ceipt of the charters referred to in the foregoing letter, Balfour, Guthrie & Co. addressed the following letter to Starr & Co.:

"Dear Sirs: We now have pleasure in handing you copy of charter party effected through our Liverpool friends on your account per Avanta Savoia, and also per Galgate, all the terms of which we trust you will find in order. Kindly acknowledge and oblige.

-To which, on the same day, Starr & Co. replied as follows:

"Yours of the 22d inst. to hand, inclosing charter parties of the Galgate and the Avanta Savoia, which are in order, except that we shall require the word 'charterers'' before 'surveyor' in the Galgate charter, which has been struck out, to stand as printed. Will you oblige us with any information you possess as regards the means and standing of the owners of these two ships? We presume your Liverpool firm are satisfied that the signatures of the owners of these ships are correct and under proper authority. *

Here is a direct statement that Starr & Co. required the correction of the charter so as to read "charterers' surveyor." This letter shows that Starr & Co. did not repudiate the clause "competent surveyor" until the price of freight for the charter of the ship had declined, as claimed by appellee. Mr. Bruce testified upon this point as follows:

"The freights in this market remained strong for some time after the 4th day of June. The freight market remained strong, both for ships on the spot and ships to arrive. Q. About how long did that continue? A. That continued for a few months. Q. What was it that upset the freight market here, if anything? ** * A. The freight market was practically demoralized or upset by the default of Dresbach and Lowenthal, Livingstone & Co. to load their ships. * * * Q. After that time there was a drop in freights? A. A complete and steady decline. Q. Up to the time of the arrival of the Galgate (January 30, 1892)? A. Yes, sir."

On the 25th of June, 1891, three days after the letter of Starr & Co. had been received, the following letter was written by Balfour, Guthrie & Co. to Starr & Co.:

"We duly received your favor of the 22d inst., and we have since explained to you verbally the reason our Liverpool friends were unable to get the words 'charterers' surveyor' left in the charter party for Galgate. You may rest satisfied, however, that we will see that there is no trouble in this connection. You may be sure our Liverpool friends have satisfied themselves that the signatures under these charter parties are correct, and under proper authority."

The interviews referred to in this letter occurred between Mr. Williamson, a clerk for Balfour, Guthrie & Co., and Mr. Bannister. Mr. Williamson testifies that he endeavored to convince Bannister that Starr & Co. ought to accept the charter of the Galgate with the words "competent surveyor," because they had accepted other charters with a like provision, and that Bannister did not at that time repudiate the charter. Mr. Bannister testifies that he informed Mr. Williamson that the word "charterers' " with reference to the surveyor must be inserted if they wished Starr & Co. to load that ship. Mr. Williamson testifies as follows:

"My interview was with Mr. Bannister, and I referred to the letter which we had received, and Mr. Bannister expressed disappointment that our Liverpool firm had allowed the word 'charterers'' to be deleted, and 'competent' inserted. I told him that our Liverpool firm had tried to exclude the word 'competent,' but we had been advised by them that they had been unable to do so. He said that he should want his own surveyor to be employed, and I said he

could not expect our firm to carry out his wishes in that respect if he chartered vessels through other firms here, accepting the word 'competent'."

Mr. Bannister's version of this interview is given as follows: "Mr. Williamson came down to our office, and saw me, and tried to get me to waive the objection I had raised, and to allow 'competent surveyor' to stand in the charter. I told him I was very sorry I could not do this, although I had no doubt, as he said, his firm would see there was no trouble in loading the ship for us; but I said my bid to Mr. Bruce was based on the San Francisco shippers' form of charter and especially I named to Mr. Bruce when I bid him on the ship that 'charterers' surveyor' was to be in the charter party, and, if he wanted us to load the ship, he had to complete the charter in the terms of my bid. He argued with me a little, and tried to get me to waive that, but I insisted on it, and told him we should not change. He then agreed to get the word 'charterers'' inserted in the charter party, and to cable that night to his Liverpool firm to have it done."

Other interviews were had. It is unnecessary to refer to them. Mr. Williamson wrote the letter of June 25th, and says it was intended to supplement his understanding with Bannister. The letter speaks for itself. It contains a promise on the part of Balfour, Guthrie & Co. that they will see that there is no trouble about the surveyor. Mr. Bruce, in his testimony, states that Balfour, Guthrie & Co. "sent no cables to Liverpool regarding the ship Galgate, after the 5th of June, until the 30th of January, 1892," and that "none were received from them." On the 1st day of February, 1892, the following letter was sent to Starr & Co.:

"Galgate.

