Charles Edward Pollock Frederic Philip Maude.

Compendium of the law of merchant shipping online

. (page 39 of 101)
Online LibraryCharles Edward Pollock Frederic Philip MaudeCompendium of the law of merchant shipping → online text (page 39 of 101)
Font size
QR-code for this ebook


the printed words; inasmuch as the written words are con-
sidered as more immediately the language of the parties (s).

Ofbn, and Thirdly, with respect to open, and valued policies, and voyage,

Jrcu.. time, and mixed poUcies.

A policy may be either open or valued. In the former the
value of the subject-matter of the insurance is not stated in the
policy, and must be proved after a loss. In the latter, to pre-
vent the neceMty of proving the actual value, in the event of a
loss, a value agreed upon by the parties is mentioned in the
policy, and is conclusive between them in case of loss(0- A
valued policy contains a clause to the following effect : " 7^
said ship, kc, goods and merchandize, i;c.,for so much as con-
cerns the assureds, by agreement between the assureds and assurers
in this policy, are and shall be valued at £ ." If the amount
of the valuation is not inserted in the policy, but is stated
to be as thereafter may be declared, and no declaration is made
before a loss, the policy is not void, but is treated as an open
policy (m).

Where the policy is valued, the insured, notwithstanding the

(n) Blacken v. The Royal Exchange borough in Robertson v. French, 4 East,

Assurance Company, 2 C. & J. 244; 136; sAao J Isager v. Tfte St. C^Uherine

Crqfts V. Manhall, 7 C. & P. 597 ; see Dock Company, 14 M. & W. 794. Where

also Hall v. Janson, 4 £. & B. 500. a policy is set out upon the record, and



(o) Scott y, Bourdillion, 2 N. R. 213
Mmoh v. Skurray, Park on Ins. 191.

{p) Conttable v. Noble, 2 Taunt 403
Payne v. Hutchinson, ib. 405, note.

(q) Brown v. Tayleur, 4 A. & £. 241
Uhde V. Walters, 3 Camp. 16.

(r) Moxon v, Atkins, 3 Camp. 200



comes in this form before the Court, no
argument can be rested on this distinc-
tion, unless it is averred on the record
that the difference exists. See the
judgment of Parke, B., in the last-men-
tioned case.
{t) See the judgment of Lord Ellen-



Robertson v. Clarke, 1 Bing. 445 ; see borough in Forbes v. Jspinall, 13 East,



also Parr v. Anderson, 6 East, 207
Robertson v. Jackson, 2 C. B. 412, an
nte, p. 207.
(«) See the judgment of Lord Ellen- 150.



Robertson v. Jackson, 2 C. B. 412, and (k) Craaifurd v. Hunter, 8 T. R. 15,

ante, p. 207. note ; Harman ▼. Kingston, 3 Camp.



Digitized by



Google



INSURANCE. 301

19 Geo. 2, c. 37 (a:), is entitled to recover the whole valua-
tioOy although it exceeds his interest (y). If, however, it
appears that the valuation has been adopted as a mere cover to
a wager (^r), or that the value has been fraudulently misrepre-
sented (a), the policy is void, and the insurer cannot recover
even to the extent of his actual interest. Another effect of a
policy being valued is that in cases of constructive total loss the
assured may obtain in some events more than a compensation
for his actual loss (&).

Where there are several insurances upon the same vessel, the
valuation is generally conclusive only between tlie assured and
the underwriters of that policy which contains the valuation. It
is not enough for the underwriters on one of the other policies
to show that the assured has received from another quarter the
sum fixed by this valuation, unless this amounts to a complete
indenmity (c). Where, however, an owner effects two insur-
ances, declaring the same value in each, he is bound by this
sum, and cannot recover more on the two policies than the
sum mentioned, although the real value of the vtesel is more(rf).
If the loss is only partial, the value in the policy must still be
looked to as the basis of the calculation (e).

