No. 58. Gibson v. Small, 4 H. L. Cas. 353, 354.

Gibson (Plaintiff in error) v. Small and others (Defendants in error). 4 H. L. Cas. 353-424 (s. c. 1 C L. R. 363; 17 Jur. 1131).

[353]

Insurance. Time-policy. - Implied Warranty of Seaworthiness.

By the law of England, in a time-policy effected on a vessel then at sea, there is no implied condition that the ship should be seaworthy on the day when the policy is intended to attach.

A policy of insurance was effected in London on the 27th of November, 1843, on a ship then abroad, "lost or not lost, in port and at sea, in all trades and services whatsoever and wheresoever, during the space of twelve calendar months, commencing on the 25th September, 1843, and ending on the 24th September, 1844, both days included." To a declaration for a total loss on the 14th October, 1843, by perils of the sea, the defendant pleaded that "ship was not, at the time of the commencement of the risk in the policy of insurance mentioned, nor at the making of the said insurance, nor on the said 25th September, 1843, in the declaration mentioned, seaworthy, or in a fit and proper condition to go to sea; but, on the contrary thereof, was wholly unseaworthy." It appeared in evidence that on the 24th of September, 1843, the ship was at sea, seriously damaged, and in that state it succeeded in making Madras in the course of the following day. The verdict found the plea to be proved in fact.

Held (affirming the judgment of the Court of Exchequer Chamber, which had reversed a previous judgment of the Court of Queen's Bench), that this plea did not afford a defence to the action, for that there was no implied condition that the ship should be seaworthy on the day when the policy was intended to attach.

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In this case an action had been brought in the Court of [354] Queen's Bench by Small and others v. Gibson, on a policy of insurance effected on the 27th of November, 1843, by them, as agents for Antonio Hypolite Gigual, on the ship "the Susan, lost or not lost, in port or at sea, in all trades and services whatsoever and wheresoever, during the space of twelve calendar months, commencing on the said 25th day of September, 1843, and ending on the 24th day of September, in the year 1844, both days included." Gibson pleaded four pleas, of which the second alone is material: "That the said ship or vessel, in the said declaration mentioned, was not, at the time of the commencement of the said risk in the said policy of assurance mentioned, nor at the making of the said insurance, nor on the said 25th day of September, in the year of our Lord 1843, in the said declaration mentioned, seaworthy, or in a fit and proper condition safely to go to sea; but, on the contrary, was wholly unseaworthy." Verification. Replication, de injuria, and issue thereon.

No. 58. Gibson v. Small, 4 H. L. Cas. 354, 355.

At the trial of the cause at the London sittings after Trinity Term, 1848, it appeared that, about the beginning of September, 1843, the ship sailed from Madras for the Mauritius, with 288 coolies on board; encountered very bad weather, and put into Trincomalee, which place the captain was ordered to quit or to go into quarantine, as the small-pox was reported to be on board his vessel. He preferred the former alternative, and determined to try to return to Madras, in order to get repaired. He encountered bad weather on the voyage, and the vessel became still more damaged, but he arrived at Madras on the 25th of September; so that on the day on which the risk was to attach, the vessel was at sea, seriously injured, and endeavouring to make a port to get repaired. The necessary repairs could not be effected at Madras, and the captain therefore tried to reach Coringa, but met other misfortunes of a similar sort to those before experienced, and was obliged to put into Masulipatam. [* 355] The coolies refused to stay on board any longer, the surveyors reported against the possibility of repairing the vessel, except at a very considerable expense, and finally it was sold, and the owners gave notice of abandonment.

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The jury returned a verdict for the defendant, finding "that the said ship or vessel in the said declaration mentioned was not, at the time of the commencement of the said risk in the said policy of insurance mentioned, nor at the making of the said insurance, nor on the said 25th day of September, 1843, in the declaration mentioned, seaworthy, or in a fit and proper condition safely to go to sea, but, on the contrary thereof, was at those times, and each of them respectively, wholly unseaworthy." A motion was afterwards made to enter judgment for the plaintiff non obstante veredicto, but the rule was discharged and judgment given for the defendants (16 Q. B. 128). A writ of error was then brought in the Exchequer Chamber, when the judgment of the Court of Queen's Bench was reversed, and judgment was given for the plaintiff non obstante veredicto (16 Q. B. 141). The case was then brought by writ of error to this House.

The Judges were summoned, and Lord Chief Baron POLLOCK, Mr. Baron PARKE, Mr. Baron ALDERSON, Mr. Justice MAULE, Mr. Justice ERLE, Mr. Baron PLATT, Mr. Justice WILLIAMS, Mr. Justice TALFOURD, and Mr. Baron MARTIN attended.

The case having been argued by the Attorney-General (Sir F.

No. 58. Gibson v. Small, 4 H. L. Cas. 355–396.

Thesiger) and Mr. J. P. Wilde, for the plaintiff in error, and by Sir F. Kelly and Mr. Serjt. Shee (Mr. Unthank was with them), for the defendants in error:

[367]

The LORD CHANCELLOR proposed the following questions to the Judges:

1. Adverting to the record and proceedings in this case, is the policy subject to an implied condition or warranty that the ship was seaworthy?

