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Insurable in

terest of con

or agents.

Thus, where the general agents of the consignor, on the

signees, factors, refusal of the consignees to accept the goods, had themselves retained the bills of lading in their own hands, and had also accepted bills on account of the consignment to the amount 1 Bos. & Pull. of 300%, it was held that such general agents had an insurable

Woolff v.
Horncastle.

316.

Hill v. Secretan, 1 Bos, & Pull. 315.

Robertson v.
Hamilton, 14
East, 522.

Insurable in-
terest in cap-

after restitu

tion.

interest to the amount of their acceptances, on the ground, as stated by Mr. J. Buller, that "a debt which arises in consequence of the article insured, and which would have given a lien upon it, does give an insurable interest. (v)

The house of De la Torre, in Spain, consigned a cargo of wool, with the bill of lading indorsed to the firm of Du Bois and Son, in London, directing them to hold part of it for Messrs. Hill & Co. of Exeter. Hill & Co. had given no orders for the wool, but De la Torre & Co. were indebted to them in the sum of 500l. The court held that, under these circumstances, Hill and Co. had clearly an insurable interest in that part of the wool which was held by Du Bois & Son for their benefit, and might recover under a count averring the interest to be in them. (w) Where, however, the consignor directed the consignees to hold, not the goods, but the proceeds of the goods, to the use of his creditor, this was held, in the United States, not to give such creditor an insurable interest in the goods. (x)

Two British ships, the Ross and the Atlantic, having, with their cargoes, been captured by the Spaniards, the plaintiffs (who were owners of the Ross); the owners of the Atlantic; tured property and the proprietors of the cargoes; gave a joint authority to one Cowan, to endeavour to obtain restitution. Cowan, by giving up part of the cargoes to the captors, obtained restitution of the rest, together with the two ships, in a mass, for the general benefit of all concerned. He drew bills on the plaintiffs, for his general expenses in effecting this arrangement, which the plaintiffs accepted and paid; and he also, together with the rest of the property, consigned to them the Atlantic

(v) Woolff v. Horncastle, 1 Bos. & Pull. 316. 323.

(x)† Murray v. Colonial Ins. Comp., 11 Johnson's Rep. 302. Phillips on (w) Hill v. Secretan, 1 Bos. & Pull. Ins., vol. i. p. 108.

(the ship of which they were not originally owners), in order, as he expressed it, to simplify the concern. The question arose upon an insurance effected by the plaintiffs on the ship Atlantic after her restitution, and especially on the two first counts of the declaration, which averred the interest to be in the plaintiffs. Lord Ellenborough and the Court of King's Bench were of opinion that the plaintiffs, under the circumstances, had a clear insurable interest in the ship Atlantic. They were the original owners of one of the captured ships, and after the whole of the captured property had been redeemed by the sacrifice of a part for the general benefit, they had advanced money for securing the whole concern, which had then been brought into one mass. They were also the consignees of the ship in question from Cowan; and, therefore, as such consignees, having besides accepted and paid bills for the expenses of restoring this ship, conjointly with the rest of the property, they had on this ground likewise a clear insurable interest. (y)

The court in this case held, that the plaintiffs had an insurable interest in the whole mass of the property restored, and might, therefore, recover the whole amount of the insurance; in trust, however, as far as such amount might exceed their advances, to hold the surplus for those who were interested with themselves in the whole.

As a general principle, then, there can be no doubt that consignees of the goods, being in advance to the consignors, or under acceptances for them, may insure, in their own name and on their own account, to the full value of the goods, and apply the proceeds of the policies to their own benefit, up to the extent of their claims in respect of such advances and acceptances, holding the residue in trust for the

consignors. (z)

Insurable insignees, factors,

terest of con

or agents.

Such a consignee, however, is so far identified in interest But such con

(3) Robertson v. Hamilton, 14 East, established in the United States, † De

522.

(2) See, in addition to the cases already cited, Carruthers v. Shedden, 6 Taunt. 14. The same position is

Forest v. Fulton, 1 Hall's Rep. 84.,
cited in Phillips on Ins., vol. i. p. 117.
121.

signee cannot apply to his

Insurable interest of con

or agents.

and right with his consignor as not to be able to apply with signees, factors, effect to his own interest, which is derived out of that of the consignor, an insurance which was effected in order to cover policy which is the interest of the latter, but which, owing to the internot available to vention of some principle of law, cannot be available for such

own benefit a

protect the in

terests of the

consignor.

Conway v.

purpose.

