bring from Spain into France piastres, pistoles, and silks, for the support of the Banks, the manufactures, and the commerce of that country. These merchandizes are a lawful branch of trade; and there is no reason why they should not be the subject-matter of a contract of insurance. But above all, they insist that they are justified by the constant custom; and that the reasoners on the other side ought to be less strict, when it is considered, that this contraband trade is a vice common to all commercial nations. The Spaniards and English in time of peace practise it in France: it is therefore permitted to carry it on in their respective countries, by way of reprisal. Whatever difference there may be on the question of expediency; it is universally admitted by the French writers, that insurances upon such goods are valid. We have already seen that the same ideas have been adopted by the law of England; and that every policy upon goods, the exportation and importation of which is not prohibited by the municipal laws of this country, or by the general laws of nations, is legal and binding upon the parties; and the underwriter must answer for every loss arising by means of any of the usual perils. CHAPTER XIV. Of Wager-Policies. HAVING in the four preceding chapters stated the various cases, in which the contract of insurance is void from its very commencement, on account of its repugnancy to those principles of justice, equity, and good faith, which are the great foundation of all contracts between man and man; we proceed to treat of those policies, which by the positive statute law of the country are declared to be absolutely null and void. Of these the largest class are wager-policies, or policies, as they are called, upon interest or no interest. The nature of the contract of insurance, in its original state, was, that a specific voyage should be performed free from perils; and in case of accidents, during such voyage, the insurer in consideration of the premium he received, was to bear the merchant harmless. It followed from thence, that the contract related to the safety of the voyage thus particularly described, in respect either of ship or cargo; and that the person insured could not recover beyond the amount of his real loss. In process of time, however, variations were made, by express agreement, from the first kind of policy; and in cases where the trader did not think it proper to disclose the nature of his interest, the insurer dispensed with the insured having any interest either in the ship or cargo. In this last kind of policy (of which we are now to treat) "valued free from "average," and "interest or no interest," it is manifest, that the performance of the voyage or adventure, in a reasonable time and manner, and not the bare existence of the ship or cargo, is the object of the insurance. VOL. II. D D Such Assievedo v. Cambridge, 10 Mod. 77. Goddard v. Garret, 2 Vern. 269. Depaiba v. Such an object as that, from a reference to the real nature of an insurance, as stated in the outset of the chapter, namely, that it is a contract of indemnity from a real and manifest, not from a supposed and ideal loss, must have been originally bad. Indeed it has been declared from the Bench, prior to the discussion of Assievedo v. Cambridge, in the reign of Queen Anne, that such insurances were formerly bad; for it is taken for granted in 1692 to be settled law, that in former times, if one had no interest, though the policy ran, interest or no interest, the insurance was void; because insurances were made for the benefit of trade, and not that persons unconcerned therein, or uninterested in the subject-matter, should profit by them. The idea thus started seems to receive some confirmation from the counsel, and was not contradicted by the Court in the case of Depaiba v. Ludlow, for the counsel there observed, that insurances upon interest or no interest were introduced since the revolution. If this was the law of England in this respect previous to the revolution, as these cases suppose it to be, it was consonant to the positive laws of most of the commercial states and coun2 Mag. 70 tries in Europe. For we find that by positive regulations of Middleburg, Genoa, Konynsburg, Rotterdam, and Stockholm, all insurances upon wagers, or as interest or no interest, are declared to be absolutely void, and of no effect. 65.88.189. 257. Garret, But though this mode of insuring gained footing in England, yet when introduced, the courts of justice looked upon these contracts with a jealous eye; and by their determination shewed the strong prejudices which they entertained against them. The courts of Equity in particular manifested that their inclination would lead them as much as possible to suppress such a species of contract: nay, that they still considered them as void. This is evident from two cases in Vernon's Reports. Goddart v. In one of them, the defendant had lent money on a bot2 Vern. 269. tomry bond, but had no interest in the ship or cargo; the Trin. Term. money lent was 300l. and he insured 450l. on the ship; the 1692. plaintiff's bill was to have the policy delivered up, because the defendant was not concerned in point of interest as to the ship or cargo. Per Curiam. Take it that the law is settled, that if a man has no interest, and insures, the insurance is void, though it be expressed in the policy, interested or not interested. The reason the law goes upon is, that insurances were made for the benefit of trade, and not that persons unconcerned therein, and who were not interested in the ship, should profit thereby; and where one would have the benefit of the insurance, he must renounce all interest in the ship. And the reason why the law allows that a man having some interest in the ship or cargo may insure more, or five times as much, is, that a merchant cannot tell how much or how little his factor may have in readiness to lade on board his ship.-Per Cur. Decree the policy to be delivered up to be cancelled. From the spirit of this decision it may likewise appear, that the Court of Chancery inclined to think, that an insurance made without the benefit of salvage to the insurer, was unconscientious, and a proper subject for relief in equity; for the Court expressly says, where one would have the benefit of the insurance, he must renounce all interest in the ship. Le Pypre v. Farr, Michaelmas In another case also, which was on a policy of insurance on goods, by agreement valued at 600l. and the insured not to be obliged to prove any interest: the Lord Chancellor ordered InChancery, the defendant to discover what goods he had put on board; Term,1716. for although the defendant offered to renounce all interest to the insurers, yet it must be referred to the Master to examine the value of the goods saved, and to deduct it out of the value or sum of бool. at which the goods were valued by the agree ment. There was one very remarkable difference between policies upon interest, and such as were not, of which I believe notice has already been taken in a former part of this work: namely, that in policies upon interest, you recover for the loss actually sustained, whether it be total or partial: but upon a wager-policy, you can never recover but for a total loss. All the doctrine, which turns upon this distinction between inte Vide ante, P. 234. 2 Burr.683. rest and wager-policies was considered at much length by Lord Mansfield in the famous cause of Goss v. Withers, to which we have had occasion more than once to refer. Vide ante, c. I. It has already been observed, that the security given to the insured was very considerably increased by the erection of two Assurance Companies, which were incorporated by royal charter in the year 1720; for the legislature had taken care that those corporations should have sufficient funds to answer any demands that might be made upon them in the common course of business. But this additional security for the insured soon produced many dangerous and alarming consequences, which, if they had not been checked, would have proved very detrimental to the trade of this country. For instead of confining the business of insurances to real risks, and considering them merely as an indemnity to the fair dealer against any loss which he might sustain in the course of å trading voyage, which, as we have seen, was the original design of them; that practice, which only prevailed since the Revolution, of insuring ideal risks, under the names of interest or no interest, or without further proof of interest than the policy, or without benefit of salvage to the underwriters, was increasing to an alarming degree, and by such rapid strides as to threaten the speedy annihilation of that lucrative and most beneficial branch of trade. All these various kinds of insurance just enumerated (and many others, which the ingenuity of bad men found no difficulty in devising), having no reference whatever to actual trade or commerce, were very justly considered as mere gaming or wager-policies: and therefore the legislature thought it necessary to give them an effectual check, and, by positive rules, to fix and ascertain what property or interest a merchant should be permitted to insure. Accordingly an act of parliament passed in the 19th year of the reign of King George the Second, intituled, "An act to "regulate insurance on ships belonging to the subjects of Great "Britain, and on merchandizes or effects laden thereon." As this act is the most important and most extensive in the whole code of statute law, with regard to insurance, I shall now cite as much of it at length as relates to the present chapter, and afterwards the other clauses of it under those heads to which they more immediately apply. ΙΑ The |