This rule does not extend to the master. But an insu rance on money lent to the captain, payable out of the freight is illegal. rule extends to the length of establishing another, viz.,"That no seaman can avail himself of the insurance of the ship or cargo." In the case of the Lady Durham (a), Sir J. Nicholl says, "It is thrown into the summary petition that the owner had made insurances on the homeward cargo; but 'that will not give the seaman a legal right to wages: it may induce the owner to act with liberality, but it cannot induce me to violate a principle and rule of law, whatever may be the hardship on the seaman.' The policy of the law requires that a seaman shall not insure his wages; he must take the risk of the ship, and stand by her at every hazard: he has a lien on the ship to the last plank, and on the freight which is appurtenant to the ship; and I think that, in principle, the king's advocate's argument is not remote, and that an insurance on the ship does not benefit the seaman; for if the seaman could look to the insurance of the ship as a security for his wages, it would be a substitution for his own private insurance, and would defeat the policy of the law. A seaman knows whether the ship is insured or not, and if such an insurance could enure to his advantage, it might make him indifferent or moderate, if not extinguish all exertion on his part." This rule of law does not affect the master of the ship; and it has been holden that an insurance on the commission, privileges, &c., of the captain of a ship in the African trade was valid, when that traffic was legal (b). And in this respect the English law corresponds with the French, in allowing the captain of a ship to insure goods which he has on board, or his share in the ship, if he be a part-owner (c). But a master of a ship has not a lien on the freight for his wages, or for his disbursements on account of the ship during the voyaye (d); and therefore a policy of insurance "on money lent to a captain of a ship, payable out of the freight, is illegal and void on the face of it" (e). (a) 3 Hagg. A. R. p. 200. Rep. (c) Emerig. tom. 1, p. 236. (d) Smith v. Plummer, 1 B. & A. 575. (e) Wilson v. R. Exchange Co. 2 Camp. 626. Fifthly, freight, or the profit derivable from the carriage Freight is a good insurable of goods, or hire of a vessel under a charter-party, consti- interest. tutes a good insurable interest. "It would, indeed, be extraordinary," says Mr. J. Chambre, in delivering his opinion in the case of Lucena v. Craufurd (a), "if freight could not be made the subject of protection by an instrument which had its origin from commerce, and was introduced for the very purpose of giving security to mercantile transactions. It is a solid, substantial interest, ascertained by contract, and arising from labour and capital employed for the purpose of commerce. But even in this case the existence of a subject out of which freight may arise, or be earned, is necessary, as is settled by the case of Tonge v. Watts (b), lately cited and approved of by Lord Kenyon, in the case of Thompson and Taylor" (c). When freight is intended to be insured it should be mentioned, eo nomine, in the policy (d). The owners have an insurable interest in the profits which they expect to make in carrying their own goods in their own ship; decided in the cases of Flint v. Flemyng (e), and Devaux v. J'Anson (ƒ), which important cases will be more fully referred to in a subsequent part of this treatise. Sixthly, carriers have likewise a special property in the goods entrusted to their care, and they may protect "their interest" in them by an insurance; and although it is not absolutely necessary to state particularly in the policy that it is their "special interest as carriers," still it is more correct to do so, as said by Lord Tenterden, in the case of Crowley v. Cohen (g), which was mentioned before (h). There are many more instances in which the assured may protect his "interest" in different mercantile concerns, which we shall have presently to mention; it, however, is my object at present, (a) 3 B. & P. 102. (b) 2 Strange, 125. (c) 6 T. R. 478. (d) 2 New Rep. 315; 11Ves. 628; and see Baillie v. Moudigliani, B.R. Hil. 25 Geo. 3; Park Ins. 116. (e) 1 B. & Ad. 45. (f) 7 Scott, 507; 5 Bing. N.C.519. (g) 3 B. & Ad. 478. (h) Ante, p. 17. And the shipinsurable interest in the expect to make owners have an profits they by carrying their own goods in their own ship. Carriers have interest in the goods entrusted an insurable to their care. Wager policies or "interest or no interest." Seventhly, to refer to a class of cases which have been by the statute law of the country declared to be absolutely null and void. This class are what are called wager-policies, or, in other terms, policies on "interest or no interest.” Mr. J. Park (a) lays it down, that "the nature of the contract of insurance in its original state was, that a specific voyage should be performed, free from the perils of the seas;" and, in case of accidents during such voyage, the assurer, on consideration of the premium he received, was to bear the merchant harmless. It followed, from thence, that the contract related to the safety of the voyage, thus particularly described in respect either of ship or cargo, and that the assured could not recover beyond the amount of