The difficulties that occur in practice arise chiefly out of the crabbed SECT. 1. and obscure language of the time-honoured Lloyd's policy, which was framed with reference to the conditions of commerce in a bygone era. New wine has continually to be put into the old bottle, with inconvenient results. See note to Sched. I., post, p. 121. and land § 2. (1.) A contract of marine insurance may, by its Mixed sea express terms, or by usage of trade, be extended so as to risks. protect the assured against losses on inland waters or on any land risk which may be interposed in, or subsidiary or incidental to, any sea voyage.1 (2.) Where a ship in course of building, or the launch of a ship, or any adventure analogous to a marine adventure, is covered by a policy in the form of a marine policy, the provisions of this Digest, in so far as applicable, apply thereto; but, except as by this section provided, nothing in this Digest applies to any contract of insurance other than a contract of marine insurance as by this Digest defined.2 NOTE. As commerce has progressed, and insurance has developed, new forms of risks are included in marine policies. But in order to cover them, special and appropriate forms of words must, in the absence of any well-ascertained trade usage, be inserted in the policy. Thus goods may be insured "from Japan to London, viâ Marseilles and [or] Southampton; "3 wool may be insured "at and from Townsville to London, including risk of fire and flood, from sheep's back until 1 McArthur, Ed. 2, p. 88. As to trade usage, which hitherto has been of very limited scope, see Rodocanachi v. Elliott (1873), 42 L. J. C. P. at p. 254, per Lord Esher. 2 For form of launch and trial trip insurance, see Owen's Notes and Clauses, Ed. 3, p. 83. As to the words "so far as applicable," see Quebec Mar. Ins. Co. v. Commercial Bank of Canada (1870), L. R. 3 P. C. 234 (lake, river, and canal insurance); Joyce v. Kennard (1871), L. R. 7 Q. B. 78 (insurance of lighterman's liability); Shelbourne v. Law Invest. Ins. Co. (1898), 8 Asp. Mar. Cas. 445 (river insurance). 3 Rodocanachi v. Elliott (1873), L. R. 8 C. P. 649; affirmed L. R. 9 C. P. 518, Ex. Ch. (goods detained in Paris during siege). SECT. 2. Marine adventure and mari time perils defined. waterborne at Townsville; "1 and bullion may be insured "at and from Boodini to London, including all risks of every description, from the mines by escort to railway station at Raichur, thence by rail to Bombay, and thence to London." 2 These mixed sea and land risks may be compared, by way of analogy, with "through bills of lading," which are the invention of modern commerce. Compare also the definition of "policy of sea insurance," given by § 92 of the Stamp Act, 1891 (54 & 55 Vict. c. 39), post, p. 137. § 3.—(1.) Subject to the provisions of this Digest, every lawful marine adventure may be the subject of a contract of marine insurance.3 (2.) In particular there is a marine adventure where— (c.) Any liability to a third party may be incurred or responsible for, insurable property, by reason of its exposure to maritime perils." 1 King v. Victoria Ins. Co. (1896), A. C. 250 P. C.; see, too, Davies v. National Ins. Co. of New Zealand (1891), A. C. 485. 2 Hyderabad Co. v. Willoughby (1899), 2 Q. B. 530. 3 Arnould, Ed. 6, p. 688; Wilson v. Jones (1867), L. R. 2 Ex. 139, Ex. Ch. • Arnould, Ed. 6, pp. 18-29, and as to "movables," see § 91, post. 5 McArthur, Ed. 2, pp. 59, 65; cf. Rankin v. Potter (1873), L. R. 6 H. L. 83 (chartered freight on homeward voyage insured as to outward voyage); Price v. Maritime Ins. Co. (1900), 5 Com. Cas. 332 (advances). • McArthur, Ed. 2, p. 59; Boehm v. Bell (1799), 8 T. R. at p. 161 (damages and costs for illegal capture); Tatham v. Burr (1898), A. C. at p. 385 (liability for running down another ship), and see §§ 14, 75. (3.) "Maritime perils" mean the perils consequent SECT. 3. on, or incidental to, the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints and detainments of princes and peoples, jettisons, barratry, and any other perils, either of the like kind, or which may be designated by the policy. NOTE. Strictly speaking, it is the risk or adventure of the assured, and not the property exposed to peril, which is the subject of insurance. Ex hypothesi, the ship or goods may be lost. What is really insured is the pecuniary interest of the assured in or in respect of the property exposed to peril, in other words, the risk or adventure.1 Lord Esher has sought to reconcile the underlying facts with popular language, by drawing a distinction between the subject insured and the subject matter of insurance.2 The Netherlands Com. Code, Art. 268, provides simply that "the subject matter of an insurance may be any interest appreciable in money, and not excepted by land." See, too, German Com. Code of 1897, art. 778. If an insurer, with his eyes open, insures an unlawful adventure, the policy is obviously a mere "honour policy," for ex turpi causa non oritur actio. Speaking generally, an adventure is illegal if it is prohibited by statute, or contrary to good morals or public policy and illegality in any part of the adventure taints the whole of it. (Arnould, Ed. 6, p. 691). 