AVERAGE,^[1. Average is said by Cowell to be derived from the Latin word averaġiwm, from the verb averare, to carry. He supposes it to have been introduced into commerce to show the proportion to be paid by every man according this goods carried. Loccenius, on the other hand, derives it from the French havre, or the German ĭjahm, a port; it being a contribution paid for having goods brouζ^ safely to port. (De Jure Mantimo, lib. ιι. cap. viii. sect. 1.) ] a termused in commerce and navigation to signify a contribution made by the individuals to whom a ship, or the goods on board it, belong, or by whom it or they are insured, in order that no particular individual or individuals amongst them, who may have been forced to make a sacrifice, or submit to a loss for the preservation of the ship or cargo, or both, should lose more than others.

Average is either general or particular. General average is when a sacrifice is made for the common benefit of the ship and cargo, or a loss is incurred in providing for their mutual safety. “Thus,” says Mr Sergeant Marshall, “when the goods of a particular merchant are thrown overboard in a storm, to save the ship from sinking; or when the masts, cables, anchors, or other furniture of the ship are cut away or destroyed for the preservation of the whole; or money or goods are given as a composition to pirates to save the rest, or an expense is incurred in reclaiming the ship, or defending a suit in a foreign court of admiralty, and obtaining her discharge from an unjust capture or detention; in these and the like cases, when any sacrifice is deliberately and voluntarily made, or any expense fairly and bona fide incurred to prevent a total loss, such sacrifice or expense is the proper subject of a general contribution, and ought to be mutually borne by the owners of the ship, freight, and cargo, so that the loss may fall equally on all, according to the equitable maxι∏ 1 [7:4:251]of the civil law, nemo debet locupletari aliena jactura? (On Insurance, book i. chap. xii. sect. 7.)

Particular average is when a sacrifice is made for the sake of the ship only, or of the cargo only, or when a loss is incurred on account of one or other of them. General average affects all who have any interest in the ship or cargo, proportionally to that interest; particular average affects only the owners of the ship, or the owners of the cargo, or part of the cargo.

There are also some small charges, called petty or accustomed averages. They consist of disbursements on account of pilotage, light-houses, beaconage, quarantine, &c. When these charges are incurred in the ordinary course of the voyage, they are not considered as a general average, but are set down, one third to the ship, and two thirds to the cargo. If, however, they are incurred for any extraordinary purpose, or to relieve the ship and cargo from some impending danger, they are to be reputed general average.

The word average is also met with in bills of lading, when it is said that so much freight shall be paid for the goods “with primage and average accustomed.” In this sense it merely signifies a small duty or premium, which those who send goods in ships belonging to others are in the habit of paying to the master, over and above the freight, for his care and attention to the goods intrusted to him.

The doctrine of average contributions seems to have grown out of the necessity which must have been early experienced, of occasionally throwing overboard part of a cargo, in order to provide for the safety of the remainder. The justice of making those whose property was saved contribute to place those who had been called upon to submit to such a sacrifice in the same situation as themselves, is so very obvious, that it could not long escape the notice of commercial legislators. The principle is clearly laid down in the Rhodian law, “Omnium contributione sarciatur (it is there said), quod pro omnibus datum est. Aequissimum enim est, commune detrimentum fieri eorum qui, propter amissas res aliorum, consecuti sunt, ut merces suas salvas haberent.” (Dig. lib. xiv. tit. 2.) This sound principle, with some of the cases illustrating its application, was early embodied in the Roman law; and having been applied and modified according to the greater experience afforded by the extraordinary extension of navigation, the subject of average forms a most important and interesting chapter in all modern systems of maritime jurisprudence.

No general average ever takes place unless it can be shown that the danger was imminent, and that the sacrifice made was indispensable, or believed to be indispensable, b]; the captain and officers, for the safety of the ship and cargo. It has been stated (Lex Mercat. 148), that in order to legalize the act of throwing goods overboard, three things must concur:

1rf, That what is so condemned to destruction be in consequence of a deliberate and voluntary consultation held between the master and men;

2<Z(y, That the ship be in distress, and that sacrificing a part be necessary, in order to preserve the rest;

3√(y, That the saving of the ship and cargo be actually owing to the means used with that sole view.

