Result.

Who are covered by this clause.

The intention of the party directing the

insurance to be effected is the test.

Of course, ratification of what has previously been done implies knowledge of it. But the party for whom the insurance was intended cannot be presumed, merely from any after authority to insure, to have adopted the previous iusurance, unless it be also proved that at the time of giving such authority he knew as a fact that the prior insurance had been made. This is so plain a principle that it requires no authority to enforce; yet it is all that was really decided in the case of Bell v. Janson.1

Such, then, having been the wise latitude of the interpretation adopted by the Courts, the statute has been reduced to a mere prohibition against policies in blank.

Questions have been raised as to the parties who may avail themselves of the very broad and comprehensive terms of this clause. In the first place, it is clear they must be persons who may lawfully be insured. In the next place, they must be persons who, at some time or other during the risk, have an insurable interest in the property, the original parties and their assignees. Beyond this it must be shown, that the person giving the order to effect the insurance either intended it for their benefit, or, at all events, did not intend it exclusively for the benefit of others, having a conflicting or inconsistent interest, but that it was meant to apply generally, so as to cover the interest of those who should ultimately appear concerned; if this be shown, a subsequent adoption of the policy by the parties so intended to be insured, or so appearing ultimately concerned in interest, will be held equivalent to a previous order, and entitle them, under the words of the general clause, to avail themselves of the benefit of the insurance.

The intention, at the time, of the party who directs the insurance to be effected, is the great point to be ascertained in determining whose interests the policy can be applied to protect; and this point is to be ascertained by the verdict of a jury on the evidence adduced in the cause.2

11 M. & Sel. 202.

2 Grant v. Hill, 4 Taunt. 380;

Irving v. Richardson, 2 B. & Ad. 193.

Where the intention of the party directing the insurance is to embrace the interests of any person whatever who may ultimately appear to be concerned, there can be no doubt that any person coming within that category, who subsequently chooses to adopt the policy, may obtain the benefit of it. Thus, where a prize agent abroad, who at the time Routh v. Thompson. did not know to whom the prize would ultimately pass, wrote directions to this country for the insurance to be made for the benefit of those concerned, and it ultimately turned out that the Crown had an insurable interest, and had adopted the insurance by an Order in Council, it was held that the nominal plaintiffs might recover in an action on the policy averring interest in the Crown alone. In a former action on the same policy, it having been stated as a fact, in the special case on which the argument proceeded, that the policy had been in reality effected on account of the captors, the plaintiffs failed, because the Court were of opinion that the captors had no insurable interest, and they considered themselves precluded, by the statement in the special case, from applying the benefit of the policy to any other parties than those for whom alone it was found to have been effected.2

Richardson.

So where a party had insured 37007. on a ship in which Irving v. he was interested only as mortgagee to the extent of 9007., Lord Tenterden left it to the jury to say, on the evidence, whether they thought he intended by the insurance to cover his own interest only, as mortgagee, or that also of the mortgagor. The jury having found that he meant only to insure his own interest, the Court would not permit the policy to be extended, by virtue of the general clause, so as to cover the interest of the mortgagor.3

On the contrary, where an insurance agent, being unable to effect such a policy as the plaintiff required, indorsed the risk on his own general policy, it was held that the plaintiff

1 Routh v. Thompson, 13 East, 274.

2 Ibid. 11 East, 428.

3 Irving v. Richardson, 2 B. & Ad.

193.

Result.

could not recover under it, as it had not been effected on his behalf, or even adopted by him as his after the indorsement had been made; the plaintiff was no party to the contract, and consequently could not put it in suit.1

The true rule, then, would appear to be, that any party to whom an interest in the property insured "doth, may, or shall appertain," at any time during the pendency of the risk, may, under the general words, by subsequent adoption, take advantage of the policy to protect such interest, unless it appears from extrinsic evidence that the person directing the policy to be effected intended at the time so to confine the insurance as not to embrace such interest.

Assignment of sea policies.

We have already said that an assignee in order to recover on a policy must be assignee not only of the insurable interest covered by it, but also of the policy by which it is covered. A sea policy in its ordinary form, is not an incident of the property insured, so as to follow its transmission from hand to hand during the continuance of the risks; the purchaser of the property insured does not, by the simple fact of such purchase, and without more, entitle himself also to the protection of the policy. The contract of insurance is a personal contract on the part of the underwriter to indemnify the party originally insured against the consequences of the perils insured against; it is not a contract to indemnify any one whatever who may become interested in the subject insured during the continuance of the risks. In order to entitle the purchaser of the insured property to the substantial benefit of the insurance, there must have been an assignment to him of the policy by the party originally insured, or, at all events, an agreement to assign it, or what in effect is probably the same thing, to hold it for the benefit of the purchaser.

