NOTE.-The acknowledgment is not conclusive as between the SECT. 55. insurer and the broker.1 Probably then it is not conclusive as between insurer and assured, where the latter effects the policy directly. But it ought to be conclusive in favour of an assignee for value without notice.2 any Loss and Abandonment. cluded § 56.—(1.) Subject to the provisions of this Digest, and Included unless the policy otherwise provides, the insurer is liable and exfor loss proximately caused by a peril insured against, losses. but, subject as aforesaid, he is not liable for any loss which is not proximately caused by a peril insured against.3 (2.) The insurer is not liable for any loss attributable to the misconduct of the assured, but, unless the policy otherwise provides, he is liable for any loss proximately caused by a peril insured against, even though the loss would not have happened but for the misconduct or negligence of the master or crew.4 (3.) Unless a different intention appears from the terms of the policy, the insurer is not liable for any loss 1 Taylor on Evidence, § 774. 2 See further, note to last section, and cf. Roberts v. Security Co. Ltd. (1897), 1 Q. B. 111 (accident policy). 3 Arnould, Ed. 6, p. 727; Broom's Legal Maxims, Ed. 7, p. 175; Carver's Carriage by Sea, Ed. 3, §§ 87-90; Jackson v. Union Mar. Ins. Co. (1874), L. R. 10 C. P. at p. 148, Ex. Ch. (freight); Cory v. Burr (1883), 8 App. Cas. at p. 398 (barratry); Reischer v. Borwick (1894), 2 Q. B. at p. 550, C. A. (collision); Trinder v. Thames and Mersey Mar. Ins. Co. (1898), 2 Q. B. at p. 124, C. A. (negligent navigation); Brankelow v. Canton Ins. Office (1899), 2 Q. B. 178, 186, C. A. (loss of freight due to form in which bills of lading were given). 4 McArthur, Ed. 2, p. 143; Arnould, Ed. 6, p. 731; Thompson v. Hopper (1858), E. B. & E. at p. 1047, Ex. Ch. (act of assured himself); Dixon v. Sadler (1839), 5 M. & W. 405 (bad seamanship of master); Trinder v. Thames and Mersey Ins. Co. (1898), 2 Q. B. 114, C. A. (negligent navigation by master and co-owner). SECT. 56. proximately caused by delay, although the delay be caused by a peril insured against.1 (4.) Unless the policy otherwise provides, the insurer is not liable for any loss caused by ordinary wear and tear, ordinary leakage and breakage, inherent vice or nature of the subject-matter insured, or any other ordinary and normal operation of natural causes, or for any loss caused by rats or vermin, [or for any injury to machinery not caused by maritime perils].2 Illustrations. Sea 1. Policy on goods, which consist of hides and tobacco. water is shipped during a storm, which wets the hides. The hides become putrid, and the fumes from them spoil the flavour of the tobacco. The damage to the tobacco is proximately caused by perils of the seas.3 2. Insurance on cargo warranted "free from all consequences of hostilities." During the American war the Confederates extinguish the light on Cape Hatteras. Owing to the absence of the light, the ship runs on to the rocks and is wrecked. The proximate cause of loss is the perils of the seas, and the insurer is liable.4 3. Policy on ship, warranted free from capture and seizure. The master engages in smuggling, and in consequence she is seized by the 1 Taylor v. Dunbar (1869), L. R. 4 C. P. 206 (cargo of meat); Pink v. Fleming (1890), 25 Q. B. D. 356 (cargo of fruit); cf. Shelbourne v. Law Investment Corpn. (1898), 2 Q. B. at p. 629 (collision, delay during repairs). See note, post, as to freight. 