Thus, Townsend, an American merchant, had consigned to Messrs. Conway & Co., commission merchants at LiverGray, 10 East, pool, a cargo of American produce, "for sales and returns on account and risk of the shipper," and assigned to them the bill of lading. Messrs. Conway & Co. effected an insurance on the cargo so consigned, in their own names, "as interest might appear," and debited Townsend with the premiums ; they being, at the time of effecting the policy, and down to the time of loss, in advance to Townsend on account of the cargo, and having a general balance against him to a greater amount than the sum insured. The goods were detained in the United States, under an American embargo; whereupon Messrs. Conway & Co. gave notice of abandonment; brought an action on the policy as for a total loss; and, in the first count of the declaration, upon which the question mainly turned, averred the interest to be in themselves. Lord Ellenborough and the Court of King's Bench, while admitting, on the general question, that a consignee so circumstanced might insure on his own account, yet held in the particular case that, as the consignor himself, being an American citizen, could not insure against acts done by the government of his own country, so the consignees, though British subjects, were as much incapacitated from applying the policy to their interests, and enforcing payment, as though it had been made on their account. (a)

General agents of a purchaser of goods who

The general agents of a purchaser of goods, who, by his directions and at his cost, have effected an insurance on the are directed by goods in order to cover bills drawn on them by him in favour

him to insure,

and elect to do of the seller, need only apply the proceeds of such policy to

so, in order to

cover his drafts the payment of such drafts as far as the state of their accounts

upon them in

favour of the

sellers, have an insurable in

(a) Conway v. Gray, Conway v. Forbes, Maury v. Shedden, 10 East, 536.

with the purchaser may enable them to do so without loss to themselves, and are entitled to hold the residue to their own benefit. (b)

The pre

Insurable in

terest of con

signees, factors,

or agents.

terest in such goods, and may apply the pro

ceeds of the policy to their

own use as

against the

"It has never been decided," says Mr. J. Bayley, "that a person not bound to insure, but who elects to insure in order to cover payments if the goods do not arrive, may not apply the proceeds of the policy to his own use. mium for the insurance comes out of the general means of sellers, to the the party effecting it, and diminishes the fund applicable to the claims of the general creditors. As between them and against the purthe seller of the particular goods, they certainly would be entitled to the money secured by the policy. (c)

ART. 5. Insurable Interest of Mortgagor and Mortgagee, and other Parties having a Lien or Money Claim on the thing insured.

extent of their own balance

chaser.

Insurable ingagor and mortgagee.

terest of mort

The mortgagee

has an insura

§ 110. From the general principle, that any creditor, having a claim on property pledged to him for advances, has an insurable interest to the extent of his claim, it follows that a mortgagee of ship or goods has a distinct insurable interest in the mortgaged property, and may recover in an action upon a policy effected for his benefit, averring the interest to his debt. be in himself, to the full amount of the debt to secure which the mortgage was made.

ble interest to

the extent of

has also an in

The insurable interest, however, of the mortgagee of The mortgagor course extends only to the legal title to the mortgaged property; the equitable title still remains in the mortgagor, and this the mortgagor may protect by a separate insurance.

Thus, a factor resident in this country, to whom goods and freight have been mortgaged by his foreign principal for advances, may, upon consignment to himself of the goods, with the bill of lading endorsed, insure the legal interest in the property on his own account, and the equitable interest remaining in his foreign principal on his account. (d)

(b) Neale v. Reid, 1 B. & Cr. 657. (e) Ibid. €62.

(d) Smith v. Lascelles, 2 T. Rep.

187.

surable interest in respect of

his equity of redemption.

Insurable in

terest of mortgagor and mortgagee.

Mortgagee of

ships may, even

since the Regis

try Acts, protect

his interest in the ship by a general policy on ship.

The amount

which he may

recover and re

policy will depend on the amount of interest he intended to insure.

Although the ownership of the mortgagee is distinguished in the register from the absolute ownership, by the late Registry Acts (e), yet the mortgagee of a ship may still protect his interest therein by a general policy on the ship in the common form; and in such policy he may insure to the full value of the ship, but can only recover to the extent of his mortgage debt, unless it appears that, in effecting the policy, he intended to cover, not his own interest only, as mortgagee, but that of the mortgagor also. (ƒ)

The question, then, as to the amount recoverable under an open policy effected by a mortgagee, will, in all cases, tain under such depend upon the intention, in point of fact, of the mortgagee in effecting the policy; if he intended it to cover the whole interest, both legal and equitable, he may then recover the whole amount of the insurance, under trust as to the surplus, to hold it for the mortgagor; if he intended it only to cover his own interest as mortgagee, and the amount of the insurance is greater than that of the mortgage debt, he can recover to the extent only of his lien. (g) If, under such circumstances, he have recovered the whole sum in an action on the policy, and retains the surplus, it may be recovered back from him by the underwriters in an action for money had and received. (h)

he mortgagor has an insura

ble interest in the mortgaged

property to its full value.

The mortgagor has clearly an insurable interest in the mortgaged property, and that to its full value; for in case of loss he would not only be deprived of the thing insured, but be compellable also to pay the mortgage debt: hence it has been decided that the mortgagor of the ship has still an insurable interest, though the ship may be mortgaged to her full value. (i)

(e) The act in force at the time of the decision in Irving v. Richardson, was 6 G. 4. c. 110. s. 5.

(f) Irving v. Richardson, 2 B. & Ad. 193. S. C. at N. P. 1 Moody &

Rob. 153.

(g) So, in Carruthers v. Shedden, 6 Taunt. 17., Chief J. Gibbs told the jury to consider what amount of interest the policy was in fact intended

to cover by those who caused it to be effected.

(h) Irving v. Richardson, 2 B. & Ad. 193.

(i) See Allston v. Campbell, 4 Brown's Parl. Cases, 476. † Higgin son v. Dall, 13 Massachusset's Rep. 96., cited in Phillips on Ins., vol. i. p. 106.

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