Page:Encyclopædia Britannica, Ninth Edition, v. 13.djvu/198

186 INSURANCE [MARINE. himself by his principal, but also any other material facts which may have come to his knowledge from other sources. If either the principal or the agent fail to communicate such facts, the policy will be void. Should any material fact come to the knowledge of the parties wishing to effect the insurance after they have sent away an order to have it effected, they are bound to intimate such fact without delay, so that the underwriter may be informed of it (if there should still be time) before he has accepted the risk. The suppression of information tending to show that the ship was overdue, or that there were rumours current as to her having met with some accident (even though it afterwards appeared that these rumours were unfounded), is concealment fatal to the validity of the contract. It has also been held that a policy was void because the agents employed to effect it failed to inform the under writers that their principal had instructed them to wait the arrival of the ship for a certain number of days before acting on the order to insure. Misrepresentations of the terms on which other underwriters have agreed to accept the insurance will be fatal to the validity of the contract, as well as misrepresentation of the risk itself. It may be observed generally that every circumstance repre sented to the underwriter ought to be at least substantially true. A mere expression of opinion or expectation does not of course amount to a positive representation of facts ; but the opinion or expectation expressed must itself be genuine, since, if it appeared that it had been only a pre tence, or inconsistent with anything within the actual know ledge of the assured at the time, the policy might be viti ated. When an express "warranty" is given, its terms must be literally complied with, otherwise the policy will be void. The chief distinction between a warranty and a representation is that the former is always inserted in the policy, while the latter is never so inserted ; and the effect of this is that, while a representation affects the contract only in so far as it may be found to have been material to the risk, a warranty precludes all questions as to materiality, its express terms superseding any such in quiry. Perils The perils insured against are described in the printed insured form as the "adventures and perils of the seas, men-of-war, against. re ^ enem j e3j pi ra tes, rovers, thieves, jettisons, letters of mart and counter-mart, surprisals, takings at sea, arrests, restraints, and detainments of all kings, princes, and people, of what nation, condition, or quality soever, barratry of the master and mariners, and all other perils, losses, and misfortunes that have or shall come to the hurt, detriment, or damage of the said goods, merchandises, and ship, &c., or any part thereof." It may be observed that, as a general rule, the underwriters are liable only for such losses as are proximately caused by the perils insured against. For the remote consequences of these perils, such, for instance, as the loss of markets through delay, they are not responsible. But, on the other hand, if a loss has been proximately caused by a peril insured against, the underwriters are not relieved from liability, although such loss may have been remotely occasioned by the acts or negligence of the assured or his agents. The reason for this rule, as given by Lord Bacon, is that " it were infinite for the law to consider the causes of causes, and their impulsions one on another ; therefore it contenteth itself with the immediate cause." Losses resulting from breaches of the revenue laws or of the law of nations, or from illegal voyages generally, are not covered by the policy. The risk of "thieves" applies only to plunder committed by open violence, and does not cover losses by secret theft. The illegal acts of the master and crew, if committed without the privity of the owners, will amount to barratry, so as to render the underwriters responsible for them , but if the master bo also owner of the ship, none of his acts will be held as barratrous. A shipmaster, however, who is only part owner may commit barratry as against his co-owners and their underwriters. If the assured be the subject of a foreign state, British underwriters will not be liable for the acts of that state, unless it appear from the form of the policy or from the ..circumstances of the case that the intention was to insure against such risk. Losses by the ordinary wear and tear of the ship, or by the natural deterioration or decay of perishable goods, are not chargeable to the underwriters. The printed form of the policy declares that " in case of D any loss or misfortune it shall be lawful to the assured, : isf their factors, servants, and assigns, to sue, labour, and j a travel for, in, or about the defence, safeguard, and recovery of the said goods and merchandises, or ship, or any part thereof, without prejudice to this insurance : to the charges whereof, we, the assurers, will contribute, each one according to the rate and quantity of his sum herein insured." The object of this clause is to permit the assured to take measures for the recovery of the property without losing any right of abandonment he might have in the circumstances. Although the language of the clause is only permissive, it is a settled rule that the assured i:; bound so to labour for the recovery of the property. The best practical rule for the assured to follow in cases of partial loss or damage is to act in the circumstances as a prudent man would do if uninsured. An important clause in the printed policy is what is Tl called the "memorandum," which is as follows : " Corn, m( fish, salt, fruit, flower, and seed are warranted free from ra: average, unless general, or the ship be stranded. Sugar, tobacco, hemp, flax, hides, and skins are warranted free from average under 5 per cent. And all other goods, also the ship and freight, are warranted free of average under 3 per cent., unless general, or the ship be stranded." The effect of this clause, as interpreted by legal decisions, is to free the underwriter from claims for particular average (or partial damage), or from such claims if under the rates specified, unless the ship be stranded. But if the ship be stranded, he is liable for such claims, whether caused by the stranding or not. For losses of the nature of general average the underwriter is liable whether the ship be stranded or not, and whether the amount be over or under the rates mentioned in the memorandum. It is frequently a matter of some difficulty to determine whether a ship has been stranded within the meaning of the memorandum. A mere touching or striking, whether on a rock, bank, reef, or other object, will not constitute a stranding, unless the ship settles down and remains fixed for some definite time. The amount of damage sustained is not material to the question either way. Where a vessel takes the ground in the ordinary and usual course of the navigation in a tidal river or harbour, on the ebbing of the tide, or from natural deficiency of water, this is no stranding. It is essential to a stranding that the ship should take the ground by reason of some unusual or accidental occurrence. A voluntary stranding to save the ship from sinking is within the meaning of the memoran dum, although the ship should be run into a tidal harbour for the purpose. When an absolute total loss occurs, the assured is entitled To to recover the amount of the policy, without giving notice los of abandonment. When the subject insured, without ^ being wholly destroyed, is so seriously injured, through the perils insured against, that its recovery might involve greater expenses than its eventual value would cover, it forms a "constructive total loss," and the assured is entitled to give notice of abandonment to the insurers, and to claim the amount of the policy. (See ABANDON-