or that the ship has been captured and recaptured, and the assured has been obliged to pay the salvage (d). But every arrival of the ship at the port of her destination is not an arrival within the fair construction of the agreement; such, for instance, as an arrival in possession of an enemy at a neutral port, to which she was insured, or an arrival at her port in England as the property of other persons after her capture. In short, it must be an arrival at the destined port in the course of her voyage (e). The captors of a ship and cargo effected an insurance: restitution was afterwards awarded to the owners (with the exception of a small part of the cargo); it was holden, that the captors were not entitled to a return of premium : for they had possession of the property insured; and if it were a legal capture, they were entitled; if it were not, the Court of Admiralty might amerce them in the damages and costs (f). Policy at and from Gottenburgh to Riga upon goods and ship, beginning the adventure upon the goods from the loading thereof aboard the ship at Gottenburgh; it appeared that there were not any goods laden at Gottenburgh, but only at London: it was holden (g), that as the risk upon the goods never commenced, the plaintiff was entitled to a proportional return of premium. In the preceding case, the adventure upon the goods is expressly mentioned to begin from the loading at Gottenburgh; but if the place had been omitted, the court would have intended a loading at the place whence the voyage commenced (h). The formal receipt in the policy is conclusive evidence of the receipt of the premium as between the assured and underwriter in an action for the return of the premium (i). Where the assured or his agent (k) had been guilty of fraud, as where the assured knew that the ship () was lost, at the time of effecting the policy, the premium cannot be recovered; and the same rule holds, where the contract of insurance is illegal (m), unless the assured was ignorant of the illegality at the time of effecting the insurance (n); or unless everything has been done by the assured which lay in his power to legalize the voyage (o); though the endeavour has failed; and although the adventure is never entered upon, yet there ought at least to be some formal renunciation of the contract before the bringing the action (p). If the language of the policy be large enough to comprise an illegal adventure, and the assured contemplated an illegal adventure, the underwriter is not entitled (g) to sue for the premium. A policy broker is the agent of both the assured and underwriter, and is the trustee for the

46.

(d) Aguilar v. Rodgers, 7 T. R. 421.
Adm. by Kenyon, C. J., S. C.
(f) Boehm v. Bell, 8 T. R. 154.

Horneyer v. Lushington, 15 East,

(h) Spitta v. Woodman, 2 Taunt. 416. (i) Dalzell v. Mair, 1 Campb. 532. (k) Chapman v. Fraser, B. R. T. 33 Geo. III., Park, 329.

(1) Tyler v. Horne, London Sittings

after H. T. 25 Geo. III., Lord Mansfield, C. J., Park, 329.

(m) Lowry v. Bourdieu, and other cases, ante, vol. i. p. 93.

(n) Oom v. Bruce, 12 East, 225.
(o) Hentig v. Staniforth, 5 M. & S.

122.

(p) Palyart v. Leckie, 6 M. & S. 290. (q) Jenkins v. Power, 6 M. & S. 282.

assured as long as the policy remains in his hands, to adjust and receive returns of premium for him when the events have happened on which they are to be made. Hence the broker, having notice that the events have happened which entitled the assured to such returns, is authorized to deduct so much from the gross amount of the premiums, and to pay over the difference only to the underwriter (r). In assumpsit, on a policy of insurance (s), with a count for money had and received, the defendant had not paid any money into court. The defence was, that the ship was not seaworthy; on which point, without any direct evidence of fraud, the case was submitted to the jury. General verdict for defendant. N. It was not intimated to the jury, that the plaintiff was entitled to a verdict for a return of premium; on an application to the court, it was holden, that the plaintiff was entitled to a verdict for the premium on the count for money had and received; but the court hoped, that in future the counsel would in his opening demand the premium, in every case where it was intended to insist upon it on failure of his claim for the loss. Where a total loss is recovered, there cannot be a return of premium for convoy, because the total loss includes the entire premium added to the invoice price (t). Upon a mere misrepresentation without fraud, where the risk never attached, the assured is entitled to a return of the premium (u).

XII. Of Bottomry and Respondentia.

Bottomry.-An agreement entered into by the owner, or, under certain circumstances, by the master of a ship (49), whereby, in

(r) Shee v. Clarkson, 12 East, 507. (s) Penson v. Lee, C. B. M. 41 Geo. III., 2 Bos. & Pul. 330.