"Messrs. Starr & Co., San Francisco-Dear Sirs: We beg to advise you of the safe arrival of the above vessel in this port on the 30th ult., under charter to your good selves outwards. We are, dear sirs,

"Yours, faithfully,

Balfour, Guthrie & Co.,

"Alex. B. Williamson, Agents."

-To which Starr & Co. replied, on February 2d, as follows:

"Galgate.

"Messrs Balfour, Guthrie & Co., San Francisco-Dear Sirs: We have your favor of the 1st inst. regarding above vessel, which, however, is not under charter to us.

"Yours, truly,

A. Bannister, Vice President and Manager."

What occurred after this has no special bearing on the questions involved in this case. It is deemed proper to state that Balfour, Guthrie & Co. immediately cabled to Liverpool, and tried to get the provision in the charter changed, and that the owners of the ship declined to make any alteration in the clause "competent surveyor." After a careful investigation of all the evidence, our conclusions are: (1) That Starr & Co. never authorized the signing of the charter party, except upon the condition that charterers' surveyor was provided for therein; (2) that Starr & Co. never confirmed or ratified the signing of the charter with the clause "competent surveyor" at any time after full knowledge of that fact had been communicated; and (3) that Starr & Co. never at any time waived the condition as to charterers' surveyor. The libel should have been dismissed.

The judgment of the district court is reversed, with costs in favor of appellant.

THE LONDON ASSURANCE v. COMPANHIA DE MOAGENS DO BARREIRO.

(Circuit Court of Appeals, Third Circuit. May 14, 1895.)

No. 6.

1. MARINE INSURANCE-PARTICULAR AVERAGE CLAUSE-EFFECT OF COLLISION. An exception in the words, "Free of particular average unless the vessel be sunk, burned, stranded, or in collision," ceases to operate as soon as a collision has occurred; and the insurer is liable for subsequent loss, whether the same resulted from the collision or not. 56 Fed. 44, affirmed. 2. SAME "COLLISION" DEFINED.

Where a policy contained the words, "Free of particular average unless the vessel be sunk, burned, stranded, or in collision," held, that there was a "collision," within the meaning thereof, where the vessel, after being completely loaded and casting off her moorings, was made fast again to the wharf, because of a difficulty with her engines, and was there run into by a scow, in tow of a tug boat, which made a substantial break in her bulwarks.

8. SAME-DAMAGE TO CARGO-BREAKING UP OF VOYAGE-ADJUSTMENT OF Loss. A vessel bound from New York to Lisbon, with a cargo of wheat, was compelled to put into Boston harbor, because of a protracted storm, where her cargo was found to be so damaged by water that it could not be restored to a merchantable condition, and it was accordingly sold at that place. In an action against the insurers of the cargo, it was shown that, owing to peculiar conditions in Portugal, damaged wheat was unsalable there. Held, that the sale at Boston must be regarded as made from necessity for the benefit of all concerned, and that the insurer was liable as upon a salvage loss for the difference between the valuation in the policy and the sum realized.

Appeal from the District Court of the United States for the Eastern District of Pennsylvania.

This was a libel by the Companhia De Moagens Do Barreiro against the London Assurance, a corporation, to recover upon a policy of insurance for damage to a cargo of wheat shipped on board the steamer Liscard. The cause was tried in the district court, together with another libel by the same company against the Manheim Insurance Company, upon a similar policy. Decrees were entered in favor of

the libelant in each case. 56 Fed. 44. An appeal was taken by the London Assurance, a stipulation having been filed that the other case should abide the event of this one.

W. W. MacFarland and Wm. Parkin, for appellant.
John F. Lewis, for appellee.

Before ACHESON and DALLAS, Circuit Judges, and BUFFINGTON, District Judge.

ACHESON, Circuit Judge. This is an appeal by the London Assurance, a corporation of the kingdom of Great Britain, the respondent in the court below, from a decree of the district court, sitting in admiralty, in a suit on a policy of marine insurance. The material facts as disclosed by the record are these: On the 10th of December, 1890, the London Assurance insured for the libelants

