insured, is called a policy of insurance (x)—an open policy, where the value of the thing insured is not inserted in it, but in case of loss is to be proved -a valued policy where the value is settled by agreement between the parties (y), viz., the assured and the underwriters; though, even in this case, if the loss be partial, the amount must be proved; and if the goods insured are fraudulently overvalued, to cheat the insurers, the contract is thereby entirely vitiated, and nothing can be recovered upon it (z).

The policy must contain the name or names of one or more of the persons interested, or of the consignor or consignee of the property, or of the person or persons residing in Great Britain, who shall receive the order for and effect the insurance, or of the person or persons who shall give the order to the agent employed to effect the same (a). It has, however, recently been enacted (b), that wherever a policy on any ship, goods, or freight has been assigned (c), so as to pass the beneficial interest therein to any person entitled to the property [* 213] thereby insured, the assignee of such policy shall be entitled to sue thereon in his own name; the defendant in such action being entitled to make any defence which he might have made if it had been brought in the name of the person by whom or for whose account the policy sued upon was effected.

The wording of a sea policy of insurance is peculiar; but the mercantile world have long been used to it, and every material portion of it has been diligently scanned by lawyers, and been illustrated by the decisions of our courts. It is to be construed according to the same rules as other written contracts, and by reference to the intention of the parties, which must be gathered from the words of the instrument and the surrounding circumstances. If the words of the instrument are clear in themselves, the instrument must be construed accordingly; but if its words are susceptible of more meanings than one, the judge must inform himself of their true significance by the aid of the jury and the surrounding circumstances which bear upon the contract (d).

The person underwriting a sea policy is guided in so doing by these considerations. He calculates and estimates, as best he may, the price at which he may safely indemnify the trader, proposing to insure, against risks, regard being had to the nature of the voyage to be performed, and the usual course and manner of making it. He takes the risk upon the supposition that whatever is usual or necessary will be done. And if the risk is varied, or the voyage is altered, by the fault of the owner or master of the ship, the insurer ceases to be liable. (544)

Marine insurance is thus essentially a contract of indemnity against the perils of the voyage enumerated in the policy (e); the dangers usually insured

(x) See its ordinary form, Arnould, Mar. Insur. 3rd ed. 220. As to the stamp on the policy, see Smith, Merc. Law, 7th ed. 367.

(y) Smith, Merc. Law, 7 ed., 344; Irving v. Manning, 1 H. L. Cas. 287; Barker v. Janson, L. R. 3 C. P. 303; Wilson v. Nelson, 5 B. & S. 354.

(z) Haigh v. De la Cour, 3 Camp. 319. (a) Stat. 28 Geo. 3, c. 56, s. 1.

(b) 31 & 32 Vict. c. 86, s. 1.

(c) As by indorsement of the policy. Id. s. 2.

(d) Carr v. Montefiore, 5 B. & S. 408, 428. (e) Which must set forth the premium, the amount insured, the risks insured against, and the names of the underwriters. 35 Geo. 3, c. 63, s. 11. See, also, 54 Geo. 3, c. 144.

(544) If the vessel departs voluntarily, and without necessity, from the usual course of the voyage, the insurer is discharged; but a deviation to save life will not avoid the policy. Crocker v. Jackson, 1 Sprague, 141; George v. Nicholaus, Newb. 449, 452. And see Turner v. Protection Ins. Co., 25 Me. 515; Walsh v. Homer, 10 Mo. 6

against, being "of the seas, men of war, fire, enemies, pirates, rovers, thieves, jettisons (f), letters of mart and countermart, surprisals, takings [*214] at sea, arrests, restraints, and detainments of all kings, princes, and people of what nation, condition, or quality soever, barratry (g) of the master and mariners, and all other perils (h), losses, and misfortunes." (545)

