this condition is not complied with, the policy may be avoided Sect. 30. by the underwriter (u). warranty of 2. Again, in voyage policies the assured is understood by Implied the very act of procuring the insurance to warrant that the seaworthiness. vessel is seaworthy and in every way fit for the voyage or service on which it is employed; accordingly this warranty, though it is never expressed, is uniformly implied as a part of the contract (x). to be followed. 3. The actual navigation of the ship between the termini Usual course of the voyage is, as we have seen, never inserted in any policy; because every underwriter is presumed to be acquainted with the usual mode of conducting the voyage on which he has assured the risk; but, although never inserted, the usual course of the voyage is supposed to be incorporated in every policy, and as much forms part of its legal effect as though it were set out in terms on the face of the instrument (y). 4. It is always an implied condition of every policy, that the ship, in proceeding from one terminus to the other, shall pursue this usual course of the voyage, without any delay or deviation: this implied condition is generally termed a condition not to deviate; and any failure to comply with it exempts the underwriter from all liability from the moment of deviation (z). Implied condeviate. dition not to known mer 5. Not only the course of the voyage insured, but all All generally generally established usages of trade and navigation, appli- cantile usages cable to the subject of their contract, are always supposed are incorporated. to be known by the parties contracting for a mercantile indemnity; and therefore, though never expressly inserted in any policy, are as binding on the parties as though they were. 6. It must never be forgotten, therefore, that the whole Real nature (u) Post, Part II. Chap. II. "Concealment." (x) Post, Part II. Chap. IV. "Seaworthiness." (y) Noble v. Kennoway (1780), 2 Dougl. 510; Pelly v. Royal Exch. (z) Per Buller, J., in Newman v. Sect. 30. and effect of the contract. The stamping of policies. Requisites of the Stamp Act, 1891. contract between the assured and the underwriters is only partially expressed in the policy; and that the real contract between them is, that, supposing the underwriters to have been informed beforehand of the real nature of the risk, supposing also (except in time policies) the ship to have been seaworthy when the risk commenced, and never afterwards to have deviated from the usual course of the voyage insured, and the assured not to have precluded himself from recovery on the ground of illegality of the risk, then the underwriters engage to indemnify him, according to the terms of the policy as explained by usage, for any loss he may sustain as a direct consequence of the enumerated perils. 31. The stamping of policies in the United Kingdom is regulated by the Stamp Act, 1891 (54 & 55 Vict. c. 39), by which all then-existing enactments dealing with the stamping of policies were repealed. The first section and the first schedule of the Act together require all policies of sea insurance to be stamped according to the following scale: (1) Where the premium or consideration does not (2) In any other case (a) For or upon any voyage— In respect of every full sum of 1007., and Where the insurance shall be made for any (a) A time policy embracing a gate sum insured. Great Britain S.S. Premium Association v. White (1891), 19 Ct. of Sess. Cas. 4th Ser. 109; (1896) W. N. 91. By sect. 91, the expression "policy of insurance" for the Sect. 31. purposes of the Act includes every writing whereby any contract of insurance is made or agreed to be made, or is evidenced. The meaning of the term "policy of sea insurance for the purposes of the Act is defined in sect. 92 (b). Sect. 93 (1) provides that a contract for sea insurance (other than such insurance as is referred to in the 55th section of the Merchant Shipping Act Amendment Act, 1862 (c)) shall not be valid unless it is expressed in a policy of sea insurance. By sect. 93 (2), no policy of sea insurance made for time shall be made for any time exceeding twelve months. Sect. 93 (3) declares that a policy of sea insurance shall not be valid unless it specifies the particular risk or adventure, the names of the subscribers or underwriters, and the sum or sums insured (d), and is made for a period not exceeding twelve months. By sect. 94, where any sea insurance is made for a voyage and also for time, or to extend to or cover any time beyond thirty days after the ship shall have arrived at her destination and been there moored at anchor, the policy is to be charged with duty as a policy for a voyage, and also with duty as a policy for time. Effect of mission to stamp the policy under the old law. 