But, however desirable, deliberate consultation is not to be expected when danger is imminent; and, in point of fact, the only thing necessary to legalize Oλq jettison, as it is termed, is that it be deemed essential by the master and seamen for the common safety. Provided it be the effect of danger and the cause of security, all authorities agree that contribution ought to be made, though the onus may not have been complied with. “Previous demeration, if there be time to deliberate, and a due choice of the heaviest and most cumbersome articles, may be proofs of the necessity and propriety of the act; but they are not the only nor the essential proofs. Indeed, in this case, as in many others, too close a compliance with forms, at a period of supposed danger, has very justly excited a suspicion of fraud. In all cases, however, and in all countries, it is justly required of the master, that he draw up an account of the jettison, and verify the same by the oath of himself and some of his crew, as soon as possible after his arrival at any port, that there may be no opportunity to purloin goods from the ship, and then pretend they were cast over in the hour of danger.” (Abbott, Lord Tenterden, On the Law of Shipping, part. iii. cap. 8.)

The third condition above stated as requisite to warrant a general contribution, viz. “that the saving of the ship and cargo be actually owing to the means used with that sole view,” is not only incapable of proof, but is in itself unreasonable and absurd. There is, however, no contribution, unless the ship and the rest of the cargo be saved. Hence, if goods be thrown overboard in a storm, and the ship afterwards perish in the same storm, there is no contribution of the goods saved, if any, because the object for which the goods were thrown overboard was not attained. But if a ship, preserved by a jettison, and continuing her course, be afterwards lost, the goods saved from this last misfortune, if any, must contribute to the loss sustained by the jettison, because to it their preservation at a previous period was owing. (Marshall, b. i. c. xii. § 7.)

No general average takes place in consequence of a jettison that has been rendered necessary by the ship being overloaded, or by goods being placed in some improper place, as on the deck. The loss in such cases falls wholly on the owners and master; for it must have originated either in the negligence or misconduct of one or both of those parties. (Loccenius De Jure Maritimo, lib. ii. c. viii. § 14.)

Formerly it was a customary practice in this, as it still is in some foreign countries, to ransom ships when captured by an enemy, the ransom being made good by general average. But this practice having been deemed disadvantageous, was abolished by statute 22 Geo. III. c. 25, which declares, “That all contracts and agreements which shall be entered into, and all bills, notes, and other securities which shall be given, by any person or persons, for ransom of any ship or vessel, merchandise or goods, captured by the subjects of any state at war with his majesty, or by any person committing hostilities against his majesty’s subjects, shall be absolutely void in law, and of no effect whatever.” Any person entering into such a contract is subjected to a penalty of L.500.

The principles already laid down apply equally to all injuries done to the ship, or to extraordinary expenses incurred on her account, for the common safety. Thus, if damage be voluntarily done to a ship, by cutting her sides or deck to facilitate a necessary jettison, or by running her on shore to avoid an enemy or the danger of a storm; or if the captain, compelled by necessity, cut away and abandon his masts, or any other part of the rigging or furniture, to lighten the ship in the moment of distress; the loss and expenses occasioned by these sacrifices must be made good by a general average.

But injuries to the ship, not voluntarily incurred for her safety and that of the cargo, are not compensated by general average. Whatever happens in the ordinary course of wear and tear, or by a peril of the sea, as the loss of masts, sails, &c. in a storm, is particular average, and falls on the owners only. The ship, to borrow the admirable illustration given in the civil law, is like the tool or instrument[7:4:252] of a workman in his trade. If in doing his work he break his hammer, his anvil, or any other instrument, he can claim no satisfaction for this from his employer. “Si conservatis mercibus deterior facta sit navis, aut si quid exarmaverit, nulla facienda est collatio: quia dissimilis earum rerum causa sit, quae navis gratia parentur, et earum pro quibus mercedem aliquis acceperit. Nam etsi faber incudem aut malleum fregerit, non imputaretur ei qui locaverit opus: sed si voluntate vectorum vel propter aliquem metum id detrimentum factum sit, hoc ipsum sarciri oportet.” (Dig. lib. xiv. tit. 2.)

Much doubt has been entertained whether the expenses incurred by a ship in an intermediate, port, in which she has taken refuge, should be general average or fall only on the ship. But on principle, at least, it seems pretty obvious, that if the retreat of the ship to the intermediate port be made in order to obviate the danger of foundering, or some other great and imminent calamity, the expenses incurred in entering it, and during the time she is obliged by stress of weather or adverse winds to continue in it, should belong to general average. But if the retreat of the ship to port be made in order to repair any injury occasioned by the unskilfulness of the master, or in consequence of any defect in her outfit, such, for example, as deficiencies of water, provisions, sails, &c., with which she ought to have been sufficiently supplied before setting out, the expenses should fall wholly on the owners.

