Charles Edward Pollock Frederic Philip Maude.

Compendium of the law of merchant shipping online

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to his Majesty, or any of his subjects ; or on any goods, mer-
chandizes, or effects laden, or to be laden, on board such ships,
interest or no interest, or without further proof of interest than
the policy, or by way of gaming or wagering, or without benefit
of salvage to the assurer, and that every such assurance should
be void.

This statute applies to an insurance on profits on goods
laden on board a ship (n). Foreign ships are omitted from its
provisions, owing, it has been said, to the difficulty of bringing
witnesses from abroad to prove interest. Consequently insur-
ances on foreign ships are valid, even although there is no
interest, provided the policy is expressed on the face of it to be
a wager policy (o).

It is not necessary that the interest of the assured should
exist at the time when the policy is effected ; it is sufficient if
he was interested during the risk and at the time of the loss (p).
And in the case of a policy upon goods " lost or not lost," the
assured may recover, although the goods received damage before
he acquired any interest in them; provided he bought them
during the voyage, and without knowing that they were injured ;
for this is. a contract of indemnity against oil past as well as all
future losses (9). Nor is his insurable interest determined by
his parting, after the loss, with the property insured ; since he
may sue as trustee for the person to whom it has passed (r).
Where, however, the assured parted before the loss with the
ship insured, and it did not appear that there was any agree-
ment that the policy should be kept alive for the benefit of the
assignee, it was held that the assured could not recover (s).

By the Passengers Amendment Act, 1855, no policy of assur-
ance effected in respect of any passages or of any passage or
compensation money by any person by that act made liable in

(w) See the judgment of Cbambre, v. Thomptont 2 East, 385, overruled by

J., in Lucena v. Crat^furd, 3 B. & P. Cousin v. Nantes, 3 Taunt 512.
101 ; S, C, 2 N. R. 269. (p) Rhind v. Wilkinson, 2 Taunt. 237.

(m) SmUh v. Reynolds, 1 H. & N. (q) Sutherland v. Pratt, 11 M. & W.

221. 296.

(o) See Thellusson y. Fletcher,! Dougl (r) Sparkes v. Marshall, 2 B. N. C.

315; Craufurd y. Hunter, 8T. R. 13; 761.
Lueena v. Cratfyrd, ubi supra ; Nantes (s) Powles v. Innes, 11 M. & W. 10.

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292



INSURANCE.



certain events to provide passages or to pay monies, or in re-
spect of any other risk under that act, is invalid by reason of
the nature of the risk or interest {t).

Mode of effect- Policies are usually effected by brokers who are employed
ing insura c y^^ ^j^^ assured. Indeed it would be nearly impossible for the
merchant or shipowner to act for himself in effecting insurances,
owing to the complexity of the modem system of insurance,
and the peculiar knowledge which is requisite in this matter. The
broker is the agent of the assured to effect the policy ; yet he
is not solely his agent, for he is a principal to receive the premium
from the assured, and pay it to the underwriter (ti), and is liable
to the latter for it {v).

The mode in which losses are settled by poKcy brokers will
be mentioned at the close of this Chapter.

Form and Secondly, as to the form and construction of policies and their

C0N8TRUC- ^n^„4:^^

TioNOPFOLi. o^lteratwn.

ciEs AND The form of marine policy used in this country has varied

RATION. " little for more than two hundred years.



Ordinary form
of policy.



The following is the ordinary form now in use at Lloyd's : —
In the name of God. Amen. as well in

own name, as for and in the name and names of all and
every other person or persons to whom the same doth,
may, or shall appertain, in part or in all, doth make assur-
ance, and cause and them, and every of them, to be
insured, lost or not lost, at and from upon any kind
of goods and merchandizes, and also upon the body, tackle,
apparel, ordnance, munition, artillery, boat, and other fur-
niture, of and in the good ship or vessel, called the
whereof is master, under God, for this present voyage
or whosoever else shall go for master in the said ship,
or by whatsoever other name or names the said ship, or the
master thereof, is or shall be named or called; beginning



(0 18 & 19 Vict c. 119, s. 55.