Now, supposing a loss, whether of ship, cargo, or freight, to have occurred, it may, regard being had to the above words, sometimes be matter of contention whether the loss resulted from a peril insured against, or whether in respect of it, the underwriters are exempt from liability (i). And although difficulty may be felt in satisfactorily discriminating between particular cases and peculiar states of facts, and although it be impossible to draw any precise line upon this subject, the general rule is, that where mischief arises from perils of the seas, and the natural and almost inevitable consequence of that mischief is to create further mischievous results, the underwriters will be responsible for the further mischief and damage so occasioned. The relation of cause and effect cannot, indeed, always be accurately ascertained; yet if, in the ordinary course of events, a certain result usually follows from a given cause, the immediate relation of one of these to the other may, for practical purposes, be held to be established, and the causa causans may thus be singled out (k). (546)

(f)" Jettison" is a voluntary throwing overboard of goods in case of distress, or to save them from capture. Butler v. Wildman, 3 B. & Ald. 398.

(g) Generally speaking, "barratry" comprehends every species of fraud, knavery, or criminal conduct in the master, by which the owners or freighters are injured.

The meaning of this word was much discussed in Grill v. General Iron Screw Co., L. R. 3 C. P. 476; 1 C. P. 600.

(h) As to what perils are comprised in the general words " other perils," see Phillips v.

Barber, 5 B. & Ald. 161; Cullen v. Butler, 5 M. & S. 461; Taylor v. Dunbar, L. R. 4 C. P. 206.

(i) See, for instance, Montoy v. London Ass. Co., 6 Exch. 451, where a vessel laden with hides and tobacco, in the course of her voyage, shipped seawater, which damaged the hides and affected the flavour of the tobacco. This damage was held to have been caused by perils of the seas.

(k) See, ex. gr., Ionides v. Univ. Mar. Ins. Co., 14 C. B. N. S. 259.

(545) This clause has been modified in form in most of the American policies, and some changes have been made in the substance. Perils of the sea, fire, barratry, theft, piracy, capture, arrests, and detentions, are the perils usually enumerated in American policies. The phrase "perils of the sea" is held to cover all losses or damages which arise from the extraordinary action of the wind and sea, and from inevitable accidents directly connected with navigation, excepting those provided for in other parts of the policy, as capture and the like. See 1 Pars. on Mar. Ins. 544, Schieffelin v. New York Ins. Co., 9 Johns. 21; Martin v. Salem Mar. Ins. Co., 2 Mass. 420; Hazard v. New England Mar. Ins. Co., 1 Sumn. 218. Barratry is one of the usual marine risks, and is covered by a policy which does not state explicitly the perils insured against. Parkhurst v. Gloucester, etc., Ins. Co., 100 Mass. 301; S. C.,1 Am. Rep. 105. As to the meaning of the term barratry, see Atkinson v. Great West. Ins. Co., 4 Daly, 1; S. C., 5 Alb. Law Jour. 252; Wilson v. General M. Ins. Co., 12 Cush. (Mass.) 360. Ignorance or inattention of the master or mariners is not one of the perils of the sea. Lodwicks v. Ohio Ins. Co., 5 Ohio, 433; Moses v. Sun Mut. Ins. Co., 1 Duer, 159; S. C., 11 N. Y. Leg. Obs. 78; Monongahela Ins. Co. v. Chester, 43 Penn. St. 491. The warranty against capture has been held to include capture by a confederate cruiser during the rebellion. Swinnerton v. Col. Ins. Co., 37 N. Y. (10 Tiff.) 174; Mauran v. Ins. Co., 6 Wall. 1; Dole v N. E. M. M. Ins. Co., 51 Me. 465; Same v. Same, 6 Allen (Mass.), 373.

(546) It is a settled rule that the peril, whatever it may be, upon which the policy attaches must be the proximate, and not the remote cause of the loss. 3 Kent's Com. 302. For illustrations of the application of the rule, see Dyer v. Piscataqua F. & M. Ins. Co., 53 Me. 118; Woodruff v. Commercial M. Ins. Co., 2 Hilt. 122.