1 Watson v. Swann, 11 C. B., N. S. 756; 31 L. J. (C. P.) 210.

2 The remedy is entirely at law,

and not in equity; De Ghetoff v. London Ass. Co., 4 Brown's Parl. Cases, 436, Tomlin's ed.

valid assign

loss.

A valid assignment before loss supposes the co-existence of Conditions of three things at the time of assignment:—(1) an assignable ment before interest within the meaning of the policy in the assignor: (2) the continuance of the risk insured in the policy; (3) an insurable interest in the subject matter of the policy vested in the assignee and exposed to the perils during the risk in the policy.

A cargo of linseed was insured from Constantinople to a port of call and discharge in the United Kingdom to be named, including all risk of craft or lighters to and from the brig, each lighter to be considered as if separately insured. Whilst it was on the voyage the cargo was sold in London to the plaintiffs on the following terms:-To be delivered at destined port in sound merchantable condition, and paid for in fourteen days from being ready for delivery by cash, less 23 per cent. discount, or on seller's option on handing shipping documents, less 5 per cent. The vessel to go to any safe floating port in the United Kingdom. A safe floating port was named. The ship had arrived there in February, and the cargo was being landed in public lighters employed by the plaintiffs, when one of the lighters with her cargo on board was sunk, and would have been a loss within the meaning of the risk in the policy. The policy was assigned to the plaintiffs in the following June, and the assignment indorsed on it in the following October. The plaintiffs sued on it in their own names, but did not recover, because at the time of the assignment the assignor had no assignable interest, the same having ceased by delivery of the goods into the plaintiffs' lighter. Until such delivery the plaintiffs were incapable of an assignment of the policy, since the risk by the terms of the sale note continued to be on the vendors until then, and the same terms negatived any agreement to assign the policy to them, which might otherwise have kept it alive for their benefit when they had become capable of an assignment.1

1 North of England Oil Cake Co. v. Archangel Maritime Ins. Co., L. R., 10 Q. B. 249.

Assignee

may sue in

or in that of

another.

In case the policy be assigned to the person entitled his own name, to the property thereby insured, such assignee may now, by statute, sue on the policy in his own name;1 and after a loss has occurred, an assignment of the policy merely vests in the assignee a right under the statute to sue in his own name for the loss. He may still, as formerly, sue in the name of the assignor,3 or of the brokers named in it as effecting the policy. In this case, he sues subject to all rights of defence that may be set up against the nominal plaintiff and so now, when he sues in his own name by virtue of the statute, he does so subject to those same rights, they being expressly preserved by it to the defendant."

Mode and form of assignment.

Assignment of a policy of marine insurance has been hitherto made either by writing indorsed on the policy, or by delivery merely of the policy with intention to assign it.

1 31 & 32 Vict. c. 86, s. 1.

2 Lloyd v. Fleming, and Lloyd v. Spence, L. R., 7 Q. B. 299.

3 Sparkes v. Marshall, 2 Bing. N. C. 761; Gibson v. Winter, 5 B. & Ad. 96.

If inequitable defences, such as a release by the nominal plaintiff after assignment, bo set up, either the plaintiff may set out the true facts by way of reply; De Pothonier v. De Mattos, E. B. & E. 461; Lyall v. Edwards, 6 H. & N. 337; or the Court will interfere upon motion to protect the rights of the parties; Gibson v. Winter, 5 B. & Ad. 96, and cases cited in the judgment; Bauerman v. Radenius, 2 Smith's L. C.

531 & 32 Vict. c. 86, s. 1. "Whenever a policy of insurance on any ship, or on any goods in any ship, or on any freight, has been assigned so as to pass the beneficial interest in such policy to any person entitled to the property thereby insured, the assignee of such policy shall be entitled to sue thereon in his own name; and the

defendant in any action shall be entitled to make any defence which he would have been entitled to make if the said action had been brought in the name of the person by whom or for whose account the policy sued upon was effected." The insurer cannot maintain a right to set off a debt due to him from the assignor of the policy, because no such right of set off against an unliquidated claim is given by the Statutes of Set Off, and this statute affecting procedure only, does not alter the law of set off; Pellas v. Neptune Mar. Ins. Co., 5 C. P. D. 34 (C. A.).

The Judicature Act, 1873 (36 & 37 Vict. c. 66, s. 25, sub-sect. 6), making choses in action assignable with a complete transfer of remedies to the assignee, does it with this reservation-"Subject to all equities which would have been entitled to priority over the right of the assignee." Notice of the assignment is required by this Act, which is not necessary under the 31 & 32 Vict. c. 86.