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Sect. 98. trade, is regarded as an alien enemy, and cannot maintain an action here on a policy effected to protect it (a).

Consuls carrying on such


Neutral ships carrying enemy's goods.

National character of a corporation.

The consul of a neutral nation in this country, if engaged in such privileged colonial or coasting trade of the enemy, loses his neutral character (b); and his consular residence does not protect his goods concerned in such trade from seizure and condemnation as enemy's property (c).

When enemy's goods, although carried in neutral ships, are liable to seizure and confiscation (d), the mere fact of their being so carried does not expose the ship to a similar fate, nor the rest of the cargo unless belonging to the same owners (e).

99. The question what is the national character of a company incorporated under the law of an enemy was recently raised before Mathew, J., in an action on a policy, but left undecided, because the learned judge found that the loss took place before the commencement of hostilities (ƒ). The plaintiffs were a Transvaal mining company, incorporated and registered according to the laws of the South African Republic, and carrying on in the territory of the latter the business of extracting gold from their mines. The company had a London office and committee of management, and its shareholders were almost entirely resident outside the Transvaal, and not subjects of the Republic. It is submitted that a corporation

(a) See the judgments of Sir W. Scott in The Immanuel (1799), 2 C. Rob. 186; The Anna Catherina (1802), 4 C. Rob. 107; The Dree Gebroeders (1802), ibid. 232; and see Berens v. Rucker (1761), 1 W. Bl. 314; Brymer . Atkins (1789), 1 H. Bl. 165, 191.

(b) The Dree Gebroeders (1802), 4 C. Rob. 232.

(c) The Indian Chief (1800), 3 C. Rob. 22.

(d) By the Declaration annexed to the Treaty of Paris of 1856, the neutral flag covers enemy's goods,

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derives its national character from the State under whose laws it is incorporated, and it seems clear on authority that the nationality of the shareholders cannot affect such national character. Thus it has been held that a ship owned by a British company can be registered as a British ship under the Merchant Shipping Act, although some of the shareholders are aliens, and aliens are not qualified to own British ships, or shares in British ships (g).

Sect. 99.


100. Europeans, residing and trading under the protection Europeans of factories or colonial establishments in Asia or Africa, have trading in residing and the national character of the European mother state to which Asiatic or the establishment belongs, and under whose protection they factories. live and trade; and the reason of this is obvious: Europeans, so circumstanced, do not become the subjects of the Asiatic or African power in whose dominions such trading establishment is situated ().

Such are some of the more important points in the jurisprudence of this country and the United States on the subject of national character, as affected by domicil or course of trade. It has not been deemed desirable further to encumber a work devoted to a special subject, by references to authorities which more properly range themselves under other heads of legal inquiry.

(9) R. v. Arnaud (1846), Q. B. 806; 16 L. J. Q. B. 50.

(h) The Indian Chief (1800), 3

C. Rob. 22; The Etrusco (1798),
cited ibid. 11; The Twee Frienden
(1784), cited ibid. 29.


Employment of insurance brokers.

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101. In this country almost all policies are effected by insurance brokers, whose business it is to act as middlemen between those merchants and shipowners who wish to insure their property, on the one hand, and the private underwriters or public insurance companies, on the other. Primâ facie, the business of an insurance broker would seem to be limited to receiving instructions from his principal as to the nature of the risk, and the rate of premium at which he wishes to insure; communicating these facts to the underwriters; effecting the policy with them on the best possible terms for his employer; paying them the premium; and receiving from them whatever may be due in case of loss.

The usage, however, of our great commercial metropolis has introduced modes of transacting business between insurance brokers and underwriters in London, apparently intended to facilitate the transaction of insurance business on an extensive scale, by substituting, as far as possible, credits for payments, in all dealings between broker and underwriter; but one effect of the system has been to introduce a considerable degree of complexity into the relations subsisting

between the assured, the broker, and the underwriter: in Sect. 101. order the better to understand which, we will consider the subject under separate heads.

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course of business


The slip.

102. The actual course of the business of marine insurance, Outline of as carried on in London and elsewhere in this country, is as follows:-A broker on receiving orders from his principal to between assured, effect an insurance prepares what is commonly known as a broker, and 'slip." This is merely a slip of paper containing rough notes relating to the intended insurance. It is, however, sufficiently precise to enable anyone conversant with the business to draw up, without difficulty and without going beyond its four corners, the policy which it is proposed to effect, in regular form. The broker then takes the slip round to the various underwriters to whom he may be disposed to offer the business; these may be private Lloyd's underwriters, or they may be underwriters on behalf of companies, or some of one class and some of another. Those underwriters who are willing to accept the risk, whether private or representing companies, signify their willingness by initialing the slip for the amounts for which they are willing to become insurers. When the broker has succeeded in getting the slip initialed for the full amount required, it is then his duty to procure the execution of policies in accordance therewith. So far as the initials on the slip are those of Lloyd's underwriters, a policy is prepared by the broker, and taken round by him to the different underwriters in succession for their signature. The insurance companies, however, always prepare their own policies, and in order to enable them to do so, the broker fills up a form, which is also called a slip, and sends one to each company. This slip is an entirely distinct document from the slip which we have already explained, and is merely a memorandum of the engagement which the particular company has already entered into by the initialing of the "slip" proper (a).

(a) The term "slip" is used, in Liverpool at least, in yet a third sense, to denote the covering or in

surance note, by way of provisional
insurance, issued by a company in
order to signify its acceptance of a

Sect. 102.

Possession of



As soon as the policy is completed, the underwriters enter the risk in their books, and debit the broker with the premium.

103. The broker, having effected the policy, usually retains it in his possession (). He may do so either as of right, in exercise of his lien for premiums, or as a matter of convenience; for insurance brokers are now very generally employed not merely to effect insurances, but to attend to all business relating thereto that may subsequently arise, and the possession of the policy enables them to do so.

When a loss occurs in respect of which the assured desires to make a claim on the policy, he instructs the broker to do so, sending him the policy if it is not already in the broker's possession. The broker then ascertains (c) the percentage of the loss which ought to fall upon the policy-100 per cent. if it be a total loss, or a smaller percentage in case of an average loss-employing average adjusters if necessary, and endorses the ascertained percentage upon the policy, with the "Settling the word "settled" prefixed. He then takes the policy, so endorsed, round to the several underwriters, who, unless they see reason for resisting the claim, sanction it with their initials and enter the amount to the broker's credit. This process is called "settling the claim." Any underwriter who is not satisfied about, or who proposes to resist, the claim, simply does nothing, and refuses to attach his initials. Disputed claims are dealt with by ordinary course of law, complicated in no way by the usages of insurance business. Of course, if the claim is one which it is known will be generally disputed, the process of ascertainment of the percentage, and the

risk, and its undertaking for the
subsequent issue of a stamped policy.
See Gow, 13; and App. CA. and CB.

(b) This is so more particularly as
regards policies on ship. Those on
goods are often handed over forth-
with to the assured, who then may
pass them on to bankers or other
parties, together with bills of lading,

as security for advances or other


(e) In a great majority of cases this work has been already done by an average adjuster employed by the assured. As to the position and functions of an average adjuster, see Wavertree Sailing Ship Co. v. Love, [1897] A. C. 373.

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