4 The lawfulness of an English adventure or insurance must be determined by English law. For example, if two foreign states are at war, there is nothing unlawful in sending an English ship to run a blockade, though the ship may be liable to confiscation by the blockading belligerent. So, too, as a general rule, English law takes no cognizance of foreign trade or revenue laws. But a distinction must 1 A good illustration of this principle is furnished by the rule that there may be a total loss of goods when the adventure is wholly frustrated, though the goods themselves remain in specie. See § 61, post, p. 73. 2 Rayner v. Preston (1881), 18 Ch. D. at p. 9, C. A. 3 Cf. Gedge v. Royal Exchange Ass. Corpn. (1900), 2 Q. B. at p. 220. ✦ Wetherell v. Jones (1832), 3 B. & Ad. at pp. 225, 226. 5 Cf. Kellner v. Le Mesurier (1803), 4 East, at pp. 402, 403. • Arnould, Ed. 6, p. 713, Ex. p. Chavasse (1865), 34 L. J. (Bank.) 17. 7 Westlake, Private International Law, Ed. 3, § 213; Lowndes, Ed. 2, p. 102; cf. Francis v. Sea Ass. Co. (1898), 8 Asp. Mar. Cas. 418. SECT. 3. be drawn between the lawfulness of the adventure and the implied warranty of legality by the assured (see § 42, post). If insurer and assured like to insure an illegal venture, the contract is an honour contract; but where the assured does not disclose the illegality of the venture, the contract is binding neither in law nor honour. Again, if there be anything in foreign law or international relations which increases the particular risk, and is not a matter of common knowledge, it must be disclosed to the insurer before the contract is entered into, for the nature of the risk and the amount of premium charged will necessarily be affected thereby. Cf. § 18, post. The terms of subsect. (2) are inclusive, not exhaustive. As the conditions of maritime commerce change, new dangers and matters require to be covered by insurance. For example, shipments of live cattle, which are insured against mortality and all other risks, have to be covered by special provisions, as such risks are not contemplated by the old form of policy. The subject-matter, says Lord Blackburn, "is generally described very concisely as being so much 'on ship,' ' on goods,' 'on freight,' on profit on goods,' on advances on coolies,' ' on emigrant money,' and so on." 1 See further, § 27, post. The insurer, as a rule, is not liable for damages consequent on delay, even though the delay be caused by a peril insured against (see § 56 (3), post, p. 63). But policies may be effected to protect the assured against the cancelling clause in charter parties, and to protect the owner of perishable goods. Subsect. (3).-Lloyd's policy, after enumerating the ordinary perils, proceeds with the words "and of all other perils, losses, and misfortunes that have or shall come to the hurt, detriment, or damage of the said goods," etc. But these general words have always been interpreted to refer to perils of a like kind with those already enumerated.2 Perils of a dissimilar kind may be insured against (see, e.g., the note to § 2), but they must be covered by express terms.3 On the other hand, a policy may be confined to some only of the specified perils. In that case a so-called warranty is added, excluding particular perils, e.g. "warranted free from capture, seizure, and detention, and all the consequences of hostilities."-(See Owen's Notes and Clauses, Ed. 3, p. 28, et seq.) 1 Mackenzie v. Whitworth (1875), 1 Ex. D. at p. 40, C. A. 2 Arnould, Ed. 6, p. 789; McArthur, Ed. 2, p. 136; Thames and Mersey Ins. Co. v. Hamilton (1882), 12 App. Cas. at p. 495. 3 See, e.g., Inman v. Bischoff (1882), 12 App. Cas. at p. 686 (abatement clause in charter party); Thames and Mersey Ins. Co. v. Hamilton (1887), 12 App. Cas. 484, at p. 491 (donkey engine explosion), which gave rise to the "Inchmaree clause." The result of maritime perils is to cause "marine damage," which, SECT. 3. says Lord Herschell, does not mean only damage which has been caused by the seas, "but damage of a character to which a marine adventure is subject. Such an adventure has its own perils, to which either it is exclusively subject or which possess in relation to it a special or peculiar character. To secure an indemnity against them is the object of marine insurance."1 As to the narrower expression "perils of the seas," see Sched. I. rule 7, post, p. 124. Insurable Interest. § 4.-(1.) Every contract of marine insurance by way Wagering of gaming or wagering is void. or gaming contracts (2.) A contract of marine insurance is deemed to be are void. a gaming or wagering contract— [8 & 9 Vict. c. 109, and 19 Geo. 2, (a.) Where the assured has not an insurable interest c. 37.] as defined by this Digest: 2 (b.) Where the policy [is on a British ship or goods and effects laden thereon, and] is made “interest or no interest," or "without further proof of interest than the policy itself," or "without benefit of salvage to the insurer," or subject to any other like term: [Provided that where there is no possibility of salvage, a policy may be effected without benefit of salvage to the insurer.] 3 NOTE. This section appears to reproduce the effect of the 19 Geo. 2, c. 37, §§ 1 to 3, as read with the 8 & 9 Vict. c. 109. Subsect. (1).-See the Gaming Act, 1845 (8 & 9 Vict. c. 109), s. 18, which provides that "all contracts or agreements, whether by parole or in writing, by way of gaming or wagering, shall be null and void." 1 Thames and Mersey Ins. Co. v. Hamilton (1887), 12 App. Cas. at p. 498. 2 McArthur, El. 2, p. 24; Cousins v. Nantes (1811), 3 Taunt. 513 (presumption of interest and averment in pleading) Ex. Ch.; Wilson v. Jones (1867), L. R. 2 Ex. at p. 141, per Willes, J. See §§ 4-15. 3 Cf. Lucena v. Crauford (1806), 2 B. & P. at p. 310, and note, post. |
