of the prime cost as is equal to the diminution in value occasioned by the damage.

In the case of a partial loss', although the policy be a valued policy, yet the computation must be by the real interest of the assured on board, and not by the value in the policy; that is, the policy, notwithstanding the valuation, must be considered as an open policy.

In the case of a partial loss upon goods, by sea damage, the rule is, that the underwriter is not to be subjected to the fluctuation of the market, and that he is not liable for any loss which may be the consequence of the duties or charges to be paid after the arrival of the commodity at the place of its destination. Hence, in computing the average in a case of this kind, the difference between the respective gross proceeds (35) 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 40l. whereas, if the sugar had not been damaged, the gross proceeds would have amounted to 501. The difference is 10. or one fifth part of 501. The sum then which the underwriter must pay, will be one-fifth of 301. 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

s Le Cras v. Hughes, Marsh. 541. t Lewis v. Rucker, 2 Burr. 1167.

(35) It was solemnly determined in Johnson v. Sheddon, 2 East, 581. recognised in Hurry v. Royal Ex. Ass. 3 Bos. & 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. 803.

of the sound : the gross proceeds of the damaged :: the original value : a fourth quantity, 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 price at the port of delivery, including premiums of insurance and commission.

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 holden, 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.

u Lewis v. Rucker, 2 Burr 1167. x Usher v. Noble, 12 East, 639. y Livie v. Janson, 12 East, 649.

z Le Cheminant v. Pearson, 4 Taunt. 867.

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 hand, but it does not require a stamp. If the underwriter refuses to pay, the assured may declare on the policy, and give the adjustment in evidence (proving the signature) as an admission of all the facts necessary to be proved. It is not necessary, although usual at this day, to declare specially on the adjustment. The adjustment is only primâ 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.

Case upon a policy of insurance upon the ship Valiant, and goods, "from London to Leghorn and Naples, or Naples and Leghorn, both or either, with permission to join convoy in the Channel and to call at Gibraltar." The plaintiff declared for a total loss by perils of the sea. A broker, called on the part of the plaintiff, said, that he had effected the policy, and that it had been subscribed by one M'Clery, as the defendant's agent. That after the loss there was laid before the agent a translation of all the papers which had come to his (the broker's) hands, and that the agent might have examined them if he pleased, and that he signed the adjustment. It was then proposed to call M'Clery, but

a Marsh. 529.

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

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

d Per Kenyon, C. J. in Rodgers v. Maylor, Park, 119.

e S. C.

f De Garron v. Galbraith, Park, 118. g Voller and another v. Griffiths, London Sittings after M. T. 41 G. 3. B. R. Kenyon, C. J. MSS.

Erskine objected to it, on the ground that he was an interested witness. Kenyon, C. J. over-ruled the objection, observing, that however his concern in the transaction might operate on his feelings and affect his credit, he did not think he had such an interest as to render him incompetent. M'Clery was then called, who said, that he read the protest in a cursory manner, and that, when he came to the average, observing the accounts to be correct, and not then knowing what he had learned afterwards, viz. that some vitriol had been stowed in an improper part of the ship, he signed the adjustment.-Kenyon, C. J. "When I first came into this court, I was told that an adjustment was conclusive evidence against a defendant. My mind revolted at this proposition, and I then went to the extent, and perhaps I have gone far enough, of saying, that if there had been any fraud practised, or if there had been any misconception of the law or fact upon which the adjustment had been made, the underwriter should not be absolutely concluded by it; but can I say in this case, that a merchant in the city of London, when papers were laid before him, and he had an opportunity of examining them, signed the adjustment inconsiderately?" Verdict for the plaintiff.-N. The defendant was not prepared to prove, that the vitriol had been improperly stowed. See Christian v. Combe, 2 Esp. N. P. C. 489. to the same effect.

Since these decisions, a case has occurred, viz. Herbert v. Champion, 1 Camp. N. P. C. 134, in which Lord Ellenborough has 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 Camp. N. P. C. 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 which discharged his liability to the assured; Lord Ellenborough, C. J. observing, that the adjustment was primû 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 Mr.

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. The doctrine laid down by Lord Ellenborough, in Herbert v. Champion, certainly supports the argument of Mr. Campbell: but the expressions used by his lordship in Shepherd v. Chewter, seem to re-establish the opinion delivered by Lord Kenyon in Voller v. Griffiths, and Christian v. Combe. It is to be lamented that on a subject of so much importance, hitherto, there has not been one solemn decision, and that the law relating to the operation and effect of an adjustment, is still to be gleaned from the fluctuating opinions of three or four judges sitting at Nisi Prius.

It

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. afterwards appeared the capture was not in port. Held, 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 also*.

VIII. Of the Remedy by Action for Breach of the Contract of Insurance, and herein of the Declaration-Pleadings-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, adding a general indebitatus assumpsit with the usual money counts, as they may become necessary, in case the policy should be considered as void, and the assured entitled to recover the premium.

The policy must be stated in the declaration, and it must be alleged, that it was signed or subscribed with the name of h Reyner v. Hall, 4 Taunt. 725,

k lb.