"MARINE INSURANCE" DEFINED. 22. Marine insurance is an insurance against risks connected with navigation, to which a ship, cargo, freight, or other insurable interest in such property may be exposed during a certain voyage or a fixed period of time. 23. MARITIME CHARACTER OF CONTRACTS-Such contracts are cognizable in the admiralty, but are not so connected with the ship as to give a proceeding against the ship herself for unpaid premiums. Marine insurance is of great antiquity, and is recognized as within the jurisdiction of the admiralty courts by the leading continental courts and authorities. In America it was so held by Mr. Justice Story in the great case of DE LOVIO v. BOIT,29 and was definitely settled by the decision of the Supreme Court in New England Mut. Ins. Co. v. Dunham.3 But, while such contracts are maritime, the distinction heretofore drawn still prevails, as preliminary contracts for insurance, or suits to reform a policy not in accordance with the preliminary contract, are not maritime.31 30 San Fernando (C. C.) 12 Fed. 341. On this general subject. See, also, 1 Pars. Shipp. & Adm. 338-478; Coast Wrecking Co. v. Phoenix Ins. Co. (C. C.) 13 Fed. 127; Ralli v. Societa Anonima de Navigazione (D. C.) 222 Fed. 994. $$ 22-23. 29 Fed. Cas. No. 30 11 Wall. 1, 20 L. Ed. 90. no jurisdiction in such cases. 3,776. In England the admiralty courts have The English act to codify the law relating to marine insurance, known as the Marine Insurance Act, 1906, so far from restoring such jurisdiction, provides that "the rules of the common law, including the law merchant, save in so far as they are inconsistent with the express provisions of this act, shall continue to apply to contracts of marine insurance.” 31 Andrews v. Essex Fire & Marine Ins. Co., 3 Mason, 6, Fed. Cas. No. 374; Reliance Lumber Co. v. Rothschild (D. C.) 127 Fed. 745. Though insurance contracts are maritime, a claim for unpaid premiums can only be asserted against the party taking out the insurance, and cannot be made the basis of a proceeding in rem against the vessel insured.32 The reason of this is that insurance is for the benefit of the owner alone. It does not benefit the vessel as a vessel. It does not render her more competent to perform her voyage, or aid her to fulfill the purpose of her creation.3 INSURABLE INTEREST 33 24. Every person has an insurable interest who is interested in a marine adventure. In particular, a person is interested in a marine adventure, where he stands in any legal or equitable relation to the adventure, or to any insurable property at risk therein, in consequence of which he may benefit by the safety or due arrival of insurable property, or may be prejudiced by its loss, or by the detention thereof, or by damage thereto, or may incur liability in respect thereof. This definition is taken from the English Marine Insurance Act, 1906. It does not necessarily mean that the insured must have an insurable interest at the time of effecting the policy. He must have it, however, at the time of the loss. For instance, it is frequently the case that vessels whose whereabouts are unknown may be insured "lost or not lost," and this insurance is valid though at the time it is effected it may turn out that the vessel has been totally lost. In HOOPER v. ROBINSON, the court quotes with 32 Hope (D. C.) 49 Fed. 279; City of Camden, 147 Fed. 847. 33 Pleroma (D. C.) 175 Fed. 639. § 24. 34 98 U. S. 528, 25 L. Ed. 219. See, also, Woodside v. Canton Ins. Office (D. C.) 84 Fed. 283; Canton Ins. Office v. Woodside, 90 Fed. 301, 33 C. C. A. 63. approval a paragraph from Arnould's Insurance, which says that the insurable interest subsisting during the risk and at the time of loss is sufficient, and the assured need not allege or prove that he was interested at the time of effecting the policy. The court also says that where the insurance is "lost or not lost" the thing insured may be irrecoverably lost when the contract is entered into, and yet the contract is valid, for it is a stipulation for indemnity against past as well as future losses, and the law upholds it. In the same case the court says: "A right of property in a thing is not always indispensable to the insurable interest. Injury from its loss or benefit from its preservation to accrue to the assured may be sufficient, and a contingent interest thus arising may be made the subject of a policy." In Buck v. Chesapeake Ins. Co.35 the