*

[*215] Again, by the terms of the policy, the underwriters are usually made liable for salvage and for general average.

The term "salvage" is used to signify either what may be recovered from a wreck, or, as here, the compensation allowed to those persons by whose assistance a ship or cargo is saved from danger or loss in case of wreck, capture, or the like (1).

General average (originally the proportion of cattle-labour due from each tenant to his lord, from averare, to carry or draw, and afterwards used to signify the proportion paid by each merchant for his goods carried (m) ), is a contribution by the owners of the ship, freight, and goods on board, in proportion to their respective interests, towards any particular loss or expense sustained for the general safety of the ship and cargo, in order that the particular sufferer may not in the end be a greater loser than the rest of the persons interested. Thus, in the case of jettison (n), or of cutting away the ship's masts in a storm, or where salvage is paid to recaptors, or goods are given as a compensation to pirates to save the rest, or an expense is incurred in reclaiming the ship, or defending a suit in a foreign court of admiralty, and obtaining her discharge from an unjust capture or detention:-in these and the like cases, where any sacrifice is deliberately and voluntarily made, or any expense is fairly and bond fide incurred to prevent a total loss, or some great disaster, such sacrifice or expense is regarded as the proper subject of a general contribution, and is to be rateably borne by the owners of the ship, freight, and cargo, so that the loss may fall equally upon all, according to the maxim of the civil law, nemo debet locupletari aliená jactura. The application of this principle was understood by the Rhodians, whose regulations on the subject were adopted into the Roman law, and made an important head in

[*216] the Digest (0). The claim to general average does not arise, unless

the loss was voluntarily incurred by those on board, or having the conduct of the business, and tended to, and was actually followed by, the preservation of the rest, or of some part of the ship and cargo (p).

Petty or accustomed averages are such small charges as pilotage, towage, light money, beaconage, anchorage, quarantine, &c., which, when they are incurred in the ordinary course of the voyage, are regarded as necessary and ordinary expenses, and not as a loss within the terms of the policy; but if incurred for any extraordinary purpose in the voyage, as to provide against an impending danger, or in consequence of the ship's being driven out of her course by stress of weather, are deemed general average, for which the insurer will be liable (q). (547)

() Maud. & Poll. Merch. Shipp., 2nd ed. 419. The claim to and mode of estimating salvage are now mainly regulated by stat. 17 & 18 Vict. c. 104, ss. 458, et seq.

(m) Cowell, Law Dict. ad verb.

(n) See Miller v. Tetherington, 6 H. & N.

278.

(0) Under the title De lege Rhodi de jactu. (p) Marshall, Insur. 539.

As to the mode of estimating the amount

of contribution in respect of general salvage, and liability for it, see Fletcher v. Alexander, L. R. 3 C. P. 375; Dickenson v. Jardine, Id. 639.

(q) As to "particular average," and " particular charges," see Kidston v. Empire Mar. Ins. Co., L. R. 2 C. P. 357; Booth v. Gair, 15 C. B. N. S. 291; Oppenheim v. Fry, 5 B. & S. 348.

(547) In the United States, partial loss and average are understood by commercial men to mean the same thing, and average other than general includes every loss for which the underwriter is liable, except general average and total loss, which last includes total loss with salvage. Wadsworth v. Pacific Ins. Co., 4 Wend. 33. See Wallerstein v. Columbian

Such being in brief the liabilities cast upon the underwriter of a marine policy in the ordinary form, he engages within such limits, and to the extent of its real or agreed value, that the ship or cargo insured shall arrive safely at its destination, and undertakes, on the happening of a certain contingency, to make good the loss. Such loss may be partial or total, there being three classes of cases in which total loss may occur: the first is where the ship absolutely sinks, and is, in fact, lost; the second, where the ship itself may not be, in fact, totally lost, but may be unable to continue her voyage, being injured past repair; and the third, where the ship can be repaired, but the expense of repair will be so considerable, that after the repairs have been effected the vessel will fetch less in the * market than the sum expended in repairing [*217] her; (548) a case falling within this last class is one of what is termed constructive total loss, and there notice of abandonment should be given by the insured (r). Where, moreover, the subject-matter of the insurance is not actually annihilated, the assured claiming as for a total loss must give up to the underwriters all the remains of the property recovered, together with all benefit and advantage belonging or incident to it (s).

