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SECT. 29. insurable value to be subsequently ascertained, in the manner herein-before specified.'
Floating policy by ship or
§ 30.—(1.) A floating policy is a policy which describes the insurance in general terms, and leaves the name of the ship or ships and other particulars to be defined by subsequent declaration.2
(2.) The subsequent declaration or declarations may be made by indorsement on the policy, or in other customary manner.3
(3.) Unless the policy otherwise provides, the declarations must be made in the order of despatch or shipment. They must, in the case of goods, comprise all consignments within the terms of the policy, and the value of the goods or other property must be honestly stated, but an omission or erroneous declaration may be rectified even after loss or arrival, provided the omission or declaration was made in good faith.1
(4.) [Subject to any express provision in the policy], where a declaration of value is not made until after notice of loss or arrival, the policy must be treated as an unvalued policy as regards the subject-matter of that declaration.5
NOTE. The legality of the practice under floating policies was affirmed in England in 1794 (Arnould, Ed. 6, p. 337). When two
1 Arnould, Ed. 6, p. 318; McArthur, Ed. 2, p. 67; Irving v. Manning (1847), 1 H. L. C. at p. 307. As to insurable value, see
16; and as to
Ibid.; and Stephens v. Australasian Ins. Co. (1872), L. R. 8 C. P. 18; Imperial Mar. Ins. Co. v. Fire Ins. Corporation (1879), 4 C. P. D. 166; cf. Davies v. National Ins. Co. of New Zealand (1891), A. C. at p. 491 (form of policy requiring double declaration).
5 McArthur, Ed. 2, p. 78; Gledstanes v. Royal Exchange Ass. Corporation (1864), 34 L. J. Q. B. 30, 35. Special clauses as to valuation in event of loss before declaration are now frequently inserted.
or more floating policies, effected with different insurers, are open, SECT. 30. it is said that "the assured has a right to declare on any of the policies
a loss on board any ship he pleases that comes within the terms of that policy." That may have been the law formerly, but floating policies are now commonly effected "to follow and succeed," that is to say, the prior policy must be exhausted before the next policy is declared on (McArthur, Ed. 2, p. 78).
§ 31.—(1.) A policy may be in the form in the First ConstrucSchedule to this Digest.
tion of terms in
(2.) Unless the context of the policy otherwise policy. requires, the terms and expressions mentioned in the First Schedule to this Digest must be construed as having the scope and meaning in that schedule assigned to them.2
NOTE. It would be beyond the scope of this Digest to attempt to reproduce the many decisions which interpret particular terms in particular policies. But the rules in the schedule record the interpretation which has been put on the more important terms and expressions in the common Lloyd's policy. This may assist the parties to see the scope and effect of the ordinary printed contract, and to add to or alter its terms to meet their special requirements.
32.—(1.) Where an insurance is effected at a premium Premium to be arranged, and no arrangement is made, a reasonable arranged. premium is payable.
(2.) Where an insurance is effected on the terms that an additional premium is to be arranged in a given event, and that event happens but no arrangement is made, then a reasonable additional premium is payable.3
NOTE. This section is not covered by express decision, but it
'Arnould, Ed. 6, p. 340; note that in the cases cited the declaration was made before loss, and see the cases cited for subsect. (3).
2 See Lloyd's policy set out, post, p. 118, and the main rules for its construction, post, p. 122.
3 Cf. Hyderabad (Deccan) Co. v. Willoughby (1889), 2 Q. B. at p. 535 (deviation clause).
SECT. 32. accords with the mercantile understanding, and follows the analogy of "reasonable price" in the case of contracts of sale.1
Policies are often effected on the terms that a given departure or deviation from the conditions of the policy shall be "held covered at a premium to be arranged."
§ 33.-(1.) Where two or more policies are effected by or on behalf of the assured on the same adventure and interest or any part thereof, and the sums insured exceed the indemnity allowed by law, the assured is said to be over-insured by double insurance.2
(2.) Where the assured is over-insured by double insurance
(a.) The assured, unless the policy otherwise provides,
(c.) Where the policy under which the assured claims is an unvalued policy he must give credit, as against the full insurable value, for any sum received by him under any other policy;5
1 Chalmers' Sale of Goods Act, 1893, § 8, and notes thereto.
2 Arnould, Ed. 6, p. 327; McArthur, Ed. 2, p. 73; North British Ins. Co. v. London and Globe Ins. Co. (1877), 5 Ch. D. at p. 583, C. A.