(tt) See the judgment of Lord Ellen-
borough in Jenkins v. Powers 6 M. & S.
287. The policy always contains an
admimion by the underwriter of the
receipt of the premium, although the
practice is, that it is not in fact paid,
but allowed in account between the



underwriter and him. The effect of this
is, that there is no remedy for it against
the assured, if it is not properly allowed
by the broker. lb, ; Dalzell v. ifotr, 1
Camp. 532.

{v) See per Bayley, J., in Fower v.
Butcher, 10 B. & C. 340.



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INSURANCE.

the adventure upon the said goods and merchandizes^ from
the loading thereof aboard the said ship, at upon

the said ship, &c. and so shall continue and endure,

during her abode there, upon the said ship, &c. And
further, until the said ship, with all her ordnance, tackle,
apparel, &c. and goods and merchandizes whatsoever, shall
be arrived at upon the said ship, &c. until she hath

moored at anchor twenty-four hours in good safety; and
upon the goods and merchandizes, until the same be there
discharged, and safely landed. And it shall be lawful for
the said ship, &c. in this voyage, to proceed and sail to,
and touch and stay at, any port or places whatsoever,
without prejudice to this insurance. The said ship, &c.,
goods and merchandizes, &c., for so much as concerns the
assureds, by agreement between the assureds and assurers
in this policy, are and shall be valued at

Touching the adventures and perils which we the as-
surers are contented to bear, and do take upon us in this
voyage ; they are of the seas, men of- war, fire, enemies,
pirates, rovers, thieves, jettisons, letters of mart and counter
mart, surprisals, takings at sea, arrests, restraints^ and de-
tainments of all kings, princes, and people, of what nation,
condition, or quality soever ; barratry of the master and
mariners, and of all other perils, losses, and misfortunes
that have or shall come to the hurt, detriment or damage
of the said goods and merchandizes, and ship, &c., or any
part thereof. And in case of any loss or misfortune, it
shall be lawful to the assureds, their factors, servants, and
assigns, .to sue, labour, and travel for, in and about the
defence, safi^ard and recovery of the said goods and
merchandizes, and ship, &c., or any part thereof, without
prejudice to this insurance ; to the charges whereof we the
assurers will contribute, each one according to the rate and
quantity of his sum herein assured. And it is agreed by
us the insurers, that this writing or policy of assurance
shall be of as much force and effect as the surest writing
or policy of assurance heretofore made in Lombard Street,
or in the Royal Exchange, or elsewhere in London. And
so we the assurers are contented, and do hereby promise
and bind ourselves, each one for his own part, our heirs,
executors, and goods, to the assureds, their executors^ ad-*



293



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294 INSURANCE.

ministratorSy and assigns, for the true performance of the
premises, confessing ourselves paid the consideration due
unto us for this assurance by the assured, at and after the
rate of . In witness whereof, we the assurers have

subscribed our names and sums assured in London.

N,B. — Com, fish, salt, fiiiit, flour, and seed are war-
ranted free fi*om 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 €dl other goods, also the ship and fi-eight, are war-
ranted fi'ee from average, under three pounds per cent,
unless general, or the ship be stranded.
It will be seen that the essential pai*ts of the contract are as
follows :

The stamp ; the name of the assured ; the ship and master ;
the subject-matter of insurance ; the voyage ; the perils insured
against ; the premium ; the memorandum ; and the subscription.
It will be convenient to notice, in the first place, the question
of stamps, and then to deal with those of the above divisions
which relate more particularly to the form of the policy, leaving
the others, which are of a more general character, to be con-
sidered in a later part of this Chapter.

Stamps. The statutes at present in force which relate to the stamping

of marine policies are the 35 Geo. 3, c. 63, and the 7 & 8 Vict
c. 21. The latter of these acts regulates the amount of duty
payable (a:).

