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(2.) FIRE INSURANCE.) – A fire policy engages, that,
(3.) LIFE INSURANCE.) in consideration of a single premium or (as the case may be) periodical payments of premiums, the company will pay to the assured compensation for such loss as may occur by fire to his specified property within a certain period, to an amount not exceeding a particular sum fixed for that purpose by the policy.
A life policy usually engages, that, in consideration of a single premium or (as the case may be) a number of periodical premiums, the company will pay, on the death of some individual, or on his death within a limited period, a certain sum of money therein specified ; that is, will pay it to the party effecting the insurance (supposing it to be effected by a stranger having an interest in the life insured), or to the executors or administrators of the party whose life is insured, supposing him to effect it for his own benefit. Under the Policies of Assurance Act, 1867, s. 1, any person becoming entitled to a life policy by assignment or other derivative title, and having a right in equity to give an effectual discharge to the insurance company, is enabled on giving notice of such assignment to the company, to sue on the policy in his own name, as soon as it becomes a claim.
By the Life Assurance Companies Acts, 1870 to 1872, certain provisions are made for securing the solvency of life insurance societies, in particular, by requiring every society to deposit in court a sum of 20,0001. By the Companies Act, 1862, s. 44, every insurance company is bound to publish twice a year a full statement of its capital, and its assets and liabilities.
Insurable interest. It is a rule regarding all insurance contracts, whether against fire, or on life, or against loss at sea, that the assured must have an “insurable interest." in the subject-matter thereof (either in his own right or at least as a trustee), equal to the amount of the sum insured. Beyond the extent to which he possesses such interest, the contract will not be effectual ; and the interest must be one of a pecuniary kind (e). A practice nevertheless formerly obtained in marine insurances, of insuring large sums without having any property on board, which were called insurances “interest or no interest” (f); and though the policies in such cases amounted obviously to a species of wager, yet there was nothing at the common law which prevented their taking effect according to the design of the parties, that is, as wagers, although not as policies. But it was thought proper to repress these wagering bargains by positive regulation, and the Marine Insurance Act, 1745, accordingly enacted, that all insurances on British ships or goods (9), “ interest or no interest,” or without further proof of interest than the policy itself, or by way of gaming or wagering, or without benefit of salvage to the insurer, should be totally void, subject only to certain exceptions in the Act specified. As regards policies of insurance generally, it has been enacted by a later statute, namely, the Gambling Act, 1774, that no insurance shall be made on the life or lives of any person or persons, or on any other event or events whatsoever, wherein the person or persons for whose benefit, or on whose account, such policies are made, have no interest, or by way of gaming or wagering ; and every insurance so made is rendered void. It is also unlawful to make any policy, without inserting therein the name of the person interested, or for whose use, benefit, or account it is made (h); and no greater sum may be recovered from the insurer than the amount of the interest of the assured, in the life or lives, or other event or events. But with reference to life policies, a man has always been considered as having an interest in his own life (though not in that of his wife
(e) The Marine Insurance Act, 1745, and the Gambling Act, 1774 ; Hebdon v. West (1862), 3 B. & S. 579; Dalbyv. India,etc. Assurance Company (1855), 15 C. B. 365 ; Inglis v. Stock (1885), L. R. 10 App. Ca. 263.
(f) 2 Bl. Com. 461.
(y) Berridge v. The Man On Insurance Company (1887), 18 Q. B. D. 346.
(h) Hodson v. Observer Life Assurance Company (1858), 8 El. & Bl. 40.
or child), of a kind that justifies his effecting an insurance upon it to any amount (i); and a policy effected on the life of one's debtor has always been valid to the extent
of the amount of the debt. It has, moreover, been Liety decided (k), that a policy on the life of another, in which
w the assured was interested at the time of effecting the 2hr zudian
policy, is not invalidated by the Act of 1774, merely because such interest has ceased before the death; and it has also been decided (l), that in the case of an insurance
;* policy, the full amount of his insurance, though he shall
also have recovered damages against the party by whom the accident was caused. It is further to be observed, that, under the Married Women's Property Act, 1882, a husband may insure his own life expressly by way of trust for the benefit of his wife and children, and (subject thereto) for his own benefit ; also, that a wife may effect a policy either on her own life or on that of her husband (m), for her own benefit, or that of herself and her children. In every such case the policy moneys do not, so long as any object of the trust remains unperformed, form part of the assured's estate, or become subject to his or her debts.
