government at the port of discharge; the shipowner might at the same time have insured his interest in freight under a common policy against ordinary sea risks. The charterer of a ship who advances money under the terms Advances on freight. of the charter-party in part payment of the freight, purchases thereby an insurable interest in the cargo beyond its prime cost to the extent of the money advanced; for the money cannot, in case of the loss of the ship, be recovered back,' so that the loss of the ship involves the loss of the money advanced.* The charterer, after such an advance, is comparable to the shipowner conveying his goods in his own ship; the value of the goods is enhanced to the extent of the freight, and that value in each case is insurable by the shipowner as freight," and by the charterer as advances on account of freight. But, for this purpose it must appear, by fair and reasonable inference from the words in the charter-party, that the money paid is an advance in part payment of the freight.. Hence, where the covenant as to payment of freight was in the following terms:-"Such freight to be paid as follows, viz., 1207. British sterling for freight of the outward cargo to Maranham, and as much cash as may be found necessary for the ship's disbursements at Maranham, to be advanced by the charterer or his agents to the master when required, free from interest or commission, &c., and the residue of such freight to be paid on the delivery of the cargo in Liverpool," &c.: Lord Ellenborough and the Court of King's Bench held, that under these terms the money must have been advanced specifically on account of freight, and, therefore, upon loss of the ship before freight earned, could not be recovered back as money bad and received. So, where the stipulation was 1 Anonymous case, 2 Shower, 283; De Silvale v. Kendall, 4 M. & Sel. 37. See the observations of Bayley, J., in Manfield v. Maitland, 4 B. & Ald. 582, 585. Flint v. Flemyng, 1 B. & Ad. 45; Devaux v. J'Anson, 5 Bing. N. C. 519. 4 See cases supra, and Wilson v. Martin, 11 Exch. 684; 25 L. J. (Ex.) 217; and see Ralli v. Janson, 24 L. J. (Q. B.) 97; 4 E. & B. 500. 5 Abbott, C. J., in Manfield v. Maitland, 4 B. & Ald. 585; Maclachlan on Shipping, 442, 443. De Silvale v. Kendall, 4 M. & Sel. 37. Lord Ellenborough and Dampier, J., lay some stress upon the words "free from interest and commission," as showing that the money advanced was not intended to have been a loan. in these words:-"Cash for ship's disbursements to be advanced to the extent of 300l., free of interest, but subject to insurance, and 2 per cent. commission"; Lord Campbell, C. J., said, that this mention of insurance stamped the transaction indelibly as a payment on account of freight, and not a mere loan; and the rest of the Court of Queen's Bench concurred with him in holding accordingly.' In both these cases, as Lord Tenterden remarks of the former of them, "the instrument was studiously framed, so as to make the freighter lose the money advanced by him, unless the owner reaped the benefit by the ship's coming home safe." Where, however, the charter-party does not, on the face of it, clearly and distinctly import that the sum advanced is to be a payment on account of freight, it is to be regarded as a mere loan, which the freighter has a right to recover, whatever be the issue of the adventure, and in which he has, therefore, no insurable interest. Hence, where the memorandum of charter-party, after stipulating for the amount of freight, and the mode of its payment, merely contained the words, " The captain to be supplied with cash for the ship's use," the Court held, that the charterer had no insurable interest in bills of exchange drawn on him by the master in respect of cash so supplied, it not appearing by the charter-party to be advanced as a part payment of freight.3 But where the freighters of a general ship paid her disbursements abroad, and by the request of the owners took the captain's bill "drawn against freight," on the consignees of the cargo in this country, in discharge of such disbursements, which bill was dishonoured; it was held that, as the freighters had agreed to advance on "credit of the freight," which was distinctly pledged by the captain's bill, they had an insurable interest in freight, and might recover on a policy describing their interest as "an advance on account of freight." Where it was stipulated by the charter-party that the 1 Hicks v. Shield, 7 E. & B. 633; 25 L. J. (Q. B.) 205, 208. 2 Per Abbott, C. J., in 4 B. & Ald. 585. 3 Manfield v. Maitland, 4 B. & Ald. 582; see also Saunders v. Drew, 3 B. & Ad. 445. 4 Wilson v. Martin, 11 Exch. 684; S. C. 25 L. J. (Ex.) 217. freighters should pay for the use of the ship "for the voyage 10,000 dollars, in manner following: viz., in China, all the sums that might be necessary for the payment of port charges and other incidental expenses (the latter not to exceed 2000 dollars), and the balance at thirty days after the ship's return to the port at Buenos Ayres": Lord Tenterden admitted, that the freighters had an insurable interest in these payments at Canton, provided it were covered by a policy " on money paid for shipment of goods to be transported to Buenos Ayres," and not by a general policy on freight.' 