The poHcy must be stamped before it is executed (y), and
therefore cannot be stamped upon payment of a penalty when
it is given in evidence (z). All persons, whether brokers, under-
writers, or others, effecting an insurance without a stamp, are
liable to a penalty of 100/. (a); and in such cases a broker
cannot recover his fees. Where an over-assurance is made
upon a homeward voyage, the Commissioners of Stamps may,
in some cases, return so much of the duty as has been paid

(x) See the schedule to this act, post, 17. By these sectioBS the peDslty im-

Appendix, p. xviii. posed was 500A, but it is reduced to

{y) 35 Geo. 3, c. 63, s. 14. lOOA by the 7 & 8 Vict & 21, s. 4. See

(«) See the Com. Law Proc. Act, also Roderick v. Hovil, 3 Camp. 103.

1854, 17 & 18 Vict c 125, ss. 28, 29, See as to where additional stamps may

and the proviso at the conclusion of the be imposed on mutual insurance pNolioies,

latter section. the 9 Geo. 4, c 49, s. 1.

(a) 35 Geo. 3, c. 63, ss. 15, 16 and



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INSURANCE. 295

on the excess (b). Both of the above acts contain exceptions
enabling the officers of the two chartered companies to make
agreements to insure upon labels or slips of unstamped paper,
provided they are truly dated, and a stamped policy is executed
within three office days (c). This provision does not, however,
give any validity to these documents, nor can they be adverted
to in order to explain the meaning of the parties (rf).

The effect under the Stamp Acts of the alteration of a policy
is mentioned below (e).

The Legislature has provided that it shall not be lawful to The name of
effect a policy on any ship, goods, or other property, unless the
name or the usual style and firm of dealing of one or more of
the persons interested, or of the consignor or consignee of the
property insured, or of the person residing in Great Britain,
who receives the order for effecting the policy, or of the person
who gives the order to the agent immediately employed to effect
it, is inserted in it (/). This enactment has, however, met with
a liberal construction ; and it has been held that a policy effected
in the name of the general agents of the consignor, who receive
a cargo upon the refusal of the consignee to accept it, is valid ;
and that if, acting upon the clear intention of the consignor,
although without his express authority, they effect an insurance
as bis agents, or if their act is subsequently ratified by their
principal, they may recover on the policy (g). Nor is it neces-
sary that an agent effecting the policy should be described in it
as such (A).

(b) 36 Gen. 3, c. 63, 8. 10. 8 ; and see Bell v. Janton, 1 M. & S«

(c) n. 8. 18, and 7 & 8 VicL c 21, 201, where it was held that a letter di.
8. 4. reeling assurance could not be con-

(J) See the judgment in Pattisan v. sidered to be a ratification of an insur-

Mills, 2 Blighy N. S. 562. ance which had been actually made at

(e) See post^ p. 297. the time, but without the knowledge of

(/) 28 Geo. 3, c. 56. An earlier the principal,
sutute, the 26 Geo. 3, c. 44, which was (h) De Vignier v. Swanson, 1 B. & P.

repealed by this act, was passed to pre- 346, note. Where the persons interested

Tent the effecting of policies in blank, were described as *' the trustees of

and required that the names of the per- Messrs. K. & Co.," it was held that this

sons interested, or of the agent who might be considered their usual style

effected the policy, should be inserted. and firm of dealing. Hibbert ▼. Martin,

See Cox v. Parry, 1 T. R. 464, and Pray 1 Camp. 638. The statute does not

▼. Editrib. 313. prevent an assured from recovering

{g) Wolff V. Homeastle, 1 B. & P. against persons who are engaged as

316 ; Lueena v. Craufurdy 3 B. & P. 75 ; partners in underwriting, though each

2 N. R. 269 ; Stirling v. Faughan, 1 1 has signed in his own name for a dis-

East, 619 ; Routh v. Thomptm, 13 East, tinct sum. Brett ▼. Beckwith, 26 L. J.,

274 ; Hagedom Y. OliversoHy 2 M. & S. Chan. 130.
485 ; Barlow ▼. Leckie, 4 J. B. Moore,



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296



INSURANCE.



