the loss or perishing of any ship there followeth not the undoing of any man, but the loss lighteth rather easily upon many, than heavily upon few." To treat the subject of insurance fully, it would be necessary to consider at some length the maritime codes of foreign countries; but as this would require a space beyond the scope of the present work, the remarks upon it will be chiefly confined to the mode in which the contract has been dealt with by the Legislature and Courts of this country. In so doing it is proposed to arrange that portion of the subject which falls within the first division of this Chapter under the following heads:-1, the parties to the contract; 2, the form and construction of policies, and their alteration; 3, open, and valued policies, time, voyage, and mixed policies; 4, re-insurance and double insurance; 5, the subjectmatter of insurance; 6, the voyage, and the effects of delay and deviation; 7, the perils insured against; and, 8, the memorandum; leaving the subjects of warrantry, representation, and concealment, and of losses, adjustment, remedies on the policy, and return of the premium, for consideration in the second part of this Chapter. First, as to the parties to the contract. The persons whose property is insured are called the insured Parties to or assured. Those who undertake to insure are called the contract. insurers, assurers or underwriters. insurers. Any number of persons may now be marine insurers. For- Who may be merly, ordinary partnerships or companies could not insure; for the exclusive right of insuring upon joint stock belonged, under the 6 Geo. 1, c. 18 (c), to two companies, namely, the Royal Exchange and the London Assurance Corporations. This privilege was, however, taken away by the 5 Geo. 4, c. 114, and insurance companies stand now upon the same footing, in all important respects, as private underwriters (d). surance, enabled the Lord Chancellor to direct a commission to the Judge of the Admiralty, the Recorder of London, two doctors of civil law, two common lawyers, and eight grave and discreet merchants, to make decrees in cases arising out of insurances. This Court, however, soon fell into disuse. An interesting account of the history of insurance, and of the writers upon it, will be found in Kent's Commentaries, vol. 3, p. 342. See also the Introduction to Park on Insurance, and the Introductory Lecture in Duer on Insurance. (c) The preamble of this act recites the supposed advantages of this restriction. For instances of infringement of the privileges of these companies, see Sullivan v. Greaves, 1 Park, 8; Mitchell v. Cockburne, 2 H. Bl. 379; Booth v. Hodson, 6 T. R. 405; Aubert v. Maze, 2 B. & P. 371. It was in order to avoid the effect of the charters granted to these companies that clubs of mutual insurers were established. See Harrison v. Millar, 7 T. R. 340, n.; Strong v. Harvey, 3 Bing. 304; and post, p. 443. (d) By s. 2 of this act, the existing Who may be insured. Interest of assured. Wager policies on Eng All persons, except alien enemies, may be insured. It was once doubted whether the latter also could not legally be insured (e); but it was decided in 1794, and it has ever since been held, that insurance upon the property of an enemy is repugnant to public policy, and consequently void (f); nor can an English insurance, even although effected before the commencement of hostilities, cover a loss by British capture (g). Where, however, a neutral subject had an interest in goods in common with one who was an alien enemy, and the former insured his part interest, it was held that he was entitled to recover (h). If, when the insurance is entered into, the insured is an alien, and after the loss he becomes an enemy, his right of action is only suspended in consequence of his personal status being changed, and it revives upon the return of peace (i). Where an enemy is allowed by royal licence to trade, insurances upon adventures within its protection are legalized (4): and if the assured is domiciled in this country, the disability to sue in our Courts in his own name is also removed (7). It was not essential at common law that the insured should have any interest in the subject-matter of the insurance. Whether the insured had or had not any interest the insurance was valid; but unless the words "interest or no interest" were inserted in the policy, it was presumed that the insurance was on interest, and proof of it was necessary (m). To prevent the perversion of the contract, however, into a mere rights of the two chartered companies, (e) See the