(t) Per jury, in Langhorn v. Allnutt,

4 Taunt. 511.

(u) Feise v. Parkinson, 4 Taunt. 640.

(49) In a foreign country, in the absence of the owners, and in cases of necessity, the master may take up money on bottomry for the use of the ship; as where a ship, being on a voyage from Bengal to London, was obliged to put back to Bombay to repair. See the form of bottomry-bond in this case, in Abbott on Shipping, p. 601, 6th ed. by Shee; and see also The Exeter, Whitford, 1 Rob. A. R. 176. The master may hypothecate his cargo on freight for repairs in a foreign port, such repairs being necessary for the prosecution of his voyage. The Gratitudine, 18th December, 1801, Sir W. Scott. The master of a ship has authority by law to pledge the credit of his owner, resident in England, for money advanced to the master in an English port where the owner has no agent, if such advance of money was necessary for the prosecution of the voyage; and whether it was so or not is a question for the jury. Arthur v. Barton, 6 M. & W. 138. Patteson, J., in giving judgment in Johns v. Simons, 2 Q. B., 425, said, "I held in Arthur v. Barton, that to justify the master in borrowing, it is not necessary that the occasion should arise in a foreign country; but the case must be one of pressing necessity, and the master and owner cannot

consideration of a sum of money advanced, (for the purpose of enabling the borrower to fit out the ship, or purchase a cargo for an intended voyage,) the borrower undertakes to repay the same with a stipulated interest, if the voyage shall terminate successfully, and binds himself and the ship and tackle for the due performance of the agreement, is termed bottomry. The term "bottomry" is derived from the original language of the agreement, which merely spoke of the keel or bottom of the ship; but the expression was always considered as being used figuratively, viz. pars pro toto. This agreement is sometimes made in the form of a deed-poll, called a bill of bottomry, executed by the borrower, and sometimes in the form of a bond with a penalty. "Instruments of bottomry are in use in all countries wherein maritime commerce is carried on. The lender of the money is entitled to receive a recompense far beyond the rate of legal interest; this recompence is very properly called in the civil law periculi pretium,' and no person can be entitled to it who does not take upon himself the peril of the voyage; but it is not necessary that his doing so shall be declared expressly, and in terms; it is sufficient that the fact can be collected from the language of the instrument considered in all its parts. It has been said, that such instruments, being the language of commercial men, and not of lawyers, should receive a liberal construction, to give effect to the intention of the parties" (x). An assured on bottomry cannot recover against the underwriter, unless there has been an actual total loss of the ship (y); for if the ship exist in specie, in the hands of the owners, though under circumstances that would entitle the assured on the ship to abandon, it will prevent its being an utter loss within the meaning of the bottomry bond.

Bot

Respondentia.-If the loan is not upon the vessel, but upon the goods and merchandize, which must necessarily be sold or exchanged in the course of the voyage, then by the terms of the agreement the borrower only personally is bound to answer the contract, who, therefore, in this case, is said to take up money at respondentia. tomry and respondentia differ very materially from a simple loan (z). 1. In the case of a loan, the money is at the risk of the borrower, and must be repaid at all events. But where money is lent on bottomry or respondentia, the money is at the risk of the lender during the voyage. 2. Upon a loan, legal interest only can be reserved. But upon bottomry or respondentia, any interest upon which the parties agree may be reserved. By stat. 7 Geo. I. c. 21, s. 2, "all

(a) Per Lord Tenterden, C. J., delivering judgment, Simonds v. Hodgson, 3 B. & Ad. 50, on error from C. B.

(y) Thompson v. The Roy. Exch. Ass. Comp., 1 M. & S. 30.

(z) Marsh. 634.

communicate without very great prejudice and delay." As to the power of the master to sell the ship, see Hunter v. Parker, 7 M. & W. 322.

contracts and agreements made or entered into by any of his majesty's subjects, or any person or persons in trust for them, for the loan of any money by way of bottomry on any ship or ships in the service of foreigners, and bound to or designed to trade in the East Indies, are void." By stat. 19 Geo. II. c. 37, s. 5, "all money lent on bottomry, or at respondentia, upon ships belonging to any of his majesty's subjects bound to or from the East Indies, must be lent only on the ship, or upon the merchandize on board, and shall be so expressed in the condition of the bond; and the benefit of salvage shall be allowed to the lender, who alone shall have a right to make insurance on the money so lent; and no borrower of money shall recover more than the value of his interest in the ship, or in the effects laden on board, exclusive of the money so borrowed; and in case it shall appear that the value of his share in the ship, or the effects on board, does not amount to the full sum or sums he has borrowed as aforesaid, such borrower shall be responsible to the lender for so much of the money borrowed as he has not laid out on the ship or merchandize laden thereon, with lawful interest for the same, in the proportion the money laid out shall bear to the whole money lent, notwithstanding the ship or merchandize shall be totally lost."

