twenty bales of cotton, marked to, the said twenty bales valued at that sum] or [at one thousand pounds, being on the interest which I. S. has as owner in one-fourth share of the said ship, the said one-fourth share being valued at that sum]," or the words "valued at" are frequently struck out, and a description of the real subject of insurance then inserted without any valuation; as, e.g., the said ship and goods, &c., for so much as concerns the assured and assurers in this policy, are freight," or "profits," or "money lent on bottomry." 66 In this case it is obvious that the words "the said ship and goods," &c. are to be read as though they meant "the subject insured by this policy, as far as concerns the assured and underwriters, is taken to be 'freight,' 'profits,' 'bottomry,' &c. The words "valued at " are frequently struck out, and the sum insured is then inserted, thus, "1,000. on ship," or "on goods," &c.; and if the policy is intended to be a valued one, it proceeds, "1,0007. on ship valued at 2,0007.," "2,0007. on goods valued at 11,0007." By statute the policy is not valid unless it specifies the sum or sums insured (m). Sect. 20. insured 21. The next clause in the policy contains an enumeration The perils of the perils against which the underwriters undertake to against. insure the property on which the policy is effected; or, in the language of the clause, which they "are contented to bear, and do take upon them" in the voyage insured. As the underwriter is, on plain principles, considered not to be liable to indemnify the assured against loss arising from any perils not specified in the policy or embraced in the general clause, great care has been taken to make this form of words as comprehensive as possible; and the clause in its present state may fairly be regarded as affording a protection against almost every casualty which can possibly happen in the course of any voyage, and for which it is meant that the (m) Stamp Act, 1891, s. 93 (3). Sect. 21. Sue and labour clauses. Reason of introducing this clause. The effect of it. underwriter shall be answerable. The effect of it is frequently modified by exceptions inserted on the face of the policy, e.g., "warranted free from capture or any attempts thereat, or the consequences thereof." 22. "And in case of any loss or misfortune, it shall be lawful to the Assured, their Factors, Servants, and Assigns, to sue, labour, and travel for in, or about the Defence, Safeguard, and Recovery of the said Goods and Merchandises, and Ship, &c., or any part thereof, without prejudice to this insurance: To the charges whereof, we, the Assurers, will contribute, each one according to the Rate and Quality of his sum herein insured." This clause was introduced to obviate a notion which appears at one time to have prevailed, that if the assured, after a loss which threatened the total destruction of the property insured, were, either by himself or his agents, to take active measures for its recovery or restoration, he would thereby lose the right to abandon, which he might otherwise have exercised (n). The object of this clause, therefore, is to permit the assured in such cases to take every measure for the recovery of the property without waiving his right of abandonment, and also to bind the underwriters to contribute in proportion to the amount of their several subscriptions, to reimburse the assured for the expenses which he may thereby have incurred. The language of the clause is only permissive, but it has long since been settled that it is a clear duty of the assured so to labour for the recovery and restitution of the detained or damaged property (o). The clause does not entitle the assured to recover moneys spent in averting losses for which the underwriter would not have been liable if they had actually happened (p). (n) Mitchell v. Edie (1787), 1 T. R. 608. (0) See 2 Marshall, Ins. 625; and the elaborate discussion of this clause in the learned judgment of Willes, J., in Kidston v. Empire Ins. Co. (1866), L. R. 1 C. P. 535; in error (1867), L. R. 2 C. P. 357; see also Lord Blackburn's judgment in Aitchison v. Lohre (1879), 4 A. C. 755, 764. (p) Great Indian Peninsular Ry. v. Saunders (1861), 1 B. & S. 41; (1862), 2 ibid. 266; Booth v. Gair (1863), 33 L. J. C. P. 99; Meyer r. Ralli (1876), 1 C. P. D. 358. 23. "And it is especially declared and agreed that no acts of Sect. 23. the Insurer or Insured in recovering, saving, or preserving the Waiver property insured shall be considered as a waiver or acceptance of abandonment." The object of this clause is to insure that when the assured has given notice of abandonment and claimed for a constructive total loss, the legal position of neither party shall be prejudiced by any act done by him for the purpose of averting a loss. In one case the Court of Queen's Bench expressed the opinion that the clause is superfluous (2). clause. insure and receipt of 24. And so we the insurers are contented and do promise Promise to and bind ourselves, each one for his own part, our heirs, execu- acknowledgtors, and goods, to the assured, their executors, administrators ment of and assigns, for the true performance of the premises: confess- premium. ing ourselves paid the consideration due unto us for this assurance by the assured," &c. The policy, it will be