judgment of Lord Hard- (f) Brandon v. Nesbitt, 6 T. R. 23. E. & B. 963; Avery v. Bowden, 5 E. & B. 714; the temporary statutes, the 21 Geo. 2, c. 4, and the 33 Geo. 3, c. 27; and Phillips on Ins. c. 3, s. 2. Valin, speaking of our conduct during the war of 1756, when this country allowed insurances on the ships of the enemy, observes truly, "Mais il arrivait de là qu'une partie de la nation nous rendoit par l'effet de l'assurance ce que l'autre nous prenoit par le droit de la guerre." Comm. sur l'Ordon. de la Marine, liv. 3, tit. 6, art. 3. (h) Rotch v. Edie, 6 T. R. 413. (i) Flindt v. Waters, ubi supra. Such a defence, therefore, cannot be pleaded in bar. Ib.; see also Harman v. Kingston, 3 Camp. 152. (k) Kensington v. Inglis, 8 East, 273. (1) Usparicha v. Noble, 13 East, 332. (m) See the judgment of Chambre, J., in Lucena v. Craufurd, 3 B. & P. 101; S. C., 2 N. R. 269. wager, it was provided by the 19 Geo. 2, c. 37, s. 1, that no lish ships. illegal ; assurance should be made by any person, bodies corporate or politic, on any ship belonging to his Majesty, or any of his subjects, or on any goods, merchandises, 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 (n). This statute applies to an insurance on profits on goods laden on board a ship (0). 1 Foreign ships are omitted from the provisions of the 19 Geo. 2, on foreign c. 37, owing, it has been said, to the difficulty of bringing wit- ships valid. nesses from abroad to prove interest. Consequently insurances 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 (p). ment and It is not necessary, however, that the interest of the assured Commenceshould exist at the time when the policy is effected; it is suffi- duration of cient if he was interested during the risk and at the time of the interest. loss (q). Thus the agent of a shipowner having authority can, by signing bills of lading subsequent to the policy, give to his principal an insurable interest in goods shipped at his risk (”). And in the case of a policy upon goods "lost or not lost," the assured may recover, although the goods receive damage before he acquired any interest in them; provided he bought them during the voyage, and without knowing that they were injured; for the contract is an indemnity against all past as well as all future losses (s). Nor is his insurable interest determined by (n) By sect. 2 of the act, insurances on privateers fitted out by British subjects solely for the purpose of cruising against the enemy, may, notwithstanding the provisions of the act, be made for the owner's interest or no interest, free of average, and without benefit of salvage. See supra, p. 65, note (p). A policy containing any of the words forbidden by the 19 Geo. 2, c. 37, s. 1, is illegal if the policy does not exclude British vessels. Allkins v. Jupe, 2 C. P. D. 375. (0) Smith v. Reynolds, 1 H. & N. 221; De Mattos v. North, L. R., 3 Exch. 185. In the latter case the policy which contained the words Warranted free from all average, but without benefit of salvage," was held (p) See Thellusson v. Fletcher, 1 512. (a) Rhind v. Wilkinson, 2 Taunt. 237. but he a 167 his parting, after the loss, with the property insured; since he may sue as trustee for the person to whom it has passed (t). Where, however, the assured parted before the loss with the ship insured, and it did not appear that there was any agreement that the policy should be kept alive for the benefit of the assignee, it was held that the assured could not recover («). Where an insurance is on goods to be shipped, it is material to note the precise time at which the risk commences. Where by the terms of the contract of sale the property does not pass Ray until the loading of the cargo is completed, the buyer cannot insure before the completion of the loading. The mere option 18 CL.B.1 cases not which the buyer in such a case would possess to take so much in margin 3213 of the cargo as was loaded, does not confer such an interest in 613 the cargo as would be sufficient to support a policy on profits (x). S. C. in C.A. An interest insurable against a peril must be such a one that the peril would, by its proximate effect, cause damage to the assured. Thus a mere agent, without possession or lien, has not an insurable interest to the extent of the value of goods shipped, simply because his name appears in the bill of lading instead of that of his principal (y). By the Passengers Act, 1855, no policy of assurance effected in respect of any passages, or of any passage or compensation money, by any person by that act made liable in certain events to