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MARINE INSURANCE)
675
INSURANCE


The earliest known policies in English are one of 1555 on the “ Sancta Crux ” “ from any porte of the Isles of Indea of Calicut unto Lixborne, " and one of 1557 on the “ Ele " from Velis Maliga to Antwerp. The authority for this statement is Mr R. G. Marsden, who edited for the Selden Society the records of the Admiralty Court; nothing earlier had been found at the Record Office down to May 1907. In the “ Sancta Crux " olicy there is no detailed statement of perils insured against, or of risifcs undertaken by the underwriter; the whole obligation of the underwriter to the assured is embodied in the following words: “ We will that this assurans shall be so strong and good as the most ample writinge of assurans, which is used to be maid in the strete of London, or in the burse of Andwerp, or in any other forme that shulde have more force." This reference to Antwerp usage is 67 years before the date of C. Malynes' statement that all Antwerp policies contained a clause providing that they should in all things be the same as policies made in Lombard Street of London. The wording of the English policies written in Italian is very much simpler than the Florentine form of 1523, from which it almost seems that the wording used in England followed an earlier Italian form. But even the Italian policies in the two “ Santa Marias ” mention the uses and customs of “ questa Strada Lombardo di Londra " as the standard of the assurance they afford. The next most ancient policy we possess is dated 1613; it covers goods on the “ Tiger " from London to “ Zante, Petrasse and Saphalonia." The “ Tiger " policy is interesting in another connexion. It recalls Shakespeare's Macbeih-I. iii. 7 (written about 1605):-

“ Her husband's to Aleppo gone, master of the 'Tiger.' " Clark & Wright's note (in the “ Clarendon Press ” series edition) cites Sir Kenelm Digby's journal of 1628 mentioning “ the ' T ger ' of London going for Scanderone " (Alexandretta). Hakluyt (liioyages) gives letters and journals of a. voyage of the “ Tyger of London ” to Tripolis in 1583. Shakespeare again mentions a ship called the “ Tiger ” in Twelfth Nighi, V. iii. 63:-

“And this is he that did the 'Tigcr' board."

The policy by the “ Tiger " is much more ample than any of those already mentioned; it details the perils insured against in words closely resembling the Florentine formula of 1523, and differing only slightly from the form adopted by Lloyd's at a general meeting held in 1779, and afterwards incorporated in the Sea Insurance Stamp Act of 1795, which is the stem form of all modern British and American marine insurance policies.

While the form of the insurance policy was thus developing, there was a singular absence of legislation (and, as far as we can yet trace, of litigation) on the subject. Till 1601 differences seem to have been generally settled by arbitration. This accounts for the poverty of the British Admiralty records in matters of marine insurance. In 1601 a special tribunal was established by statute for summary trial of disputes arising on insurance olicies; but, owing mainly to the opposition of the common-law judges, the new court languished, and by I'f20 it had fallen into utter disuse. J. A. Park states that not more than sixty insurance cases were reported between 1603 and 1756. Consequently. when Lord Mansfield came to the court of king's bench in the latter year, he found a clear field. He practically created the insurance law of England. He made use of all the continental ordinances and codes extant in his day, taking his legal principles largely from them; the customs of trade he learnt from mercantile special jurors. Subsequent legislation referred solely to the prohibiting of certain insurances (wager policies, &c.), the naming in the policy of parties interested therein, and the stamp duty levied on marine insurances. In 1894 Lord Herschell introduced his Marine Insurance Bill, which endeavoured “ to reproduce as exactly as possible the existing lw relating to marine insurance.” After Lord l-lerschell's death, Lord Chancellor Halsbury took up the bill, introducing it in the House of Lords in 1899 and again in 1900; he appointed a committee on which underwriters, shipowners and average adjusters were represented, and, presiding himself, went through the bill with them clause by clause. The bill was then passed by the Lords, but was always blocked in the House of Commons till 1906, when it was taken up by Lord Chancellor Loreburn in conjunction with Lord Halsbury. After some amendment and modification it was finally passed by both Houses and became law on the lSt of January 1907 (6 Ed. VII., c. 41).' In America a less happy fate has attended the insurance code, forming part of the proposed civil code of New York, completed and published in 1865, of which a very slightly altered version was adopted in California and has been in effect there since the 1st of January 1873. On the continent of Europe legislation at first took the form of local ordinances of commercial cities, such as Barcelona (143 -1484), Florence (1523), Burgos (1538), Bilbao (1560), Middelburg f1600), Rotterdam (1604-1655). In the third quarter of the 16th century Rouen produced a handy guide to marine insurance, Le Guidon de la. mer; and in X656 1' An important addition to the marine insurance law of the muted Kingdom was made by the Marine Insurance (Gambling Policies) Act 1909, which made void policies taken out by persons uninterested in ships or cargo, who only gain b the loss of the vessel, Such policies are known as “ policies proof olyinterest " (P.P.I.). Etienne Cleirac published there his Us et coulumes de la mer. This was followed in 1681 by the Ordanmmce de lu. marine, which, through Lord Mansfield, had a great effect on English case law. In 1807 F rancc produced the Code de commerce, on the model of which nearly every European nation has issued a similar code. Probably the “ best considered " (Willes, ].) of these, and the most adequate as regards marine insurance, is that of the German empire; but Hamburg and Bremen still preserve many of their local conditions by special contract in their policies. In fact it is doubtful whether the German Code could have been produced without the previous elaboration of the Conditions of Hamburg and of Bremen. The Hamburg Conditions of 1847, revised 1867, constitute an admirable compendium of marine insurance as practised in that city. Marine insurance being peculiarly an international business, being a factor in 95 25 of the operations of oversea trade, it is natural that those engaged in this business or making use of marine fu insurance in their business should experience the diffi- fo" “M culty and hardship arising from the differences between “ws” the marine insurance law of different states, and should attempt to find a remedy. Such an attempt was made at the Buffalo conference of the International Law Association in,1899 to prepare a body of rules dealing with those parts of marine insurance on which the laws of maritime countries dider. This undertaking was of the same nature as the earlier efforts of the same association which resulted in the formulation of the York-Antwerp rules of general average. There are four important subjects on which great divergence prevails: (a) Constructive total loss; (b) Deductions from costs of repairs, new from old; (c) Effect of unseaworthiness and negligence; (d) Double insurance.