The ship and
master.



There is no express regulation in this country which requires
that the name of the vessel, or of her master, shall be inserted
in the policy; it has been usual, however, to insert the names,
since a knowledge of them is oflen material for the estimation of
the risk to be insured. A policy on a ship " called the American
ship President, or by whatever other name the same ship should
be called," was held to be a valid poUcy on a vessel which was
an American ship, and of which the real name was " The Pre^
sidenf (i).

The validity of insurances upon *^ ship or ships" has long
been established ; and it has been held that where a cargo is so
insured, and several vessels are employed in its transportation,
the assured may apply the insurance to any of them (A). It has
been doubted whether such an insurance does not amount to a
warranty that the party effecting it is ignorant of the name of
the vessel ; but however this may be, it is clear that if the effect
of withholding the name is to deprive the underwriter of any
material information, the concealment avoids the policy (Z).
Where an insurance is on cargo it will extend, although the ship
is named in the poHcy, to any other ship into which it may be
properly shifted by the master (m).

After naming the ship and appurtenances, the policy, as we
have seen, mentions the master. This portion of the policy is
so simple, and the liberty given by it to the assured is so exten-
sive, that no questions have arisen out of it, nor does it call for
further notice.



The premium. The premium is the amount paid by the assured to the under-
writer, as a consideration for his undertaking the risk. The
Stamp Act, 35 Geo. 3, c. 63, s. 11, requires that the premium
" paid, given or contracted for upon the insurance," should be
expressed in the policy. The broker is, as we have seen, the
person to whom the underwriter looks for its payment (n). As
between the assured and the underwriter, the receipt which is
always inserted in the policy is conclusive evidence of the pay-



(•) L« Meturier ▼. Faughan, 6 East,
382, and Hall ▼. Molineaux, cited ih,
385 ; see also Clapham v. Cologan, 3
Camp. 382.

[k) Kewley v. Ryan, 2 H. Bl. 343;
Henchman v. Qffley, ib. 345» note.

(/) Lynch ▼. Hamilton, 3 Taunt 37,



confirmed on error ; Lynch ▼.' Dun^fsrd,
14 East, 494.

(m) Plantamour ▼. Staples, 1 T. R.
611, note. See of transhipment gene-
rally, ante, p. 248, and OUperean v.
Brightman, 8 Q. B. 781.

(m) AnU, p. 292.



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INSURANCE. 297

ment of the premium by the latter (o) ; except, indeed, in the
case of fraud (/?).

The Stamp Act, 36 Geo. 3, c. 63, s. 11, requires also that Thesubscrip-
the names of the subscribers and underwriters, and sums insured,
should be expressed or specified on the policy ; otherwise it is
void. It is not necessary, however, that a policy underwritten
by a company or co-partnership should be signed by every
member ; it is sufficient if it be subscribed in the name of the
firm (g).

Any material alteration in a policy, as in any other contract. Alteration of
mercantile instrument, or deed, even although made by a monuw.
stranger, has the effect of making it void, as against all parties
who did not authorize the alteration (r). A person, therefore,
who desires a change in the terms of the pohcy should obtain
the concurrence of the other parties to it prior to the insertion
of the alteration. A material alteration, however, made by the
assured cannot be set up by him, and will not entitle him to
claim a return of premium (s). An alteration which is imma-
terial does not vacate the policy, and those parties who did not .
consent to it remain liable on the original contract (<). The
most usual mode of making a material alteration in a policy is
by a memorandum on the back of it ; and the signatures or
initials of the parties are commonly appended. If the alteration
be required for the purpose of remedying an error, a Court of
Equity will effect it without the consent of the parties (m); but
the intention of the instrument must be apparent (x).