provide such passages or to pay such money, or in respect of any other risk under that act, is invalid by reason of the nature of the risk or interest (). So, by the 55th section of the Merchant Shipping Act, 1862, insurances effected by shipowners. in respect of their liability for loss of life or personal injury, or (t) Sparkes v. Marshall, 2 B. N. C. 761. (u) Powles v. Innes, 11 M. & W. 10. (x) Anderson v. Morice, L. R., 10 C. P. 609 (affirmed, 1 App. Cases, 713). See also Dixon v. Whitworth, 4 C. P. D. 375; W. N. 1880, p. 43, and post, p. 462. In Joyce v. Swan, 17 C. B., N. S. 84, Willes, J., expressed an opinion that where goods were shipped with the intention of fulfilling an order, the vendee might insure his interest although the property in them had not (by reason of special circumstances) passed to him. See also per Willes, J., in Seagrave v. The Union Marine Insurance, L. R., 1 C. P. 309. As to when the property passes on a sale of goods, see the judgment of Sir C. Cresswell in Gilmour V. Supple, 11 Moo. P. C. 551; and Benjamin on Sale, B. 2, c. 2; Martineau v. Kitching, L. R., 7 Q. B. 436; The North British & Mercantile Insurance Co. v. Moffat, L. R., 7 C. P. 25. The interest of a person only equitably entitled is insurable, Ex parte Houghton, 17 Vesey, 253. So a mortgagor of a ship, if in possession, is entitled to insure to the extent of the value of the ship, The Provincial Insurance of Canada v. Leduc, L. R., 6 C. P. 244. (y) Seagrave v. The Union Marine Insurance, L. R., 1 C. P. 305. (2) 18 & 19 Vict. c. 119, s. 55. Appendix, p. cxcviii. damage or loss to ships or goods, occurring without their actual fault or privity, are not to be deemed invalid by reason of the nature of the risk (a). surances. Policies are usually effected by brokers who are employed by Mode of the assured (b). Indeed it would be nearly impossible for the effecting in merchant or shipowner to act for himself in effecting insurances, owing to the complexity of the modern 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 (c), yat and is liable to the latter for it (d). Insurance on ships is often effected by means of mutual Mutual. insurance associations or clubs. Shipowners being members of insurance.. these, enter their vessels from year to year, subject to the special rules of the particular club (e). (a) M. S. Act, 1862, s. 55. See post, p. 446. (b) A person could neither sue on a policy which was not made with him personally, nor with an agent authorized at the time on his behalf. Watson v. Swann, 11 C. B., N. S. 756; but see now 31 & 32 Vict. c. 86, enabling policies to be assigned; see also Lloyd v. Fleming, L. R., 7 Q. B. 299; Pellas v. The Neptune Marine Insurance Company, 4 C. P. D. 139; 5 C. P. D. 34. Policies are often underwritten by brokers or agents acting for underwriters. Where this is the case the agent has no power to underwrite for sums beyond the limit imposed on him by his principal, and should he do so the assured will not be able to recover from the principal any part of the amount underwritten for such a contract is indivisible, and if part is not recoverable the whole is not. Baines v. Ewing, L. R., 1 Ex. 320. As to the commission payable to brokers, see The Great Western Insurance Company of New York v. Cunliffe, L. R., 9 Ch. 525. (c) See the judgment of Lord Ellenborough in Jenkins v. Power, 6 M. & S. 287. The policy always contains an admission 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 the broker. The effect of this is, that there is no remedy for it against the assured, if it is not properly allowed by the broker. Ib.; Dalzell v. Mair, 1 Camp. 532. As to what constitutes a (d) See per Bayley, J., in Power v. (e) The rules of these associations are mostly very imperfect, and though they may effect their intention where the members are known to and have confidence in each other, they are ill adapted to give rights which require to be enforced by legal tribunals. Questions often arise as to the construction of the rules. These are usually decided by arbitration, and as the rules of the different associations vary in language, the decisions upon them are of little general value. By the rules of some of these societies, the assured, if he mortgages his vessel, must, at the peril of forfeiting his claim under the policy, deliver to the insurers a deed containing a covenant by the mortgagee to pay the premium. This rule must be strictly adhered to. See Turnbull v. Woolfe, 11 W. R. 55, overruling the decision of Stuart, V.-C., 3 Giff. 91. Formerly in some of these clubs no policy was issued. |