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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).

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 (8). 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
void. So also where the policy con-
tained the additional words "but to
pay loss on such parts as shall not
arrive." Allkins v. Jupe, ubi supra. See
also post, p. 462.

(p) See Thellusson v. Fletcher, 1
Dougl. 315: Craufurd v. Hunter, 8 T.
R. 13; Lucena v. Craufurd, ubi supra;
Nantes v. Thompson, 2 East, 385, over-
ruled by Cousin v. Nantes, 3 Taunt.

512.

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What interest sufficient generally;

In policies
under
Passengers
Acts and
Merchant
Shipping
Acts.

his parting, after the loss, with the property insured; since he may sue as trustee for the person to whom it has passed (†). 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 (u).

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 until the loading of the cargo is completed, the buyer cannot insure before the completion of the loading. The mere option which the buyer in such a case would possess to take so much of the cargo as was loaded, does not confer such an interest in the cargo as would be sufficient to support a policy on profits (x).

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 (z). 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.

() 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 inmerchant 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), 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

Y.

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
delivery of a policy, see Xenos v. Wick-
ham, 13 C. B., N. Š. 381; S. C. in Cam.
Scacc., 14 C. B., N. S. 435; Dom.
Proc., L. R., 2 H. L. 296. The
fact that instructions have been given
for an insurance and that a "slip"
has been obtained, is not a sufficient
compliance with an agreement to keep
a ship insured. See Parry v. The Great
Ship Company, 4 B. & S. 556; see also
post, pp. 449, 450.

(d) See per Bayley, J., in Power v.
Butcher, 10 B. & C. 340.

(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.

Lien of insurance broker.

FORM AND
CONSTRUCTION
OF POLICIES

AND THEIR
ALTERATION.

Ordinary form of policy.

An insurance broker has a lien upon the policy which he effects. If he be employed immediately by the assured, this lien extends to the general balance due (f). Where, however, the broker is employed by an intermediate agent who he knows to be such, his right of lien extends only to premiums and commissions relating to the particular transaction (g). This right of lien may, as in other cases, be superseded by a special contract or course of dealing. A mere arrangement, however, whereby the broker is paid upon a monthly account, but does not deliver up the policies before payment, will not affect the right of lien (h); and this is so although the policies were effected through an intermediate agent, known by the broker to be such, who was paid by the principal, but failed to pay the broker (i). Secondly, as to the form and construction of policies and their alteration.

The form of marine policy used in this country has varied little for more than two hundred years.

The following is the ordinary form now in use at Lloyds :

In the name of God. Amen.

as well in

own name, as for and in the name and names of all and
every other person or persons to whom the same doth,
may, or shall appertain, in part or in all, doth make assur-
ance, and cause
and them, and every of them, to be

insured, lost or not lost, at and from
upon any kind
of goods and merchandizes, and also upon the body, tackle,
apparel, ordnance, munition, artillery, boat, and other fur-

In Bromley v. Williams, 32 Beav. 177,
the Master of the Rolls was inclined to
the opinion that no policy was necessary.
The contrary, however, was held in
In re The London Marine Insurance
Association, L. R., 4 Ch. 611. See also
Blythe & Company's case, In re Albert
Average Association, L. R., 13 Eq. 529.
It has, however, been held in a case
where one of these clubs was being
wound up, and it appeared that the
books of the club contained admissions
that the club was liable for the pay-
ment of the amount insured, that the
assured was entitled to rank as a cre-
ditor for the amount of the insurance,
notwithstanding that the policy on
which the claim arose was unstamped,
and was, therefore, inadmissible in
evidence. In re Teignmouth and General
Mutual Shipping Association, L. R., 14
Eq. 148. As to the stringent provi-

sions of the 30 Vict. c. 23, on this point, see post, p. 448. As to the rights of members of these associations, see further In re London Marine Insurance Association, Andrews' Case, L. R., 8 Eq. 176; Gray v. Pearson, L. R., 5 C. P. 568; Wood v. Wood, L. R., 9 Ex. 190; Evans v. Hooper, L. R., 1 Q. B. D. 45; Edwards v. The Aberayron Mutual Ship Insurance Society, 1 Q. B. D. 563. As to the renewal of club policies, see Cory v. Paton, L. R., 7 Q. B. 304; Lishman v. The Northern Maritime Insurance Company, L. R., 10 C. P. 179. Forwood v. The North Wales Mutual Marine Insurance Company, 5 Q. B. D. 57.

(f) Ollive v. Smith, 5 Taunt. 55; Phillips on Insurance, s. 1909.

(g) Westwood v. Bell, 4 Camp. 352.
(h) Fisher v. Smith, 4 App. Cas. 1.
(i) Ibid.

niture, of and in the good ship or vessel, called the
whereof is master, under God, for this present voyage

or whosoever else shall go for master in the said ship, or by whatsoever other name or names the said ship, or the master thereof, is or shall be named or called; beginning the adventure upon the said goods and merchandizes, from the loading thereof aboard the said ship,

upon

the said ship, &c. and so shall continue and endure,
during her abode there, upon the said ship, &c. And
further, until the said ship, with all her ordnance, tackle,
apparel, &c. and goods and merchandizes whatsoever, shall
be arrived at
upon the said ship, &c. until she hath
moored at anchor twenty-four hours in good safety; and
upon the goods and merchandizes, until the same be there.
discharged, and safely landed. And it shall be lawful for
the said ship, &c. in this voyage, to proceed and sail to,
and touch and stay at, any port or places whatsoever,
without prejudice to this insurance. The said ship, &c.,
goods and merchandizes, &c., for so much as concerns the
assureds, by agreement between the assureds and assurers.
in this policy, are and shall be valued at

Touching the adventures and perils which we the assurers are contented to bear, and do 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, takings 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 merchandizes, and ship, &c., or any part thereof. And in case of any loss or misfortune, it shall be lawful to the assureds, their factors, servants, and assigns, to sue, labour, and travel for, in and about the defence, safeguard and recovery of the said goods and merchandizes, and ship, &c., or any part thereof, without prejudice to this insurance; to the charges whereof we the assurers will contribute, each one according to the rate and quantity of his sum herein assured (k). And it is agreed

(4) See as to this clause, which is known as "the suing and labouring clause," post, p. 490.

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