GENERAL AVERAGE.

811. Average, commercially considered, is a contribution to a loss suffered by damage done in sea-perils for the general welfare of all parties concerned. It is of two kinds, General Average and Particular Average.

812. General Average is the apportioned contribution made by all parties concerned in a ship, cargo, and freight, towards a loss voluntarily incurred for the common safety and general benefit.

It is called general average because the value of the amount of the loss or expense is assessed upon the value of all interests involved and benefited.

813. Particular Average is the contribution for damage or partial loss happening to the ship, cargo, or freight in consequence of some unavoidable accident, and is borne by the persons whose property is damaged, or by their insurers.

814. Jettison is the throwing overboard of cargo to lighten ship in stress of weather, or to prevent foundering.

815. Salvage is the compensation allowed to persons who voluntarily assist in saving a vessel, her cargo, or passengers in case of wreck or other imminent danger to life or property.

816. The Insurers, or underwriters, contribute to the general average such a part of the loss to the owners as the insured value is to the market value of the property insured.

Thus, if the cargo of a vessel is insured for $6000 and its market value is $8000, the underwriters are liable for § of the general average.

817. Before a general average can be declared, it must be shown that there was imminent common danger, that the sacrifice was voluntary and necessary, and that the act was prudent and successful.

818. An Average Adjuster is a person who is versed in general average laws, and who apportions the losses and expenses of a general average.

In determining a general average, extracts from the log (log book) of the vessel, the testimony of her officers, a detailed statement of all expenses incurred, with the vouchers of the same, and all other papers relevant to the case are placed in the hands of the adjuster. Sometimes it is a very difficult matter for the adjuster to determine whether certain losses should be made good by a general average or should be charged upon some particular interest (a particular average), and the decision has often resulted in a prolonged litigation.

819. The underlying principle of general average is that a loss incurred for the advantage of all concerned should be borne by each of them in the proportion that his invested interest bears to the total invested interests of all.

820. A General Average loss may include the following:

1. Jettison; damage to cargo by water going down the hatches during jettison; damage by chafing or breaking after jettison; freight on cargo jettisoned.

2. Sacrifices of portions of a vessel, as the cutting away of masts, rigging, etc. One-third of the cost of repairing a vessel is a special charge on the ship, the new work being considered better than the old, and hence, increasing the value of the vessel. The remaining two-thirds only of such cost is included in the general average. No deduction is made for anchors.

3. Expense of floating a stranded vessel, including salvage.

4. Expense of entering a port of refuge, whether for urgent repairs or to avert a common danger.

5. Expense of discharging a cargo to make repairs, warehouse rent, reloading the cargo, etc.

6. Wages and provisions of the crew from the time the vessel deviates from its course until it resumes its voyage.

821. The Contributary Interests and Values are as follows: 1. The ship contributes on its full value before the loss.

2. The cargo contributes on its net market value at the port of destination before the loss.

for the

3. The freight contributes on its full amount, less wages, etc., of the crew. In California, New York, Virginia, and

some other states, is deducted.

822. To apportion a loss by general average.

1. A vessel valued at $30000, with a cargo worth $50000 encountered such a storm that $20000 worth of goods were jettisoned;

and it was found necessary to cut away masts and rigging. The vessel was rescued by a steamer and taken to port for repairs. The salvage amounted to $12000; repairs to the vessel, $3000; wages and provisions for crew from point of deviation, $500; and other expenses $800. The total freight was $5250, of which $2100 was the freight on the goods thrown overboard. Apportion the settlement.

EXPLANATION OF ADJUSTER'S SETTLEMENT.-The adjuster finds the total loss subject to general average, which in this example is $37400. He then finds the total contributary interests, which is found to be $83500. Then knowing the value of each contributary interest, it is very easy to find by simple proportion or by fractional parts the contribution of each contributary interest. The adjuster settles with the owners of the cargo by receiving from them their contribution minus the goods thrown overboard, or $22395.21-$20000 $2395.21. He settles with the owners of the vessel by receiving from them their contribution plus of the cost of the repairs, or $13437.13 +$1000 $14437.13. He settles with the freight company (the charterers of the vessel) by paying them the freight on the jettison minus their contribution, or $2100 - $1567.66 = $532.34. He pays the full amount of repairs, $3000; salvage, $12000; wages, etc., of crew, $500; and other expenses, $800. Thus, it is seen that the adjuster's settlement account is in balance.

