the loss occurs: it is not to be inferred from this rule that a party who has become interested in goods after the commencement of the risk, is to be precluded from recovering for an average loss on such goods, merely because such loss occurred before his interest commenced: accordingly it has been recently decided in this country, that to an action on a policy on goods effected with the clause "lost or not lost,” and under which the assured claims to recover for an average loss, it is no answer to aver that the interest in the goods was not acquired till after the loss, it being at the same time admitted, that the plaintiff had an interest in such goods during the voyage to the amount insured. (j) Of insurable in terest generally. The indefeaproperty is not sibility of the Although, however, the party insuring must have an interest in the subject insured at the time of loss, yet it by no means follows that he must have an indefeasible interest in it: on the contrary, it is matter of common experience, that a interest. defeasible interest is insurable. "It is the case," says Lord Ellenborough, "of every consignee of goods under a bill of lading: the goods on their passage home are liable to be stopped in transitu, and his interest defeated; yet can it be said that the property is not so far vested in the consignee as to entitle him to insure. Again, what is the case of an executor? Probate is necessary to complete his title, yet before probate he has title sufficient to enable him to insure. The indefeasibility of the property, therefore, is not the criterion of an insurable interest." (k) Accordingly, his lordship decided, in the very case in which these remarks were made, that the right of captors to their prize, under the Prize Acts, was an insurable interest before condemnation, though defeasible, before that event, by the release of the crown, or by sentence of restoration. (1) The power to abandon has been suggested as a test of the party's possessing such an interest as to entitle him to insure in his own name and on his own account: but it is not a certain criterion, as cases exist in which there may be an in () Sutherland v. Pratt, 11 Mees. & Wels. 296. the criterion of an insurable interest. Defeasible interest may be insured. The power to abandon can only be a cri terion of possessing insura ble interest in those cases where the suba (k) Stirling v. Vaughan, 11 East, 629. ject insured is (1) Ibid. capable of aban donment. Of insurable in- surable interest in subjects which from their nature are interest generally. capable of abandonment, as profits, bottomry, and respondentia. (m) If, however, the nature of the subject be such as to admit of abandonment, then an incapacity to abandon certainly shows a want of insurable interest in the subject of insurance at the time of the loss, for an abandonment is nothing else than a devesting out of the assured of all the interest he had in the thing insured at the moment of the loss, on condition of his being paid by the underwriters the whole amount of the insurance. A want of power, therefore, to abandon, where abandonment is requisite, clearly shows a want of such interest, at the time of loss, as alone can enable the assured to recover on a policy effected in his own name and on his own account. (n) Of the different kinds of interest that have been held to give a title to insure. SECT. II. Of the different Kinds of Interest that have been held to give a Title to insure. Having thus seen the nature of insurable interest generally, we will proceed to consider the different kinds of interest that have at various times been held adequate or inadequate to give partics a title to procure insurances to be effected on their own account and for their own benefit. view, then, we will consider: 1. The insurable interest in freight. With this 2. The insurable interest in profits and commissions. 3. The insurable interest of the lender and borrower at bottomry and on respondentia. (m) See the opinions of the judges generally, and of Lawrence, J., in particular, on the fifth question submitted to them by the House of Lords in Lucena v. Crawfurd, 2 Bos, & Pull. N. R. 289-310. See also the opinion of Lord Eldon, ibid. 315–327., and see Phillips on Ins., vol. i. p. 109. (n) See the observations of Law. rence, J., on this point, in Lucena r. Crawfurd, 2 Bos. & Pull. N. R. 312. : and see also the case of Conway r. Gray, 10 East, 536., where the want of power to abandon, and the absence of insurable interest in goods, are treated as resting on the same ground. 4. The insurable interest of consignee, factor, or agent. 7. The insurable interest of the shipowner and charterer. Of the different kinds of interest that have been held to give a title to insure. ART. 1. Of Insurable Interest in Freight. § 106. As we have already discussed, in treating of the Insurable intesubjects of Marine Insurance, the right of protecting these rest in freight. interests by insurance generally, it will be here only requi site to consider how far, in order to legalise such insurances, the party who has effected them in his own name and on his own account must be related to or concerned with the subject insured. The principles upon which the insurable interest in such cases depend, were thus expressed by the Judges in the great case of Lucena v. Crawfurd: "Inchoate rights founded on subsisting titles, unless prohibited by positive laws, are insurable (o): — where there is an expectancy coupled with a present existing title, there is an insurable interest.” (p) The former of these two positions is more applicable to the case of freight, the latter to profits and commissions. Taking, then, first the case of freight, we shall find that, in order to