A policy of marine insurance may contain express, or may give rise to implied warranties, non-fulfilment of which by the assured will discharge the underwriter from liability; a warranty differing from a representation dehors the policy in this respect, that it must be strictly complied with. A warranty is a condition or contingency; unless it be performed there is no contract. Nor does it signify for what purpose the warranty was introduced, for being introduced the contract does not exist unless it is literally complied with (t). A collateral representation, if false in a material point, may indeed avoid the

(r) Arg. Irving v. Manning, 1 H. L. Cas. 290; Fleming v. Smith, Id. 513; Stewart v. Greenock Mar. Ins. Co., 2 H. L. Cas. 159, 183; King v. England, 3 H. & C. 209.

(8) Stewart v. Greenock Mar. Ins. Co., supra. See as to a constructive total loss of the

ship, Kemp v. Halliday, 6 B. & S. 723; King
v. Walker, 3 H. & C. 209; Grainger v. Martin,
4 B. & S. 9;-of goods, Farnworth v. Hyde,
L. R. 2 C. P. 204;-of freight, Kidston v.
Empire Mar. Ins. Co., L. R. 2 C. P. 357.
(t) Carter v. Boehm, 3 Burr. 1905.

Ins. Co., 44 N.Y. (5 Hand) 204; S. C., 4 Am. Rep. 664; Insurance Co. v. Bland, 9 Dana (Ky.), 147. General average is incurred where the expenses or losses arise in a case of emergency not produced by the misconduct or unskillfulness of the master, and not resulting from the ordinary circumstances of the voyage. Ross v. Ship Active, 2 Wash. C. C. 226 See Williams v. Suffolk Ins. Co., 3 Sumn. 513; Spafford v. Dodge, 14 Mass. 74; Sims v. Gurney, 4 Binn. (Penn.) 524; Fowler v. Ruthbones, 12 Wall. (U. S.) 102; Bales of Cotton, 8 Blatchf. 221; The Milwaukee Belle, 22 Biss. 197; The Congress, 1 id. 42.

(548) If the expenses of repair will exceed half the value of the ship when repaired she is considered a total loss, according to the American authorities, and may be abandoned. Wood v. Lincoln & Kennebec Ins. Co., 6 Mass. 479; Allen v. Commercial Ins. Co., 1 Gray (Mass.), 154; Coolidge v. Gloucester Mar. Ins. Co., 15 Mass. 341; Fiedler v. New York Ins. Co., 6 Duer, 282; Wallerstein v. Col. Ins. Co., 44 N. Y. (5 Hand) 204, 217; S. C., 4 Am. Rep 664; McColl v. Sun Mut. Ins. Co., 2 Jones & Sp. 313, 320.

Owners of merchandise insured against perils of the seas, " free of particular average only," are entitled to recover as for a total loss, although some portion of the goods may be brough into port in specie, if the right to abandon is exercised during the continuance of the peril, and there is a total loss of value to the owner. Total loss is not necessary. Wallerstein v. Columbian Ins. Co., 44 N. Y. (5 Hand) 201; S. C., 4 Am. Rep. 664. See, gen. erally, Williams v. Kennebec Mut. Ins. Co., 31 Me. 455; Lord v. Neptune Ins. Co., 10 Gray (Mass.), 109; Ridyard v. Phillips, 4 Blatchf. 443; Depeyster v. Sun Mut. Ins. Co., 17 Barb 306; Bryan v. New York Ins. Co., 25 Wend. 617.

policy; if in a point immaterial, it can rarely suffice to evidence fraud, and will not in the absence of fraud vitiate the policy (u).

