When loss partial though policy valued. When

policy open.

ordinary risks, including all perils of the seas, upon the ship "St. James," valued at £10,000, at and from A. to B.

2. The plaintiffs were interested in the said ship to the

was held that a sum of £5000 which the owners subsequently recovered against the other vessel belonged to the underwriters, although the real value of the "H." was £9000. If the loss is partial, though the policy be valued, the plaintiff is bound to prove the value of the goods in the same way as if the policy were an open one. (Irving v. Manning, 1 H. L. C. 287.) The rule in the case of an open policy is to estimate the actual value of the subject insured at its actual or market value at the commencement of the risk; and if the claim be for repairs of a ship, the full cost of repairs will not be allowed, because the owner substitutes new for old materials. (Poingdestre v. R. Erch. Assur. Co., Ry, & M. 378.) A deduction of one-third new for old, as it is called, will be made, unless the ship is on her first voyage (Pirie v. Steele, 2 M. & Rob. 49); or perhaps if she is an iron ship. (Lidgett v. Scretan, L. R. 6 C. P. 616, 627.) See also Pitman v. Universal Marine Insurance Co., 9 Q. B. D. 193 (C. A.). "Suing and It must be noticed, however, that besides the amount actually sublabouring" scribed for by the underwriters, they may become liable for average clause. losses, and, under the suing and labouring clause, for moneys expended in and about the attempting to save or recover the subject insured, if properly claimed in the statement of claim. (Le Cheminant v. Pearson, 4 Taunt. 367.)

The underwriters when, in the case of a total loss, they have paid to the assured the amounts for which they subscribed the policy, are entitled to the subject-matter of insurance for whatever it may be worth, and they stand in the shoes of the assured to the extent that they may bring any actions for their own benefit arising out of the loss which the assured might have brought, and any damages which the latter may recover against third persons for the loss of or injury to the vessel or cargo belong to them. (North of England Insurance Co. v. Armstrong, 5 Q. B. 244.) But they have no higher rights than the assured, in whose place they stand, would have, and if the assured cannot recover neither can they. (Simpson v. Thompson, 3 App. Cas. 279.) See also, in this connection, as to the rights of underwriters, Burnand v. Rodocanachi, 7 App. Cas. 333.

Warranties.]-There are in the case of all policies of marine insurance certain warranties by the assured, some express, others implied. These warranties are in the nature of conditions precedent. Their performance compliance need not now be averred in the statement of claim, but any particular

A strict

with ex

press warranties must be averred.

Implied warranties of seawor

thiness and against deviation.

warranty, the breach of which is relied on, must be specially pleaded as a defence in the statement of defence. Where the policy contains an express warranty, a literal and strict compliance with it must be proved. and it is not sufficient to show something tantamount to a performance of it, unless there be a waiver or dispensation of performance. (Weir v. Aberdeen, 2 B. & A. 320; Croockewit v. Fletcher, 1 H. & N. 893; L. J. 26 Ex. 153.)

The chief implied warranties are that there shall be no deviation from the voyage insured, and that the ship (in the case of a voyage policy) is seaworthy at the commencement of the risk; and a breach of one or other of these warranties avoids the policy, although there has been no fraud. Any deviation from the voyage insured is fatal, although no loss happens in consequence of the deviation, and although the loss in respect of which the underwriters are sought to be made liable did not occur till after the vessel had returned to the regular course of the voyage. A deviation does not discharge the insurer from liability for previous loss, but only for

amount insured at the time of the said insurance, and also at the time of the loss.

3. The said ship, while on the said voyage, became a total loss by the perils of the seas.

The plaintiff claims £100.

loss accruing after the deviation. (Green v. Young, 2 Lord Raym. 840.) All deviations by reason of inevitable accident or stress of weather, to What is a obtain needful provisions or to do needful repairs, or avoid capture, are deviation. implied exceptions to this warranty (Urquhart v. Barnard, 1 Taunt. 456); but though a deviation for the purpose of saving life would be justifiable, a deviation merely to succour a vessel and save property would probably not be an exception from the warranty. (See Laurance v. Sydebottom, 6 East, 54; The Jane, 2 Hagg. Am. Rep. 345; 3 Kent Com. 313; Scaramanga v. Scamp, 48 L. J. C. P. 478.) With respect to the implied war- What conranty of seaworthiness it is meant that the ship shall be in a fit state as to stitutes repairs, equipment, and crew, and in all other respects to encounter the unseaworordinary perils or the voyage insured at the time of sailing on it, and thiness. having regard to the particular subject-matter of the insurance. (Daniels v. Harris, L. R. 10 C. P. 1.) But the assured makes no warranty that the vessel shall continue seaworthy; or that the master or crew will do their duty during the voyage; and their negligence or misconduct is no defence to an action on the policy where the loss has been immediately occasioned by the perils insured against. (Dixon v. Sadler, 5 M. & W. 414.) Where a ship is unseaworthy when she sails on her voyage, the policy is there and then avoided, and it is not set up again by her becoming seaworthy during the course of the voyage. (Quebec Marine Insur. Co. v. Commercial Bank of Canada, L. R. 3 P. C. 234.) Not only does the ship-owner warrant that his ship is seaworthy, but the owner of goods the subject of insurance loaded on board ship, warrants that the ship is seaworthy (Biccard v. Shepherd, 14 Moo. P. C. 494); and if the ship turns out to have been unseaworthy, the owner of the goods cannot recover against the underwriters. There is, however, no implied warranty as to the goods themselves that they are seaworthy for the voyage. (Koebel v. Saunders, 17 C. B. N. S. 71; L. J. 33 C. P. 310.)

