Chap. X. Interest. Honour policies. Broker. "Slip." Form and contents of policy. 2 the time when the policy is issued; it is sufficient if he is interested at the time of the loss,1 or even at any time before the loss during the voyage, and he may recover in respect of damage done to goods sold to him on the voyage, not known to him at the time when he purchased them, if the policy is upon the goods "lost or not lost."3 An insurable interest is "a right in the property or a right derivable out of some contract about the property, which in either case may be lost upon some contingency affecting the possession or enjoyment of the party."4 5 An interest to be insurable must be such that the peril insured against would by its proximate effect damage that interest. Policies which contravene the statute, being made "interest or no interest," are called "honour" policies." The assured generally employs a broker to effect the policy, and the latter is personally liable to the underwriter for the premiums. The broker has a lien on the policy effected by him, and, if he was employed directly by the assured, his lien extends to the general balance due to him.8 A memorandum of an intended policy, generally called "the slip," is initialled by the underwriters. The slip is in practice the complete contract between the parties, and the assured need not communicate to the underwriters facts coming to his knowledge between the initialling of the slip and the issue of the policy. A contract of sea insurance must, in order to be valid, be expressed in a policy of sea insurance.10 The policy must specify the "usual style and firm of dealing of one or more of the persons interested, or of the consignor or consignee of the property insured, or of the person residing in Great Britain who receives the order for effecting the policy, or of the person who gives the order to the agent immediately employed to effect it.” 1 Rhind v. Wilkinson, 2 Taunt. 237 ; 11 R. R. 551. See Lower Rhine Assoc. v. Sedgwick, [1899] 1 Q. B. 179. 2 Sparkes v. Marshall, 3 Scott, 172; 42 R. R. 725. 3 Sutherland v. Pratt, 11 M. & W. 296. 4 Lucena v. Craufurd, 2 B. & P. N. R. 269, 321, 6 R. R. 623, per Lord Eldon. Seagrave v. Union Marine Insce. Co., L. R. 1 C. P. 320. 6 See Roddick v. Indemnity Co., [1895] 2 Q. B. 380. 7 Jenkins v. Power, 6 M. & S. 287]; 18 R. R. 375; Power v. Butcher, 10 B. & C. 340; 34 R. R. 432; Universo Co. v. Merchants' Co., [1897] 2 Q. B. 93. 8 Ante, p. 40; Olive v. Smith, 5 Taunt. 56. 9 Lishman v. Maritime Co., L. R. 10 C. P. 179. 10 54 & 55 Vict. c. 39, ss. 91-95; Home Co. v. Smith, [1898] 2 Q. B. 351. 11 28 Geo. 3, c. 56. Where the policy relates to a particular ship, or to goods to be Chap. X. shipped on a particular ship, it is the practice to insert the name of the ship; but this is not necessary. Sometimes a policy is effected on goods to be shipped "by any ship or ships." Where a policy is in this form, the risk attaches as soon as the goods are shipped, and it is the duty of the assured to declare the name of the ship to the underwriter. The policy must specify the particular risk or adventure, the names of the subscribers or underwriters, and the sum or sums insured, under pain of being void.3 4 Time policy. The policy may be made for a specified voyage, or for any "Voyage" policy. number of voyages, in either of which cases it is called a "voyage policy," or for any time not exceeding twelve months, when it is called a "time policy;" or for a voyage and also for time, as for instance, "from Dover to Calais and back for a year;" a policy in this form is called a mixed policy.5 Re-insurance is where an underwriter procures another under- Re-insurance. writer to insure the whole or part of the sum that he has insured. insurance. Double insurance is where the same risk is insured twice, in Double against. The usual risks insured against are "perils of the sea," fire, Risks insured barratry, and capture or detention. "Barratry" is every species of fraud or knavery committed by the master or crew to the prejudice of the assured. The underwriter is liable if the loss is directly caused by the peril insured against, though it would not have occurred but for the concurrent action of some other cause.9 If the loss is directly caused by a peril insured against, the underwriter is liable though there has been negligence or misconduct on the part of the assured.10 Le Mesurier v. Vaughan, 6 East, 382; 8 R. R. 500. Ionides v. Pacific Insurance, L. R. 6 Q. B. 674. 