XIII. Insurance upon Lives.

THE insurance of life is a contract whereby the insurer (a), in consideration of a certain premium, either in a gross sum or by annual payments, undertakes to pay to the person for whose benefit the insurance is made, a stipulated sum of money, or an annuity equivalent, upon the death of the person whose life is insured, whenever this shall happen, if the insurance be for the whole life; or in case it shall happen within a certain period, if the insurance be for a lesser term than for life. The utility of this species of insurance is obvious. Persons possessed of life incomes are hereby enabled to secure, after their death, a competent provision for their families; and they are also enabled, even in their lifetime, in cases of urgent necessity, to raise money by way of loan, (which they could not do on mere personal security); for, by insuring their lives to the amount of the sum borrowed, the lender may be certain of having repaid the money lent in the event of their death. By these insurances also, the fines to be paid upon the renewal of leases, or on the descent of copyhold estates, may be provided for (b). The making insurances on lives, or other events, wherein the insured had no interest, having introduced a mischievous kind of gaming, it was enacted, by stat. 14 Geo. III. c. 48; first, "That no insurance should be made by any person, body politic or corporate, on lives, or any other event, wherein the person for whose benefit or on whose account the policy is made, has no interest, or by way of gaming or wagering. 2ndly, (b) Ib.

(a) Marsh. 664.

the

That in every policy on lives, or other events, the name of the person interested, or on whose account it is made, must be inserted. 3rdly, That no greater sum should be recovered or received from the insurer, than the amount of the interest of the insured" (50). Whether the insured has an interest within the meaning of the preceding statute, is sometimes the subject of litigation; as to which, it has been holden, that a creditor has an insurable interest in the life of his debtor, at least where he has only the personal security of the debtor (c) (51). But although a creditor may insure the life of his debtor to the extent of his debt, yet such a contract is substantially a contract of indemnity against the loss of the debt (d), and, therefore, if, after the death of the debtor, his executors pay the debt to the creditor, the latter cannot afterwards recover upon policy, although the debtor died insolvent, and the executors were furnished with the means of payment by a third party, it being immaterial from what fund the debt has been discharged, so as the creditor has received satisfaction. The general principle, however, that the insured shall, in case of a loss, recover no more than an indemnity, may be controlled by mercantile usage (e). The word "interest," in the foregoing statute, means pecuniary interest in the life or event insured; hence a policy effected by a father in his own name, on the life of his son, the father not having any pecuniary interest therein, is void (f). Where the debt accrues by virtue of an illegal security, as a note for money won at play, such interest is not insurable (g). In an action on an insurance on the life of J. S. (h), for one year, and during the life of the plaintiff, but in case the plaintiff should die before J. S., the policy to be void; it appeared that J.-S. had granted an annuity to the plaintiff's late brother, which annuity he had bequeathed to persons not parties to this insurance, having appointed the plaintiff executor of his will, and directed him to make assurance. It having been objected, that the insurance was made by a person not having any beneficial interest, Lord Kenyon, C. J., held this to be a sufficient interest to support the action; observing, that the plaintiff could not assent to the legacy before the testator's debts were paid, with

(c) Anderson v. Edie, Hil. 1795, per Lord Kenyon, C. J., at N. P., Park, 640. (d) Godsall v. Boldero, 9 East, 72.

61.

See Palmer v. Blackburn, 1 Bingh.

(f) Halford v. Kymer, 10 B. & C. 724. (g) Dwyer v. Edie, London Sittings after H. 1788, Buller, J., Park, 639.

(h) Tidswell v. Ankerstein, Peake's N. P. C. 151.

(50) Marine insurances are expressly exempted from the operation of this statute. See the proviso in the 4th section.

(51) See the remark of Serjeant Marshall on this point in p. 673, 4, 5. In Read v. R. E. A. C., Lord Kenyon was of opinion, that a wife making an insurance on her husband's life need not prove that she was interested therein, for it must be presumed. See Peake's Additional Cases, p. 70.