MARINE.] INSURANCE 185 precise value in the case of ships is sufficiently obvious and, to avoid disputes, policies on them ought always to be valued, as is the usual practice. The value to be proved under an open policy on goods is their first cost, including the expenses of shipment, with any portion of the freight that may have been prepaid, and the costs of insurance. The value to be proved in open policies on freight is the amount of the manifest or freight list, excluding such freight as may have been paid in advance.
- r-in- When the value proved under an open policy falls short
ance. of the sura originally insured, the difference, which is technically termed an over-insurance, is treated as a deduction to be made from the amount of the policy. On this footing a proportionate part of the premium is return able to the assured, who, on his part, can make no claim on the underwriter for loss or damage beyond the value of his interest as actually proved. Lf, on the other hand, the value proved exceed the amount of the policy, the assured is regarded as " his own underwriter " to the extent of such excess ; and the amount of loss or damage, if such has arisen, is apportioned on this footing between the parties relatively to their several proportions of the total value, rt A short interest " arises when only a part of the interest? rest, insured has been exposed to risk, as when some portion of the goods specified in the policy have not been loaded on board of the ship. This case is treated in the same manner as that of over-insurance, from which indeed it does not essentially differ. ible Double insurance takes place when the same interest IT ~ has been insured twice or oftener. This frequently 3 occurs, either through mere inadvertence, or from the want of definite information on the part of the respec tive persons concerned in the transaction. In such cases, the usual practice is that all the underwriters make a return of premium, in proportion to the amounts of their respective subscriptions, for the excess of the sum insured above the actual value of the interest, the liabilities of the several underwriters under the different policies being of course proportionally diminished. To this rule, however, there are two important exceptions. One of these occurs when two or more persons insure the same thing, in order to protect the distinct interests which they may individually have in it ; the other, when the circumstances are such that a claim for loss might have been brought against one set of underwriters before the other set had become liable at all. isur- Reinsurance was formerly illegal in England except in
- - the event of the death, insolvency, or bankruptcy of the
original insurer. This law subsisted for about one hundred and sixty years, but it was repealed by the 27 & 28 Viet. c. 65, and the subject of reinsurance was further regulated by the 30 & 31 Viet, c. 23. Reinsurance is now recognized by these statutes as a perfectly legal contract, ation The risk on the ship, in voyage policies, commences " at isk. and from " the place specified in the policy, and continues till she arrive at the destination specified, and have been there moored twenty-four hours in good safety. On goods the risk begins with their loading and ends with their dis charge at the specified ports. On freight the risk usually commences with the shipment, and terminates with the landing of the goods ; but if there be a contract of affreight ment, under which the goods have been provided for ship ment, the risk is held to commence as soon as the ship is in readiness to take them on board. After the risk has once commenced, the whole premium is earned, even although the voyage should not be prosecuted, and the actual risk of the insurers be thereby confined to the mere lying of the ship at the port where the insurance was to commence. But if the risk should not commence at all, or, in technical phrase, if the " policy should not attach," the premium must be returned to the assured. If the ship should deviate from the regular and usual Devia- course of the specific voyage insured without necessity or lion, reasonable cause, the underwriter is thenceforth discharged from all liability under the policy. The insurance becomes void as soon as such deviation begins ; and consequently it is quite immaterial whether a subsequent loss of the ship should happen during the actual deviation or after the ship had returned to her course, the insurer being no longer concerned. It is also immaterial whether the assured was or was not cognizant of the deviation. A mere intention to deviate will not vitiate the policy; but if the ship have sailed on a different voyage from that specified, the insurer is discharged, although the loss should happen before reaching the point of divergence in the two voyages. An unjustifiable delay in the prosecution of the voyage operates as a deviation. The causes which justify deviation are such as to refit the ship after she has been disabled, to avoid an enemy or an impending storm, or to save the lives of seamen in distress. In all voyage policies it is an implied condition of the Sea- contract that the ship shall be seaworthy at the commence- wortlii- ment of the risk. By this is meant that the ship shall be " css - in a fit state, as to repairs, equipments, crew, and all other respects, for encountering the ordinary perils of the voyage insured, at the time of sailing on it. Seaworthiness is a condition precedent to the contract ; and, therefore, where the ship is originally unseaworthy, the underwriter is dis charged even although the loss should result from causes independent of the particular deficiencies constituting the unseaworthiness. It is not material whether the assured is or is not cognizant of the defects rendering the ship unseaworthy ; and this rule applies indiscriminately to the owners of the ship and the proprietors of the goods on board. There is no engagement that the vessel shall continue to be seaworthy after the voyage has been com menced ; but it is the owner s duty to take all reasonable means to keep her so. The burden of proof in any aver ment of unseaworthiness lies on the underwriter, unless where the ship, without adequate cause, becomes leaky soon after sailing. It is now settled law that in time policies there is no implied warranty of seaworthiness at any period of the risk. This was decided in the cases of Gibson v. Small (June 1853), and Fawcus v. Sarsfield (March 1856), and more recently by the House of Lords in Dudgeon v. Pembroke (March 1877). The contract of insurance being pre-eminently one based Misrcpre- on the assumption of perfect good faith between the sentation. parties, it is the duty of the party wishing to effect the policy to make a true disclosure of every circumstance likely to affect the underwriter s estimate of the risk. The concealment or misrepresentation of material facts, or the representation of anything not consistent with the facts, will render the policy void. This rule holds good even where the concealment or misrepresentation may have resulted from a mistake, without the intention to deceive. If the underwriter has actually been deceived, whether wilfully or by mistake, the risk is different from that understood and intended to be run ; and on this ground he is discharged. The materiality of a concealment or misrepresentation depends, not on its eventual influence on the result of the risk, but on its immediate influence on the judgment of the underwriter at the time of effecting the insurance. The loss may arise from causes totally uncon nected with the facts concealed or misrepresented, but the policy may nevertheless be void, because a true disclosure of the facts at the time of effecting it might have led the underwriter to decline the insurance altogether, or to accept it only at a higher premium. If an agent be employed to effect the insurance, he is bound to communicate to the underwriter, not only all the material facts disclosed to XIII. -- 24