2 McArthur, Ed. 2, p. 141; The Xantho (1887), 12 App. Cas. at p. 509 (wear and tear, sea damage); Thames and Mersey Mar. Ins. Co. v. Hamilton (1887), 12 App. Cas. 484 (donkey engine explosion); Koebel v. Saunders (1864), 33 L. J. C. P. 310 (vice propre). As to rats, see Hunter v. Potts (1815), 4 Camp. 203; Laveroni v. Drury (1852), 22 L. J. Ex. 2; but see Hamilton v. Pandorf (1887), 12 App. Cas. 518, where the action of the rats was not the proximate cause of loss. 3 Montoya v. London Assurance (1851), 6 Exch. 451. Ionides v. Universal Mar. Ins. Assn. (1863), 32 L. J. C. P. 170. Most of the cargo was destroyed by the sea, but a small part was saved, and a further part could have been saved but for the action of the Confederates, who prevented its being landed. Held, as to this part, that the warranty exempted the insurers from liability. Spanish revenue authorities. The proximate cause of the loss is SECT. 56. the seizure, not the barratry of the master. The insurer is not liable.1 4. Policy on a parcel of gold shipped by a Russian ship to Turkey. The ship is stranded in Turkey, and the gold taken charge of by the Russian Consul. As the ship is Russian, the Russian Consular Court has jurisdiction, and that court awards salvage charges against the gold which would not be payable by English law. The assured has to pay these charges to get his gold. This is a loss by perils of the seas, for which the insurer is liable.2 5. Policy on goods shipped in a French ship. The ship is injured by collision, and the master, not having the funds requisite for the necessary repairs, gives a bottomry bond on ship, freight, and cargo. The ship and freight not being sufficient to satisfy the bond, the assured has to pay the amount deficient to get his goods. The insurer is not liable. The loss is not caused by perils of the seas, but by the want of funds on the part of the master.3 "unless 6. Policy on cargo of fruit warranted free from average damage be consequent on collision." The ship gets into collision and has to go into port for repairs. The cargo has to be landed and reshipped, and it is damaged partly by handling and partly by the delay. The collision is not the proximate cause of the damage, and the insurer is not liable.4 7. Policy on ship and machinery, including donkey-engine. Owing to a valve being kept closed, which ought to have been kept open, water is forced into, and splits open, the chamber of the donkeypump. The insurer is not liable for this accident, for it is not caused by perils of the seas, or by any peril covered by the ordinary form of policy.5 8. Policy on freight from New South Wales to Valparaiso. The cargo consists of coal. The coal heats, and is in imminent danger of taking fire. Half of it has to be landed at Sydney. The rest is carried on and delivered. This is a partial loss of freight caused by fire (or other like perils) within the meaning of the policy." 1 Cory v. Burr (1883), 8 App. Cas. 393. 3 Greer v. Poole (1880), 5 Q. B. D. 272. Pink v. Fleming (1890), 25 Q. B. D. 396, C. A.; cf. Field Steamship Co. v. Burr (1899), 1 Q. B. 579, C. A. 5 Thames and Mersey Ins. Co. v. Hamilton (1887), 12 App. Cas. 484, 495. (The Inchmaree case.) 6 The Knight of St. Michael (1898), P.30; cf. Iredale v. China Traders Ins. Co. (1900), 2 Q. B. at p. 518, C. A. The insurer on goods is not liable if the combustion is caused by vice propre. F SECT. 56. 9. Cargo of rice. Rats gnaw a hole in a pipe which passes through the cargo, and sea-water escapes through the hole and damages the rice. The sea damage is the proximate cause of the loss, not the rats.1 10. Time policy on ship. The ship starts on a voyage with a short quantity of coal, and engages the services of a trawler to tow her to her port of discharge. The owner of the trawler gets judgment for salvage services, which assured has to pay. The ship met with no extraordinary weather, and might in time have sailed to her port. The loss is not due to the perils of the seas, but to the improper deficiency of coal.2 NOTE.