Insurable in terest of vendor and vendee. interest to be in himself (x): nor is it any answer to an action so brought in his name on the policy, that he has indorsed over the policy after the loss. (y) Insurable interest of shipowner and charterer. ART. 7. Insurable Interest of the Ship-owner and Charterer in Ship, Freight, &c. § 113. The owner has in all cases an insurable interest in the ship even where he lets out his ship under a contract of affreightment to a charterer, who covenants, in case of loss, The shipowner to pay him her full estimated value, he has still a right to insure to the full amount; for he is not bound to trust excluthough hired to sively to the credit of the charterer, but may likewise protect himself by a policy of insurance. (z) has an insurable interest in the ship, even a charterer, who, in case of loss, covenants to pay her full value. also in such case has an insurable in The charterer also has, in such case, an insurable interest in the ship, to the full extent in which he is liable to The charterer damage by her loss: thus, in the United States, where the owner of one half of a schooner hired the other half, with a covenant, that, in case of her being lost within the terms of the charter-party, he would pay the other part-owner the value of his moiety, he was held to have an insurable interest to the full value of the ship. (a) terest. Generally speaking, the shipowner alone has an insurable in Generally speaking, the shipowner alone has an insurable interest in freight, whether by that word he meant freight, properly so speaking, viz. the sum payable to him for the terest in freight. Carriage of goods in his ship on their arrival, or whether it be used to signify what may more correctly be called, charter money; i. e. the price paid him for the hire of his ship under a contract of affreightment. Where, however, the charterer himself In some cases, however, the charterer may have an insurable interest in freight: as where he has covenanted by ship in carrying charter-party to pay a given sum for the hire of the ship to the owner, and then employs the ship so hired for the trans employs the goods on freight, he has an insurable interest in the freight so earned. (x) Sparkes v. Marshall, 2 Bingh. N. C. 761. (y) Ibid. (z) Hobbs v. Hannam, 3 Camp. 93. (a) † Oliver v. Greene, 3 Mass. Rep. 133., cited Phillips on Ins., vol. i. p. 131. port of other people's goods on freight, there seems no doubt that, as he stands, pro hac vice, and with regard to the shippers of the goods as shipowner, he has an insurable interest in the freight he so expects to earn; at all events, for the surplus by which such freight exceeds the sum he has engaged to pay the shipowner as charter money (b), even though such surplus may partly arise from carrying his own goods in the ship; for, as it is clear law in this country that the shipowner has an insurable interest in the benefit which he expects to derive, or the profit he expects to make, by carrying his own goods in his own ship, and may protect this interest under a general insurance on freight (c), there is no reason why the charterer, who, under the circumstances supposed, stands in the same position, may not do the same. (d) If a person sells a ship, reserving his right to receive freight in respect of all goods that may be carried in it for the voyage insured, he seems to stand precisely in the situation of a charterer who takes goods on freight, and ought, therefore, to have the same insurable interest in the freight expected to be earned on the voyage insured. (e) Insurable in terest of ship owner and charterer. And also in the profit arising from carrying his own goods in the ship. The owner who sells his ship, right to receive freight for the voyage. reserving a The charterer has an insura ble interest in self against loss that may accrue from having to protecting him If the charterer of a vessel has covenanted by the charterparty that he will pay a named sum as dead freight on the arrival of the ship, in case she should be prevented by political or other circumstances from discharging her outward, or shipping her return cargo, and be, consequently, obliged to return unloaded, he has an insurable interest to the extent of freight. the sum he has so bound himself to pay, and may protect himself against the eventual loss of having to pay it, under a policy in which the underwriters bind themselves to pay a (b) The American case of † Mellen . National Ins. Comp., 1 Hall, 452., cited in Phillips on Ins., vol. i. pp. 141, 142. is contra; but it appears wrongly decided. See the observations of Mr. Phillips, loco citato, and also vol. i. p. 201. American case of † Mellen v. National to. (e) The contrary has been decided in the United States, † Riley v. Dela field, 7 Johnson's Rep. 522.; but this decision, as Mr. Phillips has ably pointed out, does not rest on satisfactory grounds. See Phillips on Ins., (d) The contrary was held in the vol. i. pp. 140. 200. (e) Flint v. Flemyng, 1 B. & Ad. 45. Devaux v. J'anson, 5 Bingh N. C. 519. pay dead Insurable interest of shipowner and charterer. The charterer has an insur able interest in money ad vanced in part payment of freight. total loss, in case the ship should be prevented from unloading, &c. in the terms of the charter-party. (ƒ) The risk insured against in this case was the risk of the vessel's not being allowed to unload &c. by the foreign government at the port of discharge, the only risk against which the charterer, under the terms of the charter-party, was interested on insuring; there is no doubt that the shipowner might also have insured his interest in the freight under a common policy against ordinary sea risks. (g) The charterer of a ship, who has advanced money under the terms of the charter-party in part payment of the freight, has an insurable interest in the money so advanced; for as such money could not, in case of the loss of the ship, be recovered back by the charterer from the owner (h), the loss of the ship would involve the loss of the money advanced (¿); but, in order to give him such an insurable interest, it must very distinctly appear, by clear and explicit words to that effect