Reinsurance.

thereof aboard the said ship at Madras. It happened that when 1200 of the bags had been laden on board the Edward Bilton, she was wrecked by a storm; the 1200 bags, damaged by sea water, were put ashore and sold on the spot, and the vessel was unfit to receive the remaining 4800 bags on board. The defendants paid upon the 1200 bags, but the plaintiff sued them on the whole 6000. Parke, B., delivering the judgment of the Exchequer Chamber, said: "We have no doubt that the plaintiff might have recovered, in the events which happened, a total loss, if he had been insured by a policy properly adapted to the case, and so drawn as to cover his special interest from the time that the rice was appropriated by the vendors and ready to be shipped at Madras, and also to assure him against losses of the expected profits, not merely by the loss of all the rice by the perils of the seas, but by the loss of any part of it, or the loss of the ship, or delay of the voyage beyond the month of May; in any of which contingencies this special interest in profits would have been entirely defeated. As that special interest was necessarily the basis of an action brought to recover on the whole 6000 bags, and the plaintiff had not insured that special interest but only the ordinary profits of a parcel of rice shipped on board the particular vessel and against the losses specified, the plaintiff failed in his action."1

On the contrary, where a policy intended as a reinsurance, but not so expressed on the face of it, or any notice given to the underwriter that it was so intended, was expressed to be "£5000 on cotton," and the same was put in suit the defence being that the interest of the assured the policy, the Court of Appeal gave plaintiff, holding the interest of the ass described. "The assured here had a safe arrival of the cotton, not in any w

1 McSwiney v. Ro Co., 14 Q. B., in

S. P., Halhead . Y

in something else after the cotton arrived. It was ih not a property in the cotton, an interes

created and evided by a binding legal e them and the owners of that cotton; and

which they acquired that interest had tee -policy it would have in no way altere. defendant's contract, which would sti contract to indemnify against a daug the cotton in consequence of any against.

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only a special interest in goods may recover, in respect of that interest, on a general insurance."1

One of the first cases in direct illustration of this point is that of Carruthers v. Shedden, in which it appeared that a general insurance "on coffee" had been effected by a London broker, "by order and for account of N. D. & Co.," a London mercantile firm, who were interested as part-owners with others in seven-tenths of the coffee, but who had also an insurable interest in the whole of it, as consignees of the cargo, and as having a lien on the whole for advances. The Court held that, under the general form of policy, N. D. & Co. might protect any or all of these different species of interest; that the nature of the several interests need not be expressed in the policy; and that the assured were not bound to elect on which they would proceed.2

Upon the same principle a general policy "on goods,"3 has been held sufficient to cover the interest of carriers on goods entrusted to their care, so as to protect them against loss arising from damage done to such property by the perils insured against, whereby they were obliged to make compensation to the owners, and were besides put to other expenses.4 It was objected that such a policy could not cover such an interest, since it merely purported to protect goods against the usual risks to which the owners of goods are liable; whereas, the loss alleged was one arising out of plaintiffs' liability to a risk to which carriers are liable. But

1 Palmer v. Pratt, 2 Bing. 192. 2 Carruthers v. Shedden, 6 Taunt. 114; S. C., 1 Marshall, R. 416.

3 The policy, which was intended to cover the interest of plaintiffs, as barge-owners, in the property carried to and fro for hire in their barges for a year, was a common printed form of policy on ship and goods, filled up and altered in a very clumsy manner so as to adapt it to the object in view; by it the plaintiffs were insured for twelve months "by canal navigation boats, containing goods,

at work between London, Wolverhampton, and Birmingham, &c., backwards and forwards, and in any rotation, upon goods, and on the body and tackle, &c., on thirty boats, as per margin;" in the valuation clause it was declared that the subject of insurance was agreed between the parties to be "twelve thousand pounds on goods as interest shall appear hereafter."

Crowley v. Cohen, 3 B. & Ad. 478. S. P., Joyce v. Kennard, L. R., 7 Q. B. 78.

the Court, although Lord Tenterden admitted that it might have been better if the policy had expressly shown that the object was to indemnify the plaintiffs as carriers, were yet unanimously of opinion that it was sufficient as it stood, on the ground that it is only necessary to state accurately the subject matter, not the interest which the assured has in it.

States.

The decisions upon this subject in the United States go to In the United the full extent of the English law; and the doctrine seems now to be established there, that a mortgagee may insure the subject of the mortgage, either generally, or under a direct description, without specifying his interest to be that of a mortgagee.1

1 See the cases collected, 1 Phillips, Ins. no. 419 et seq.

assured.

Who may be IN treating of persons as parties to a contract of marine insurance, we shall find that the general doctrine of law, as to the capacity and incapacity of persons to make a contract, is essentially modified by the peculiar nature of this contract, the sole object of which being indemnity against certain losses, requires in the person contracting for indemnity an interest in the subject insured in respect of which he may be damnified. Even that general rule is liable to be further modified by express prohibitions of the municipal law, and by the necessities of our war policy, and the principles of international law.

It is obvious that a contract, which purports to provide an indemnity for the assured against loss, becomes, when perverted to the purposes of one who has no interest in the subject insured in respect of which he can suffer loss, nothing