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she carries a certain number of guns; is manned by such a crew; carries a license; or that the vessel or cargo is owned by Englishmen, Americans, or people of some particular country; or is neutral.

In respect to the risks, it is often provided that the assured Liberty to shall have liberty to touch at certain ports out of the usual course touch, &c. of the voyage, or to take letters of marque and cruise, or to carry the goods on deck, or to carry simulated papers.

In the United States it is customary to insert an agreement, Prior policy. that in case of any prior insurance on the same subject, the policy shall be valid only to the amount of the deficiency of such prior insurance to cover the full value of the property, and that the insurer will return the premium on the excess over such value; and that the rights and obligations of the parties shall not be affected by any subsequent insurance.

It is agreed in many policies, that in case of loss, the assured Abatement. shall abate one or two per cent. that is, if a loss happen to the amount of a hundred dollars, the insurer shall be liable to pay

only ninety-eight or ninety-nine.

Though the insurer generally acknowledges in the policy that Receipt for he has been paid the premium, yet the payment is in fact gene- premium. rally made in the promissory negotiable note of the assured, and accordingly, an agreement is inserted, that in case of loss, the insurer may first deduct the amount of the premium note, if unpaid, or that he may deduct the amount of premiums due to him from the assured on account of the same and other policies.

To exclude demands for small amounts, and avoid the trouble Losses under of adjusting trifling losses, it is stipulated that no loss under 5 per cent. three, or five, or some other rate per cent. on the amount insured, shall be paid, unless in case of a general average.

losses.

Certain kinds of merchandize go under the name of mem- Memorandum orandum articles, from the circumstance of their having been articles and introduced under a memorandum or N. B. Among these arti- excepted cles are most usually comprehended, corn or grain, fish, salt, fruit, flour, hemp, flax, hides, skins, sugar, flaxseed, bread, tobacco, rice, and other articles that are esteemed perishable in their own nature; and it is universally stipulated, in both English and American policies, that on some of these articles more or less, particularly the six or seven first, no loss shall be paid, except in case of their entire destruction, or in case of a general average, or, according to many policies, in case of the stranding of the ship. In some policies it is stipulated that, on the other of these articles, the insurers shall not be liable to pay any loss under seven per cent. or some other agreed rate, which is higher than the rate of loss at which they are liable on merchandize generally; in other policies, this last stipulation is omitted.

In New-York, Philadelphia, and Baltimore, it is stipulated in If ship conpolicies on the vessel, that if the vessel, after a regular survey, demned as shall be condemned, on account of being unsound or rotten, the rotten. insurers shall not be bound to pay their subscriptions.

Contraband trade.

Half per cent. of premium

retained.

Policy to be of as much force, &c.

All other perils.

Time when

In the same places, the policies on the cargo exempt the insurer from loss by prohibited trade or trade in articles contraband of war.

In some policies it is agreed, and it is always understood, that in case of a return of premium, the insurer shall retain one half per cent. upon the sum insured, which amounts in some cases to one half, or two thirds of the whole premium, and in others to a very small part of it, according as the premium is at a lower or higher rate. This is considered to be a compensation to him for the trouble of making a contract, which he, on his part, is ready to fulfil, but of which the assured neglects to avail himself.

It is agreed in the English policies, that the instrument shall be of as much force and effect, as the surest writing or policy of insurance heretofore made in Lombard-Street or elsewhere in London. Some policies, after the enumeration of the risks, contain a provision that the policy is against all other perils and losses that may come to the hurt or detriment of the subject; in others this provision is qualified so as to extend only to the losses and misfortunes for which insurers are liable, according to the customs of the place where the policy is made.

In some policies it is stipulated that a loss shall be paid in loss payable. thirty or sixty days, or some other fixed time, after proof of it is produced to the underwriters; others do not contain this stipulation.

Reference of disputes.

Kill v. Hollister, 1 Wils. 149. Thompson v. Charnock, 8 T. R. 139.

Correspondence and communications.

It is the general practice to provide that any dispute arising on the policy, shall be referred to arbitrators mutually chosen by the parties; but this agreement has no legal effect either in the United States or Great Britain, and in France the same agreement has very little force.

Section 5. What makes a part of the Contract.