observed, contains only a promise by the underwriters, without anything in the nature of a counterpromise on the part of the assured; the reason of this is, that the premium, or, as it is described in this clause of the policy, "the consideration due unto them for the assurance," is always supposed to have been paid to the underwriters at the time the policy is subscribed by them, and is accordingly acknowledged to have been so paid on the face of the instrument. In point of fact the premium is scarcely ever, in the actual Premium course of London business, paid till long after the policy is beforehand never paid effected; and is in most cases never paid in money at all, but in practice. passed in account between the insurance broker and the underwriter, between whom a running account is kept of premiums and losses, which is settled from time to time. ment of the Although this is the actual course of practice, yet the Acknowledgacknowledgment of the receipt of premium in the policy is so receipt binds far binding on the underwriter, as to prevent him from seek- the under (2) Stringer v. English, &c. Ins. Co. (1869), L. R. 4 Q. B. 676, 686. writer. Sect. 24. ing to recover his premium from the assured himself (»). Even when the policy contains a promise by the assured to pay the premium, the usage that the underwriter must look to the broker for payment has been held to apply (s). The memorandum: its object. The premium is commonly described in the policy as at so much "per cent.," meaning on the amount subscribed by the underwriter. 35 Geo. 3, c. 63, s. 11, required the premium or consideration in the nature of a premium to be expressed in the policy. There was no express provision to that effect in 30 Vict. c. 23, nor is there in the Stamp Act, 1891. 25. This clause is introduced into all policies for the purpose of exempting the underwriters from liability for trivial losses, or for partial losses in respect of certain articles Memorandum of a perishable nature. In Lloyd's policy it is expressed in the following uncouth form of words : clause in use at Lloyd's. N.B.-Corn, fish, salt, fruit, flour, and seed are warranted free from average, unless general, or the ship be stranded (A); sugar, tobacco, hemp, flax, hides, and skins are warranted free from average under five pounds per cent. (B); and all other goods, also the ship and freight, are warranted free from average under three pounds per cent., unless general, or the ship be stranded (c) (†). In order to make this form of words at all intelligible, it must be carefully borne in mind that the word "AVERAGE," as employed in this clause, means damage to or partial loss of the subject of insurance (u), and that the expression,, means, So insured as to WARRANTED FREE FROM AVERAGE () Dalzell v. Mair (1808), 1 Camp. 532; De Gaminde v. Pigou (1812), 4 Taunt. 246. In Mavor v. Simeon (1810), 3 Taunt. 497, n.; and Foy v. Bell (1811), 3 Taunt. 493, under peculiar circumstances, where fraud on the part of the assured was alleged, the Court appear to have thought that the rule might be different. (8) Universo Ins. Co. v. Merchants' Marine Ins. Co., C. A. [1897] 2 Q. B. 93. (t) The words "sunk or burnt" are often added. (u) See Kidston v. Empire Ins. Co. (1866), L. R. 1 C. P. 535; Oppenheim v. Fry (1863), 3 B. & S. 873; Ex. Ch. (1864), 5 ibid. 348. exclude all liability for such damage or partial loss." Hence On certain articles of a peculiarly perishable nature, enumerated in paragraph (A), the underwriter shall be answerable for a total loss only (x). On certain other articles of a less perishable nature, but still very liable to be destroyed, enumerated in paragraph (B), he shall only be answerable when the amount of damage exceeds 5 per cent. of their value. On ship, freight, and all other goods, he shall only be liable when the amount of damage exceeds 3 per cent. But in all the three cases alike, the clause provides that the underwriter will be liable for any amount of damage or partial loss, however small, in case the ship be stranded; and it also provides, that he shall in every case be liable for every loss, however small, of the nature of general average (y). Sect. 25. scription, sum 26. The only parties who sign their names at the foot of The subthe policies, in other words, underwrite them, are the insurers, insured, and who are hence called the underwriters or subscribers (≈). date. In policies of insurance effected with private underwriters, Mode of subscribing the first underwriter to whom the policy is tendered sub- the policy. scribes the policy with his name, the sum he intends to insure, which is generally written in words at length, and the date. The next underwriter to whom the policy is tendered (x) Per Willes, J., Kidston v. Empire Ins. Co. (1866), L. R. 1 C. P. 535, 544. (y) The bad punctuation of the Memorandum in Lloyd's form (see above) makes it read as if the words "unless general, or the ship be stranded" have no application to the articles in the five per cent. class. Such a construction of the clause, the effect of which would be to make an utterly unreasonable distinction between the articles in paragraphs (B) and (c), has, however, never been adopted in practice. The Memorandum is diffeVOL. I. rently punctuated in the Schedule (2) The seal of a company, attested D |