§ 131.

An assignee of a policy must, in order to recover on it, Assignment of a policy. be the assignee both of the insurable interest covered by it, and of the policy itself (s). There are three essentials to the validity of the assignment, viz.:-(1) an assignable interest in the assignor; (2) the pendency of the risk insured against; and (3) an insurable interest in the thing insured, transferred to the assignee (†).

The assignee of a policy may sue on it in his own name, but the defendant may set up any defence of which he could have availed himself in an action brought in the name of the assignor (u).

The policy may be assigned either by an indorsement on the policy made in the form prescribed by the statute (v), which indorsement may be made any time between the date of the policy and the commencement of the action (x), or by mere delivery, provided such delivery be accompanied by the intention to assign the policy.

The consent of the underwriters to the assignment is not essential.

After an absolute assignment, the original assured will have no right of action on the policy, not even as an agent or trustee, unless the policy is handed over with the bill of sale to the assignee, or there is an agreement that it should be kept alive for his benefit (y). But the assured will not lose his right to recover by merely pledging the bill of lading as a collateral security (≈).

(s) Arnould, pt. 1, c. 3; North of England Oil Cake Co. v. Archangel Mar. Ins. Co., L. R., 10 Q. B. 249. (t) Ibid.

(u) 31 & 32 Vict. c. 86, s. 1. (v) Ib. s. 2, sched. The following is the form of indorsement:I, A. B., of &c., do hereby assign unto C. D., &c., his executors, administrators and assigns, the within policy of assurance on the ship,

freight and the goods therein carried
[or on ship, or freight, or goods, as
the case may be]. In witness where-
of, &c.

(x) Sparkes v. Marshall, 2 Bing.
N. C. 761.

(y) Poules v. Innes, 11 M. & W. 10; North of England Oil Cake Co. v. Archangel Mar. Ins. Co., L. R., 10 Q. B. 249.

(2) Hibbert v. Carter, 1 T. R. 745.

CHAPTER II.

THE POLICY.

§ 132.

AN ordinary policy of marine insurance is in the following form:

Delivered

the
day of

18

No.

[Stamp.]

Delivered on

the

of

BE IT KNOWN THAT

cause

voyage,

as well in

own names

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 assurance and and them, and every of them, to be insured, lost or not lost, at and from Upon any kind of goods and merchandises, and also upon the body, tackle, apparel, ordnance, munition, artillery, boat, and other furniture of and in the good ship or vessel called the whereof is master under God, for this present or whosoever else shall go for master in day 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 merchandises from the loading thereof aboard the said ship 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 merchandise whatsoever, shall be arrived at upon the said ship, &c., until she hath moored at anchor twentyfour hours in good safety; and upon the goods and merchandises, 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 ports or places whatsoever without prejudice to this insurance.

The said ship, &c. goods and merchandises, &c. for so much as concerns the assured, by

agreement between the assured and the assurers in this policy, are and shall be valued at

labour clause.

Touching the adventures and perils which we the assurers are Perils. 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 merchandises, and ship, &c. or any part thereof. And in case of any loss or misfortune, it shall be lawful Sue and to the assured, their factors, servants, and assigns, to sue, labour, and travel for, in and about the defence, safeguard, and recovery of the said goods and merchandises, 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. And it is agreed by Policy us the insurers, that this writing or policy of assurance shall be of binding. as much force and effect as the surest writing or policy of assurance heretofore made in Lombard Street, or in the Royal Exchange, or elsewhere in London. And so we the assurers are contented, and Indemnification clause. do hereby promise and bind ourselves, each one for his own part, our heirs, executors, and goods, to the assured, their executors, administrators and assigns, for the true performance of the pre- Receipt mises, confessing ourselves paid the consideration due unto us for clause. this assurance by the assured, at and after the rate of

IN WITNESS whereof we the assurers have subscribed our names and sums assured in

N.B.-Corn, fish, salt, fruit, flour, and seed, are warranted free The memofrom average, unless general, or the ship be stranded; sugar, randum. tobacco, hemp, flax, hides and skins, are warranted free from average, under five pounds per cent., and all other goods, also the ship and freight are warranted free from average, under three pounds per cent. unless general, or the ship be stranded (a).