The 35 Geo. 3, c. 63, s. 13, enacts, that the provisions of that Under Stamp
act shall not prevent " the making of any alteration which may
lawfully be made in the terms or conditions of any policy of
insurance, duly stamped as aforesaid, ailer the same shall have

(o) Dalxtll ▼. Mair, I Camp. 632 ; De M. & W. 778 ; S. C, IS M. & W. 343 ;

GamhuU ▼. Pigou, 4 Taunt. 246. Crookewit v. Fletcher, 1 H. & N. 893.

(p) Foy ▼. Bell, 3 Taunt. 493 ; see (t) Langhom v. Cologm, 4 Taunt

also Mavor ▼. Simeon, ib. 497. 330.

(q) Reid v. Allan, 4 Ex. 326 ; Dow- (t) Sanderson v. APCullom, 4 J. B.

doll ▼. AUan, 19 L. J., Q. B. 41. Moore, 5 ; Sanderson v. Symonds, 1 B. &

(r) Master ▼. Miller, 4 T. R. 320 ; B. 426.

& C, 1 Smith, L. C. 686 : Fairlie v. (u) Motteux v. London Assurance Com-

CkrietU, 7 Taunt. 416 ; Campbell v. pany, 1 Atk. 545.

Christie,2 Stark. 64 ; Forshaw ▼. Chabert, (r) Henkle v. Royal Exchange Assure

3 B. & B. 158; Davidson v. Cooper, 11 ance Company, 1 Yes. 317.



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298 INSURANCE.

been underwritten," or render necessary " any additional stamp
duty by reason of such alteration, so that such alteration be
made before notice of the determination of the risk originally
insured, and the premium or consideration originally paid or
contracted for shall exceed the rate of ten shillings per cent, on
the sum insured, and so that the thing insured shall remain the
property of the same person or persons, and that such alteration
shall not prolong the term insured beyond the period allowed
by this act, and so that no additional or further sum shall be
insured by reason or means of such alteration." This provision
has received a liberal construction (y). A mistake made in the
ship's name may be rectified (z) ; the time of saiUng may be
altered or extended (a) ; and a change of destination may be
inserted, if made before notice of the determination of the
risk(&). But where an insurance made upon ''the ship and
outfit" was afterwards altered by consent, by substituting the
words '' the ship and goods," it was held that a new stamp was
necessary (c). Where, however, a policy was effected, by mis-
take, on the goods instead of on the ship, and the parties never
intended to enter into the contract in its original form, it was
held that an alteration making the terms of the contract agree
with the real intention of the parties did not render a new stamp
requisite ((/). A policy cannot be altered so as to bring it within
a class requiring a higher duty (e).

Where the alteration renders a new stamp necessary the par-
ties cannot recover upon the policy in its original state ; since
the alteration, although ineffectual to form a new agreement,
proves an intention to abandon the former contract (/).

CoMtmction A policy of insurance is considered as a contract uberrinuB
of the contract. ^^^ and always receives a liberal construction for the benefit
of trade, and for the assured (^). The same rule of construc-
tion applies, however, to it as to all other instruments, namely,

(y) See BrockeWank v. Sugrue, 1 B. & (c) HUl v. Potter, 8 East, 873.

Ad. 88. id) Sawtell v. Loudon, 6 Taunt. 399.

(s) Robinson ▼. Tourayt 3 Camp. 158; (e) See the judgment of Lord Ten-

1 M. & S. 217 ; see Cole v. Parkin, 12 terden in Brockelbank ▼. Sugrue, ubi

East, 471. tupra.

(a) Kensington v. Inglis, 8 East, 273 ; (/) French ▼. Patten, 1 Camp. 721 ;

Hubbard v. Jackson, 4 Taunt 169 ; Weir S. C, 9 East, 351.

V. Aberdeen, 2 B. & A. 820 ; Ridsdale (g) 2 W. Saund. 200, n. (1) ; and the

V. Shedden, 4 Camp. 107. judgement of BuUer, J., in Wolfy* Hom^

(6) Ramstrom v. Bell, 5 M. & S. 267 ; castle, 1 B. & P. 822.
Brockelbank v. Sugrue, ubi supra.



