until his name has been struck off the policy, Russell v. Bangley, 4 B. & A. 395, with the consent of the assured; Bartlett v. Pentland, 10 B. & C. 760. An usage at Lloyd's does not bind a person not cognizant of it. Gabay v. Lloyd, 3 B. &. C. 793. recognized by Bayley, J. in Bartlett v. Pentland, 10 B. & C. 767. In Scott v. Irving, 1 B. & Ad. 605, where the name had been struck off the policy, but without the consent of the assured, the court held the underwriter liable, and disallowed a set-off between broker and underwriter as against the assured. A trustee suing as a plaintiff in a court of law must be treated in all respects as a party to the cause, and any defence against him is a defence in that action against the cestui que trust, who uses his name. And therefore where a broker in whose name a policy of insurance under seal was effected, brought covenant, and the defendants pleaded payment to the plaintiff according to the tenor and effect of the policy; and the proof was, that after the loss happened, the assurers paid the amount to the broker by allowing him credit for premiums due from him to them, it was holden', that although that was no payment as between the assured and assurers, it was a good payment as between the plaintiff on the record and the defendants, and, therefore, an answer to the action.

f Reyner v. Hall, 4 Taunt. 725. g Reyner v. Hall, 4 Taunt. 725. h Reyner v. Hall, 4 Taunt. 725.

i Gibson v. Winter, 5 B. & Ad. 96. 2

Nev. & M. 737.

VIII. Of the Remedy by Action for Breach of the Contract of Insurance, and herein of the Declaration-Plead

ings-Consolidation Rule.

THE usual remedy or form of action against the insurers or underwriters, to recover a loss upon a policy of insurance, is an action on the case, founded upon the express special undertaking of the insurers who have signed the policy, or (as it is technically called) a special assumpsit. Two counts upon the same policy are not allowed. But a count upon a policy, and a count for money had and received to recover back the premium upon a contract implied by law are allowed.* R. G. H. T. 4 W. 4. No. 5. The two insurance companies, namely the Royal Exchange and the London Assurance, having been, in consequence of stat. 6 G. 1. c. 18., incorporated by several charters granted, and having a common seal affixed to all their contracts, the proceedings against these companies must be by action of covenant or debt.

The policy must be stated in the declaration, and it must be alleged, that it was signed or subscribed with the name of the insurer against whom the action is brought; that in consideration that the assured had paid to the defendant the premium, the defendant had undertaken to indemnify the assured against the losses specified in the policy; that the goods, wares, and merchandizes, were laden on board the ship to the amount of £-(i. e. the value insured) (34); and further it must be alleged, that the plaintiffs were interested (35) therein, unless the insurance be on a foreign ship, in

(34) In an action on a policy of insurance of indigo and bale goods, after setting out the policy, it was averred in the declaration that divers goods were loaded on board, and that the policy was made on the said goods; on special demurrer, because it was not averred, that the goods stated to have been loaded on board were indigo or bale goods, the court observed, that the allegation, in the declaration, that the policy was made on the goods put on board, completely answered the objection taken, since that could not be true, unless indigo or bale goods were loaded on board, which it would be necessary for the plaintiff to prove at the trial. De Symons v. Johnston, 2 Bos. and Pul. N. R. 77.

(35) It is immaterial to aver interest at any day previous to the commencement of the risk. In a declaration on a policy on freight,