An insurance may be effected either for a voyage, or for a Voyaoe^time
number of voyages, in either of which cases the policy is called
a voyage policy ; or the insurance may be for a particular period,
irrespective of the voyage or voyages upon which the vessel
may be engaged during that period, and the policy is then called
a time policy. In other countries the length of the time for
which a ship may be insured is not limited, but in England time

(x) Ante, p. 291. see also the judgement of Lord Ellen-

{y) JsewU T. Rucker, 2 Burr. 1167; borough in Forbet v. ^spinall, 13 East,

Staw4 V. Feltonf 2 East, 1 14. 327 ; and in Boi^field v. Barnes, ubi

{*) See per Lord Mansfield in Lewis supra ; also Hickman v. Carslairs, 5 B.

▼. Rmeker, 2 Burr. 1171. & Ad. 651. A contrary opinion ob-

(a) Htdgh V, De la Cour, 3 Camp. tained at one time, and it was argued
319. that if the loss was only partial, the

(b) Jlltn ▼. Sttgrue, 8 B. & C. 561 ; yalue must be proved as in an open
Young V. Turing, 2 M. & G. 593 ; Man- policy. This rule appears to have been
HM^ V. Irving, 1 C. B. 168 ; S, C, in founded upon a dictum of Lee, C. J.,
error, 2 C. B. 784; 6 C. B. 391. cited in Shawe v. Felton, 2 East, 113.

(c) Bou^/Uld V. Barnes, 4 Camp. 228. and is adopted in Park on Ins. 165.

(d) Irving V. Richards<m, 1 M. & Rob. An able and elaborate refutation of this
153 doctrine will be found in 1 Aruould on

(r) Lewis v. Rucker, 2 Burr. 1171 ; Ins. 357 (2nd edit.)



AND MIXED
POLICIES.



Digitized by



Google



302



INSURANCE.



policies made for a longer period than one year are, by statute,
void ah initio (/).

In addition to the two last-mentioned kinds of policy there
is a third, which is usually called a mixed policy ; as, for in-
stance, where a ship is insured " from A. to B, for a year."
This is in eflfect a time policy with the voyage specified, and
runs for the whole period insured, irrespectively of the comple-
tion or non-completion of the voyage. A policy of this descrip-
tion does not attach, unless the ship sails upon the voyage
named (^); but although the insurance is limited to commence
at a certain time, it is not necessary that the ship should be
then in the port specified as the terminus a quo (h). Where a
policy was effected on goods to the value of 12,000/., in canal
boats plying between London and Birmingham for twelve
months, and the claim on the policy was warranted not to
exceed a certain sum per cent, and it was stipulated that a
given amount only was to be covered by the policy in any one
boat, or any one trip, it was held that this was a contmuing
insurance, and applied to successive cargoes carried within the
year, although goods exceeding 12,000/. in value had been car-
ried (i).



RE-iNsua-

ANCB AND

DOUBLE

INSURANCE.



Fourthly, as to re-insurance and double insurance. Re-insur-
ance is where an underwriter procures the sum which he has
insured to be insured again to him by another underwriter.
This is flowed in all cases by the law of France, and of the
other maritime countries of Europe (A\ and also in America (/) ;
but, by the law of England, the right to re-insure is limited to _
cases in which the insurer is insolvent, becomes bankrupt, or x Vk^
dies. In the two former cases the underwriter himself, and inl/
the latter his executors, may insure to the amount for which he
insured, provided it is expressed in the policy to be a re-insur-
ance (m). This provision applies to all insurances made in this



(/) 35 Geo. 3, c. 63, s. 12.

ig) Way V. Modigliani, 2 T. R. 30.

(/t) /&.; see also Martin v. Fishing In-
suranee Company^ 20 Pickering (Ameri-
can) Rep. 389, cited in Phillips on ins.
Chap. 11, s. 1.

(i) Crowley v. Cohen, 3 B. & Ad. 478.

(At) See dKentComm. 279; Arnould
on Ins. 340, note (c) (2nd edit)

(/) Kent Comm.y ubi tupra ; Phillips



on Ins., Chap. 3, s. 13.

(m) 19 Geo. 2, c. 37, s. 4. By the
Bankrupt Act, 12 & 13 Vict, c 106, s.
174, the assured may prove against a
bankrupt underwriter, and receive divi-
dends with the other creditors as if the
loss had happened before the fiat or pe-
tition, and the person effecting the policy
may make such proof if the party inte-
rested is abroad.



