of Appeal, 2nd and 3rd July 1894),1 Lord Justice Lindley in his judgment made the following statement: "There is no doubt that, in considering the liabilities of underwriters of marine insurance policies, it is a cardinal rule to regard 'proximate' and not 'remote' causes of loss. This rule is based on the intentions of the parties as expressed in the contract into which they have entered, but the rule must be applied with good sense, so as to give effect to, and not to defeat those intentions." The existence of personal fault of the assured among the remote causes of loss or damage has been held to exempt the underwriter from claims for loss or damage even if immediately caused by perils insured against. In the case of Thompson v. Hopper, 1856,2 a vessel was with the deliberate knowledge of her owner sent out of port into a roadstead without proper preparation for sea. As she lay anchored in an exposed position a gale came on, she was driven ashore and became a total wreck. It was acknowledged that the gale, a sea peril, was the immediate cause of the loss, but as the ship was knowingly left unprepared, it was held that the assured could not recover, as otherwise he would really be deriving advantage from his personal misconduct. This case should be contrasted with Dudgeon v. Pembroke, 1877,3 on a policy of insurance for time on a vessel bought after being out of work for a while, and fitted up by the new owner for his special trade without sparing expense or trouble. She sailed from London to Gothenburg in Sweden, and arrived there, although on the passage she made more water than was expected. On the return voyage in a gale she began to leak, and becoming full of water did not answer her helm. In consequence of this and of fog and of the gale she went ashore on the Yorkshire coast and went to pieces. The jury found that had the vessel been seaworthy she would not have gone ashore or been wrecked: that unseaworthy though she was, she would not have been lost had it not been for the gale: that her unseaworthiness was a latent defect arising from no fault of the owner. It was held in 26 E. & B. 172, 937.

1 10 Times Law Rep. 568.

3 L. R. 2 App. Cas. 284.

the Court of Queen's Bench and the House of Lords that the underwriters were liable. The words of Lord (then Mr. Justice) Blackburn are eminently worthy of attention : "The ship perished because she went ashore on the coast of Yorkshire. The cause of her going ashore was partly that it was thick weather and she was making for Hull in distress, and partly that she was unmanageable because full of water. The cause of that cause, nainely, her being in distress and full of water, was that when she laboured in the rolling sea she made water; and the cause of her making water was, that when she left London she was not in so strong and staunch a state as she ought to have been; and this last is said to be the proximate cause of the loss, though since she left London she had crossed the North Sea twice. We think it would have been a misdirection to tell the jury that this was not a loss by perils of the seas, even if so connected with the state of unseaworthiness as that it would prevent any one who knowingly sent her out in that state from recovering indemnity for this loss." In both of these cases the immediateness of the results from perils of the sea is evident. What prevented the recovery of the amount insured in Thompson v. Hopper 1 was not the remoteness of the cause, but the personal fault of the assured. Further remarks in the judgment of Dudgeon v. Pembroke 2 lead to the conclusion that if a similar loss had occurred through tear and wear aggravated by the original bad state of the vessel, Mr. Justice Blackburn would have held the underwriters exempt from the loss.

These decisions lead to the conclusion that in cases of ships insured on the ordinary form of policy, what has to be done is to determine the immediate, the very last cause of the loss or damage, in the way Mr. Justice Blackburn did in the extract cited above: if this very last cause is one of the perils insured against, then the loss or damage is due to be

16 E. & B. 172, 937.

2 L. R. 2 App. Cas. 284. This is practically what the arbitrator found to be true in the case of Fawcus v. Sarsfield, 1856, 6 E. & B. 192.

paid by the underwriter, unless there is among the more remote causes personal fault of the assured, simple tear and wear, or unseaworthiness.

In the more complicated cases where a vessel is insured against only some of the perils named in the policy, and the loss occurs jointly from a peril specifically insured against and one or more of those not insured against, the same difficulty arises in a more pointed form. As an illustration one may take the imaginary case put by Chief Justice Erle in Ionides v. Universal Marine, 1863:1

