The item claimed for "legal expenses" is for the expense of defending the salvage suit against the ship.

The claim for "repairs and attendant expenses" is: (a) For the damages to the ship's machinery by sanding, through the use of her engines and propeller during the salvage operations in getting the ship off the beach; and (b) for damages to the hull in the loosening of rivets through stranding.

On the hearing it was admitted that all the above items have been paid by the libelant on account of the stranding; and that all, except the damage to hull, would be proper subjects of a general average adjustment, but that no such adjustment has been had. The defendants contend that they are not liable for the full amount of these charges; but that (1) as the policies are valued policies and the ship therein valued at only about two-thirds her actual value, they are liable for only the same proportion, i. e. two-thirds of the losses and expenses, whether they are general or particular average; (2) that there are other policies on "disbursements" which should still further reduce their liability; and (3) that no action will lie against the insurers for any general average charges until after a general average adjustment has been had, and then only for the amounts adjusted.

The policies on "disbursements" are to the amount of about £125,000 insuring against total loss only; and there are also some other policies, termed "contingent insurance," to the amount of $121,875, against general average and contingent or collision damages; by the general average insurance it was designed to make good, as the policy states,

"The deficiency, if any, between the vessel's proportion of general average as per adjustment, and the proportion thereof due under policies on said vessel for £275,000."

This last insurance was designed to cover the uncertainty existing as respects the amount legally recoverable against the underwriters upon a general average adjustment when the policies, as in this case, materially undervalue the ship. If the defendants are liable in full in this action, those policies will not become operative; they have no bearing therefore upon the decision of the questions here raised and will not be further referred to.

1. The policies upon "disbursements" were in addition to the regular policies on hull, etc., which insured the steamer up to her policy value, and they were operative from the same date though not dated the same day as the policy of the Atlantic Mutual Company, which provided that

"Other insurance upon the premises aforesaid, of date the same day as this policy, shall be deemed simultaneous herewith: and the said Atlantic Mutual Insurance Company shall not be liable for more than a ratable contribution in the proportion of the sum by them insured to the aggregate of such simultaneous insurance."

The policies of the other defendants contained no such clause. The evidence shows that policies upon "disbursements" are in very common use; that they are designed to cover a variety of interests not covered by policies in the ordinary form, including moneys which have gone into the construction of the hull and equipment and sunk

in depreciation; the value of the contracts in the performance of which the ship may be engaged; any interest in the nature of the good will or profits of her business; any peculiar interest of the owner in the vessel irrespective of her actual value; and though not designed as an insurance on hull, would have the effect of covering any uninsured value of the vessel.

"Disbursement" policies are often issued where the hull is fully cov ered by other policies; they are against total loss only, and are deemed a different interest from a policy on hull, and in case of total loss have no benefit of salvage, such as ordinary policies have. All the other policies covered partial loss as well as total loss, excluding, however, loss below 5 per cent. in the Mutual, and 3 per cent. in the other policies.

I am of the opinion that the "disbursement" policies do not come within the clause of the Atlantic Mutual's policy above quoted, and were not designed or understood by either party to do so. The whole clause as well as the special words "upon the premises aforesaid," should be construed with reference to the well-known practice of insuring against a total loss only a variety of different interests under the name of "disbursements";-an interest so different, as to have no share in salvage on total constructive loss. The subjects, the losses, and the conditions in the two classes of policies are materially different. The description of the subject insured, namely, "disbursements," it cannot be doubted, was deliberately chosen to signify a wholly different risk from that upon "hull, machinery and equip ment," and in order to distinguish the two as wholly different classes of insurance. Had the intention in the policies in suit been to require contribution from every kind of simultaneous policy that af fected in any way any interest in the ship, it seems to me that different and more explicit language should and naturally would have been used to indicate that intention; such as, "any other policy affecting the ship or any interest therein," or some equivalent and clear indi cation of that intention. It does not seem credible that either party could have intended that the policies on disbursements, which exclude any liability for partial loss, and from which the assured, therefore, could not derive any benefit in case of a partial loss, should nevertheless be intended to be classed by that clause with the partialloss policies and serve to reduce pro rata the liability upon those very policies by which the libelant had designed to insure itself against partial loss, and had paid a full premium for that indemnity. The language of the policy is, moreover, the language chosen by the insurers. In case of doubt it is not only to be construed against them, but it is further subject to the rule of construction that it must be understood in the sense in which the insurers knew that the assured understood or would naturally understand it. In law the term "premises" in an instrument is often used to refer to whatever precedes: "That part in the beginning of a deed, consisting of all that precedes the habendum, including the date, the parties' names, and descriptions, the recitals (if any), the consideration and the receipt thereof, the grant, the description of the things granted and the exceptions, if any;" or in a bill,

"A statement of the facts and circumstances of the plaintiff's case, and the names of the persons against whom he seeks a redress, as well as the mere subject-matter, or thing granted, or described."

