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SECT. 20. a material fact or not—by the underwriters, he must answer it truly. If he answers it falsely, with intent to deceive, though it may not be a material fact, it will vitiate the policy." 1
Assured. need not
Arnould, Ed. 6, pp. 514, 530, specifies a further class of representation, viz. a communication of information which the assured has received from others, but it is submitted that this supposed third case must always fall within one of the two classes specified in subsect. (3). See, however, next section.
The cases seem generally to assume that it is sufficient if a representation as to expectation or belief is made in good faith, but there is an obiter dictum by Blackburn, J., that the assured must have reasonable ground for his belief.2
This section deals with representations made during the negotiation of the contract. A representation expressed in, or implied from the terms of, the policy itself, constitutes a warranty or condition.3 The policy is the final expression of the contract, and extrinsic evidence is inadmissible to contradict its terms. See Arnould, Ed. 6, p. 538.
As to the rule, or supposed rule, that a misrepresentation made to the first underwriter is presumed to be made to subsequent underwriters, see Arnould, Ed. 6, p. 544.
§ 21. The assured, or his agent, is not bound to give disclose his his opinion to the insurer on any matter relating to the opinion. adventure.1
When contract is deemed to
NOTE. If the assured chooses to give his opinion, he must, of course, give it honestly.5
§ 22. A contract of marine insurance is deemed to be concluded when the proposal of the assured is accepted by the insurer, whether the policy be then issued or not; and for the purpose of showing when the proposal was accepted, reference may be made to the slip or covering
1 The Bedouin (1894), P. at p. 12, C. A.
2 Ionides v. Pacific Ins. Co. (1871), L. R. 6 Q. B. at pp. 683, 684.
3 Behn v. Burness (1863), 32 L. J. Ex. 204, 205, Ex. Ch.
▲ Anderson v. Pacific Ins. Co. (1872), L. R. 7 C. P. 65.
5 Cf. The Bedouin (1894), P. at p. 12, per Lord Esher.
note or other customary memorandum of the contract, SECT. 22. although it be unstamped.1
NOTE." In effecting marine insurance," say the Court of Exchequer Chamber," the matter is considered merely as negotiation till the slip is initialled, but when that is done the contract is considered to be concluded. It was proved to be the usage of underwriters to issue a stamped policy in accordance with the slip, notwithstanding anything that might happen after the initialling of the slip." 2
The slip in insurance may be compared with the noting of a bill of exchange, or of a captain's protest. The noting has no legal effect per se, but it is the foundation of the subsequent protest.
In Cory v. Patton,3 the proposal of the agent of the assured was accepted by the insurer subject to the ratification by the assured of an increased premium, and it was held that a material fact which came to the knowledge of the assured after the acceptance, but before the ratification, need not be disclosed, for the ratification related back to the acceptance. As to ratification by assured, see § 86, post, and see further, notes to §§ 23, 24, 89.
[54 & 55
§ 23. Subject to the provisions of any statute, a Contract contract of marine insurance is inadmissible in evidence embodied unless it is embodied in a marine policy in accordance in policy. with this Digest. The policy may be executed and Vict. c. 39, issued either at the time when the contract is concluded, or afterwards.4
NOTE. No action can be maintained in England upon the implied promise to grant a policy when the slip is initialled. It is otherwise where revenue laws do not interpose."
'Arnould, Ed. 6, p. 259; Ionides v. Pacific Mar. Ins. Co. (1871), L. R. 6 Q. B. at p. 681. See further, § 89, as to slip as evidence.
2 Morrison v. Universal Mar. Ins. Co. (1873), L. R. 8 Ex. at p. 199.
3 Cory v. Patton (1874), L. R. 9 Q. B. 577, Ex. Ch.
4 See McArthur, Ed. 2, pp. 21, 29, and notes to next section. As to issuing a policy after notice of loss, see Mead v. Davison (1835), 3 A. & E. 303.
5 Fisher v. Liverpool Mar. Ins. Co. (1874), L. R. 9 Q. B. 418 Ex. Ch. 6 Bhugwandass v. Netherlands Sea Ins. Co. (1888), 14 App. Cas. 83 P. C. (Rangoon foreign policy).
Vict. c. 39,
When a stamped policy has been duly issued, then reference may be made to the slip or covering note for the purpose of showing when the contract was concluded, or for the purpose of rectifying or avoiding the policy, see §§ 22, 24, 89.
§ 24. A marine policy must specify
(1.) The name of the assured, or of some person who effects the insurance on his behalf: 1
(2.) The undertaking to insure:
(3.) The subject-matter insured and the risk insured against:
(4.) The voyage, or period of time, or both, as the case may be, covered by the insurance :
(5.) The sum or sums insured:
(6.) The name or names of the insurers.
NOTE. As regards subsect. (1), the Marine Insurance Act, 1788 (28 Geo. 3, c. 56), has been construed as merely prohibiting insurances in blank or to bearer, and is, therefore, sufficiently reproduced by this subsection.