Digitized by



Google



INSURANCE.



303



country, whether on British or foreign ships (n). A mere parol
transfer, however, of Hability by one underwriter to another at a
higher premium, in order to assign the intended benefit, is not
prohibited by the statute (o).

Double insurance takes place when the same interest and the
same risk is insured twice; a second insurance being often
necessary where the precise value of the interest is not at first
known. But if it appears, when the value of the interest
becomes known, that there has been an over-insurance ; that is
to say, that the sum of the two or more insurances exceeds the
interest of the assured, the excess cannot be recovered ; for the
insurance is, to this extent, an infringement of the rule against
wagering poUcies. But although the assured is not entitled to
be satisfied twice, yet he may proceed upon whichever of the
poUcies he chooses, and may recover from one set of under-
writers the whole sum insured, leaving the latter to sue the
Other underwriters for contribution {p). We have already seen
that where one only of several policies is valued, the assured is
not bound in the others by the value named (5). The extent
to which the underwriters are liable to return the premium
where there is an over-insurance, will be mentioned at the con-
clusion of this Chapter. In these cases payment by one of
the insurers operates as a satisfaction by both (r).

Fifthly, as to the subject-matter of insurance. An insurance Subject-
may be effected upon the ship or goods, or upon both ; in the J'n^sVrYnce.
latter case the subject-matter is usually described by these ship, &c and
words : '* any kind of goods and merchandizes, and also upon goods.
the body, tackle, apparel, ordnance, munition, artillery, boat

(*) Jndret v. Fletcher, 2 T. R. 161. whole loss, and the subsequent insurers
(tf) Delver v. Barnes^ 1 Taunt. 48. are freed from liability on returning the
The point was not expressly decided in premium, minus one-half percent Code
this case, but it does not appear to be de Comro., Art. 359. The convenience
doubtfuL of some definite rule is so great, that in
ip) Newhy v. Reed, 1 W. Bl. 416. America the policy often contains a
The ruling of Lord Mansfield in this clause, providing that, if the assured
case is now universally followed in this shall have made any prior assurance, the
country. 2 Park on Ins. 423; 1 Arnould subsequent assurers shall be answer-
on Ins. 3-16 (2nd ed.) A custom was, how- able only for any deficiency not covered
ever,once proved to the contrary. SeeThe by it. See 3 Kent Comm. 282; Phillips
Jjrican Company v. Bull, I Show. 132. on Ins. c. 14, s. 3.
The French rule is, that if the policies (q) Ante, p. 301.
are made without fraud, and the first (r) Morgan v. Price, 4 Ex. 615.
covers the whole value, it bears the



Digitized by



Google



304



INSURANCE.



and other furniture, of and in the good ship or vessel, caUed
the ."

Profits. An insurance may also be effected upon profits expected to

accrue from the cargo, and in such cases it is sufficient to use
the word " profits " generally, without further specifying what
they may be (0. They may be insured either by a valued (m) or
an open policy (x). The assured must, however, show that he
has an insurable interest (y), which had attached at the time of
the loss (z) ; and that but for the loss which intervened, profits
would have been realized (a). Where a consignor had pur-
chased rice by a binding contract, and by a similar contract had
re-sold it at a profit, and the vessel which was to carry it to the
second vendee had been chartered, it was held that the con-
signor had an insurable interest in such profit, although a por-
tion only of the rice had been shipped, and actually lost(i). As,
however, the policy in this case limited the inception of the
risk to " firom and immediately following the loading " of the
goods, it was held that the insurance applied only to profits
arising from the rice actually put on board ; and further, that
even if the policy did attach to the profit of that portion of
the rice which was lefl on shore, it only covered losses occa-
sioned directly by perils of the sea, and not such as arose from
the insurer being prevented, in consequence of the retardation
of the voyage, from completing his contract of resale (c). Where
profits were insured by a policy on goods " banning the
adventure upon the said goods and merchandizes from the
loading thereof on board the said ship," and the ship was lost
before she reached the port at which the cargo was ready to be
shipped, it was held that the policy never attached, and that the

(t) Eyre y, Gf over f Z Camp. 276; 16 In the American Courts proof that

East, 218. Such an insurance is within profits would have arisen on tne voyage,

the operation of the 19 Geo. 2, c. 37; is not required if the cargo has been

see Smith v. Reynolds^ 1 H. & N. 221. lost, The Patap$co Insurance Company v.

