Sect. 233. be insured 233. Freight must be insured eo nomine in the policy, Freight must which is generally adapted to an insurance on this interest by inserting the words "on freight" at the foot or in the margin of the instrument. nominatim. What is covered by the word "freight." Advanced freight. Such a policy would cover not only freight in its strictest acceptation, but also the chartered hire of the vessel (whether a gross sum for the whole voyage, or a fixed sum per month payable as long as the voyage lasts) (n), and the benefit derived by the shipowner from carrying his own goods in his own vessel (o). The charterer may insure advanced freight-i.e., money advanced by him to the shipowner under their agreement as part payment of the freight-specifically, e.g., as "advances on account of freight," or "advances against freight" (p). It used to be thought that advances against freight at the time of loading could not be insured by the charterer simply as "freight"; the reason being that several eminent judges have said that such a payment is not freight (which is not earned until the goods are delivered), but money paid for taking the goods on board and undertaking to carry them (q). Arnould, however, thought that the charterer could insure advanced freight eo nomine as freight, though it might be safer to insure it specifically; and his opinion is supported by high judicial authority (»). In a case before the Privy Council, where a charterer had insured an advance of freight by a policy on disbursements, it (n) Etches v. Aldan (1827), 1 Man. & R. 157; S. P., Clark v. Ocean Ins. Co. (1835), 16 Pick. 289. (0) Flint v. Flemyng (1830), 1 B. & Ad. 45, 48; Devaux v. J'Anson (1839), 5 Bing. N. C. 519. (P) Wilson v. Martin (1856), 11 Ex. 684; 25 L. J. Ex. 217; Williams v. North China Ins. Co. (1876), 1 C. P. D. 757, 761. (9) See Blakey v. Dixon (1800), 2 B. & P. 321; Winter v. Haldimand (1831), 2 B. & Ad. 649, 653, 658; Etches v. Aldan (1827), 1 Man. & R. 157; Kirchner v. Venus (1859), 12 Moore, P. C. C. 361, 390; per Blackburn, J., Allison v. Bristol Marine Ins. Co (1876), 1 App. Cas. 229. (r) See Arnould, 2nd ed. p. 272; Allison v. Bristol Marine Ins. Co. (1876), 1 App. Cas. 209; per Lord Chelmsford, p. 223; Lord Hatherley, p. 239; Lord O'Hagan, p. 251; per cur. Hall v. Janson (1855), 4 E. & B. 509; per Byles, J., Trayes v. Worms (1865), 19 C. B. N. S. 177; and see Robbins v. New York Ins. Co. (1828), 1 Hall, 363. was not questioned that the subject of the insurance was Sect. 233. properly described, and the assured recovered for a loss (s). It is not, however, the practice in this country to insure advanced freight as disbursements. The owner of goods who has made an advance of freight sometimes insures the goods and the advance by the same policy, the amount of the insurance on the advanced freight being expressly stated (ss). who carries freight, or the owner who sells his ship, reserving the freight, may insure by 234. It has been doubted in the United States whether a The charterer charterer who hires a vessel for a voyage at a certain rate per goods on month, payable on completion of the voyage, can insure, under a general policy on freight, the freight payable to him for carrying the goods of other persons (†); and also whether such a policy will cover the interest of a party who has sold a policy on his vessel, reserving to himself a right to receive the freight freight. for the voyage insured (u). The ground of this doubt is the same in both cases, viz., that the assured has not the same stake in the safety of the ship as though he were owner; and that the underwriters, when asked to insure freight generally, may presume that they are dealing with the owner of the ship. The objection, however, is not well founded; for the charterer or former owner must be regarded as owner pro hâc vice, having as much interest in the ship's arriving so as to earn freight as the owners would have if insured to the full value of the freight to be earned (†). money. 235. In some respects similar to freight, in others very Passage different, is our next subject of insurance—passage money (y). At common It differs from freight in point of practice, if not of principle, law no liability when by a very important usage that requires it to be paid before ship lost to sailing. Yet "no liability is by the common law thrown. upon the owner or master of a ship, if the ship be lost, to forward passengers to their place of destination. Nor usually (8) Currie v. Bombay Native Ins. Co. (1869), L. R. 3 P. C. 72. (88) See, however, Thames and Mersey Mar. Ins. Co. v. Pitts, [1893] 1 Q. B. 476. (t) Riley v. Delafield (1811), 7 Johns. 522; cited 1 Phillips, s. 480. (u) Mellen v. National Ins. Co. (x) See 1 Phillips, ss. 339, 480. forward passengers. Sect. 235. is there any obligation to do this imposed by the actual contract between the parties" (≈). A passenger who has paid his passage money under these conditions has an insurable interest analogous to that of the merchant upon freight paid in advance. Statutory liabilities. The law has been materially altered by statute; and it is now in many cases the duty of the owner, charterer, or master of a ship to have the passenger carried to his destination even when the vessel is lost (b). The Merchant Shipping Act, 1894, expressly provides that no insurance in respect of any steerage passage or of any steerage passage or compensation money which any person is by the Act made liable to provide or pay, or in respect of any other risk under Part III. of the Act, shall be invalid on account of the