The correspondence of the parties, or communications that take place between them, previously to executing the policy, do not constitute a part of the contract, to the same effect, as if they were inserted in the policy. Thus where the agent of the owner of the property insured, left a memorandum at the office, signed by himself, that the policy was to take effect, if no insurance should be made by the owner elsewhere,' which was shown to the underwriters at the time of signing, and the owner did in fact make insurance abroad, though not to the full value of the property; yet this memorandum was held not to be any part of the contract, and could not be taken advantage of by the underwriters to avoid payment of a loss. Chief Justice Parker giving the opinion of the court, said, that 'Policies, though not under seal, have nevertheless ever been deemed instruments of a solemn nature, and subject to most of the rules of evidence which govern in the case of specialties. The policy itself is considered to be the contract between the parties, and whatever proposals are made, or conversations had, prior to the subscription, they are to

Mass. Rep.

be considered as waived, if not inserted in the policy or contained in a memorandum annexed to it.'(1) And a correspondence (1) Higginson concerning an insurance previously to making it, in which the . Dall, 13 voyage is described, will not control the description of the voyage 96. in the policy,(a) nor will a paper that was shown to the underwriters at the time of signing, in which the number of men and guns on board was stated,(2) or in which it was stated that the ves- (2) Pawson v. sel had deviated from the voyage described in the policy before Barnevelt, the insurance was effected;(3) nor are words spoken by the par- (3) Redman v. Doug. 12. n. ties at the time of signing the policy, of the same effect as if Lowdon, 5 they had been inserted in the policy; as where the underwriter Taunt. 462. at the time of signing, said, he would not be held if the vessel did not sail by a certain day,(4) or a broker told the underwriters (4) Whitney & that the goods were not on board of a certain ship,(5) or the assur- al. v. Haven, ed said the ship was American.(6) But though the proposal or 13 Mass. Rep. order for insurance, or a paper shown, or words spoken at the (5) Weston v. time of signing, are not a part of the contract to the same pur- Emes, 1 pose, as if the words spoken or contained in the proposal, or Taunt. 115. paper shown, had been inserted in the policy, still the contract Brown, 14 may be affected by them, if they are such as to induce the un- Mass. Rep. derwriter to take the risk, and have not been waived in the 152. policy. A previous statement or communication is waived, and to be totally disregarded, if the matter to which it related, is made a part of the written contract.

172.

(6) Atherton v.

controls an

Whether a condition, warranty, or other agreement, implied, Whether a but not expressed in the policy, may be superseded by a ver- representation bal or written statement, made and assented to, at the time of implied signing the policy—that is, whether an agreement that would condition or otherwise be an implied part of the contract, may cease to be warranty. so, in consequence of a representation-is a question concerning which there seems to be some room for doubt. In case of a policy containing liberty to touch at the Cape de Verd Islands,' but not expressing for what purpose, the assured proved that a letter was exhibited to the insurers at the time of subscribing the policy, stating that the object of touching was 'to take in salt.' Mansfield, C. J. If the underwriter knows a thing by express communication, it is the same as if he had notice by the general usage.'(7) That is to say, if there had been a (7) Urquhart usage to touch for this purpose, the liberty to touch would by . Barnard, 1 implication include the customary purpose. And since a usage is said by Lord Mansfield, and all judges since his time, to be an implied part of the policy, the above decision makes an express representation equivalent to an agreement implied in the policy. Mr. Justice Story considered a representation that the ship had a letter of marque to be substantially equivalent to an express statement of the fact in the policy.(8) But this might be on the ground that insuring as a letter of marque merely, and with

(a) Vandervoort v. Smith, 2 Caines, 155; Stevens v. Bev. Ins. Co. S. J. C. Mass. Essex, Nov. 1822. It is however said, in one case, that the written order for insurance will control the policy. Norris v. Ins. Co. of N. A.; 3 Yates 84. for which 1 Atk. 547, is cited.

v.

Taunt. 450.

(8) Haven r. Holland, 2

Mason's Rep.

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(2) Redman 7. Lowdon, 5

Taunt. 462.

(3) Wiggin &

al. v. Board

man, 14 Mass.

out any liberty to cruise, &c. does not authorize any act, which might not be done, though this fact were not inserted in the policy.

That an implied condition or warranty may be explained and qualified, by the express communications that pass between the parties at the time of making the contract, appears from the above cases, and also from others.(1)

But whether an implied condition or agreement usually comprehended in the contract, may be excluded from it entirely, in consequence of verbal communications between the parties, is not distinctly decided. Some cases favour the doctrine that it could not be so excluded. It is an implied condition of the policy, that the voyage shall be pursued by the usual route, and in the usual manner, and if it be not so pursued, the insurer is discharged from subsequent losses, though the voyage may still come literally within the description in the policy. And it has been held that though the assured expressly disclosed to the insurer that the vessel had deviated, or would deviate, from the usual course of the voyage, but still keeping the same port of destination in view, the assured was still bound by the condition, and that the verbal understanding between the parties had not the effect of setting aside the condition ;(2) 'no instance can be found,' says Chief Justice Parker, where the knowledge of the underwriter that a deviation was intended, has been set up as an excuse for such deviation.'(3)

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Whatever is contained in the policy, or other instrument, or written upon it, at the time of signing, is a part of the contract, Rep. 15. See and is adopted by the signature; whether the words are in the margin,(4) and so even, it seems, when put in with consent after signing,(5) or written transversely, (6) or endorsed.(a)

also Weston

v. Emes, 1

Taunt. 115.