-No principle of marine insurance law is better established than the rule causa proxima, non remota, spectatur. But though the rule is universally admitted, lawyers have never attempted to work out any philosophical theory of cause and effect, and probably it is as well for commerce that they should not have made the attempt. The numerous decisions on the rule are rough and ready applications of it to particular facts. As might be expected, many of the decisions are difficult to reconcile. But the apparent inconsistencies may be regarded as depending rather on inferences of fact than on matters of law. Subsects. (2) to (4) embody important deductions from the general rule of proximate cause laid down in subsect. (1). As Collins, L.J., points out, a man may lawfully stipulate against the consequences of his own negligence,1 and he may stipulate against the consequences of his servants' negligence or misconduct. In the case of negligent or unskilful navigation, it now appears to be settled that the loss is regarded as caused proximately by perils of the seas, and only remotely by the negligence or unskilfulness of the master or crew. But when the loss is consequent on the wilful act or default of the assured, that act or default must be regarded as proximately causing the loss. Dolus circuitu non purgatur.5 Where, however, a 1 Hamilton v. Pandorf (1887), 12 App. Cas. 518 (bill of lading case, but the principle was said to apply to insurance). Cf. Davidson v. Burnand (1869), L. R. 4 C. P. 117 (pipe left open, and water flows in as ship is loaded). 2 Ballantyne v. Mackinnon (1896), 2 Q. B. 455, C. A.; see at p. 461 as to "inherent vice." 3 Inman v. Bischoff (1882), 7 App. Cas. at p. 683. • Westport Coal Co. v. McPhail (1898), 2 Q. B. at p. 132. 5 Cf. Trinder v. Thames & Mersey Mar. Ins. Co. (1898), 2 Q. B. at p. 127, C. A. ship is lost through the barratry of the master, who is a part owner, SECT. 56. the co-owners are entitled to recover.1 Compare the language of sect. 506 of the Merchant Shipping Act, 1894 (57 & 58 Vict. c. 60), which authorises insurances effected "against the happening, without the owners' actual fault or privity" of certain events in respect of which the liability of owners is limited under that Act. As a rule, the insurer is not liable for damage caused by delay, though the delay result from a peril insured against. But difficult cases arise with regard to freight, especially as regards time charters. Where the adventure is frustrated by a peril insured against, and freight is thereby lost, the insurer is liable.2 Thus, where a ship was delayed by the operation of perils of the seas, and the charterer justifiably refused to load, it was held to be a loss of freight by perils of the seas.3 On the other hand, in the City of Paris case, a policy was effected " on freight outstanding." The ship was hired to the Admiralty, and the charter-party provided that if the ship became inefficient the charterers might make such abatement out of the freight as they thought fit. The ship struck on a rock and became inefficient for a time. The charterers made an abatement from the freight. Held, that the insurers were not liable, as the loss was not proximately caused by the perils of the seas, but by the action of the Admiralty. The line between the principles laid down by these cases is difficult to draw with certainty, and, as the result, special clauses are often inserted to protect the insurer or the assured, as the case may be, from the consequences of delay.5 The bracketed words at the end of subsect. (4) are awkward. They were inserted to cover the decision in the Inchmaree case (illustration 7), where it was held that a donkey-engine explosion at sea had nothing to do with any maritime peril. The accident might just as well have happened on dry land, and therefore the insurer was not liable. So, too, a distinction must be drawn between the actual 1 Westport Coal Co. v. McPhail (1898), 2 Q. B. at p. 132; and see Small v. U. K. Mar. Ins. Assn. (1897), 2 Q. B. 311, C. A. (mortgagor and mortgagee). 2 See Re Jamieson (1895), 2 Q. B. at p. 95. 3 Jackson v. Union Mar. Ins. Co. (1874), L. R. 10 C. P. 125, Ex. Ch.; see, too, The Alps (1893), P. 109; and The Bedouin (1894), P. 1, C. A., also cases of chartered freight. Inman v. Bischoff (1882), 7 App. Cas. 670. 5 See, e.g., Bensaude v. Thames and Mersey Ins. Co. (1897), A. C. 609, H. L.; Turnbull v. Hull Underwriters' Association (1900), 2 Q. B. 402 (warranty, free from any claim consequent on loss of time). |