nature of the risk or interest insured (c). Under a policy against all costs, charges and liabilities to which the owner or charterer might be subjected under sections 46, 47, 48, 49, 50 and 51 of the repealed Passengers Act, 15 & 16 Vict. c. 44, the owner recovered against the underwriter for money expended in forwarding the passengers to their ultimate port from New Providence, off which place the vessel in the course of her voyage had been totally lost (d). A year after, under another policy "on passage money of emigrants, to pay a loss pro rata subject to (the same clauses almost as in the foregoing case) and against these risks only," the owner sought to recover the money spent in provisions for the emigrants during six weeks' stay at Fayal whilst the ship was being repaired after sea damage, and failed in his suit simply because his obligation to maintain the passengers during the detention was imposed by a section not included in the policy (e). Passage money is not covered by a policy on "freight," Sect. 235. unless the circumstances of the particular case and the context of the particular policy show an intention to insure it. A ship was partly laden with goods, and also carried a number of coolies whose passage money was only payable on arrival. The shipowner took out a policy on freight, the risk to attach "from the loading of the said goods or merchandise on board the said ship." It was contended, but not established, that by the custom of the particular trade freight included passage money. In this state of facts, and on the construction of the policy, the Court of Common Pleas held that the freight of the merchandise only was insured (f). 236. Insurances on expected profits are lawful in this Insurance on country and in the United States, and are in general ex- profits. pressly allowed by the commercial codes of the Continental states (g). From the same train of reasoning which led them to prohibit all insurances on freight, the jurists and lawgivers of France forbade all insurances on expected profits (h); but the law of the 12th August, 1885, introduced a more liberal rule, and profits are now insurable in France (i). upon which The grounds upon which profits are considered are expressed Principle with admirable force and clearness in the following passage they are infrom Lawrence, J.'s, judgment in the case of Barclay v. surable, as expressed by Cousins. "As insurance is a contract of indemnity, it cannot Lawrence, J. be said to be extended beyond what the design of such species of contract will embrace, if it be applied to protect men from those losses and disadvantages which but for the perils insured against the assured would not suffer; and in every maritime adventure the adventurer is liable to be de (f) Denoon v. Home & Colonial Ins. Co. (1872), L. R. 7 C. P. 341; 41 L. J. C. P. 162. See the Marine Insurance Bill, 1899, Sched. I. r. 17. (g) See the Codes of Holland, art. 593; Spain, arts. 743, 748; Germany, art. 779; Russia, art. 545; Scandinavia, art. 230; Belgium, art. 168. (h) See 1 Emerigon, c. viii. s. 9, pp. 236-239, and the former art. 347 of the Code de Com. (i) Code de Com. art. 334. In Spain and Denmark, also, profits were formerly uninsurable, but in those countries also the law has been altered. See the Spanish and Scandinavian Codes, ubi supra. Sect. 236. prived, not only of the things immediately subjected to the perils insured against, but also of the advantages to be derived from the arrival of those things at their destined port. If they do not arrive, his loss is not merely that of his goods, but of the benefits which he might obtain were his money employed in an undertaking not subject to the perils. If it be allowable for the merchant to protect capital, subject to the risk of maritime commerce, by insuring it, why may he not protect those advantages he is in danger of losing by their being exposed to the same risks? It is surely not an improper encouragement of trade to provide that merchants, in case of adverse fortune, should not only not lose the principal adventure, but that the principal should not, in consequence of such bad fortune, be totally unproductive; and that men of small fortune should be encouraged to engage in commerce by their having the means of preserving their capitals entire " (k). Profits may be insured either in valued or The assured Such are the principles upon which insurances on expected profits are allowed in this country. 237. Profits may be insured equally by valued and by open policies (); but, whether insured by one or the other, it has open policies. been held in this country (as we shall see more at large when treating of insurable interest) that the assured cannot recover unless he prove that but for the intervention of the perils insured against some profit would in fact have been realized by the sale of his goods on arrival (m). must give evidence that some profit would have been made. The ordinary policy does not cover loss of profits on goods not shipped. 238. He must also, said Arnould, prove that the goods from the sale of which the profits were expected to arise were at one time or other actually exposed to the perils of (k) Per Lawrence, J., delivering the judgment of the Court in Barclay v. Cousins (1802), 2 East, 544. (1) Eyre v. Glover (1812), 3 Camp. (m) Hodgson v. Glover (1805), 6 Coulter (1830), 3 Peters' Supreme Court R. 222; 1 Phillips, Ins. s. 318. It is there a conclusive presumption that some profit would have accrued had the goods arrived, and upon this the valuation in the policy attaches. 1 Parsons, Ins. 194, 195. |