66

Suppose the ship, insured free from all consequences of hostilities, is going to a port where there are two channels, in one of which a torpedo has been laid by the enemy. If the master not knowing this goes into the channel where the torpedo is, and is blown up, this is within the exception :2 not so, if knowing of the torpedo he takes the other channel to avoid it, and by unskilful navigation runs aground there." In the case then under C. J. Erle's consideration, a coffee-laden ship struck a reef of rocks and became a wreck, in consequence of the captain losing his reckoning owing to Cape Hatteras light being extinguished for strategic reasons by the Confederates in the American Civil War. There were 6050 bags of coffee on board, of these 1020 would have been salved but for the intervention of the Confederate troops, who, however, saved 170 for their own use. It was decided that the underwriters who insured the coffee "free from all consequences of hostilities were not liable for the loss of the 1020, but were liable for that of the remainder 5030. The 1020 were certainly lost in consequence of hostilities, but the 5030 from perils of the sea, namely from striking the reef, which was not by any means an inevitable or even a usual consequence of the extinction of the light.

In the case of the tug Rosa already referred to (Reischer

1 14 C. B. N.S. 259.

2 That is, the underwriter would in consequence of the clause "free from all consequences of hostilities" be held free from all liability for the loss.

v. Borwick, Court of Appeal, 2nd and 3rd July 1894),1 the risks insured against in the policy were "the risk of collision (as per clause attached) and damage received in collision with any object, including ice." The collision clause attached refers to collision with other ships; the accident that did occur was collision with a snag in the Danube. The damage was serious; the captain endeavoured as speedily as he could to plug up the vessel from the outside, and took the assistance of a tug to tow his vessel to a place where she could be repaired. During the tow one of the plugs fell out, and in order to prevent the vessel from sinking in deep water, the tug towed her on to the southern bank of the river. The underwriters paid cash into court for the damage sustained up to the time when the Rosa was taken into tow, but denied liability; with respect to the subsequent damage, they strenuously contended that they were under no liability on the ground that the proximate cause was not the collision, but the towing to a port of repair. Mr. Justice Kennedy overruled this contention, and the Court of Appeal (Lords Justices Lindley, Lopes, and Davey) confirmed his view. Lord Justice Lindley said: "The sinking of the ship was proximately caused by the internal injuries produced by the collision, and by the water reaching and getting through the injured parts whilst she was being towed to a place of repair. The sinking was due as much to the one of these causes as to the other; each was as much a ‘proximate' cause of her sinking as the other, and it would in my opinion be contrary to good sense to hold that the damage by the sinking was not covered by this policy. . . . I feel the difficulty of expressing in precise language the distinction between causes which co-operate in producing a given result. When they succeed each other at intervals which can be observed, it is comparatively easy to distinguish them and to have their respective effects, but under other circumstances it may be impossible to do so. It appears to me, however, that an injury to a ship may fairly be said to cause its loss if, before that injury is or can be repaired, the ship is lost by reason of the existence of 1 IO Times Law Rep. 568.

that injury, i.e. under circumstances which, but for the existence of that injury, would not have effected her safety. It follows that if, as in this case, a policy is effected covering such an injury, it will in the circumstances supposed extend to the loss of the ship, for in the case supposed the injury will really be the cause of the loss—the causa causans and not the causa sine qua non."

From consideration of all the cases mentioned above, it appears that there is some difference between the treatment of excepted perils and that of default of owner, wear and tear, and unseaworthiness. The difference seems to be that the excepted and the covered perils are regarded as of equal importance until it is discovered which is the more immediate cause of the casualty; while in the case of default, wear and tear, and unseaworthiness, any one of these once found existing absolutely wipes out the other coexisting perils and is burdened with all the liability.

There is another important group of cases, Jackson v. Union Marine, 1873,1 Inman v. Bischoff, 1881,2 and Mercantile Steamship Company v. Tyser, 1881,3 in which the subject insured was an expectation of gain, say freight, which was lost through some circumstance like the exercise of a charterer's option to cancel a charter if the vessel does not arrive at loading port by a named date. In all these cases a casualty caused by a peril of the sea occurred, and in consequence of the resulting delay the charterers did not permit the vessels to load the cargo or earn the freight they went to get. The circumstances of the three cases differed widely, but the net result was that where the loss of the opportunity to earn freight was caused solely by the exercise of the charterer's option to cancel, the underwriters on the ordinary policy against perils of the seas were held not to be liable for the loss.4

1 L. R. 8 C.P. 572; 10 C.P. 125.

2 27 App. Cas. 670.

3 7 Q.B.D. 73.

4 See also The Abrota, 1895 (Jamieson v. Newcastle Stm. Frt. Ins. Ass.), II Times L. R. 176 and 416, see also p. 241 below.