(u) Grant v. Parkinsont Park on Ins. Coultat, 8 Peters (Amer.), 222.

402 ; Henricksen v. Margetion, 2 East, (6) M*Swiney v. The Royal Bjcckange

549, note; Barclay v. Coiuinsj ib. 544. Assurance Company, 14 Q. B. 684.

See the judgment of Lawrence, J., in (c) The Royal Exchange Assurance

this case as to the foreign law on this Company v.APSunney, in C&m,ScBcc,,H

subject. Q. B. 646, overruling on this point the

{x) Eyre v. Glover, 2 Camp. 276. judgment of the Court below. See also

iy) Stockdale v. Dunlop, 6 M. & W. Chope v. Reynolds, 5 C. B., N. S. 642,

224. in which case the goods arrived without
(«) Knox V. Wood, 1 Canp. 543. < damage, but by a vessel into which they

(a) Hodgson v. Glover, 6 East, 316. had been transhipped.



Digitized by



Google



INSURANCE. 306

owner of the cargo could not recover under it, for the delay in
the shipment of the cargo and consequent loss of profits (d).

Freight, or the profit earned by the shipowner in the carriage Freight.
of goods on board his ship (e), whether arising from a charter-
party or the earnings of a general ship, may be msured either
for the whole or a portion of the voyage, and this may be done
by a time policy, though the freight is not to be earned till after
the time expires. It must, however, be insured eo nomine, and
is not covered by a policy on goods C/). Where an owner
carries his own goods in his ship, the interest which he has by
reason of his saving the amomit he would have been obliged to
pay for their freight had not the ship been his own, is covered
by a policy on freight (g).

Freight paid before or during the voyage may also be insured
as freight advanced or money advanced on account of freight (A).
So the interest of persons who have disbursed money for the use
of the ship abroad, and taken in respect of their advances a bill
of the captain's drawn against freight, may be insured as an
advance on account of freight (i).

In accordance with the rule already mentioned (A), the as-
sured, in order to recover upon the policy, must show that at
the time of the loss he had an insurable interest in the freight.
There is in practice, although not in principle, a material dis-
tinction on this head between the freight which accrues under
a charter-party and that which may be earned by a general
ship. In tiie former case the policy attaches as soon as the ship
has sailed under the charter-party, for thereupon an inchoate
right to freight arises, although no portion of the cargo may
have been taken on board (/)• In the case, however, of a general
ship the policy does not usually attach until the goods are actu-
ally shipped (m), or at least until part of the goods is on board,

(dj Halhead ▼. Young, 6 E. & B. 312. Devaux ▼. Jantoftt 5 B. & C. 519.

(e) See per Lord Ellenborough id {h) Ellii ▼. Lrfone, 8 Ex. 546 ; Hall

Forbet V. Atpinall, 13 East, 325, and ▼. Jaiuon, 4 E. & B. 500. See alw post,

A/e, p 236. p. 306.

(/) Michael T. OilUtpy, 2 C. B., N. S. (t) Wilton v. Martin, 11 Ex. 684.

627 ; Lucena v. Cratffurd, 2 N. R. 315. (*) Jnte, p. 290.

For instances of insurances on passage (/) Thompson v. Taylor, 6 T. R. 478 ;

money, subject to the provisions of £e Atty ▼. Lindo, 1 N. R. 236 ; Homcattle

Passengers Act, 1852, see Gihton ▼. ▼. Suart, 7 East, 400 ; Daoidton ▼. fFi//a-

Bra4tford, 4 E. & B. 586 ; WUlit ▼. $ey, 1 M. & S. 313.
Cookt, 5 E. & B. 641. (m) Tong$ ▼. ffatU, 2 Str. 1251.

