The acceptance of the abandonment may be inferred from words, or acts. The question has arisen whether it could be inferred from mere silence; and, in general, it cannot. "An insurer is not bound," says Mr. Justice Story, "to signify his acceptance. If he says nothing, and does nothing, the proper conclusion is, that he does not mean to accept it."

The rule may be stated thus. If the insurer, with a suffi cient knowledge of the facts, says or does that which induces an honest insured to believe that he has accepted the abandonment, and will pay the loss, and to act on that belief, it is an acceptance, and is so far binding on the insurer. But if he neither says nor does what ought to produce this belief, then he is at liberty to say and prove if he can that the insured had no right to make an abandonment, and that the claim is only one for a partial loss.

5. OF THE Effect of AbandONMENT.-We regard it is an ancient, reasonable, and well-established rule, that, if insurers pay as for a total loss, this payment entitles them to full posses sion of all that remains of the property insured, and also of ali rights, claims, or interests which the insured has in or to or in respect of the property lost, and which, if he valued or enforced them himself, would, if added to the amount paid by the insurers, give him a double indemnity. Hence, if the insured has lost his goods by jettison, and has a claim for a general average contribution, and the insurers pay him for all his goods, they stand in his place, and acquire that claim for contribution which the loss of the goods gave him. And we should, very generally at least, extend this rule to the claim which a mortgagee has on the mortgage for his debt. That is, if the insurers pay for the loss of the property which secures the debt, they acquire, to the extent of their payment, the mortgagee's claim against the debtor.

By the abandonment, both the owner and the master become to some extent, the trustees and agents of the insurers, in respect to the property abandoned; and are bound to act, in relation to it, with care and honesty. Still, if the property, after abandonment, or after a loss for which there is to be an abandonment, be further lost or wasted, by the bad faith or

neglect of the master, or of the consignee of the owner, while they continue to act as such, this loss must be made up by the owner, because, although they are, in a certain sense, agents of the insured, they are then agents of the owner, and he is responsible for them to the insured.

Goods are totally lost if destroyed, or if so injured as to have little or no value for the purpose for which they are ntended; or if the voyage upon which the insurance on the goods was effected is entirely broken up. But a mere delay gives no right of abandonment. And, in addition to all this, the rule which permits abandonment if more than fifty per cent. be lost, of which we have already spoken, is applicable to goods, in this country; subject, however, to the important qualification, that it does not apply if any substantial portion of the goods arrive at their destination uninjured; or if the goods are insured "free from average." And the rule of abandonment, salvage, and transfer to the insurers, is the same in relation to goods as to the ship.

If there be many several shipments all insured, there may be a total loss of one, a partial loss of another, and no loss of a third.

SECTION XXV.

GENERAL AVERAGE.

THIS subject belongs primarily to the law of shipping, and is treated of in the chapter on the Law of Shipping. It comes within the scope of the law of insurance only when any of the property which is lost or saved is insured.

If an owner of property is insured, and other property is sacrificed to save the insured property from a peril common to it and to the sacrificed property, the insured property must pay such indemnity to the owner of the sacrificed property as will make them suffer alike. And the amount thus paid or contributed by the insured property is a loss by a sea-peril, for which the insurers are liable.

On the one hand, the insurers of the sacrificed property are under an obligation to pay for the loss thus made or incurred voluntarily, because it was not only the right, but the duty, of

the master and crew to destroy a part rather than let the whole perish. It was therefore a loss by a peril of the sea, although purposely caused for the benefit of others; and the insurer for it.

must pay

On the other hand, the owners of the property sacrificed, acquire by its sacrifice a claim for contribution and indemnity; and if the insurers pay them for their loss, they acquire their claim for contribution. And this they take advantage of, in some cases, by deducting it from the amount they pay, and in other cases by first paying all the loss, and then collecting all the contribution for their own benefit. We have already seen that the insurers cannot deduct the contribution for the purpose of bringing the loss below fifty per cent., and thereby prevent. ing an abandonment.

SECTION XXVI.

PARTIAL LOSS.