Owner of insured

goods warrants the ship is seaworthy.

policies no implied warranty of sea worthiness.

It is now finally settled that this rule requiring seaworthiness at the commencement of the risk only applies to voyage policies. In the case of In time time policies there is no implied warranty of seaworthiness. (Dudgeon v. Pembroke, 2 App. Cas. 284; 46 L. J. (H. L.) 409.) Where in a time policy the ship was warranted "free from capture and seizure, and the consequences of any attempt thereat," and in consequence of the barratrous act of the master in smuggling, the vessel was seized by Spanish revenue officers, it was held that the loss must be ascribed to capture and seizure," and not to the barratry of the master, and that the underwriters were not liable. (Cory v. Burr, 8 App. Cas. 393.)

Action by assignee.]-By the 31 & 32 Vict. c. 86, s. 1, it is enacted that an assignee of a policy of insurance may sue thereon in his own name, and that the defendant in any action shall be entitled to make any defence which he would have been entitled to make if the said action had been brought in the name of the person by whom or for whose account the policy sued upon was effected. But in Pellas v. The Neptune Marine Insur. Co., 49 L. J. 153, it was held by the Court of Appeal that in an action on a policy of insurance on a ship's cargo brought by the assignee in his own name, pursuant to the provisions of the 31 & 32 Vict. c. 86, the defendant cannot set off any debt which he could not have set off prior to the passing of that Act, nor in the opinion of the Court did

The assured bound to communicate all material facts.

But not rumours, nor opinions and conclusions, &c.

Any mate. rial misrepresentation avoids the policy.

Any fraudulent statement

3. Claim for Total Loss on a Voyage Policy, and also for an Average Loss, and upon the Suing and Labouring Clause.

1. On the 5th of May, 1880, the plaintiff effected with the defendant a policy of marine insurance against the ordinary risks, including all losses by the perils of the seas and fire, upon

Order XIX. r. 3 alter the law in that respect, for a counter-claim is not a defence within the meaning of sect. 1 of the 31 & 32 Vict. c. 86.

Defences-Concealment.]—If the assured conceals any material fact which relates to the risk insured, the policy is void (Carter v. Boehm, 3 Burr. 1905; Russell v. Thornton, 6 H. & N. 140); and it makes no matter though the fact were once known to the underwriter, if it was not present to his mind at the time of effecting the insurance. (Bates v. Hewett, L. R. 2 Q. B. 595.) When the insurance was effected by the principal personally, and he had no knowledge of any material fact which he concealed, but his agent abroad had and designedly forbore communicating it to his principal in order that the latter might be enabled to effect an insurance, it was held that the concealment of the agent vitiated the policy. (Proudfoot v. Montefiori, L. R. 2 Q. B. 511.) The assured is bound to communicate all the information he has received, though he does not know it to be true, and though it afterwards turns out to be false. It is important to notice, however, that by mercantile usage the signing of the slip, not the delivery out of the policy, is the making of the contract. Hence it is only facts known to the assured at the former time that he is bound to communicate; and anything coming to his knowledge before the delivery out of the policy, though after the signing of the slip. he is not compelled to disclose. (Lishman v. N. Maritime Insur. Co.. L. R. 8 C. P. 216; aff. in Ex. Ch. L. R. 10 C. P. 179; Cory v. Patton, 7 Q. B. 304; 9 Q. B. 577. See also on this subject, Morrison v. Universal Marine Insur. Co., L. R. 8 Ex. 197; Lynch v. Hamilton, 3 Taunt. 37.) It is sufficient to communicate facts without the opinion or conclusions founded upon those facts. (Bell v. Bell, 2 Camp. 479.) Mere rumours or news in the public papers need not be communicated (3 Kent Com. 285), nor need facts which the underwriter is presumed to know, as that a ship classed A. 1 at Lloyd's will be struck off the list unless re-surveyed in the fourth year from the registration. (Gandy v. Adelaide Marine Insur. Co., L. R. 6 Q. B. 746.)