{£) Flhu ▼. PUmyng, 1 B. & Ad. 45;



Digitized by



Google



306 HfBURANCB.

and the reaidue is ready to be shipped (n) ; nor unless a biadtng
contract has been entered into for the loading of the goods (o),
and the vessel was in a condition to receive them (p). Where
the owner of a ship bought a c€U*go which was seven miles from
the port, but ready to be sent on board, and the ship, after bein^
ready to receive the cargo, was lost, in an endeavour to get her
out of dock, it was held that a policy on freight attached (y).
And where an owner having contracted to carry passengers, and
to make alterations in his ship for their convenience, had shipped
wat^ for them, and commenced the alterations, it was held that
this was an inception of the risk (r).

If the ship have part only of her cargo on board at the time
of the loss, the owner can recover in respect of that part, evem
although the insurance be by a valued pohcy (s).

Where a policy is on freight advanced in respect of the whole
voyage described in the policy, and a portion of the fireight is
advanced after part of the voyage has been performed, this sum
may be recovered against the underwriters, although it was paid
before the policy was effected, since, in this case, the whole of
the freight must be considered to have been at risk at the time
of the loss (0.

Money ad- Money advanced by the captain during the voyage for the

▼ancedtoship. ^^ ^f ^^ 8hip(i«), and "commissions and privileges" payable
to him (or) or to the consignee (y) may be insured. In the two
latter cases it must be shown, as in the case of insurance ob
freight, that the interest of the insurer has attached in respect
of the goods out of which the profits are expected («). The
lender of money on bottomry (^ respondentia msy also insure
to the extent of his interest, but the policy must be expressed to
be on bottomry, for such an interest is not covered by an in-
surance on the ship or goods (a). The borrower on bottomry
can only insure upon the value of the ship or cargo, minus the

(r) Montgomery ▼. Eggington, 3 T. R. 320.

862 i Parke v. Hibton, cited 2 B. & H. («) Forbes v. AtpinaU^ ubi eufrm,

326. (0 Ellis V. Lqfone, 8 Ex. 546.

(o) Forbes ▼. JsphkUl, 13 East, 328 ; (tf ) Gregory ▼. Christie, I Park on

Flint V. Flemyng, 1 B. & Ad. 46 ; Patrick Ins. 14.

V. Eames, 3 Camp. 441. {*)^King v. Glooer, 2 N. R. 206.

(p) WiUiamson v. Innes, 8 Bing. 81, (y) Flint v. Le Mesmrier, 2 Park oa

note ; iSr. C. 1 M. 3r Rob. 88 ; Deoaux ▼. Ins. 403.

Janson, 5 B. N. C. 519. («) Knox ▼. Wood, 2 Park oo lu.

(9) Devalue v. Janson, ubi aypra. 405.

(r) Truscott v. atristie, 2 B. & B. (a) Gboer v» Bhek, I Bun. 1894



Digitized by



Google



INSURANCB, 307

tmonnt which has been adyanced ; for it is obvious that without
this deduction the insurance would exceed the amount of his
interest in the subject-matter insured (b).

The interests which have been already mentioned are those Other interesu.
which in practice most frequently form the subject-matter of
insurances ; any interest, however, in the safety of a thing, or
any liability which may be incurred is sufficient to create the
right to insure. Thus, it has been held that the owners of a
vessel, who were answerable for any loss occurring by the n^li-
gence of their crew in bringing the cargo on board, might insure ^

the goods against this risk (c). So the owners may insure
against their liability for any damage which the ship insured
may, by running down or otherwise, do to any other vessel (d),
as well as for passage or compensation monies for which they
are made liable by the Passengers Act, 1855 («). In a recent
case, the owner of a vessel, which, together with her cargo, had
been deserted by the crew, and brought into port by salvors,
having obtained possession of her, entered into a recognizance
in the Court of Admiralty as a security for the whole salvage;
the ship afterwards sailed again, and together with the cargo was
totally lost, and the owner of the ship was obliged to pay the
amount of the salvage ; it was held that he had an insurable
interest in the average contribution due to him from the owners
of the cargo on account of the salvage, and that he was entitled
to recover this amount under a policy effected before the loss
for the purpose of covering what he might have to pay under
the recognizance (/).

