good, and the insurer by this means can alone form a correct judgment. It is evident that if one ship be named in the policy, and the goods be sent in another, the policy will not cover them.57 To prevent loss by any such mistake it is usual to insert in every policy these words: "or by whatever other name or names the same ship, or the master thereof, is, or shall be, named or called;" so that if the identity of the ship can be proved, and no fraud be meant, a mistake in the name of the ship will not vitiate the contract.

1205. The description of the voyage. The voyage insured must be accurately described in the policy, namely, the time and place at which the risk is to begin, the place of the ship's departure, the place of her destination, and the time when the risk shall end, whether on the goods or on the ship.58

The policy should state the place where the merchandise has been or is to be loaded; but this rule is modified when the policy is on a voyage from abroad, for it may be good though it omit the name of the ship, or master, or port of discharge, or consignee, or to specify or designate the nature or species of the cargo, for all these may be unknown to the insured when he applies for the insurance.59 But the cargo must be of the same species as that described in the policy.

In general, the port of destination ought to be mentioned, but sometimes the voyage is described merely as to time, as for three months; in that case the place of destination, if required at all, is only to identify the vessel, and to give to the insurer a clearer notion of the risks he has to run.

The policy should mention all the ports, harbors, and havens where the ship may enter and load or unload, either expressly or by sufficient designation. 1206. The subject matter of the insurance. The policy must specify the subject matter of the insurance, whether it be goods, ship, freight, respondentia or bottomry, securities, or whatever it may be.

When a ship is the object of the insurance, and not merely the place where the risks occur, as where goods on a certain ship are insured, the name must be correctly mentioned in the policy for the purpose of indicating the vessel and to prevent fraud. What we have before mentioned with regard to a mistake in the name of the ship, when it is merely designated a place where the things at risk are to be placed, does not apply when the policy is on the ship itself.60

When goods are the subject matter of the insurance, it is not necessary to designate the different sorts. It is usually expressed to be "upon any kind of goods or merchandise.”

1207. The perils insured against. The perils against which the insured means to be protected must be distinctly enumerated in the policy. By the usual form, these extend over nearly all that can happen which are insurable, but there are some, as we have seen, against which there can be no insurance.

If the policies contain the words, "lost or not lost," the insurer not only undertakes by this to insure against future losses, but against those which have already accrued.

1208. The clause giving powers to the insured in case of misfortunes. To remove a doubt which formerly existed, a clause is introduced into the policy to authorize the insured to take all necessary care of property in case of misfortunes, without prejudice to the insurance.

1209. Promise of the insurers and receipt of the premium. The next clause in the policy is that in which the insurers bind themselves to the insured for

57 Marshall, Ins. 313.

58 Marshall, Ins. 231.

59

3 Boulay Paty, 412; Pardessus, Dr. Com. n. 805, 809; 3 Kent, Comm. 259. 60 Pardessus, n. 811.

the performance of their contract, and confess themselves paid the consideration or premium by the insured, at the rate specified.

1210. The common memorandum. This is introduced for the purpose of relieving the insurer from any liability whatever as to some specified articles; and, of others, making him not responsible, unless the loss exceeds three, and others five, per centum, and then only for the excess.

1211. The date and subscription. The sum insured is, in general, placed in the subscription after the signature, in the underwriter's handwriting and in words at length, and not in figures.

The policy should be dated; it is usual for each underwriter to date it immediately after his name, so that a policy may have several dates.

1212. A warranty is a stipulation or agreement on the part of the insured, in the nature of a condition precedent. It may be affirmative; for example, where the insured undertakes for the truth of some positive allegation, as that the thing insured is neutral property, that the ship is of such a force, that she has sailed, and the like; or it may be promissory; for example, where the insured undertakes to perform some executory stipulations; as, that the ship shall sail by a given day, that she shall depart with convoy, etc.

Warranties are also either express or implied. The former are introduced in the written contract of the parties; as, that the ship is neutral property. An implied warranty is that which necessarily results from the nature of the contract; as, that the ship is sea-worthy, that she shall be navigated with reasonable skill and care, that the voyage is lawful and shall be performed according to law, in the usual course, without any deviation, etc.