354 & 55 Viet. c. 39, s. 93. In practice each underwriter writes opposite to his name the sum for which he is to be liable. * Ib. s. 93. See Royal Exch. Ass. Corp. v. Sjoforsakrings, [1902] 2 K. B. 384; and 1 Ed. 7, c. 7, s. 11. See as to mixed policies, Gambles v. Marine Co. of Bombay, 1 Ex. D. 8. G.P.P. 6 Newby v. Reed, 1 W. Bl. 416. 7 See Hamilton v. Pandorf, 12 A. C. 526. 8 See Earle v. Rowcroft, 8 East, 134; 9 R. R. 385. 9 Dudgeon v. Pembroke, 2 App. Cas. 10 Small v. United Kingdom Assoc., Chap. X. Subjectmatter of insurance. Voyage policy; attaching of risk; delay, or deviation. 1 4 The most common forms of insurance are on the ship or goods, on "furniture,' on the profits to accrue from the cargo, which may be described as "profits" generally, on "profits on charter," on the freight, on money advanced by the captain during the voyage for the use of the ship, on "commissions and privileges" due to him or to the consignee, on money advanced on bottomry or respondentia, and on the master's, but not the seamen's wages. Insurances may also be effected on goods intended to be smuggled contrary to the laws of a foreign state," and on the goods of a neutral being carried to an enemy's country, not being contraband of war,10 and even on contraband of war carried from one neutral port to another.11 Where the policy is a "voyage or "mixed" policy, the voyage must be accurately described. If the insurance is for a particular voyage, the risk does not attach until that particular voyage is commenced.12 If the insurance is "from" a port, the risk does not attach until the ship sails; but if it is "at and from," she is protected while in the port.13 If the voyage is to a country generally, it terminates on the arrival at any port in that country; if to a named port, it terminates on the mooring of the ship at the port in the usual place for discharge of cargo.14 In a time policy the risk attaches from the time mentioned in the policy. The policy becomes void if there is an unreasonable delay in commencing the voyage; 15 or if there is an improper deviation from the usual course of the voyage.16 1 Hogarth v. Walker, [1900] 2 Q. B. 283. 2 Eyre v. Glover, 16 East, 218. 3 Asfar v. Blundell, [1896] Q. B. 123. Forbes v. Aspinall, 13 East, 323; Gregory v. Christie, 3 Doug. 419; 6 Ante, pp. 118, 119; Glover v. Black, King v. Glover, sup. 8 Webster v. De Tastet, 7 T. R. 157; 4 R. R. 402. 9 Planche v. Fletcher, 1 Doug. 251. 10 Barker v. Blakes, 9 East, 283; 9 R. R. 558. 11 Hobbs v. Henning, 17 C. B. N. S. 791. 12 Simon v. Sedgwick, [1893] 1 Q. B. 303. 13 Haughton v. Empire Co., L. R. 1 Ex. 206; The Copernicus, [1896] P. 237 ; Hydarnes Co. v. Indemnity Co., [1895] 1 Q. B. 500. 14 Stone v. Marine Co., 1 Ex. D. 81; Camden v. Cowley, 1 W. Bl. 417. 15 Palmer v. Marshall, 8 Bing. 317; 34 R. R. 628; Maritime Co. v. Stearns, [1901] 2 K. B. 912. 16 Lavabre v. Wilson, 1 Doug. 291. The policy generally contains what is called the "suing and labouring" clause, which provides that, in case of loss or misfortune, the assured may "sue, labour and travel" for the defence or recovery of the ship or goods without prejudice to the insurance, and that the underwriters are to contribute. The meaning is that where unusual labour and expense are rendered necessary, owing to a peril insured against, to prevent a loss insured against, the underwriters will contribute, as persons benefited by the expenditure, in the proportions in which they would have had to pay the loss which is avoided by the expenditure.1 The policy invariably contains the "memorandum," which "Memoranprovides that: (1.) Specified goods are "warranted free from