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INSURANCE.

that it is to be construed according to its sense and mean-
ing, as collected in the first place from the terms used in it^
which terms are themselves to be understood in their plain,
ordinary and popular sense, unless they have generally in re-
spect to the subject-matter, as by the known usage of trade,
or the like, acquired a peculiar sense distinct from the popular
sense of the same words; or unless the context evidently points
cot that they must in the particular instance, and in order to
effectuate the immediate intentions of the parties to that con-
tract, be understood in some other special and peculiar sense (A).
Where, therefore, the policy is ambiguous in its terms, or con-
tains nothing which expressly rebuts the construction, it vnll be
understood as referring to what is usually done by such a ship,
with such a cargo, on such a voyage (i); for it is presumed that
every underwriter is acquainted with the practice of the trade in
which he insures (A) ; and if the usage is general, the policy is
governed by it, although the trade which it affects is of recent
origin (Z)« As, however, evidence of usage is admissible only
upon the ground that the parties contracting u*e presumed to
have been aware of its existence, and consequently to have
entered into the policy subject to its effect, the usage must be
general, either to all trades, or to the particular trade in respect
of which the insurance is made, llius, an usage at Lloyd's is
not binding upon an assured unless he is in the habit of effecting
policies there (m). If the terms of a policy are plain and unam-
biguous, eyidence of an usage which would contradict instead of
explaining them is inadmissible. Thus, where a policy on a
ship was in the usual form, including '^ boats," evidence of an

(ft) Per Iiord EUenborough in Rohertt ton, 1 Taunt. 463 ; Robertson ▼. Clarke,

V. Fremch, 4 East, 185 ; tee also True- I Bing. 445 ; VaUance v. Dewar, 1

man v. Loder, 11 A. & £. 589. Camp. 503, and the cases cited ib. 505,

(I) See the judgment of Lord Mans- note ; Chaurand v. Jngerttein, Peake,

field in Pelly v. The Royal Exchange 43 ; Gould v. Oliver, 4 Bing. N. C. 134;

Jsntranee Company, 1 Burr. 350. In a Milward v. Hibbert, 3 Q. B. 120 ; Lewie

recent case it was held, that the con- v. Manhall, 7 M. & Or. 729 ; and ante,

ttmction of a policy could not be varied p. 207.

by a correspondence between the as- (l) Nobis v. Kennoway, ubi supra,

tured and their agents who effected the (m) Gabay v. Lloyd, 3 B. & C. 793 }

insurance, which was not referred to in Barilett v. Pentland, 10 B. & C. 760 ;

the policy, but of which the under- Scott v. Irving, 1 B. & Ad. 605 ; Stewart

writers had notice, Halhead v. Young, 6 v. Aberdein, 4 M. & W. 211 ; Mackintosh

£. & B. 312. V. Marshall, 11 M. & W. 116 ; Partridge

{k) See per Lord Mansfield in Noble ▼. Bank qf England, 9 Q. B. 896; and

▼. Kennoway, 2 Doug. 512; see also the judgment of Parke, B., in Bay/^f y.

Letkeulier's case, 2 Salk. 443 ; Salvador Butterworth, I Ex, 428.
T. Hopkins, S Burr. 1707 ; Grant ▼. Pox-



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^^ ' INSURANCE.

usage not to pay upon a loss of boats slung outside upon the
quarters of the vessel was excluded (n).

Parol evidence may be resorted to for the purpose of explain-
ing words which, being technical or local, have acquired a
peculiar meaning ; as, for instance, words relating to the articles
of commerce which form the cargo (o), or to the port (p), sea (y),
or country to which the ship is bound (r).

If, as is usually the case, part of the policy is printed and part
written, it has been held that the words superadded in writing
are entitled to have a greater weight attributed to them than



Online LibraryCharles Edward Pollock Frederic Philip MaudeCompendium of the law of merchant shipping → online text (page 38 of 101)