1213. A representation, in insurance, is a collateral statement, either in writing, not inserted in the policy, or by parol, of such facts or circumstances relative to the purposed adventure as are necessary to be communicated to the underwriters to enable them to form a just estimate of the risk. Representations must be exactly true, for, as we have already observed, the contract of insurance requires the most perfect fairness.61

A representation, like a warranty, may be either affirmative; as, where the insurer avers the existence of some fact which may affect the risk; or promissory, as when he engages for the performance of something executory.62

There is a material difference between a representation and a warranty. A warranty, being a condition upon which the contract is to take effect, is always a part of the written policy, and must appear on its face; whereas a repre

63

61 When the insured, in a case of fire insurance, made an offer for insurance in these words: "What premium will you ask to insure the following property belonging to L. & P. for one year against loss or damage by fire? On their stone mill four stories high, covered with wood, on an island about one mile from Fredericksburg, in the county of Stafford, the mill called Elba mill. Seven thousand are wanted. Not within thirty yards of any other building, except a corn-house, which is about twenty yards off." The policy which was made in consequence of this offer states that the underwriters insure L. & P. against loss or damage by fire, to the amount of seven thousand dollars on their mill, etc. On a suit on this policy, it appeared that, instead of such an estate in the property as the representation justified the insurers in expecting, the plaintiffs held only one-half of one-third, under a lease for three lives, renewable for ever, and one-half of the other two-thirds as mortgagees; that the other moiety was held under a contract, the terms of which had not been complied with; and which, if complied with, would give them a title to two-thirds as mortgagees. It was held that the representation did not truly state the interest the insured had in the property. Columbian Ins. Company v. Lawrence, 2 Pet. 25, 47, 49.

62 It has been made a question whether a promissory representation was obligatory, but the principle stated in the text has been repeatedly sustained. Clark v. Manufacturers' Ins. Co., 8 How. 235; Williams v. N. E. Ins. Co., 31 Me. 219; Underhill v. Agawam Ins. Co., 6 Cush. Mass. 440; Sillem v. Thornton, 3 Ell. & B. 868; 2 Duer, Mar. Ins. 657; Phillips, Ins. No. 553.

63 Marshall, Ins. c. 9, ? 2.

sentation is only a matter of collateral information or intelligence on the subject of the voyage insured, and makes no part of the policy. Again, a warranty, being in the nature of a condition precedent, must be strictly and literally complied with; but it is sufficient if the representation be true in substance. Whether a warranty be material to the risk or not, the insured stakes his claim to indemnity upon its precise truth, if it be affirmative, or upon the exact performance of it, if executory. But if a representation be made without fraud, and be not false in any material point, or if it be substantially, though not literally fulfilled, it is sufficient. A false warranty avoids the policy, as being a breach of the condition upon which the contract is to take effect, and the insurer is not liable for any loss, though it do not happen in consequence of the breach of the warranty; a false representation is no breach of the contract, but, if material, avoids the policy on the ground of fraud, or at least because the insurer has been misled by it.

1214. A concealment in insurance is the unlawful suppression of any fact or circumstance which the insured is bound to disclose to the insurer. This, like any other fraud, avoids the contract ab initio, upon principles of natural justice.

It does not matter whether the concealment be intentional or the mere effect of negligence, accident, inadvertence, or mistake; if material, it is equally fatal to the contract as if it were intentional and fraudulent.

The insured is required to disclose all the circumstances which are within his own knowledge only, and which increase the risk. A neglect to do this will avoid the policy; as, where the concealment was that the assured had heard that a vessel like his was taken.64 And in a case where the assured had information of "a violent storm," about eleven hours after his vessel had sailed, and represented there "had been blowing weather and severe storms on the coast after the vessel had sailed," but without any reference to the particular storm, it was held that this was such a concealment as violated the policy.