3 Arnould, Ed. 6, p. 328; Newby v. Reed (1763), 1 W. Bl. 416, Lord
Mansfield; Morgan v. Price (1849), 4 Exch. 621.
Arnould, Ed. 6, p. 332; Bruce v. Jones (1863), 1 H. & C. 769.
5 Arnould, Ed. 6, p. 329; Park on Insurance, p. 423.
(d.) If the assured receives any sum in excess of SECT. 33.
according to their right of contribution among
NOTE.-The following case may be put in illustration. a merchant to have £3000 by one policy, and £2000 by another, on cotton, and that the insurable value of his cotton on board is £4000, and the loss on it £400, the merchant can recover the whole £400, and a return of premium on £1000, just as if he had one policy for £5000; but he may at his option claim from one policy three-fifths and from the other policy two-fifths of this total; or he may claim from either policy as if the other did not exist." 2
For further illustrations, see the illustrations to § 23; and see also § 81 (contribution between insurers), which supplements this section. There is very little English authority on the rules relating to double insurance, but the theory on which they rest is well explained in Lowndes on Insurance, Ed. 2, pp. 33-35. Insurance is a contract of indemnity, and the assured is entitled to indemnity, but not to a gambling profit. Correlatively the insurer must not make a profit where he runs no risk, hence the rules as to return of premium detailed in § 84. The English rule that the same subject-matter may be differently valued in different policies, while the valuation in a policy is conclusive for the purposes of that policy, gives rise to curious anomalies in working out the rules of double insurance under valued policies; see § 28.
There appears to be no decision as to overlapping policies. Suppose a ship is insured from A to B, and thirty days while there after arrival, and is also insured at and from B to C. If she is lost at B. during the thirty days she is doubly covered.3 The question of mortgagor and mortgagee, among others, is discussed by Mellisb, L.J., in an important case on a fire policy, where both merchant and wharfinger insured the same goods against fire. The goods were destroyed by fire, and it was held that the loss must be wholly borne by the wharfingers' insurers, as the wharfinger was liable
1 This is consequential.
2 Lowndes, Ed. 2, p. 35 (unvalued policy).
See the point raised in argument in Union Mar. Ins. Co. v. Martin (1866), 35 L. J. C. P. 182, where the second policy superseded the first.
SECT. 33. to the merchant. The Lord Justice says: "The rule is perfectly established in the case of a marine policy that contribution only applies where it is an insurance by the same person having the same rights, and does not apply where different persons insure in respect of different rights. Where different persons insure the same property in respect of their different rights, they may be divided into two classes. It may be that the interest of the two between them makes up the whole property, as in the case of tenant for life and remainderman. Then if each insures, although they may use words apparently insuring the whole property, yet they would recover from their respective insurers the value of their own interests, and of course these values addel together would make up the value of the whole property. Therefore it would not be a case of either subrogation or contribution, because the loss would be divided between the two companies in proportion to the interests which the respective persons assured had in the property. But then there may be cases where, although two different persons insured in respect of different rights, each of them can recover the whole, as in the case of mortgagor and mortgagee. But whenever that is the case, it will necessarily follow that one of these two has a remedy over against the other, because the same property cannot in value belong at the same time to two different persons. Each of them may have an interest which entitles him to insure for the full value, because in certain events—for instance, if the other person became insolvent-it may be he would lose the full value of the property, and therefore would have in law an insurable interest, but yet it must be that if each recover the full value of the property from their respective offices with whom they insure, one office must have a remedy against the other. Whenever that is the case, the company which has insured the person who has the remedy over succeeds to his right of remedy over, and then it is a case of subrogation.” 1
Nature of § 34.-(1.) A warranty, in §§ 35 to 42, relating to warranty. warranties, means a promissory warranty, that is to say,
a warranty by which the assured undertakes that some particular thing shall or shall not be done, or that some condition shall be fulfilled, or whereby he affirms
1 North British Ins. Co. v London and Globe Ins. Co. (1877), 5 Ch. D. at p. 583.