(a) Constructive total loss results, according to the law of France, Italy, Spain, Belgium, Holland, in case of loss or deterioration of the things insured amounting to not less than three-quarters; in German law a ship is considered to be “ unworthy of repair " when the cost of the repair, without deductions new for old, would amount to over three-fourths of the ship's former value (no similar provision seems to exist in Germany for goods); in the law of America a damage over 50 % of the value of the vessel when repaired is a constructive total loss of the vessel, in case of the policy containing no express provision to the contrary. None of these varying systems appears to be so equitable to all concerned as the Britis rule, which was for this reason suggested to the Buffalo conference for international adoption. As regards the time when the test for constructive total loss should be app ied, it was suggested to reject the British rule, prescribing that it shall be the time of commencing action against underwriters, and to adopt the continental and American rule referring to the facts as they existed at the time of abandonment. Then, as respects the effect of a valid abandonment on the rights in the property insured, the conference proposed to adopt the British and American rule of making the abandonment refer back to the time of the loss, as against the continental European system of making the transfer operative only from the date of the notice of abandonment. Finally, as to the freight of a properly-abandoned ship, it was proposed to follow for international purposes the American rule of dividing the freight of the voyage between shipowner and underwriter in the proportion of the distances ru11 before the disaster and to be run thereafter, rejectin the British rule of complete transfer to the underwriter and the various continental rules of pro ortional division between shipowner and underwriter. (E) It was proposed to ado t the deductions set forth in the York-Antwerp rules as being suitable for international adoption in marine insurance contracts.

(c) As regards unseaworthiness and its effect on insurances on ships and goods, it was proposed in the case of ships to reduce materially the obligations of the insured as required by English and American law; to diminish the requirement from the absolute attainment of seaworthiness to the mere exercise of all reasonable care to make the vessel seaworthy. Even this attenuation did not appear sufficient, as it was proposed to degrade the performance of the already minimized warranty from being a condition of the insurance, and its non-performance from invalidating the policy. As to goods, they were proposed to be exempted from any warranty of seaworthiness of ship. Concerning negligence, it was proposed to hold the underwriter liable (subject to the new seaworthiness warranty) for any loss caused proximately by a peril insured against, although wholly or partly the result of the neglect of the insured, or his servants or agents, or by the wilful act of his servants or agents, or the inherent nature or unsoundness of the article insuredx (d) In case of double or multiple insurance, the conference proposed to adopt the British rule of making all the policies effectual, independently of the order in which they were edected, and of making all the underwriters entitled to contributions inter se. As regards the premium, it was proposed that no premium should be returnable, where the risk has attached.

With the exceotionof those embodying the two sug estions named in par. gr), all the resolutions roposed were accepted by the conference. ut it appears extremely unlikely that British and American underwriters will voluntarily consent to the practical annihilation of the seaworthiness warranty, and no less improbable that American and continental assured will voluntarily accept the stricter rule of

constructive total loss embodied in English law, when their national