give an insurable interest on freight, there must be, 1. A title either legal or equitable in the party insuring, subsisting at the time of loss, in the subject out of the ownership of which the right to freight accrues, i. e. the ship. 2. There must be, at the time of loss, an inchoate right to the freight; in other words, the position of things must be this, that, but for the intervention of the loss, freight would have been realised by the party insuring. First, then, the party effecting an insurance on freight must have a title in the ship, either legal or equitable, sub (0) Lucena v. Crawfurd, 2 Bos. & (p) Ibid. 293. Pull. N. R. 294. In order to he must have a title, subsisting at the time of loss, in the inchoate right to the freight. ship; and an The assured on freight must have a title in the ship, either legal or equitable, subsisting at the time of loss. Insurable inte rest in freight. Camden v. T. R. 709. The party who insures freight must have an inchoate right thereto. In order to give an insurable interest in freight, not secured by charter-party, but payable on delivery of the sisting at the time of loss, " for the right to freight results from the right of ownership, and if the assured have no title to the ship they have no interest in the freight. (q) Hence, where a ship was paid for by four persons, but registered in the names of two of them only, it was held, that three out of the number could not recover under a policy effected in their names on the freight of the ship, upon a declaration which in one count averred the interest to be in the three plaintiffs, and in another count averred it to be in them and in the remaining fourth purchaser; the ground of the decision being, that, as the plaintiffs had not complied with the provisions of the then Registry Act (26 G. 3. c. 60.), they had neither the legal nor the equitable title in the ship; out of one or the other of which alone could a claim to freight arise, and, consequently, they had no insurable interest in the freight. (r) Secondly, at the time of the loss there must be an inchoate right to the freight in the party insuring; in other words, he must be so situated with respect to it, as that he would certainly have earned freight but for the intervention of the loss. The principle here is, that, where nothing intervenes between the subject insured and the possession of it, but the perils insured against, the person so situated may insure the safety of such subject of insurance, for he has an interest to avert the perils insured against. (s) We shall have occasion elsewhere to investigate more at large the numerous decisions that show when an inchoate right to freight may be considered to have vested in the party effecting an insurance on that interest. It will be sufficient here to state the principles established by these decisions, and draw those conclusions from them that have a more particular application to the subject of insurable interest. The word freight, in policies of insurance, means, as we (9) Per Lord Kenyon in Camden Bos. & Pull. 272. (r) Camden v. Anderson, 5 T. Rep. 709. and see S. C. 6 T. Rep. 723. 1 : See also Marsh v. (s) Lucena v. Crawfurd, in error, 3 Bos & Pull. 95. goods, the shipable to show owner must be that the goods, at the time of loss, were either loaded on have already had occasion to observe, either, 1. Freight, pro- Insurable interest in freight. perly so called, i. e. the sum paid to the shipowner for the transport of goods in his ship; or 2d, The price agreed to be paid by charter-party for the hire of the ship, which is, strictly speaking, rather to be called charter-money than freight. The shipowner's right to freight in the former case does not accrue, in other words, he has no inchoate right to freight, and, therefore, no insurable interest thereon, unless the goods or a part of them are actually loaded on board the ship before the loss; "or are so situated with respect to the ship as to create a well grounded expectation of freight being realized." (t) The true proposition, in fact, as far as regards freight, properly so called, is this, that, in order to give the shipowner an insurable interest in such freight, he must prove that, but for the intervention of the perils insured against, some freight would have been earned, either by showing that some of the goods, for the transport of which it was to be paid, were actually put on board; or that there was some contract for putting them on board, and that the ship was ready to receive the goods, and the goods ready to be shipped under such contract, before the loss. (u) board, or con tracted for and ready to be so shipped. under a charter surable interest On the other hand, where the freight intended to be in- Where the sured is the price of the hire of the ship under a charter-party, hire of the ship freight is the the cases show, that the inchoate right to such freight vests for a voyage in the shipowner directly the ship has broken ground on the party, the invoyage described in the charter-party; from that moment vests on the nothing can intercept the earning of freight under the terms ship's breaking ground for the of the charter-party, except the breaking up of the voyage voyage. by the perils insured against; and, consequently, from that moment, the shipowner has an insurable interest in the freight, which, but for the intervention of such perils, he has thus put himself in a position to earn. (v) (t) Dictum of Mr. Ch. J. Eyre in Curling v. Long, 1 Bos. & Pull. 636. (u) Montgomery v. Egginton, 3 T. Rep. 362. Truscott v. Christie, 2 Brod. & Bingh. 326. Parke v. Heb son, ibid. 329. East, 331. Ad. 45. N. C. 519. Forbes v. Aspinall, 13 Flint v. Flemyng, 1 B. & () Thompson v. Taylor, 6 T. Rep. |