As showing the nature of an implied warranty, the following instance must suffice: a voyage policy may be effected on a ship prior to her leaving port, or when actually at sea, and in it there is contained an implied warranty that the ship is seaworthy at the commencement of the voyage; or in port, when pre[* 218 ] paring for it, or that * she had been seaworthy for the voyage when it commenced, if the insurance were on a vessel then at sea, that is to say, there is in such case a warranty to seaworthiness at the commencement of the risk (x). (549) The ground on which the implication of a warranty of seaworthiness rests is this. The insurer is entitled to expect that the shipowner will do all that it behoves a careful and conscientious man to do to secure the safety of the crew who are to navigate the vessel, and of the merchant's goods which are to be conveyed in it, so that the risk covered by the insurance shall be limited to those perils incidental to navigation, against which the care and skill of man cannot provide. This doctrine is, however, flexible, and capable of accommodating itself to particular states of facts, so that if an insurer, with full knowledge of facts, agrees to insure a vessel incapable from her size or construction of being brought up to the ordinary standard of seaworthiness, the implied warranty will be taken to be limited to the capacity of the vessel, and will be satisfied if she is made as seaworthy as she is capable of being made (y).

A policy of insurance, as we have seen (z), is a contract of indemnity, subject to this qualification, that the parties may agree beforehand in estimating the value of the subject assured, by way of liquidated damages (a). Such an insurance is essentially a speculative contract. The special facts upon which the contingent chances are to be computed lie most commonly within the knowledge of the assured only; the underwriter trusts to his representation, and proceeds in confidence that the assured does not keep any circumstance within his knowledge to mislead the underwriter into a belief that the circumstance does not exist, and to induce him to estimate the risk as if it [* 219] did not exist. The keeping back such circumstance is a fraud, which

(u) M'Dowell v. Fraser, Dougl. 247; De Hahn v. Hartley, 1 T. R. 343.

(x) By the law of England, in a time policy effected on a ship then at sea, there is no implied condition that the ship should be seaworthy on the day when the policy is intend

ed to attach.
353.

Gibson v. Small, 4 H. L. Cas.

(y) Burges v. Wickham, 3 B. & S. 669.
(z) Ante, pp. 212, 213.

(a) Irving v. Manning, 1 H. L. Cas. 307.

(549) For an elaborate discussion of the question of the implied warranty of seaworthiness in time policies, see 1 Pars. on Mar. Ins. 389 et seq. The American rule is stated to be, that a warranty of seaworthiness, at the time of the ship's sailing, is implied when insurance by a time policy is made on a vessel then in her home port; but in a time policy, taken on a vessel "lost or not lost," then in a distant ocean, seaworthiness at the moment of effecting the insurance cannot be implied. Rouse v. Insurance Co., 3 Wall. Jr. 367. And see Jones v. Insurance Co., id. 278; Capen v. Wash. Mut. Ins. Co., 12 Cush. (Mass.) 517.

The question as to whether a vessel is seaworthy is ordinarily one of fact to be determined by the jury. Myers v. Girard Ins. Co., 26 Penn. St. 192; Walsh v. Washington M. Ins. Co., 32 N. Y. (5 Tiff.) 427; Hathaway v. Sun Mut. Ins. Co., 8 Bosw. 33; Field v. Ins. Co. of N. A., 3 Md. 244. A ship is held to be seaworthy if, before setting out on a voyage, it is fit, in the degree which a prudent owner uninsured would require, to meet the perils of the service it is then engaged in, and would continue so during the voyage, unless it met with extraordinary damage. Hoxie v. Pacific M. Ins. Co., 7 Allen (Mass.), 211.