his real loss. In process of time, however, variations were made, by express agreement, from the first kind of policy; and in cases where the trader did not think it proper to disclose the nature of his interest, the assurer dispensed with the assured having any interest either in the ship or cargo. In this kind of policy, valued free from average, and "interest or no interest," it is manifest that the performance of the voyage or adventure in a reasonable time and manner, and not the bare existence of the ship or cargo, is the object of the insurance. Such an object as that, with a reference to the real nature of insurance," that it is a contract of indemnity" from a real and manifest, not from a supposed or ideal loss, must have been originally bad. Indeed it had been declared from the Bench, prior to the discussion of Assievedo v. Cambridge (b), in the reign of Queen Anne, that such insurances were formerly held to be bad; for it is taken for granted in 1692 to be settled law that, in former times, if one had no interest, though the policy ran "interest or no interest," the insurance was void. After argument (but a second argument was ordered, but does not, from any reporter, appear ever to have been made), it was held "that the defendant was entitled to judg ment." Upon this case Lord Mansfield, in the case of Goss v. Withers, has observed (a), "that the man-of-war which retook the ship, brought her into the port of London, and restored her to the owner upon reasonable redemption: (that appears from the special verdict); and then the owner, not abandoning the ship, could only have come upon the insurers for the redemption; and no question could have arisen about the change of property. But the policy being 'interest' or ' no interest,' without benefit of salvage, the question arose upon the terms and meaning of the wager. That case was not determined." And his Lordship, relating the circumstances of the principal case of Goss v. Withers, says (b), "whatever rule ought to be followed in favour of the owner against the recaptor or vendee, it can in no way affect the case of an insurance between the assurer and the assured. The ship is lost by capture; though she be never condemned at all, nor carried into any port or fleet of the enemy, the assurer must pay the value. If, after condemnation, the owner recovers or retakes her, the assurer can be in no other condition than if she had been recovered or retaken before condemnation. The reason is plain, from the nature of the contract. The assurer runs the risk of the assured, and undertakes to indemnify: he must, therefore, bear the loss actually sustained, and can be liable to no more. So that if, after condemnation, the owner recovers the ship in her complete condition, but has paid salvage, or been at any expense in getting her back, the assurer must bear the loss actually sustained. This point would not have been started in policies upon real interest, because it never could have varied the case, but wager policies gave rise to it: it was necessary to set up a total loss, as between third persons, for the purpose of their wager, though, in fact, the ship was safe, and restored to the owner. In the case of Spencer v. Franco (c), the South Sea ship, Prince Frederick, had returned safe to the (a) 2 Burr. 695. (b) 2 Burr. 694, 695. (c) Before Lord Hardwicke, at Guild.1735. Lex Merc.red.4th. 316. port of London with her cargo: the wagerers contended that she was "totally lost at La Vera Cruz," from this notion of a change of property, but failed. Depaiba v. Ludlow (a) was also a wager policy; and the property could not be changed, because there was then no war, nor even a declaration of war: but the Court held that, as the ship had been once taken in fact, the event had happened, though she was afterwards recovered." So in the case of Pond v. King (b), which was also a wager policy. But in the case of Fitzgerald v. Pole (c), the majority of the Judges and the House of Lords, in 1754, held "that, though the ship might be deemed for a time as lost,' yet, as she was afterwards recovered, the event of a total loss had not finally happened, according to the construction of the wager." In the case of Depaiba v. Ludlow, before mentioned, the counsel there observed, and was not contradicted by the Court, that insurances upon "interest or no interest" were introduced since the Revolution: and from the date of the cases of wager policies mentioned by Lord Mansfield in Goss v. Withers, this appears to be so; and if the law of England (as Mr. J. Park observes (d), previous to the RevoWager policies lution, was more agreeable to the true intention of the conforbidden by tract between the assurers and assured, than it afterwards foreign states. came to be-it was, according to Magens (e), consonant to the laws on this subject of most of the commercial states in Europe, viz., of Middleburg, Genoa, Konisburg, Rotterdam, and Stockholm, by the regulations of which countries, all insurances upon wagers, or 66 as interest or no interest," are declared absolutely void, and of no effect. In England the In England, after the bad practice of resorting to these wagering contracts had come into use, the Courts of Justice, to regard these particularly the Equity, began very soon to treat them in wagering con tracts with an unfavourable aspect. |