2. If yea, then did the condition of seaworthiness mean that the ship was seaworthy at the time it commenced the voyage, or at the making of the insurance, or when the liability of the underwriters commenced, that is, on the 25th of September, 1843?

3. Are there any, and if any, what, qualifications in [368] regard to such seaworthiness in a case like this which would affect the rights of either party under the policy? 4. And, lastly, whether the plea is a valid plea in law in answer to the action?

Lord Chief Baron POLLOCK, on behalf of the Judges, requested time to answer these questions. The request was acceded to.

The Judges differed in opinion, the minority, Mr. Justice ERLE and Mr. Justice WILLIAMS, being of opinion that there was an implied warranty, and that the plea was good; Mr. Baron PLATT being of opinion that there was a warranty that at the inception of a voyage commenced during the term the vessel should be seaworthy; but that this warranty did not apply to the circumstances of the case, and so the plea was bad. The remaining six Judges delivered judgments to the effect that there was no implied warranty at all. As fairly representative of these, and the most important of them, it will be sufficient here to set forth the judgment of

[395] Mr. Baron PARKE.

The first three questions proposed by your Lordships, as well as the last, were under the consideration of my Brethren and myself, by whom the present case was decided in the Court of Exchequer Chamber; but as they were not necessary for the decision of the case in the Court below, we disclaimed deciding upon them, nor were they argued there so fully, nor so much deliberated upon, as if they had been essentially necessary to the decision of the case itself.

[396] As your Lordships have now proposed to us the first

No. 58. Gibson v. Small, 4 H. L. Cas 396, 397.

three questions in distinct terms, it is my duty to pronounce my opinion upon them, which I proceed to do, though not with. quite so much confidence or satisfaction to myself as I should have done if they had been argued at the bar in the manner they would have been, if essentially necessary to the decision of the question in the cause. That question was simply whether the fourth plea is valid; and the only point involved in that question is, whether there is an implied condition in every policy of assurance for time, in the form of this policy, under all circumstances in which the ship shall be situated, that it should be seaworthy at the commencement of the term or the date of the policy. Unless there is, the plea is bad. I am of opinion that there is no warranty or implied condition that the ship was seaworthy at the commencement of the term; and, upon the best consideration I can give to the subject, I think I ought to advise your Lordships that there is none that the ship was seaworthy at any particular time; that there is, in fact, no warrant of seaworthiness at all.

The whole of the law upon this subject depends upon one question, whether there is any sufficiently distinct and clear authority in the common law for annexing any condition of this sort to a policy of assurance for time.

The policy is a written instrument, which contains a number of express stipulations, but none on the subject of seaworthiness; for the notion that it was involved in the term "good ship" in policies is, I think, put an end to, for the reason stated in the judgment in the Court of Exchequer Chamber in this case, and has been entirely abandoned in the argument at your Lordships' bar.

If, then, there is any such warranty or condition, it must be added to the written policy, as an incident annexed to the contract, and that either by the usage of trade or by * the [* 397] common law of the land; from the nature of the policy itself, there is no other way in which it can be added.

The custom of trade, which is a matter of evidence, may be used to annex incidents to all written contracts, commercial or agricultural, and others, which do not by their term exclude it, upon the presumption that the parties have contracted with reference to such usage, if it is applicable.

This is explained in the case of Hutton v. Warren, 1 M. & W.

475. But in this case there is no evidence stated on the record of such usage; and none such can be supposed to exist, unless there is evidence of it.

Such a condition may, however, be annexed as a necessary incident by the common law. The simple question is, Does the common law annex any such incident? An examination of the authorities, judicial decisions, and dicta, and of text-writers on the common law, from which we derive our knowledge of that law, leaves us without any satisfactory proof that the same implied warranty, or condition as to seaworthiness at the commencement of the risk, which confessedly is annexed to voyage-policies, or any warranty or condition as to seaworthiness, is annexed to timepolicies.

In the common law of England, to be collected from these sources, there is ample authority that a warranty, or condition of seaworthiness at the commencement of the risk, is implied in all voyage-policies, whether it has been adopted originally from the law merchant, or implied from the very nature of the contract itself. So other conditions are implied; as, not to deviate from the usual course of the voyage, to commence it in a reasonable time, to disclose all material circumstances, and the non398] performance of these conditions avoids the policy, whether it arises from fraudulent motives or not. This is explained at length in the accurate report of the judgment of the Court of Exchequer Chamber in the Queen's Bench Reports, 16 Q. B. 158 (for, as elsewhere reported, it is full of errors), and the authorities there referred to, and they need not now be repeated.

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It is undoubted law that there is an implied warranty with respect to a policy for a voyage, that the ship should be seaworthy at the commencement of the voyage, or in port when preparing for it; or had been seaworthy for the voyage when the voyage insured had been commenced, if the insurance is on a vessel already at sea; which yoyage being commensurate with the risk insured, the warranty is compendiously described as a warranty of seaworthiness at the commencement of the risk; and this has led to the supposition that there is always such a warranty. It is also perfectly clear that, in our law, there is no other warranty of seaworthiness in a voyage-policy than that the ship is seaworthy at the commencement of the voyage. There is no warranty in the law of England that the vessel shall continue seaworthy after the voyage has