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The wages, etc., of the crew paid by the adjuster is their general average portion. He has nothing to do with their regular wages. The adjuster has only to do with apportioning the losses and expenses of the general aver

age. The charterers of the vessel pay their crew their regular wages, receive their freight charges from the owners of the saved portion of the cargo, pay the owners of the vessel for the charter of it, etc., entirely aside from the settlement of the average adjuster.

2. The general average charges occasioned by a storm were found to be $5432.57, and the contributary interests were $97635. What was the rate per cent. of contribution? What was the loss to Mr. Sinker, whose goods were valued at $17850?

3. A ship in her passage from Liverpool to Boston with a cargo valued at $75000, during a storm threw overboard $15000 worth of goods, and cut away masts and rigging. The vessel entered the port of Halifax for repairs. The cost of replacing masts and rigging cut away was $3715. The loss of freight on cargo jettisoned was $1200. The wages and provisions of the crew from the time of deviation from course until ready for sea were $475; other expenses, $725. The total freight (including freight on cargo jettisoned) was $7410. The value of the ship before the loss was $27000. Apportion the loss among the different contributary interests, and state how settlement should be made.

4. What was the rate per cent. of loss to the contributary interests in problem No. 3?

5. A steamer having on board $35000 worth of goods shipped by A, $28745 worth shipped by B, and $30000 worth shipped by C, was obliged to throw overboard during a severe gale $25000 worth of goods, of which $15000 worth belonged to A, and the remainder to B. The repairs of damages purposely done to the vessel to preserve it cost $2400, and the maintenance of the crew during delay was $632; other expenses, $968. The value of the steamer was $60000. The total freight was $8562, of which $2150 was the freight on the jettison. Apportion the settlement.

6. A ship being in distress, threw overboard part of the cargo, cut away the masts, and finally bore away to a port of refuge for repairs in order to complete the voyage. The cost of replacing masts and rigging cut away was $5700, and an anchor cost $225. The value of the cargo was $85000, of which $5000 worth was jettisoned. The total expected freight earnings were $5718, of which $375 was the freight on the goods jettisoned. The expenses of entering port of refuge, unloading, storing, and reloading the cargo were $1500 wages of crew and provisions during the delay, $1000. The adjuster's fee was $150. The value of the vessel was $45,000. Apportion the settlement.

PARTNERSHIP.

823. Partnership is the result of a contract, whereby two or more persons agree to combine their capital, skill, or labor for the purpose of a common undertaking and the acquisition of a common profit.

Such an association is usually called a Firm, House, or Company.

824. The Partners are the persons associated in the business. They may be general, or active, special, silent or dormant, and nominal partners.

A general, or active, partner is one who takes an active part in the management of the business and who is responsible for the debts of the company to the amount of his entire property.

A special partner is one who takes no active part in the business and whose liability is limited only to the amount of his investment, provided that this amount is duly advertised and legally recorded.

A silent, or dormant, partner is one whose name does not appear in the firm, but who nevertheless shares in the profits and thereby renders himself (if discovered) liable for losses.

A nominal partner is one whose name appears to the public, but who has invested no capital in the business and receives no profits.

It is a general rule that each partner is the accredited agent of all the other members of the firm, whether they be active, nominal, or dormant, and has authority as such to bind them, either by simple contracts respecting the goods or business of the firm, or by negotiable instruments circulated in its behalf to any person dealing bona fide.

825. Articles of Copartnership is the written agreement of the partners, stating the amount of each partner's investment, the period during which the partnership is to exist, the manner in which the gains and losses are to be divided, and all other conditions which may be considered necessary or expedient.

826. The Capital is the money or other property invested in the business.