The receipt clause, acknowledging payment of the premium, is conclusively binding on the underwriter, except in cases of fraud (b).

Therefore, in an action on the policy the underwriter

(a) This is the form authorized by 30 & 31 Vict. c. 23, s. 5, and Sched. E.; often termed a Lloyd's

Policy.

(b) Dalzell v. Mair, 1 Camp. 532; De Gaminde v. Pigon, 4 Taunt. 246.

Open policies.

Valued policies.

cannot, in the absence of fraud, set off the premiums, though they have never been paid (c).

To describe more accurately the thing they intend to insure, the underwriters usually write in the policy, or at the margin or foot, what it really is (e. g. " on freight," "on bottomry," &c.) The effect of this addition is to limit the clause in the policy:-"Upon any kind of goods and merchandise, and also upon the body, tackle,” &c., to what they really intend to insure, as the freight, bottomry, &c.

The insurers alone sign their names at the foot of the policy. Hence their name of underwriters. The date in the margin immediately under the stamp is that on which the policy was delivered by the Officer of Inland Revenue to the party who applied for it. This date must be inserted by such Officer under a penalty of 1001. (d).

Besides the common printed clauses in the statutory form of policy, others are usually inserted called Express Warranties (as to which see Chap. VII. (e) ), and also a clause called the running down clause (see Chap. V. (f)). The effect of the latter is to limit the liability of the underwriters in the event of a collision in respect of the loss of or damage to the ship, freight and cargo.

$133.

Marine policies consist of two classes, open and valued. In an open policy, the value of a thing insured is not included in the policy, and consequently in the event of a loss has to be proved at the trial.

In a valued policy, on the other hand, the value of the subject-matter of the insurance is fixed by the parties, and included in the policy in the valuation clause (g). The value so included is conclusive on both insurer (h) and

(e) De Gaminde v. Pigon, 4 Taunt.
246.

(d) 30 & 31 Vict. c. 23, s. 5.
(e) Page 284, post.

(f) Page 258, post.

(g) See p. 220 for form of policy. (h) Lewis v. Rucker, 2 Burr. 1167, 1171; Irving v. Manning, 1 H. L. Ca. 287; Lidget v. Secretan, L. R., 6 C. P. 616; Bur

insured. Therefore, where a ship insured by a valued policy is sunk through the fault of another ship, and the underwriters pay the shipowners the amount specified in the policy, the underwriters will be entitled to any damages recovered from the owners of the ship in fault, though the damaged ship were worth more than the amount specified in the policy (g).

In estimating for the purposes of a valued policy the value of his goods, the owner can add to the first cost the premium, any commissions, and also the profit which will in all probability result from the adventure (h).

In the case of a ship, the insured can include in the valuation, besides her own value, the stores, outfit and money advanced for seamen's wages; and also premiums and commissions (i); and then the mere fact of the loss occurring at the end of the voyage will not affect the valuation, but the whole will be recoverable (k).

If, as is usual, the freight be valued at its gross amount by a separate policy, such amount can be recovered from the underwriters; even in cases where the loss has prevented the expenses, which would have been necessary to the earning of it, from being incurred; and although the shipowner clearly obtains more than an indemnity (1).

interest.

If the insured fraudulently value his interest at too high Over-valuing a rate, with the object of cheating the underwriters, he cannot recover, even to the extent of his real interest; for the fraud will entirely vitiate the contract (m). Though the amount of the valuation can be disputed only on the ground of fraud, yet it may be shown what was intended to be valued, with a view to disputing the interest of

nand v. Rodocanachi, 7 App. Cas. 333; 51 L. J., Q. B. 548; 47 L. T. 277.

(g) North of England Ins. Ass. v. Armstrong, L. R., 5 Q. B. 244; "Cases" (1) at end of this §. (h) Per Lord Ellenborough, Forbes v. Aspinall, 13 East, 323, 327; and

see

see Stevens on Av. 179.

(i) Stevens, Av. 190.

(k) Shawe v. Felton, 2 East, 109. (1) Arnould, Ins. Part I. Ch. VI. (m) Haigh v. De la Cour, 3 Camp. 319; see "Cases" (2) at end of this §.