The extent of the interest need not be specified. Sect. 251. stated in the policy, it would have in no way altered the effect of the defendant's contract, which would still have remained a contract to indemnify against all damage sustained by the cotton in consequence of any of the perils insured against " (d). The extent of the interest of the party insuring need never be specified in the policy, for it is a well-established rule that a party interested only to a certain extent in property, which he owns in common with others, may effect insurance generally without specifying his interest, and will recover for such interest as he has (e). Thus, a mortgagee may recover under a policy on ship to the extent of his mortgage (f); or one of several part-owners of a ship may insure the freight generally without specifying what share he has in the ship, and he may declare generally and recover for such interest as he has (g). Interest in ship and freight. Cases on rule that interest need not be specified. 252. The above positions have received abundant illustration in the jurisprudence of this country and the United States (h). Thus, with regard to the nature of the interest, Lord Mansfield, in the case of Glover v. Black, after deciding, solely on the ground of the usage of merchants, that the interest of the lender on bottomry and respondentia must be specifically described in the policy, adds: "But we by no means say that, under an insurance on goods at large, a man may not be permitted to give in evidence a mortgage or other special lien" (i). "I admit," says Park, J., " that a party who has only a special interest in goods may recover, in respect of that interest, on a general insurance” (k). One of the first cases, in direct illustration of this point, is (d) Mackenzie. Whitworth (1875), 1 Ex. D. 36, 44; below, L. R. 10 Ex. 142. Sect. 27 of the Marine Insurance Bill, 1899, declares that a policy effected by way of re-insurance must specify that it is a reinsurance. (e) The principle is laid down, 1 Emerigon, c. x. s. 1, p. 299. (f) Irving v. Richardson (1831), 1 Mood. & Rob. 153; 2 B. & Ad. 193. (9) Rising v. Burnett (1798), 2 Marshall, Ins. 738. (h) See 1 Phillips, ss. 421 et seq., for the cases in the United States. (i) Glover v. Black (1863), 1 W. Bl. 423; see also 3 Burr. 1401. (k) Palmer v. Pratt (1824), 2 Bing. 192. that of Carruthers v. Shedden, in which it appeared that a Sect. 252. general insurance "on coffee" had been effected by a London broker, "by order and for account of N. D. & Co.," a London mercantile firm, who were interested as part owners with others in seven-tenths of the coffee, but who had also an insurable interest in the whole of it as consignees of the cargo, and as having a lien on the whole for advances. The Court held that, under the general form of policy, N. D. & Co. might protect any or all of these different species of interest; that the nature of the several interests need not be expressed in the policy; and that the assured were not bound to elect on which they would proceed (7). Upon the same principle, a general policy "on goods" (m) has been held sufficient to cover the interest of carriers on goods entrusted to their care, so as to protect them against loss arising from damage done to such property by the perils insured against, whereby they were obliged to make compensation to the owners, and were, besides, put to other expenses (n). It was objected that such a policy could not cover such an interest, since it merely purported to protect goods against the usual risks to which the owners of goods are liable; whereas the loss alleged was one arising out of plaintiff's liability to a risk to which carriers are liable. But the Court, although Lord Tenterden admitted that it might have been better if the policy had expressly shown that the (1) Carruthers v. Shedden (1815), 6 Taunt. 15; S. C., 1 Marshall, R. 416. (m) The policy, which was intended to cover the interest of plaintiffs, as barge-owners, in the property carried to and fro for hire in their barges for a year, was a common printed form of policy on ship and goods, filled up and altered in a very clumsy manner so as to adapt it to the object in view. By it the plaintiffs were insured for twelve months "by canal navigation boats, containing goods, at work between London, Wolverhampton and Bir- (n) Crowley v. Cohen (1832), 3 B. Sect. 252. object was to indemnify the plaintiffs as carriers, were yet unanimously of opinion that it was sufficient in its present form, on the ground that it is only necessary to state accurately the subject-matter, not the interest which the assured has in it (0). The rule in the United States is to the same effect. The decisions upon this subject in the United States go to the full extent of the English law; and the doctrine seems to be established there, that a mortgagee may insure the subject of the mortgage, either generally or under a direct description, without specifying his interest to be that of a mortgagee (p). (0) In Joyce v. Kennard, supra, the fact that the insurance was of a carrier's interest was specifically stated in the policy. (p) See the cases collected, 1 Phillips, Ins. ss. 419 et seq. CHAPTER XII. OF THE INTEREST THAT GIVES A TITLE TO INSURE; i.e., INSURABLE INTEREST. interest 253. It is obvious that a contract which purports to pro- Of insurable vide an indemnity for the assured against loss becomes, when generally. perverted to the purposes of one who has no interest in the subject insured in respect of which he can suffer loss, nothing better than a bet or wager upon the event of the voyage or adventure described in the policy. Such policies, with no interest to justify the assured in making them, came into frequent use in the reign of Charles the Second, and in the time of Queen Anne our Courts of Justice unfortunately pronounced them to be valid and legal. An Act of Parliament (19 Geo. 2, c. 37) afterwards declared them illegal in respect of British ships and their cargoes, and thus reduced the policy once more to a contract of indemnity (a). (a) As to the wager policies which are not affected by this statute, see post, ss. 313, 314. Sect. 253. insurable interest. The interest which it is thus necessary for a party to have, before he can effect an available insurance on his own account and for his own benefit, is called an insurable interest. Description of 254. It is very difficult to give any definition of an insurable interest; but it may be stated, as the fair result of the cases, that, in order to have an insurable interest, it is not necessary to have an absolute vested ownership or property in that which is insured: it is sufficient to have a right in the thing insured, or to have a right or be under a liability arising out of some contract relating to the thing insured, of such a nature that the party insuring may have benefit from its preservation, or prejudice from its destruction (b). Lawrence, J., in Lucena v. Craufurd. An insurable interest is thus described by a Judge of the highest legal reputation :-"A man," says Lawrence, J., "is interested in a thing to whom advantage may arise or prejudice happen from the circumstances which may attend it; and whom it importeth that its condition as to safety or other quality should continue. Interest does not necessarily imply a right to the whole or part of the thing, nor necessarily and exclusively that which may be the subject of privation, but the having some relation to, or concern in, the subject of the insurance; which relation or concern, by the happening of the perils insured against, may be so affected as to produce a damage, detriment or prejudice to the person insuring. And where a man is so circumstanced with respect to matters exposed to certain risks and dangers as to have a moral certainty of advantage or benefit but for those risks and dangers, he may be said to be interested in the safety of the thing. To be interested in the preservation of a thing is to be so circumstanced with respect to it as to have benefit from its existence, prejudice from its destruction. The property of the thing and the interest derivable from it may be very (b) See the dicta of Lawrence, J., in Lucena v. Craufurd (1806), 2 B. & P. N. R. 302; and of Lord Eldon, ibid. 321; Crowley v. Cohen (1832), 3 B. & Ad. 478. For a possible ex ception in the case of captors to the rule that an insurable interest depends on some right relating to the thing insured, see post, ss. 301-303. |