(4) Cockran

r. Retberg, & al. 3 Esp.

v.

Hartley, 1

T. R. 343;
Guerlain v.

Col. Ins. Co.
7 Johns. 527,

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A policy, as well as other instruments, may refer to records, or other and so make them a part of the written conpapers, 121; De Hahn tract; as where in a policy under seal against fire, the insurers agreed to pay the loss according to the tenor of their printed proposals,' it was objected that a foreign paper could not be thus incorporated into a sealed instrument, the court held that it might be so, and that it was too clear to admit of a doubt.(b) Verbal declarations even may by a provision in the policy be made to form, directly, a part of the contract; as where the policy is on goods, thereafter to be declared, the subsequent declaration of the assured, though not made in writing, will determine the subject to which the policy is to attach. And the

but the mar

gin is referred

to in the po-
licy; Bean v.
Stupart,
Doug. 11.
(5) Jenks v.
Hallet, 1
Caines, 60.

(6) Kenyon &
al. v. Berthon,
Doug. 12. n.

(a) Mod. Cas. 237, cited Jac. L. Dic. tit. Deed III.; Harris v. Eagle Fire Co. 5 Johns. 368, though the words and figures endorsed are referred to in the policy in this case; Warwick v. Scott, 4 Camp. 62, where the regulations of the insurance company and the conditions on which they insured were endorsed.

(b) Routledge v. Burrell & al. 1 H. B. 254; Oldman & al. v. Bewicke & al. 2 H. B. 577. n.; Wood & al. v. Worsley, 2 H. B. 574; Worsley v. Wood, 6 T. R. 710; Tarleton & al. v. Staniforth, & al. 5 T. R. 695.

assured having made a declaration, by mistake, that the goods were on board of a certain ship, on board of which he had not goods, was permitted to make a second declaration. Lord Ellenborough said, it was a 'corrigible mistake,' and that the first declaration did not form any part of the contract."(1)

Section 6. Renewal of the Contract.

Policies against fire frequently contain a provision for their renewal or continuance, by the payment of the premium within a certain time.(2)

Without a provision of this sort, it would require as much form to renew a policy as to make it originally.

Section 7. Assignment of the Policy.

It is a general rule that the assignment of a contract must be made with as much formality, or by an instrument of as high a nature, as the contract itself. The policies of some fire insurance companies contain a provision for their assignment on reasonable notice, and others, that no assignment shall be valid without the assent of the underwriters.(3)

(1) Robinson
v. Touray, 3
Camp. 158.
1 M. & S. 217

(2) Tarleton, & al. v. Sta

niforth & al. 5 T. R. 695.

(3) Marsh. 801. If the property insured be conveyed, and afterwards a loss This condihappen, and after the loss the policy be assigned to the pur- tion is annexchaser of the property, the assignment will be ineffectual in ed to some, at least, of the respect to such loss, and neither the party originally insured nor American pohis assignee can recover the loss; the original assured can re- licies. cover nothing, for, not being owner of the property at the time of the loss, he has sustained no injury; nor can the assignee recover any thing, because, at the time of the loss, he was not the party insured.(5)

(5) Lynch & al. v. Dalzell,

Saddler's Co.

Mr. Marshall says, 'a policy like every other chose in action, & al. 4 may be assigned in equity,'(6) by which he doubtless means, Brown's Parl. that if the property insured be assigned or conveyed, the policy Cas. Tomlin's may be assigned to the same person, without the consent of the Ed. 431; the insurers, so as to give him a right of action in the name of the v. Badcock & assignor, leaving to the underwriter all right of set-off, and ob- al. 2 Atk. 554. jections to a claim for a loss, which they would have had against (6) p. 800. the assignor; this being the construction of an equitable assignment of other choses in action. This opinion coincides with divers cases.(7)

(7) Gourdon
v. Ins. Co. of
N. A. 3 Yates,

327, S. C. 1

A suit being commenced in equity on a policy which seems to have been assigned without the assent of the underwriters, was dismissed, on the ground that there was an adequate remedy Bin. 430; at law. (a) It has been expressly decided in Massachusetts, that Rousset r. an assignment of a policy, without the assent of the under- same, 1 in. writer, vested an equitable interest in the assignee.'(b) And the Condy's,

8

429, S. C.;

Marsh. 287 n.
Delany v.

(a) Carter & al. v. United Ins. Co. 1 Johns. Chan. Rep. 463. Wakefield v. Martin & trs. 3 Mass. Rep. 558. See also 1 Atk. Stodart, 1 T. 547; and Dhegetoft & al. v. Lond. Ass. Co. Moseley's Rep. 83.

R. 22.

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