32. The first Act relating to the stamping of sea-policies (35 Geo. 3, c. 63), declared that a policy should neither be given in evidence nor available in law or equity unless duly stamped, and it absolutely prohibited the stamping of a policy after it was underwritten (sect. 14). The effect of this provision was that a policy not properly stamped at the time when it was made was wholly null and void (e). The rigour of the law has been considerably modified. Stamping the Sect. 95 (1) of the Stamp Act, 1891, after declaring that a execution. policy after Sect. 32. policy of sea insurance may not be stamped at any time after it is signed or underwritten by any person, makes the two following exceptions: (a) Any policy of mutual insurance having a stamp impressed thereon may, if required, be stamped with an additional stamp, provided that at the time when the additional stamp is required the policy has not been signed or underwritten to an amount exceeding the sum or sums which the duty impressed thereon extends to cover. (b) Any policy made or executed out of, but being in any manner enforceable within, the United Kingdom may be stamped at any time within ten days after it has been first received in the United Kingdom on payment of the duty only. Further, sect. 95 (2) allows a policy of sea insurance for the purpose of production in evidence to be stamped after the execution thereof, on payment of a penalty of 1007. (ƒ). This is a provision of the greatest importance. The contract is good ab initio, and either party can enforce it by paying the penalty. Under the old law, as we have seen, there was no enforceable contract (g). 33. Section 97 (1) of the Act imposes a penalty of 1007. on any person who becomes an insurer, or who effects an insurance, or knowingly procures one to be effected, except by a duly stamped policy, or who fraudulently or wilfully seeks to evade the duty payable on a policy. By sect. 97 (2), a broker, (f) This was first allowed in 1876, by 39 Vict. c. 6, s. 2 (repealed by the Act of 1891), which made sea-policies instruments within the Stamp Act, 1870 (33 & 34 Vict. c. 97), s. 16. Before this provision a special case stating that the parties agreed that a valid (i.e. stamped) policy should be deemed to have been issued was ordered to be struck out as sanctioning an evasion of the stamp laws. Nixon v. Albion Marine Ins. Co. (1867), L. R. 2 Ex. 338. Where the question in issue was whether an unstamped document was a policy of insurance, an order was recently made at chambers that for the purposes of the trial the Court was to assume that all penalties (if any were necessary) had been paid. Home Marine Ins. Co. v. Smith, [1898] 2 Q. B. 351. (9) Arnould, 2nd ed. pp. 43, 44. agent, or other person who negotiates a sea insurance contrary Sect. 33. to the Act, or writes a policy upon material not duly stamped, is liable to a similar penalty, and has no legal claim to any charge for brokerage or commission, or for any money paid by him with reference to the insurance. Further, any money paid to him in respect of any such charge shall remain the property of his employer. Section 97 (3) imposes a similar penalty on anyone who makes or issues a document purporting to be a copy of a policy, unless there be a duly stamped policy in existence of which it is a copy. stamps. The Stamp Duties Management Act, 1891 (54 & 55 Vict. Spoiled c. 38, ss. 9-12), deals with the question of allowances for spoiled stamps. 34. The most difficult questions raised by the Stamp Acts The slip. relate to the legal effect of the slip. The broker, when requested to effect an insurance, prepares a brief memorandum of the leading particulars of the proposed risk, such as convey at a glance to those who are skilled in the business a sufficient notion of the intended policy to enable them to say whether, and at what premium, they will underwrite it. This memorandum, called the slip, is presented, if the insurance is effected at Lloyd's, successively to the underwriters there, who, if they think well of the risk and the premium at which it is offered, initial the slip, each for the sum he thinks proper to underwrite, and so on until the whole amount is subscribed (h). The legal effect of the slip was explained by Blackburn, J., in the year 1871, when the Act of 1867 (30 Vict. c. 23) was in force. "The slip," said the learned judge (i), “is in (h) Another document of similar import, sometimes also called a slip, is that which is known as a cover note or covering note. It is a memorandum containing similar particulars of the terms of an insurance signed on behalf of, and issued to the broker or assured by, a company See post, (i) Ionides v. Pacific Fire and Marine Ins. Co. (1871), L. R. 6 Q. B. 674, 684, 685; affd. on appeal (1872), L. R. 7 Q. B. 517. |