Under the Life Assurance Act, 1896, an insurance company can pay policy moneys into court, “it in the opinion of the board of directors no sufficient discharge can otherwise be obtained.”
Any misrepresentation of fact, on the part of the assured (whether made by himself or by his agent without his knowledge), upon a point material for the insurer's guidance in estimating the risk, will, as in the case of other contracts, discharge the latter from his liability; and this
(i) Halford v. Kymer (1830), 10 B. & C. 729.
(k) Dalby V. The India and London Life Assurance Company (1855), 15 C. B. 365.
(I) Brudburn v. Great Western Railway Company (1874), L. R. 10 Exch. 1.
(m) In re Daries' Policy, [1892) 1 Ch. 90.
is so, whether the loss which actually happens has any connection with the matter misrepresented or not (n). And, insurance contracts being contracts uberrimae fidei, mere concealment of any circumstance of the like description, vitiates the policy, provided it were known to the assured at the time of effecting the policy (o). Finally, it may be observed, that where a policy is void ab initio, from a cause not amounting to fraud or illegality on the part of the assured—as where, in a marine insurance, the ship, though believed to be seaworthy, turns out not to have been so, contrary to the implied warranty on that subject, or sails alone, contrary to an express warranty to sail with convoy,—the insurer is bound in every such case to refund the premium ; for he was never legally in risk, and therefore cannot retain the consideration (p). But where, on the other hand, a policy is void ab initio for illegality, or is voidable for fraud, the assured cannot reclaim even the premium, the mutuality of the fault making no difference ; for in this latter class of cases the maxim applies,-in pari delicto, potior est conditio possidentis (9).
(n) Blackburn v. Vigors (1887), L. R 12 App. Ca. 531 ; Blackburn v. Haram (1888), 21 Q. B. D. 144.
(0) See above, p. 86; London Axsurance v. Mansel (1879), 11 Ch. D. 367 ; Seaton v. Burnund,  A. C. 135.
(p) Tyrie v. Fletcher (1777), 2 Cowp. 666.
(g) Morck v. Abel (1802), 3 Bos. & P. 35; Chapman v. Fraxer (1793), Marsh. 525.
CHAPTER V.--SECTION XI.
OF CHARTERPARTIES AND BILLS OF LADING.
CHARTERPARTIES are instruments in writing (with or without seal), between a merchant and a shipowner, for the hire of an entire vessel at a freight or reward agreed on, either for a particular voyage or voyages or for a specified period of time. Upon the execution of such an instrument, the ship is said to be chartered or freighted, and the party by whom she is engaged is called the charterer or freighter. But where, instead of taking the entire vessel, the owner of goods merely bargains for their conveyance, for freight, by any particular vessel (other goods being at the same time conveyed in her for other owners), she is described, not as a chartered but as a general ship ; and in this latter case, no charterparty is usually executed, but merely a bill of lading. The shipowner in the latter case is merely a carrier, and is subject to the ordinary law of carriers, except so far as his duties and liabilities are specially provided for by the Merchant Shipping Act, 1894, and other statutes (a).
A bill of lading fulfils three functions in law. (1) It is an acknowledgment of or receipt for the goods shipped under it (l); (2) it constitutes the contract for carriage of the goods, and sets forth the terms and conditions by which the parties are bound (c); and (3) it is a document of title to the goods, so that indorsement and delivery of
(a) l'ide supra, p. 127.
(6) Bills of Lading Act, 1855, s. 3; Parsons v. New Zealand Co., (1901) 1 K. B. 548.
(c) Bills of Lading Act, 1855, Leduc v. Ward (1888), 20 Q. B. D. 479.