This provision of the Atlantic Company's policy should, I think, be held to refer only to other policies that are upon substantially the same risk, i. e. upon essentially the same subject-matter, and upon the same essential terms and conditions of the policy as well. As these "disbursement" policies are so wholly different from the others as to subject-matter, terms and risk, and do not cover partial loss, I am of the opinion that they should not be deemed within the language or intention of the provision quoted. The Fern Holme (D. C.) 46 Fed. 119; Insurance Co. v. Bowring, 1 C. C. A. 583, 50 Fed. 613. Literally, the date would also exclude them.

2. The defendants' contention that an adjustment in general average is a condition precedent to any action against the insurers, and that they are only liable for the amount therein assessed against the ship, has no application to the item claimed for the damage to the hull by the loosening of rivets, since this damage is particular average only, and could not possibly form any part of a general average adjustment.

For the other items claimed a general average adjustment might be made. But even if the defendants would be entitled after such an adjustment to deduct the amounts charged against freight and cargo, this would not make a prior adjustment in general average a condition precedent to the maintenance of these actions, but would only require the proper deductions to be made upon a reference to ascertain the amount due, as was done upon a similar objection in the case of Jumel v. Insurance Co., 7 Johns. 412. There the owner of the ship was also owner of the freight and cargo; and it was held that inasmuch as upon a full recovery by the plaintiff of the expenses incurred under the sue and labor clause, he would be bound at once to repay to the defendant, as insurer on ship alone, the amount of the contributory share chargeable against himself as owner of freight and cargo on the principles of general average, the proper deductions should be ascertained and made by the referees appointed in the case. See, also, Greely v. Insurance Co., 9 Cush. 415, 419. The same course might be pursued here if the libelant owned both freight and cargo; but being the owner of the freight only, he should deduct the proportionate charge against that interest, so far as not already deducted; and the amount adjusted upon a reference, if not agreed upon. The proportion which would be chargeable to the freight is extremely small, being only about four-fifths of 1 per cent. of the amount chargeable against the ship; and for so small an interest no formal general average adjustment would be ordered, if it were not otherwise necessary; but that fraction would be otherwise computed.

Under the American law, however, the assured is under no obli gation to enforce such partial remedies as he may have by means of a general average adjustment against third persons, for the benefit of the insurers, as respects a loss or expense directly covered by the policy; but he may look to the insurers, in the first instance, for the payment of the whole damage or expense, without deduction for prospective contributions that may be obtained from other persons equitably bound to pay a part of the loss, leaving those remedies, if any, to be pursued by the underwriters by subrogation to

the rights of the assured. The defendants contend that this rule does not apply to salvage losses and expenses.

As above stated, however, the salvage expenses chargeable against the cargo have already been separated by the adjudication of this court and are not claimed in these libels; so that that proportion of these expenses has already been deducted; and the law expenses claimed were not in the cargo suit. Thus all that remains subject to the defendants' contention in this regard (the freight interest being disposed of as above), is the cost of repairing the damage to the steamer's machinery by sanding, which it is admitted would be a general average charge. This expense having never been apportioned, fairly presents the question whether or no the insurers are liable for the whole of it in the first instance, taking their remedy over by subrogation against the owners of other interests.

Considering that the house of lords has held in Aitchison v. Lohre, 4 App. Cas. 755, that salvage losses and expenses are directly within the contract of insurance against sea perils, and that the damage to the ship's machinery by sanding is a direct damage to the ship herself, the subject insured, and that this item of the libelant's claim is thus brought directly within the well-settled principle of Dickenson v. Jardine, L. R. 3 C. P. 639, to say nothing of the numerous older cases to the same effect in this country, I fail to perceive any force in the defendants' contention, or how the existence of a possible remedy for a part of this loss against other persons, can impair the libelant's right to recover its whole actual damage directly against the defendants, according to the terms and conditions of the insurance contract.