When a ship, supposed to be sea-worthy, is forced to take refuge in an intermediate port because of a loss occasioned by a peril of the sea, as the springing of a mast, &c., then, as the accident is not ascribable to any fault of the master or owners, and the retreat to port is indispensable for the safety of the ship and cargo, it would seem that any extraordinary expense incurred in navigating the ship into port ought to be made good by general average.

Supposing, however, that it could be shown that the ship was not at the outset sea-worthy, or in a condition to withstand the ordinary perils of the sea; that the mast, for example, which has sprung, had been previously damaged; or supposing that the mischief had been occasioned by the incapacity of the master; the whole blame would, in such a case, be ascribable to the owners, who, besides defraying every expense, should be made liable in damages to the freighters for the delay that would necessarily take place in completing the voyage, and for whatever injury might be done to the cargo.

These, however, are merely the conclusions to which, as it appears to us, those should come who look only to principle. The law with respect to most of the points now stated differs in different countries, and has differed in the same country at different periods. “A doubt,” says Lord Tenterden, “was formerly entertained as to the expenses of a ship in a port in which she had taken refuge to repair the damage occasioned by a tempest; but this has been removed by late decisions,—and it has been held that the wages and provisions of the crew during such a period must fall upon the ship alone. But if a ship should necessarily go into an intermediate port for the purpose of repairing such a damage as is in itself a proper object of general contribution, possibly the wages, &c. during the period of such detention, may also be held to be general average, on the ground that the accessory should follow the nature of its principal.” (Law of Shipping, part iii. chap. 8.)

I erhaps the reader who reflects on the vagueness of this passage will be disposed to concur with Lord Tenterden’s remark in another part of the same chapter, “That the determinations of the English courts of justice furnish less of authority on this subject (average) than on any other branch of maritime law.”

Within these few years it was decided, in the case of a British ship that had been obliged to put into port in con- ' sequence of an injury resulting from her accidentally coming into collision with another ship, that so much of the repair she then underwent as was absolutely necessary to enable her to perform her voyage, should be general average. (Plummer v. Wildman, 3 Μ. and S. 482.) The judges, however, spoke rather doubtfully on the subject; and it is not very easy to discover any good grounds for the judgment. According to the usual terms of the charter-party, the owners bind themselves,“that the ship shall be tight, staunch, and strong, and furnished with all necessaries for the intended voyage ;” and also, “that during the course of the voyage the ship shall be hept tight and staunch, and furnished with sufficient men and other necessaries, to the best of the owners’ endeavours.” And these conditions are no more than what the law requires of every owner who takes goods on board without a charter-party. Seeing, therefore, that the owners are bound to carry the cargo to its destination, they must consequently be bound, in the event of the ship sustaining any accidental or natural damage during the course of the voyage, either to repair that damage at their own expense, or to provide another ship to forward the goods. In point of fact, too, such subsidiary ships have frequently been provided; but we have yet to learn that it was ever pretended that their hire was to be defrayed by a general average, though, according to the principle of the decision in the case alluded to, this should be the case.

Practically, it is now the custom in this country, when a vessel puts into port on account of damage belonging to particular average, which requires to be repaired before she can safely proceed on her voyage, to allow as general average the expense of entering the port and unloading; to charge the owners of the goods or their underwriters with the warehouse rent and expenses attending the cargo; and to throw the expense of reloading and departure on the freight.

According to the law of England, when a ship is injured by coming into collision with or running foul of another, if the misfortune has been accidental, and no blame can be ascribed to either party, the owners of the damaged ship have to bear the loss; but when blame can be fairly imputed to one of the parties, it of course falls upon him to make good the loss done to the other. The regulations in the Code de Commerce (art. 407) harmonize in this respect with the law of England. According to the laws of Oleron and Wisby, however, and the famous French ordinance of 1681, the damage occasioned by an accidental collision is to be defrayed equally by both parties.