66 Money advanced to the assured as owner of the ship, on account of freight of the cargo loaded on board her, and subject to the risk of the voyage," is really and substantially freight, and may be insured by the shipowner by a policy on money advanced on account of freight."" According to the principles already discussed, in treating of the subjects of Marine Insurance, an insurable interest in freight depends on the co-existence of two rights in the assured at the time of the loss, namely,—a title, legal or equitable, to the ship out of the ownership of which the right to freight accrues, and an inchoate right to the freight. We say, a title to the ship, either legal or equitable, for the right to freight is one of the rights of ownership; and such an inchoate right to the freight, as that the party assured would certainly have earned freight but for the intervention of the perils insured against. We have seen, however, that the shipowner conveys an insurable interest by assigning over for value freight that is being earned, or by accepting prepayment of freight from the shipper, whose goods have thereby an enhanced value in case they arrive at their port of destination." 1 Winter v. Haldimand, 2 B. & Ad. 649. The dicta of Lord Tenterden, above referred to, are in pp. 653, 658 of the report. 2 Hall v. Janson, 4 E. & B. 500; 24 L. J. (Q. B.) 97. 3 Camden v. Anderson, 5 T. R. 709; and see S. C. 6 T. R. 723; 1 B. & P. 272; see also Marsh v. Robinson, 4 Esp. 98; Davidson v. Case, 5 M. & Sel. 79, 82; Miller . Woodfall, 8 E. & B. 493; Stewart v. Greenock Marine 4 Lucena v. Craufurd, in error, 3 B. That it is assignable, Willis v. Ante, p. 55. When freight insurable becomes an interest. Shipowner's insurable interest as to other things. 1 The shipowner has no inchoate right to freight, properly so called, and, therefore, no insurable interest therein, unless the goods or a part of them are actually loaded on board the ship before the loss; "or are so situated with respect to the ship as to create a well-grounded expectation of freight being realized." He must prove, in fact, for the purpose of maintaining his insurable interest, that, but for the perils insured against, some freight would have been earned, either by showing that some of the goods, for the transport of which it was to be paid, were actually on board, or that there was some contract for putting them on board, and that the ship was ready to receive, and the goods ready to be shipped, under such contract, before the loss. On the other hand, where the freight intended to be insured is the chartered hire of the ship, the inchoate right to such freight vests in the shipowner directly the contract has had its inception in point of performance on the part of the shipowner, and what that may be will depend on the terms of the charter-party. From that moment the shipowner has an insurable interest in the freight, which, but for the intervention of the perils insured against, he has thus put himself in a position to earn." A shipowner, who has entered into recognizance for salvage of ship and cargo, has an insurable interest in the average contribution due to him from the owners of cargo. He has also an insurable interest in protecting himself against charges imposed by the Passengers' Act (now the 18 & 19 Vict. c. 119). Under a policy "on passage money against all charges and liabilities to which owner or charterer might be subject, under sect. 46 to 51 inclusive of the Passengers' Act, 1852" (15 & 16 Vict. c. 44), expenses incurred in forwarding passengers from a British colony, where the ship was wrecked, 1 Dictum of Eyre, C. J., in Curling v. Long, 1 B. & P. 636. 2 Montgomery v. Egginton, 3 T. R. 362; Truscott v. Christie, 2 B. & B. 320, 326; Parke v. Hebson, ibid. 329; Forbes v. Aspinall, 13 East, 323, 331; Flint v. Flemyng, 1 B. & Ad. 45; Devaux v. J'Anson, 5 Bing. N. C. 518. 3 Thompson v. Taylor, 6 T. R. 478; Horncastle v. Suart, 7 East, 400; Atty v. Lindo, 1 B. & P., N. R. 236; Davidson v. Willasey, 1 M. & Sel. 312; Maclachlan, Shipping, c. x. Briggs v. The Merchant Traders Assoc., 13 Q. B. 167. to their place of destination, were held to be recoverable :' The insurable interest in goods vests in him who has the Shipper, freighter, right of property. It is in the shipper if he undertake to vendor, vendee. deliver at a distant port, or, without any undertaking, has the bill of lading drawn deliverable to himself, and indorses it to his own agent; or attaches it to a negotiable bill of exchange, as a security in the hands of the holder of the latter." But if he buys and ships, although at his own cost, goods "on As to goods. account and risk of" his foreign correspondent, and so invoices them, the property already vested is not altered by his merely sending an unindorsed bill of lading to his correspondent, accompanied by a bill of exchange for his acceptance." If goods at sea be sold on the London Exchange, an insurable interest immediately passes to the buyer,' unless to be delivered at the risk of the vendor, or, the transaction be invalid for want of an agreement in writing. Goods at sea 1 Gibson v. Bradford, 4 E. & B. 586. 2 Willis v. Cooke, 5 E. & B. 641. 3 Taylor v. Dewar, 5 B. & S. 58; 33 L. J. (Q. B.) 141. 4 Mitchel v. Ede, 11 A. & E. 888; Brandt v. Bowlby, 2 B. & Ad. 932. Turner v. Trustees of the Liverpool Docks, 6 Exch. 543 (in error). 8 6 Coxe v. Harden, 4 East, 211, 217, 218; Gurney v. Behrend, 3 E. & B. 622; 23 L. J. (Q.B.) 265; and see Maclachlan on Shipping, 344-348. 7 Sparkes v. Marshall, 2 Bing. N. C. 761. 8 Stockdale v. Dunlop, 6 M. & W. 224. |
