Every loss is a partial loss which is less than a total loss, either actual or constructive.

The phrase "particular average" is frequently used, as the equivalent of "partial loss."

An essential principle of all insurance is, that the insured shall be indemnified, and only indemnified, for any loss which he may sustain under the policy. If a new vessel is badly injured in rigging, sails, or hull, and is afterwards repaired as thoroughly as may be at the expense of the insurers, the owner certainly gains nothing; but loses a little, for a repaired ship can hardly be made quite equal to a new one. But if the spars, the sails, the rigging, or the sheathing, are nearly worn out, and then repairs are made necessary by an injury within the policy, these repairs cannot be made with equally old materials, for they must always be new and of good quality. By such repairs, it is obvious that the owner gains the whole difference in value between worn-out materials and new materials. It follows, therefore, that the condition of the old materials which are replaced by new, must determine whether and how much the owner gains or loses in any case. For the purpose of indemnifying the owner, without a minute inquiry into the particular circumstances of each case, American usage and law have now settled on a rule, which, being applied to all cases, on the whole works justice, although in any one case it may be inaccurate. This rule is commonly expressed as that of "one-third off, new for old." It means, that the insurers shall pay for any partial loss on the ship, two-thirds of the whole expense of making the repairs thoroughly and with new materials; * and of course the owner pays or loses the remaining third. (c) 1

(c) See cases infra.

1 As to whether the customary deduction of "one-third new for old" is applicable to iron vessels, see Lidgett v. Secretan, L. R. 6 C. P. 616. Pitman v. Universal Ins. Co. 9 Q. B. D. 192, declared that, if in case of a partial loss the owner sells during the continuance of the risk instead of repairing, where the cost of repairing would greatly exceed the value of the ship when repaired, the amount recoverable is the difference between the value of the ship at the port of departure and the amount received at the sale, and not two-thirds of the estimated cost of repairs.

Whether a loss shall be adjusted under this rule, where by such adjustment and the consequent deduction it will fall below fifty per cent., and thereby not be convertible into constructive total loss by abandonment, is not certain. We think the weight of authority and of reason require, either that this third should not be deducted from the amount of repairs, or if deducted from the repairs that it should be deducted from the value of the ship, which would be the same thing in effect. Then, if the loss were more than fifty per cent. before any deduction, there might be an abandonment. (d) Insurers of course contend against this view, and now many policies contain a clause to the effect, that the insured shall not abandon for amount of damage merely, unless when adjusted as a partial loss it exceeds half the amount insured. Such a clause settles the question, and the effect of it is, that there can be no abandonment making a constructive total loss for damage merely, unless this damage amounts to more than three-fourths of the amount insured. (e)