The laws of different states, and the opinions of the ablest jurists, vary as to whether the loss incurred in defending a ship against an enemy or pirate, and in the treatment of the wounded officers and men, should be made good by general average. The ordinance of the Hanse Towns (art. 35), the ordinance of 1681 (liv. iii∙ tit. 7, art. 6), and the Code de Commerce (art. 400, § 6), explicitly declare that the charges on account of medicine and attendance upon the officers and seamen wounded in defending the ship shall be general average. A regulation of this sort seems to be founded on reason. But other codes are silent on the subject; and though the contrary opinion had been advanced by Mr Serjeant Marshall, and by Mr Justice Park in the earlier editions of his work, the Court of Common Pleas has unanimously decided, that in England neither the expense of repairing a ship injured by successfully 7 resisting and beating off an enemy, nor the cost of curing the wounds incurred by the sailors in the action, nor the ammunition expended [7:4:253]in it, was the subject of general average. (Taylor v. Curtis, 2 Marsh. 309.)

Perhaps the most that can be said in favour of this decision is, that it is conformable to the opinion of Emerigon (TVßité des Assurances, tome i. p. 627), who contends that an attack of pirates or enemies is to be considered in the same point of view as any ordinary peril of the sea. But though Emerigon supports his opinion with great learning, the principle on which it is founded appears to be altogether unsound. Losses voluntarily incurred, in cutting down masts, rigging, &c. in order to avert a peril of the sea, are, as every one allows, peculiarly proper subjects for general average; but an attack by an enemy or pirate is a danger that is, in most cases, of the most imminent kind, and cannot be resisted without voluntary sacrifices, involving the risk of death on the part of the crew; and if such sacrifices be made, and the danger be in consequence averted, it seems quite clear, even on Emerigon’s own ground, that they cannot, either consistently or justly, be made particular average.

The ordinance of the Hanse Towns (art. 35) declares that such seamen as are maimed or disabled in defending a ship against an enemy or pirate, shall be maintained at the public expense during the remainder of their lives.

The ship, freight, and every thing remaining on board that can be deemed a part of the cargo, must contribute to general average. Money, plate, and jewels, though their weight could not have increased the danger of the ship, are not exempted; for the advantage derived from the sacrifice was not in proportion to the weight, but to the value of the things saved. But the persons on board, their wearing apparel, and the jewels or ornaments belonging to these persons, do not contribute. Neither are the seamen’s wages subjected to this charge; if they were, they might sometimes, perhaps, be tempted to resist a sacrifice necessary for the general safety.

Different states have adopted different modes of valuing the articles which are to contribute to an average. In this respect the law of England has varied considerably at different periods. At present, however, the ship is valued at the price she was worth at the port of delivery; and most foreign states follow the same rule. The value or the freight is the clear sum which the ship has earned, after seamen’s wages, pilotage, and all such small charges as come under the name of petty averages, are deducted. It was formerly the custom in England to value the goods Jost or thrown overboard at prime cost, if the loss happened before half the voyage was performed; but if after, then at the price they would have borne at the port of delivery. But this distinction has been exploded, and it is now the settled practice with us to estimate the goods lost, as well as those saved, at the price they would have fetched at the port of delivery on the ship’s arrival there, freight, duties, and other charges, being deducted. Each person s share of the loss bears, of course, the same proportion to the value of his property that the whole loss bears to the aggregate value of the ship, freight, and cargo. The necessity of taking the goods lost into this account is obvious, for otherwise their owners would be the only persons who would not be losers.

when the loss of masts, cables, and other furniture of the ship is the subject of general average, it is usual, as the new articles will in all ordinary cases be of greater value than those that have been lost, to deduct one third >om the value of the former, leaving two thirds only to be contributed.

But the mode of adjusting an average loss will be better understood by the following example, extracted from

°™ Tenterden’s work On the Law of Shipping.

1he reader will suppose that it became necessary in the Downs to cut the cable of a ship destined for Hull; that the ship afterwards struck upon the Goodwin, which compelled the master to cut away his mast, and cast overboard part of the cargo, in which operation another part was injured; and that the ship, having cleared from the sands, was forced to take refuge in Ramsgate harbour, to avoid the further effects of the storm.

“ Amount of Losses.

“Goods of A cast overboard L.500

“Damage of the goods of B by the jettison 200

α Freight of the goods cast overboard 100

“Price of a new cable, anchor, and mast L.300

“Deduct one-third 100

200

“Expense of bringing the ship off the sands 50

“Pilotage and port dues going into the harbour and out, and commission to the agent who made the disbursements 100

“Expenses there 25

“Adjusting this average 4

“Postage 1

“Total of losses L.1180

“ Value of Articles to contribute.