Subsects. (2) to (6).—By § 93 of the Stamp Act, 1891 (54 & 55 Vict. c. 39), set out post, p. 137, a policy is invalid unless it specifies "the particular risk or adventure, the names of the subscribers or underwriters, and the sum or sums insured." 2
Where under an open cover the insurer undertook to re-insure the plaintiffs to the extent of the excess over certain amounts upon risks which plaintiffs had undertaken, or might undertake, on goods by certain ships, with a limit of £4000, it was held that the cover could not be stamped as a policy, inasmuch as it did not specify the sum or sums insured. Although the requirement that a contract of marine insurance must be embodied in a policy is contained in a Revenue Act, it is more than a fiscal rule. The rule is clearly stated in the Guidon de la Mer in 1600, and may be regarded as a general rule of
1 See Arnould, Ed. 6, pp. 107-109; McArthur, Ed. 2, p. 29; 28 Geo. 3, c. 56, and the common form of Lloyd's policy.
2 Cf. Edwards v. Aberayron Mutual Ins. Society (1875), 1 Q. B. D. 563, Ex. Ch. (mutual insurance).
3 Home Mar. Ins. Co. v. Smith (1898), 2 Q. B. 351, C. A.
public policy. The Continental codes contain minute regulations as SECT. 24. to the particulars to be inserted in marine policies.1
An error in describing the name of the ship is not usually material.2 The error then comes under the maxim falsa demonstratio non nocet.
§ 25.-(1.) A marine policy must be signed by or on Signature behalf of the insurer, provided that in the case of a corporation the corporate seal may be sufficient, but nothing in this section is to be construed as requiring the subscription of a corporation to be under seal.3
(2.) Where a policy is subscribed by or on behalf of two or more insurers, each subscription, unless the contrary be expressed, constitutes a distinct contract with the assured.4
NOTE. In a recent case, underwriters formed a syndicate, and an ordinary Lloyd's policy was subscribed "The S. Syndicate, C. Manager;" afterwards followed the names of the members and the amounts of their subscriptions. Held, that the contract of the members was several, and not joint.
A marine policy, like every other instrument, is incomplete and Issue of revocable until delivery to, or for the benefit of, the person entitled policy. to hold it. In the case of Lloyd's underwriters the assured's broker gets the signatures, so that no difficulty arises. In the case of a company's policy delivery is presumed on very slight evidence."
1 See, for example, French Commercial Code, Art. 332; Netherlands Commercial Code, Art. 592. Art. 605 of the Italian Commercial Code provides that, where possible, the name of the master, and the nationality and tonnage of the ship must be inserted in the policy. It has also been suggested that a policy should specify the place where it is made (McArthur, Ed. 2, p. 29, n.).
2 Ionides v. Pacific Ins. Co. (1871), L. R. 6 Q. B. 674, affirmed L. R. 7 Q. B. 517.
3 Arnould, Ed. 6, p. 271, and compare § 91 of the Bills of Exchange Act, 1882 (45 & 46 Vict. c. 61).
✦ Arnould, Ed. 6, pp. 150, 250; Lloyd's Act, 1871 (34 & 35 Vict. c. xxi.), Rule 4 in schedule.
5 Tyser v. Shipowners' Syndicate (1896), 1 Q. B. 135.
6 Xenos v. Wickham (1867), L. R. 2 H. L. 296 (policy executed by two directors, and ordered to lie in the office till assured called for it); see to like effect, Roberts v. Security Co. Ltd. (1897), 1 Q. B. 111, C. A. (accident policy).
Voyage and time policies.
[54 & 55 Vict. c. 39, $93.]
§ 26. (1.) Where the contract is to insure the subject-matter at and from, or from, one specified place to another, the policy is called a voyage policy," and where the contract is to insure the subject-matter for a definite period of time the policy is called a "time policy." A contract for both voyage and time may be included in the same policy.1
(2.) A time policy which is made for any time exceeding twelve months is invalid.2
NOTE.-A ship may be insured" from London to Hong Kong for six months," or "from London to New York, and thirty days after arrival."
Subsect. (2) reproduces § 93 of the Stamp Act, 1891 (54 & 55 Vict. c. 39), post, p. 137. The rule prohibiting time policies for a longer period than twelve months dates from the Stamp Act of 1795.3 The prohibition applies to a continuation clause, as well as to the original policy.1
A voyage policy which covers a ship for thirty days after arrival may be stamped as a voyage policy only, but if any longer period be covered it must be stamped both as a voyage and time policy. See § 94 of the Stamp Act, 1891, post, p. 138.
Time policies sometimes give rise to difficult questions where the cause of loss comes into operation before the policy expires, but the actual loss occurs after it expires.5 As to calculating time, when ship's time differs from English time, see note to § 91.
Designation § 27. (1.) The subject-matter insured must be designated in a marine policy with reasonable certainty."
1 Arnould, Ed. 6, pp. 230, 373; and Gambles v. Ocean Ins. Co. (1876), 1 Ex. D. 141, C. A.
2 See 54 & 55 Vict. c. 39, §§ 93, 91, 96; and as to calculation of dates, see South Staffordshire Tramways v. Sickness Ass. Assn. (1891), 1 Q.B. 402. 3 Stewart v. Merchants Mar. Ins. Co. (1885), 16 Q. B. D. at p. 622.
4 Charlesworth v. Faber (1900), 5 Com. Cas. 408.
5 See the cases reviewed in Lidgett v. Secretan (1870), L. R. 5 C. P. 190; and see Rule 5 of First Sched., post, p. 123.
Arnould, Ed. 6, p. 49; McArthur, Ed. 2, p. 61; Mackenzie v. Whitworth (1875), 1 Ex. D. 36, at p. 40, C. A.