The law of England, as of most other countries, forbids, on Seamen's
■ grounds of public policy, the insurance of seamen's wages, or of ^^^
any equivalent which they may be entitled to receive in their
st^ul iff). This rule does not, however, apply to the wages of

(h) As to the insurance of ships bound Willisy, CooH, 5 E. & B. 641, which

to or from the East Indies on which were decided on very similar sections in

Booey has been advanced on bottomry, the repealed Passengers Act, 1852, 15

see 19 Geo. 2, c 37, s. 6. & 16 Vict c. 44.

(c) W*lk€r ▼. MaUland, 5 B. & A. (/) Briggt v. The Merchant Trader^

in. AuociatUm, 18 a B. 167.

{d) Thomptom ▼. Reptolds, 7 E. & B. (g) Weheter v. De Tastet, 7 T. R.

172. 167 ; Park on Ins. 14 ; see the judg-

(e) 18 ft 19 Vict, c 119, s. 55, and ment of Sir John Nicholl in Th$ Ladf

Gibmm y. Braiford, 4 £. & B. 586; Dmrham, 8 Hagg.201.

x2



Digitized by



Google



308



INSURANCE.



the master, or to the commission to which he is entitled, or to
any share which he may have as part owner (A).

Illegal trading. AH insurances are invalid which are intended to cover adven-
tures prohibited by the law of nations, such as voyages under-
taken in breach of a blockade (f), or of the articles of a treaty (ft),
or which are in violation of the statutory provisions as to con-
voy, ti-ade, or revenue of the country in which the insurance is
effected (/).

Thus, a policy effected in England upon a voyage which is
f contrary to the navigation laws, or in breach of the customs

laws of this country, is void(m). It is not necessary to mention
more fully the cases depending upon the system established by
the Navigation Acts, which are now repealed (n). With respect
to contracts in violation of the customs laws, it has been held
that if a small portion only of the goods insured be contraband
the whole policy is vitiated, and the assured is precluded from
recovering any part of his loss (o). And it is a general rule,
that if there is an illegality in any part of an entire risk, the
whole is thereby vitiated (p).

It has been often doubted how far the legality of an insurance
ought to be affected by the fact that it is designed to cover a



(A) King V. Glover, 2 N. R. 206 ; see
ante, p. 84.

(i) See The HurHge Hone, 8 Rob.
824; Hannell v. Wise, 9 B. & C. 712,
and ante, p. 220.

{k) See The Eenrom, 2 Rob. I, and
Bird V. Jppleion, 8 T. R. 562.

{I) Wainhotue v. Cowie, 4 Taunt. 1 78 ;
Darby v. Newton, 6 Taunt 644 ; John-
ston V. Sutton, Doug. 354. In cases of
violation of statutory provisions as to
convoy, it must be shown, if the policy
was effected by an agent, that the as-
sured authorized the infHngement of
the statute. Carstairs v. JUnutt, 3
Camp. 497 ; Metoalf v. Parry, 4 Camp.
125 ; ThomhiU v. Lance, ib, 231.

(m) See Morck v. Jbel, 3 B. & P. 35 ;
Chalmeri v. Bell, ib, 604 ; Lubbock v.
Pottt, 7 East, 449 ; Gray v. Lloyd, 4
Taunt. 136 ; Campbell v. Innes, 4 B. &
A. 426 ; Thompson v. Irving, 7 M. & W.
367 ; Suart v. PoweU, I B. & Ad. 266.
All these cases were decided upon sta-
tutes which are now repealed; but
the principles laid down in them may
still be useful in determining what ii
■uch an illegal trading ai to invalidate



an insurance. In Cunard v. Hyde, 1 E.
B. & £. 670, it was held that the sailing
of a ship from her port of loading, in
contravention of customs laws, did not
prevent the owner of the cargo, who
was not aware of the irregularity, from
recovering on a policy on the cargo and
freight. Where the owner of the cargo
is aware of the illegal act he cannot re-
cover. Cunard v. Hyde, 29 L. J^ N. S.,
Q.B.6.

(n) Ante, p. 16.

(o) Parkin v. Dick, 2 Camp. 221;
S,C,\l East, 502 ; Camelo v. Btittem, 4
B. & A. 184. It has been held, how-
ever, that when a licence to carry pro-



Online LibraryCharles Edward Pollock Frederic Philip MaudeCompendium of the law of merchant shipping → online text (page 39 of 101)