The above decisions alone, without reference to the American cases, seem to me on principle to dispose of the defendants' contention in this regard. But considering the practical importance of the principle involved, the fact that by the practice of the English underwriters this principle, in the absence of express adjudication there, is not applied to general average expenditures (Lown. Ins. 207), and the natural desire of the foreign insurers to introduce that practice here, notwithstanding the earlier adjudications in this country to the contrary, and the elaborate argument of counsel, I add some further observations upon the reasons and the authorities in support of the American law on this subject.

(a) It is conceded that for a loss or damage directly to the subject insured, although it is occasioned by a general average sacrifice, such as a jettison of goods, the insurer may be directly called on to pay the assured his whole loss, taking by subrogation whatever rights the assured may have to contribution from other interests. This was held in the above-cited case of Dickenson v. Jardine, L. R. 3 C. P. 639, a case of jettison, where it is said that the assured "Has two remedies, one for the whole value of the goods against the underwriters, and the other for a contribution in case the vessel arrives safely in port; and he may avail himself of which he pleases, though he cannot retain the proceeds of both so as to be repaid the whole of his loss twice over." Fage 643.

And this is now the settled English rule as to any general average sacrifice of goods or of the ship. See The Knight of St. Michael

[1898] Prob. 30-36; 2 Arn. Ins. (6th Ed.) 915, 916; McArthur, Ins. 134, 281; Gow, Ins. 312.

The same rule, however, was long before adjudged in the early decisions in this state, and has been ever since deemed to be the settled American law. 2 Pars. Mar. Ins. 289; 2 Phil. Ins. § 1348; Vandenheuvel v. Insurance Co., 1 Johns. 406; Maggrath v. Church, 1 Caines, 196, 215; Watson v. Insurance Co., 7 Johns. 57, 62; Faulkner v. Insurance Co., 2 McMul. 158; Potter v. Insurance Co., 4 Mason, 298, Fed. Cas. No. 11,336; Griswold v. Insurance Co., 3 Blatchf. 231, 238, 239, Fed. Cas. No. 5,840; Lord v. Insurance Co., 10 Gray, 109, 126; Thornton v. Insurance Co., 12 Me. 150.

No clearer exposition of the situation is to be found than in the early case of Maggrath v. Church, 1 Caines, 196, where some corn insured had been damaged through necessary cutting away of the vessel's masts, while she was on her beam ends; the court having held that the damage to the corn was a general average sacrifice, the question arose, said Kent, J. (page 215):

"Whether the totality of the contribution due to the plaintiffs for the loss of their corn is recoverable in the first instance from the insurer. We are of opinion that it is, because the loss arises wholly from a peril within the policy, and the plaintiff has a right to look for his indemnity from the person who has engaged to indemnify him from the peril. This argument appears conclusive. This will not lead to a multiplicity of suits any more than a different rule; for if the plaintiffs could recover only a contributory share from the defendant, they would be compelled to resort to the owner of the ship for the residue; and this suit over may as well be brought by the insurer as the plaintiffs, for one great object of insurance is, promptly to reinvest the assured with his capital, lost by the perils of the sea, and thereby enable him to continue his commercial enterprises."

The principle of all these cases is very simple, namely, that where the loss or damage claimed is a loss or damage to the subject insured, and is a loss within the policy, the insurers are directly liable therefor, by force of the contract of insurance, and that they "Cannot avail themselves by way of plea, of the fact that the assured has a distinct right against some other person. They must pay the amount claimed in the first instance, and will then be entitled to use the name of the assured and proceed against the other parties who are liable, as explained by Lord Wensleydale in Assurance Co: v. St. Louis, 7 Moore, P. C. 286, 316. Questions of this kind have arisen in many forms and always have been decided in the same way." Per Willes, J., in Dickenson v. Jardine, L. R. 3 C. P. 643, 644.

The same point was adjudged on full consideration by Shaw, C. J., in Hart v. Railroad Co., 13 Metc. (Mass.) 99. It is immaterial, therefore, as respects the liability of the insurer to the assured, whether the loss is a particular average loss, or a general average loss; or, if the latter, whether there has been any adjustment or not. If the assured is entitled to a general average adjustment and a consequent contribution from the cargo, the insurers may have the benefit of it afterwards.

But general average and insurance have no necessary connection. The rights and duties of the parties as regards a general average contribution, grew out of the law of the seas long anterior to the practice of insurance; and those rights and duties are the same, whether there is insurance on ship, freight or cargo, or no