“Goods of A cast overboard L.500

“Sound value of the goods of B, deducting freight and charges 1000

“Goods of C ...... 500

» OfD 2000

“Of E 5000

“Value of the ship 2000

“Clear freight, deducting wages, victuals, &c 800

“Total of contributory value L.11800

“Then L.11,800: L.1180:: L.100: L.10.

“That is, each person will lose 10 per cent, upon the value of his interest in the cargo, ship, or freight.

Therefore A loses L.50

B 100

C 50

D 200

E 500

The owners 280

“Total L.1180, which is the exact amount of the losses.

“Upon this calculation the owners are to lose L.280; but they are to receive from the contribution L.380 to make good their disbursements, and L.100 more for the freight of the goods thrown overboard, or L.480 minus L.280

“They therefore are actually to receive 200

“A is to contribute L.50, but has lost L.500; there fore A is to receive 450

“B is to contribute L.100, but has lost L.200; there fore B is to receive 100

“Total to be actually received. L.750

“On the other hand C, D, and E have lost ] ŋ ⅞jθθ nothing; and are to pay as before, viz )

“Total to be actually paid L.75O

which is exactly equal to the total to be actually received, and must be paid by and to each person in valuable proportion.

“In the above estimate of losses I have included the freight of the goods thrown overboard, which appears to be proper, as the freight of these goods is to be paid, and [7:4:254]their supposed value is taken, elcar of freight as well as other charges.” (Law of Shipping, part iii. chap. 8.)

The subject of average does not necessarily make a part of the law of insurance; but as insurers, from the terms of most policies, are liable to indemnify the insured against those contributions which are denominated general average, its consideration very frequently occurs in questions as to partial losses. But in order to confine assurances to that which ought to be their only object, namely, an indemnity against real and important losses arising from the perils of the sea, as well as to obviate disputes respecting losses arising from the perishable quality of the goods insured, and all trivial subjects of difference and litigation, it seems to be the general law of all maritime states, and is expressly, indeed, provided by the famous ordinance of 1681 1 (see liv. iii. tit. 6, § 47, and the elaborate commentary of Μ. Valin), that the insurer shall not be liable to any claim on account of average unless it exceed one per cent. An article (No. 408) to the same effect is inserted in the Code de Commerce ; and, by stipulation, this limitation is frequently extended in French policies to three or four per cent. A similar practice, and for a similar object, was adopted in this country in 1749. It is now constantly stipulated in all policies, that upon certain enumerated articles of a quality peculiarly perishable, the insurer shall not be liable for any partial loss whatever; that upon certain others, liable to partial injuries, but less difficult to be preserved at sea, he shall only be liable for partial losses above five per cent.; and that as to all other goods, and also the ship and freight, he shall only be liable for partial losses above three per cent. This stipulation is made by a memorandum inserted at the bottom of all policies done at Lloyd’s, of the following tenor: “N. B. Corn, fish, salt, fruit, flour, and seeds, are warranted free from average, unless general, or the ship be stranded; sugar, tobacco, hemp, flax, hides, and skins, are warranted free from average under five pounds per cent.; and all other goods free from average under three pounds per cent., unless general, or the ship be stranded.”

The form of this memorandum was universally used, as well by the Royal Exchange and London Assurance Companies as by private underwriters, till 1754, when it was decided that a ship having run aground was a stranded ship within the meaning of the memorandum, and that although she got off again the underwriters were liable to an average or partial loss upon damaged corn. This decision induced the two companies to strike the words, “or the ship be stranded! out of the memorandum, so that now they consider themselves liable to no losses which can happen to such commodities, except general averages and total losses. The old form is still retained by the private underwriters.

For further information with respect to this important subject the reader is referred to the famous work of Μ. Valin, Commentaire sur l’ Ordonnance de 1681, tome ii. p. 147-198, ed. 1760; to Emerigon, Traite des Assurances, tome i. p. 598-674; Park on Insurance, chap. vii.; Marshall On Insurance, book i. chap. xii. sect. 7; Stevens’s Essay on Average ; Benecke On the Principles of Indemnity in Marine Insurance ; Lord Tenterden’s excellent work on the Law of Shipping, part iii. chap, viii. &c. (c. c.)