Misrepresentation.]-Any misrepresentation of a material fact by the assured to the underwriters at the time of entering into the contract avoids the policy; and any misrepresentation made to the first of the underwriters is regarded as made to them all. (Marsden v. Reid, 3 East, 572; Bell v. Carstairs, 2 Camp. 543.) A material misrepresentation will vitiate the policy, though the actual loss is in no way connected with the misrepresentation, and though no fraud was intended by the insured. (Seaman v. Fonerau, 2 Str. 1183.) If a representation is not a positive assertion, but only an expression of opinion, expectation, or belief, this will not avoid the policy, if the assertion is made bona fide. and in ignorance of the untruth. (Barber v. Fletcher, 1 Doug. 305; Anderson v. Pacific, &c., Insur. Co., 21 L. T. N. S. 408, P. C.) It is sufficient, however, if the representation be substantially correct, and it need not, like a warranty, be strictly and literally complied with. (Pandon v. Watson, Cowp. 785.)

Fraud.]-Any fraudulent statement made by the assured to induce the "If the represenunderwriters to accept the risk will avoid the policy. tation was by a fraudulent design it avoids the policy without staying to

the ship "Queen," at and from London to Otaga, and the defendant subscribed the said policy for £200 on the said ship, valued at £15,000. The policy contained the usual suing and labouring clause.

2. While the said ship was upon the said voyage she was stranded at C. by perils insured against, and a particular average loss, amounting to £100, was caused thereby.

3. Afterwards, and while the said ship was upon the said voyage, a loss occurred within the meaning of the policy, and the plaintiff thereupon did sue and labour in and about the defence of the subject-matter of insurance, and necessarily incurred charges amounting to £70.

4. Afterwards, and while the said voyage still continued, the said ship was wholly lost by one of the perils insured against, viz., by fire.

5. The plaintiff, at all the times mentioned in this statement of claim, was interested in the said subject-matter of insurance to the amount subscribed by the defendant.

The plaintiff claims from the defendant the sums of £100, £70, and £200.

Defence.

1. The defendant denies that the said ship was stranded at C. by any of the perils insured against.

2. He denies that any particular average loss was then sustained.

3. A loss did not afterwards occur within the meaning of the policy, and the plaintiff did not sue and labour, in defence of the subject-matter of insurance, or incur any charges in connection therewith.

4. The said ship did not become a total loss by any of the perils insured against.

inquire into its materiality." (Kent Com. 283.) If goods insured are will destroy over-valued with intent to defraud the underwriters, the contract is void, the policy. and the assured cannot recover even for the value actually on board. (Haigh v. De La Cour, 3 Camp. 319.)

Return of the Premium.]-In many cases the assured may recover back from the underwriters the premium paid or some part of it, as where the policy was void ab initio, or the risk never commenced, or where the interest of the assured is less than the amount insured; but there can be no return where the policy is void for fraud or illegality, or where the risk has once commenced.

5. The defendant further says that the said ship was wilfully set fire to by the plaintiff, or by his orders.

6. The plaintiff was not interested in the subject-matter of insurance to the amount subscribed by the defendant at any of the times mentioned in the statement of claim.

7. The said ship was not of the value of £15,000, and was, at the time of insurance, over-valued by the plaintiff with the intention of defrauding the defendant.

Reply.

The plaintiff joins issue upon the statement of defence.

4. Claim for a Total Constructive Loss on a Time Policy. 1. On the 21st of March, 1880, the defendant subscribed, for the sum of £50, a policy of marine insurance upon the plaintiff's ship the "Mist," valued at £2000, and insured the same against the ordinary risks, including perils of the seas, from noon of the said 21st of March, 1880, to noon of the 3rd of April, 1880.

2. On the 23rd of March, 1880, the said ship, by the perils of the seas, became a constructive total loss, and notice of abandonment was duly given by the plaintiff to the defendant.

3. At all the times mentioned in this pleading the plaintiff was interested in the subject-matter of insurance to the amount subscribed by the defendant.

The plaintiff claims £50.

Defence.

1. The defendant denies that the said ship became a constructive total loss.

2. The plaintiff did not give the defendant notice of abandonment.

3. The plaintiff had ceased to have any interest in the subject-matter of insurance at the time of the alleged loss.

4. The defendant further says that he was induced to effect the said insurance by the concealment by the plaintiff of certain facts then known to the plaintiff and unknown to the