But although the insured is thus bound to disclose all he knows, he is not required to state general circumstances which apply to all policies of a particular description, notwithstanding they may greatly increase the risk.

66

1215. A loss in insurance is the injury or damage sustained by the insured in consequence of the happening of one or more of the accidents or misfortunes against which the insurer, in consideration of the premium, has undertaken to indemnify the insured.

These accidents or misfortunes, or perils, as they are usually denominated, are all distinctly enumerated in the policy. These are: "Touching the adventures and perils which we the assurers are contented to bear and 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, taking at sea, arrests, restraints and detainments 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 merchandise, and ship, etc., or any part thereof, without prejudice to this insurance." No loss, however great or

1 W. Blackst. 594; 3 Burr. 1909.

65 Ely v. Hallett, 2 Caines, N. Y. 57.

66 The general rule is that the assured need not disclose facts known to those conversant with the trade, and which the underwriter has equal opportunities of learning, but must disclose all material facts which lie commonly in his own knowledge only. Whether the disclosure would affect the rate of premium is a useful though not infallible criterion to ascertain their materiality.

unforeseen, can be a loss within the policy, unless it be the direct and immediate consequence of one or more of these perils."

It is a matter of great difficulty to say what damage is the direct consequence of the peril. As the assured must take steps to avert or diminish the loss, the underwriters are responsible for damage caused thereby; as, where in case of fire the goods are wet by the water used to extinguish it, so the expense necessarily incurred is a part of the loss.69

68

It may happen that damage is caused during the period covered by the policy, but the loss may not happen or the full effects of the damage may not be manifested until the policy has expired. In such cases the liability of the underwriters is determined by the condition of the vessel at the expiration of the policy, and if a total loss is the inevitable consequence of its condition at that time, it is a total loss under the policy.70

Where two causes concur to produce the loss, it must be attributed to the efficient predominating cause, whether it is actually in operation at the time of the loss or not.71

1216. An absolute total loss happens when the subject of the insurance is entirely destroyed, or so much injured as to be of no value to the assured for its intended uses, or is taken from his control. A constructive total loss takes place when the subject ceases to be of material value to the assured, although some portion thereof or some claim against third persons arising out of the injury thereto remains.

There is a constructive total loss when the ship, for all useful purposes of the voyage, is gone from the owner's control, and the time when she will be restored to him in a state to resume the voyage is uncertain or unreasonably distant, or the risk and expense are disproportioned to the expected benefit from the voyage." 72

In the United States a constructive total loss happens when the subject insured is damaged more than half its value.73

1217. A partial loss is any damage short of, or not amounting to, a total loss; for if it be not the latter, it must be the former. Partial losses are sometimes denominated average losses, because they are often in the nature of those losses which are the subject of average contributions, and they are distinguished into general and particular averages.

1218. Losses are occasioned in a variety of ways, but most usually in the following:

By perils of the sea. This is the generic name for all those losses which arise from natural accidents peculiar to the sea, but in more than one instance they have been held to extend to events not attributable to natural

causes.

74

By collision, which takes place when two vessels run foul of each other, or when one runs foul of the other. In all cases, collision, when there is no fault

67 Marshall, Ins. B. 1, c. 12.

68 Magoun v. New England Mar. Ins. Co., 1 Stor. C. C. 157.

69

1 Magens, p. 76, s. 64; Dix v. Union Ins. Co., 23 Mo. 57.

70 Coit v. Smith, 3 Johns. Cas. N. Y. 16; Howell v. Protection Ins. Co., 7 Ohio, 284; Roche v. Thompson, Millar, Ins. 20.

71

Phillips, Ins. No. 1132; Thompson v. Hopper, 1 Ell. B. & E. 1038; 6 Ell. & B. 937; Tudor v. New England Ins. Co., 12 Cush. Mass. 554.

72 Peele v. Merchants' Ins. Co., 3 Mas. C. C. 65; Rhinelander v. Ins. Co., 4 Cranch, 41; Marshall v. Delaware Ins. Co., 4 Cranch, 207; Wood v. Lincoln Ins. Co., 6 Mass. 479.