A PARTIAL loss is simply a loss of a part, and not of the whole. The principal questions relating to it arise out of the rule of one-third off, new for old, which has been already spoken of. We repeat the rule, with the reason of it. A ship sails to-day with new copper. Another sails with her copper. nearly worn out. Both meet with peril which requires new. coppering. The first is new coppered, and the insurers pay for it, and the insured gains nothing, because the copper on her was worth as much as it is now. The second is also coppered, and the insurers pay for it. But this ship gains nearly the whole value of the copper put on, because the old copper was worth very little: Now the whole purpose and principle of the law of insurance is to indemnify the insured, or make his loss good, and no more. Formerly they tried to do it by finding out in each case how much the old materials had lost of their value. But this was found so difficult, that it was agreed upon by merchants and insurers to average all the cases, and consider that all old materials had lost one-third of their value. And the rule is found to work well in practice.

The first effect of this rule is, that the thing or the part lost or injured, whether it be new or old, worn out or not worn at

all, must be replaced or repaired in adaptation and conformity with the vessel, in the same way in which it would be if she were properly repaired at the owner's port, by his orders.

This third part is generally deducted from dockage, moving the ship, and similar expenses, provided they are incidental to the main purpose of repair.

The value of the old materials should be deducted from the expense of repair, before the third "new for old" is taken off. If a sea-peril makes it necessary to recopper a vessel, and the cost will be $9,000, and her old copper is worth $3,000, we should say that this should be deducted, leaving $6,000, for two-thirds of which only ($4,000), one-third being off, new for old, the insurers would be liable. The other way would be, to say the cost of repair is $9,000, of which the insurers would pay two-thirds ("one-third off "), or $6,000; and then the insurers would be entitled to the $3,000 which her old copper brings. Then the loss of the insurers would be only $6,000 less $3,000, or $3,000, instead of $4,000, which the insurers would lose on the first way. Insurers have tried to make the second way the law; but the first way is now pretty well established.

If an owner effects insurance on a part only of the value of the property insured,—as if for $5,000 on a ship valued at $10,000,-he is insured for half, and is his own insurer for the other half, and he recovers in the same proportion from the insurers in case of a partial loss. Thus, if there be a partial loss of sails and rigging, or of repairs, amounting, after one third is deducted, to $2,000, one-half of this is the loss of the insurers, and they pay it to him, and one-half is his own loss.

The insurer takes no part of the risk of the market, and his liability is the same whether that rises or falls, although this may make a great difference as to the amount lost by the insured. What goods have lost from their original invoice value is the amount which the insurer pays. Thus, if he insures $10,000 on goods of which that is the original value, and they are so far damaged by a sea-peril, that at the port of discharge they bring, or are worth, only half of what they would have brought if they had not been damaged, the insurers are liable for $5,000, or that half, although the goods thus damaged

may bring in the market of arrival the whole of their invoice cost or more. And if they bring but a quarter of it, the insurers pay no more than one-half, because the rest of the loss is caused by the falling market.

If the goods have sustained damage or loss by leakage, or by breakage, or by natural decay, or from inherent defect in quality,—that is, not by a sea-peril,—before the partial loss occurs, a proportional deduction should be made from the partial loss, as the insurers are liable only for the injury resulting from that loss, and not for any part of that which already existed when the loss took place, or which has occurred since from causes against which they did not insure.

CHAPTER XXVII.

FIRE INSURANCE.

SECTION I.

THE USUAL SUBJECT AND FORM OF THIS INSURANCE.

THIS kind of insurance is sometimes made to indemnify against the loss by fire of ships in port; more often of warehouses, and mercantile property stored in them; or of personal property in stores or factories, in dwelling-houses or barns, as merchandise, furniture, books and plate, or pictures, or live stock. But by far the most common application of this mode of insurance is to dwelling-houses and other buildings.

Like marine insurance, it may be effected by any individual who is capable of making a legal contract. In fact, however, it is always, or nearly always, in this country, and we suppose elsewhere, made by companies.

There are stock companies, in which certain persons own the capital and take all the profits by way of dividends; and mutual companies, in which every one who is insured becomes thereby a member, and the net profits, or a certain proportion of them, are divided among all the members in such manner as