average, unless general, or the ship be stranded.” (2.) Other specified goods are warranted free from average under 5 per cent. (3.) All other goods, and also the ship and freight, are warranted free from average under 3 per cent., unless general, or the ship be stranded. dum." A loss is said to be total where the thing insured is totally "Total loss." destroyed, or where it is damaged to such an extent as to justify the owner in abandoning it to the underwriters; it is said to be "partial" where the thing is only partially damaged, or where "Partial the assured is liable to contribute in respect of it towards general loss." average. A total loss is said to be constructive where, though the thing Constructive insured exists, it is, by plunder, capture, or the like, lost to the total loss. owners, and notice of abandonment is given to the underwriters. The restoration of the thing insured after the commencement of an action upon the policy will not prevent the assured recovering as for a total loss.1 Upon abandonment the underwriters are entitled to the things 1 Kidston v. Empire Co., L. R. 1 C. P. 535; 2 Id. 357; Meyer v. Ralli, 1 C. P. D. 358; Cunard Co. v. Marten, [1903] 2 K. B. 511. See ante, p. 121, as to general and particular average. 3 See, for example, Blairmore Co. v. Macredie, [1898] A. C. 593. Goss v. Withers, 2 Burr. 683; Stringer v. English, &c. Co., L. R. 5 Q. B. 599; Ruys v. Royal Exchange Assurance Chap. X. Warranty. Representation. Seaworthi ness. insured and all profits arising therefrom as from the time when the loss occurred.1 The ordinary test by which the loss of a ship is determined to be constructively total or only partial is whether a prudent owner, who had not insured, would repair; if he would not, the loss is total. The term "warranty," as used with reference to policies of assurance, bears a meaning different from that which it bears in a contract for sale. In a policy, "warranty" means an assertion on the part of the assured, either contained in or implied by the policy, on the truth or performance of which the liability of the underwriters depends: so that, if the warranty is broken, the underwriters are not liable in case of loss, even if the loss be unconnected with the breach. In other words, a warranty forms part of the contract. The meaning of "representation," as used in assurance law, is a statement made by the assured to the underwriter at the time of making or during the negotiation for the policy, of some fact connected with the proposed risk, which, even if included in the policy, is not one of its terms, and therefore need not be strictly complied with; but if material and untrue it will avoid the policy.8 A voyage policy, but not a time policy, implies a warranty that the vessel is seaworthy at the commencement of the risk; but even in the case of a time policy, the owner cannot recover if he knowingly and wilfully sends his ship to sea in an unseaworthy condition.10 1 The Red Sea, [1896] P. 20. 2 Allen v. Sugrue, 8 B. & C. 561; 32 R. R. 483; Blairmore Co. v. Macredie, [1898] A. C. 593; Angel v. Merchants' Co., [1903] K. B. 811; Francis v. Boulton, 73 L. T. 578, as to goods. 3 Ante, p. 67. As to the warranties implied when policies are effected, and their breach, see notes to Dixon v. Sadler, and Woolridge v. Boydell, Tudor's L. C. Merc. Law, 136; as to total loss and the law of abandonment, see Roux v. Salvador, Id. 184; as to the underwriters' liability, or "adjustment of average," see Lewis v. Rucker, Tudor's L. C. Merc. Law, 246; and as to return of premiums where the underwriters are not liable, see Tyrie v. Fletcher, Id. 265. 4 Pawson v. Watson, 2 Cowp. 785; De Hahn v. Hartley, 1 T. R. 343; 2 T. R. 186; 1 R. R. 221; Woolmer v. Muilman, 3 Burr. 1419; Rich v. Parker, 7 T. R. 705; 4 R. R. 552. 5 As to misrepresentation, see ante, p. 65. 6 Dawson v. Atty, 7 East, 367. Edwards v. Footner, 1 Camp. 530. 8 Pawson v. Watson, 2 Cowp. 785: Behn v. Burness, 1 B. & S. 877; 3 Id. 751. 9 Greenock Co. v. Maritime Co., [1903] 2 K. B. 657. 10 Gibson v. Small, 4 H. L. C. 353; |