Supreme Court says that interest does not mean property. A contract of marine insurance, like other contracts of property insurance, is a contract of indemnity, and hence the party taking out the insurance can only claim indemnity for his actual loss, and cannot make a wager policy. An absolute title or property is not necessary for the validity of such insurance. For instance, in China Mut. Ins. Co. v. Ward,3 it was held that advances by a ship's husband, accompanied by no lien, but constituting a mere personal debt of the shipowner, were not such an interest as gave him an insurable interest. On the other hand, in the Gulnare, an agent who was operating a vessel on commission, with an actual pledge of the vessel as security, was held to have an insurable interest. 37 In Merchants' Mut. Ins. Co. v. Baring,38 it was held that 231 Pet. 151, 7 L. Ed. 90. 36 8 C. C. A. 229, 59 Fed. 712. See, also, Seagrave v. Insurance Co., L. R. 1 C. P. 305. 37 (C. C.) 42 Fed. 861. 38 20 Wall. 159, 22 L. Ed. 250. See, also, Fern Holme (D. C.) 46 advances of money for the benefit of the ship which had attached to them a lien, marine or equitable, upon the ship for their repayment gave an insurable interest. A carrier has an insurable interest in goods under its control.30 Double Insurance As it is possible thus to insure not simply the entire property, but different interests in the property, different parties may insure different interests in the same property without its constituting double insurance. 40 In International Nav. Co. v. Insurance Co. of North America, it was held that a policy on disbursements, which covered many subjects connected with the use of the ship as well as any interest in the ship not covered by insurance (which was against total loss only), was not double insurance with the policy on the ship herself covering partial as well as total loss. The subject-matter of the insurance was different. In St. Paul Fire & Marine Ins. Co. v. Knickerbocker Steam Towage Co.,11 a marine policy permitting the tug to navigate certain waters provided that, while she was out of these waters, the policy should be suspended, and should reattach when she returned to such waters. The vessel, intending to go out of these waters, thereupon procured insurance during such deviation. The court held that this was not double insurance, as the two policies necessarily did not overlap. The issue of the policy raises a presumption that the party insured has an insurable interest.42 Fed. 119; Providence Washington Ins. Co. v. Bowring, 50 Fed. 613, 1 C. C. A. 583. 39 Ursula Bright S. S. Co., Ltd., v. Amsinck (D. C.) 115 Fed. 242; Munich Assur. Co. v. Dodwell, 128 Fed. 410, 63 C. C. A. 152. 40 (D. C.) 100 Fed. 304; Id., 108 Fed. 987, 48 C. C. A. 181. 41 93 Fed. 931, 36 C. C. A. 19. 42 Nantes v. Thompson, 2 East, 386. CONDITIONS IN CONTRACTS OF INSURANCE 25. CONTRACTS OF MARINE INSURANCE ARE SUBJECT TO CERTAIN CONDITIONS, express or implied, a breach of which avoids the contract. 26. MISREPRESENTATION AND CONCEALMENTAny misrepresentation or concealment of a material fact, or any breach of warranty of any fact, will avoid the policy. The law on the subject of representations in insurance policies may be said to be generally the same as in any other contract. Any representation of a material fact, or a fact which would influence the judgment of a prudent underwriter, as to taking the risk or assessing the premium, must be substantially true, and every fact of this sort which is within the knowledge of the assured, and not in the knowledge of the underwriter, must be stated. The courts, perhaps, have been a little stricter in reference to marine insurance policies than other contracts, on account of the peculiar nature of the business. In Hazard v. New England M. Ins. Co., the vessel was represented as a coppered ship. She was then in the port of New York, and the party applying for the insurance wrote from there to Boston to get it. The expression had different meanings in New York and Boston. The court held that the New York meaning was to be taken. If the representation had not come up to that meaning, the policy I would have been void. In the same case it was held that an underwriter is presumed to know the usages of foreign ports to which insured vessels are destined; also the usages of trade, and the political conditions of foreign nations; and that, therefore, §§ 25-26. 43 8 Pet. 557, 8 L. Ed. 1043. |