$20,000 on 33,000 bushels of wheat, the property of the libelants, valued at $40,887, shipped on board of the steamship Liscard, in the port of New York, for a voyage "at and from New York to Lisbon, Portugal." A policy in the usual form and a short certificate, taken together, constituted the contract of insurance. The policy, by its terms, covers all losses and damages by the perils of the sea, but the certificate contains the memorandum: "Free of particular average unless the vessel be sunk, burned, stranded, or in collision." The policy provides that the risk shall begin "upon the said goods and merchandises from and immediately following the loading thereof on board of the said vessel," and shall continue until the same shall be safely landed at the port of destination. The libelants shipped upon the Liscard, for the same voyage, other lots of wheat, which were insured in other companies, upon the like terms and conditions. The loading of the wheat here in question and of the entire cargo on board the Liscard was completed, and her bills of lading were signed and delivered to the libelants, by December 11th. On the next day, December 12th, the ship was unmoored for the purpose of starting on her voyage; but, on account of some trifling derangement of the engines, they would not work, and therefore the ship was made fast again to the wharf. After she was remoored, on the evening of the same day, shortly after 8 o'clock, the Liscard was run into by a scow or lighter in tow of the tug George Carnie. By this collision a break was made in the bulwark or inclosed iron side of the Liscard above her deck. The break was a continuous one in two of the iron plates of the bulwark, was eleven feet long, and for most of its length was open a width of from onehalf inch to one and a half inches. The bulwark was an important part of the vessel, essential in her design and construction, and intended to keep the water off her deck and hatches. A claim upon

the tug and scow for damages sustained by the collision was made by the master of the Liscard, and the sum of $250 was paid in settlement. After the collision, and before starting on her voyage, the vessel was surveyed and pronounced seaworthy. The Liscard finally left New York on December 15th. In the course of her voyage, the vessel encountered very bad weather,-"gales and hurricanes,"which lasted eight days, and by the excessive straining of the ship opened the seams of the deck, admitting water to the cargo; and in that way, and also by water going down the hatchways, from which the canvas coverings were swept by the storm, the wheat was injured. On December 24th the vessel put into Boston Bay in distress. At Boston the cargo was discharged into lighters for examination, and was found to be badly damaged by sea water, and unfit for reshipment in its then condition. A survey made January 16, 1891, recommended that the entire cargo be sold for the benefit of all concerned. Later surveys reported the wheat to be in an improved condition, in consequence of the judicious treatment to which it had been subjected. But by the last survey, which was made on February 28, 1891, and from other evidence, it appears that none of the wheat had been restored to a first-rate condition. Even

the part reported by that survey as in "fair merchantable condition" was "slightly damp," and had a "slight smell." About one-half of the wheat remained in a seriously damaged state, a great part of it beyond remedy, and some was practically worthless. On February 20th all the underwriters on the cargo (including the London Assurance) agreed in writing that the payment of $3,600 freight on the damaged cargo, "and the acceptance and sale of said cargo" by the owners, should be "without prejudice to any of the rights or claims the shippers or owners of the cargo may have against the insurers of said cargo, and 'shall not be considered a waiver or an acceptance of an abandonment,' and shall be without prejudice to any defense that the insurers of the cargo may have under their contract of insurance." On February 27th the agents of the ship entered into an agreement with the agents of the owners of the cargo to terminate the voyage, and surrender the cargo to the owners, in consideration of the payment by them of $3,600, as full freight, and this agreement was carried out. Shortly thereafter the owners of the cargo sold the greater part of the wheat at Boston, and a small portion, which could not be disposed of there, was taken to New York, and sold.

The first question with which we have to deal arises upon the memorandum clause: "Free of particular average unless the vessel be sunk, burned, stranded, or in collision." This clause is of ancient origin, but originally was confined to the stranding of the ship. We learn from the elementary works on marine insurance that it was introduced into English policies, with respect to stranding, as early as the year 1749. Afterwards it was extended so as to cover other casualties to the ship besides stranding. The clause, "Free from average unless general, or the ship be stranded," was first judicially considered in 1754, curiously enough, in an action against the present appellant (Cantillon v. London Assurance Co., cited in 3 Burrows, 1553), where it was held that these words amounted to a condition, and that, upon the ship's being stranded, the insured was let in to claim his whole partial loss. The London Assurance Company then struck the clause out of its policies, but has since reinserted it. Marsh. Ins. 140; 1 Pars. Mar. Ins. 629, note 3. The meaning and effect of the clause were finally settled in 1797, in the leading case of Burnett v. Kensington, 7 Durn. & E. (7 Term. R.) 210, wher the whole court of king's bench, after the fullest argument and upon great consideration, determined that a stranding destroys the exception in the memorandum, and lets in the general words of the policy; and that, therefore, where the ship has been stranded, the insurer is liable for any partial loss sustained by any of the articles mentioned in the memorandum, although such loss did not arise from the stranding, but solely from another cause. Marsh. Ins. 151. This has been the accepted doctrine ever since that adjudication. All the text-book writers agree that this is the well-settled construction of the clause, and that if the ship be stranded while the memorandum articles are on board, and during the continuance of the risk, then the underwriter is liable to pay all particular average losses, although they may have taken place at a different time,