in that the money the charter-party, that the money advanced is an advance in part payment of the freight. (j) But it must distinctly ap pear upon the face of the charter-party advanced is in part payment of the freight. Cases on this point. De Silvale v. Hence, where the covenant as to payment of freight in a charter-party, on a ship bound from Liverpool to Maranham and back, was in the following terms: "Such freight to be 4 M. & Sel. 37. paid as follows, viz. 1207. British sterling for freight of the outward cargo to Maranham, and as much cash as may be found necessary for the ship's disbursements at Maranham, to be advanced by the charterer or his agents to the master when required, free from interest or commission, &c. and the residue of such freight to be paid on the delivery of the cargo in Liverpool," &c.: Lord Ellenborough and the Court of King's Bench held, that, under the special terms of this charter-party, the money advanced must be held to have been advanced specifically on account of freight, and, therefore, (f) Puller v. Staniforth, 11 East, 232. See also Puller v. Glover, 12 East, 124. Puller v. Halliday, 12 East, 494. De Silvale v. Kendall, 4 Maule & Sel. 37. (i) See the observations of Bayley, J., in Manfield v. Maitland, 4 B. & Ald. (g) See the observations of Phillips 585. on Ins., vol. i. p. 140. (h) Anonymous case, 2 Shower, 283. (j) Abbott, C. J., in Manfield r. Maitland, 4 B. & Ald. 585. upon the loss of the ship, before any freight earned, could not be recovered back by the charterer from the owner, as money had and received. (k) "In this case," as Lord Tenterden remarks, "the instru ment was studiously framed, so as to make the freighter lose the money advanced by him, unless the owner reaped the benefit by the ship's coming home safe." (1) Insurable in terest of ship owner and charterer. Where it does not distinctly appear on the face of the charter-party, that the sum advanced is as part of the vance is regard ed as a mere Where, however, the charter-party does not, on the face of it, clearly and distinctly import that the sum advanced is to be a payment in advance specifically of freight, it is to be regarded as a mere loan, which the freighter may recover against the owner, and in which he has, therefore, no insur- specifically paid able interest, as he runs no risk of losing it by the perils freight, the adinsured against; hence, where the memorandum of charterparty, after stipulating for the amount of freight, and the mode of its payment, merely contained the words, "The captain to be supplied with cash for the ship's use," the court held, that the charterer had no insurable interest in bills of exchange drawn on him by the master in respect of cash so supplied, it not appearing by the charter-party to be advanced 582. as a part payment of freight. (m) loan by the charterer, in re spect of which he has no inManfield v. surable interest. Maitland, 4 B. & Ald. dimand, 649. Where, in the case of a ship chartered for a voyage from Winter v. HalBuenos Ayres to Canton and back, it was stipulated by the 2 B. & Ad. charter-party that the freighters should pay for the use of the ship "for the voyage 10,000 dollars, in manner following: viz. in China, all the sums that might be necessary for the payment of port charges and other incidental expenses (the latter not to exceed 2000 dollars), and the balance at thirty days after the ship's return to the port at Buenos Ayres:" Lord Tenterden admitted, that the freighters had an insurable interest in payments made under this stipulation by their agents at Canton, in respect of port charges and incidental expenses; but he (k) De Silvale v. Kendall, 4 Maule & Sel. 37. Lord Ellenborough and Mr. J. Dampier lay some stress upon the words "free from interest and comTission," as showing that the money advanced was not intended to have been a loan. (1) Per Abbott, C. J., in 4 B. & Ald. 585. (m) Manfield v. Maitiana, 4 B. & Ald. 582. See also Saunders v. Drew, 3 B. & Ad. 445. Insurable interest of shipowner and charterer. Insurable in terest of captors, prize agents, &c. The officers and crew of a ship of war able interest under the prize acts, in a prize taken, flagrante bello, seems to have considered that they could only insure such interest by a policy, specially purporting to be "on money paid for shipment of goods to be transported to Buenos Ayres," and not by a general policy on freight. (n) ART. 8. Insurable Interest of Captors, Prize Agents, &c. § 114. The insurable interest of captors, prize agents, &c. in captured property, has been the subject of very elaborate and refined discussion in the English courts. The first case in which the question arose was that of Le Cras v. Hughes, before Lord Mansfield, generally known in insurance law as the Omoa case. The facts of the case were shortly these: a detachment of the sea and land forces of Great Britain, under the respective have an insur commands of Captains Luttrell and Dalrymple, jointly captured the fort of Omoa, and two Spanish register ships then lying under its protection; one of which ships, the St. Domingo, by the sea and together with her cargo, was insured on account of the officers and crews of the ships under Captain Luttrell "at and from Omoa to London; " the ship, laden with captured property, Hughes, or the was lost on her homeward voyage by the perils of the sea; and an action being brought on the policy, averring the interest to be in the officers and crews of the ships, two questions were made, land forces jointly. Le Cras v. Omoa case. 1. Whether the sea officers had an insurable interest under the then prize act (19 G. III. c. 67.). 2. Whether possession of the ship would entitle them to insure upon the bare contingency of a future grant from the crown. The consideration of the second question became unnecessary, except speculatively, for Lord Mansfield was clearly of opinion that the officers and crew had an insurable interest under the prize act. The objection on this point was, that (n) Winter v. Haldimand, 2 B. & Ad. 649. The dicta of Lord Tenterden, above referred to, are in pp. 653. 658. of the report. See antè, Chap. IX. Description of Subject insured in the Policy. |