73 Fontaine v. Phoenix Ins. Co., 11 Johns. N. Y. 293; Byrne v. La. State Ins. Co., 12 Mart.

N. S. La. 126; Bullard v. Roger Williams Ins. Co., 1 Curt. C. C. 148.

74 Garrigues v. Coxe, 1 Binn. Penn. 592; 3 Kent, Comm. 300, 4th ed.

on either side, is deemed a peril of the sea within the meaning of the policy of insurance.75

By fire. The insurer is liable for the loss of a vessel by fire, though it may have been occasioned by the negligence of the master and crew.76

By capture, which is the taking of property by one belligerent from another according to the laws and usages of war.

By detention of princes. By the terms of the policy the insurer is liable for all loss occasioned by "arrest or detainments of all kings, princes, and people, of what nation, condition, or quality soever.'

By barratry, which is the act of the master or mariners, committed with fraudulent intent, contrary to their duty as such, to the prejudice of the owners of the ship.78

By average and contribution. Average is a term used in commerce to signify a contribution made by the owners of the ship, freight, or goods on board, in proportion to their respective interests, toward any particular loss or expense sustained for the general safety of the ship and cargo, to the end that the particular loser may not be a greater sufferer than the owner of the ship and the other owners of the goods on board.79

By salvage. Salvage loss is understood to be the difference between the amount of salvage after deducting the charges and the original value of the property.

80

By the death of animals. If animals, such as horses, cattle, or beasts or birds of curiosity, be insured in their passage by sea, their death, occasioned by tempests, by the shot of an enemy, by jettison in a storm, or by any extraordinary accident occasioned by the perils enumerated in the policy, is a loss for which the underwriters are liable. Not so if it be occasioned by mere disease or natural death.

By piracy. By this term is understood a robbery or forcible depredation on the high seas without lawful authority, done animo furandi, in the spirit and intention of universal hostility. A capture by pirates is a loss within the policy.

81

1219. An abandonment in insurance is the act by which the insured relinquishes to the insurer all the property to the thing insured. When the property insured has been lost, or so deteriorated that it cannot be used by the owner to advantage, he may in many cases abandon the property to the insurer, and look to him as for a total loss.

The assured may always elect whether to abandon or not; he is never obliged to abandon.

An absolute total loss is not affected in any way by abandonment. The assured cannot recover a constructive total loss unless he makes an abandonment. An abandonment must be prompt, absolute in its terms, not conditional, and must state the grounds upon which it is made.

84

83

75 Hale v. Wash. Ins. Co., 2 Stor. C. C. 176; Peters v. The Warren Ins. Co., 3 Sumn. C. C. 389; 14 Pet. 99.

76 Waters v. Merchants' Ins. Co., 11 Pet. 213.

78

"Marshall, Ins. B. 1, c. 12, s. 5.

Emerigon, Ins. tom. 1, p. 366; Merlin. Rép.; Roccus; Abbott, Shipp. 167, n. 1; Crousillat v. Ball, 4 Dall. 294.

19 Marshall, Ins. B. 1, c. 12, s. 7.

80 Stevens, Av. c. 2, s. 1.

81 United States v. Smith, 5 Wheat. 153; United States v. Pirates, 5 Wheat. 184; United States v. Tully, 1 Gall. C. C. 247; United States v. Jones, 3 Wash. C. C. 209.

Livermore v. Newburyport Ins. Co., 1 Mass. 264; Smith v. Newburyport Ins. Co., 4 Mass. 668; Bell v. Beveridge, 4 Dall. 272.

Fuller v. McCall, 1 Yeates, Penn. 464; Fireman's Ins. Co. v. Powell, 13 B. Monr. Ky.

311. So in France, Code de Commerce, 1. 2, tit. 10, s. 3, a. 183.

Allen v. Commercial Ins. Co., 1 Gray, Mass. 154; McConochie v. Sun Mutual Ins. Co., 26 N. Y. 477.