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INSURANCE OF PROPERTY. We shall now attempt, in the brief space that can be allotted to this subject, to state the effect of war (1) as the law stood before the recent war, (2) under the emergency legislation, and (3) as the law now stands after five years of war. We shall find, as is to be expected, that it is mainly the insurance of property at sea that will claim our attention,

1. Before the recent war. After some contrary decisions by Lord Mansfield it was definitely settled in 1802 in the case of Furtado v. Rogersl that an insurance of enemy property by a British subject against the effects of British capture or (Brandon v. Curling)2 of capture by our Allies is absolutely illegal and void, whether the contract is made before the war (as in Furtado v. Rogers) or a fortiori during the war. Upon principle a contract to indemnify a neutral against the consequences of the seizure of his property by British or allied forces and its condemnation in prize would be contrary to public policy and illegal and void. Further, a policy, whether effected before the war or attempted to be effected during the war, whereby an enemy is insured against loss or damage occurring during the war, whether from belligerent or ordinary risks, is void; this is clear from the statement contained in Brandon v. Curling that 'where the insurance is upon the goods generally [the underwriter being a British subject], a proviso to this effect shall in all cases

(1802) 3 B. and P. 191. Kellner v. Le Mesurier, and Gamba v. Le Mesurier in (1803) 4 East are to the same effect.

2 (1803) 4 East, 410.


be considered as engrafted thereon, viz., Provided that this insurance shall not extend to cover any loss happening during the existence of hostilities between the respective countries of the assured and assurer. Because during the existence of such hostilities, the subjects of the one country can not allowably lend their assistance to protect by insurance the property and commerce of the subjects of the other' a passage which is cited with approval by Lord Brampton in Janson's case1.

So the distinction (if it ever existed) between an insurance of enemy property against British or allied capture and an insurance against ordinary non-belligerent risks can no longer be made.

No loss or damage whatever occurring during the war of or to enemy property, can, therefore, be recovered from a British insurer either during or after the war.

Moreover, it appears to be safe to say upon the analogy of the cases of long term contracts for the sale of goods discussed in Chapter IV that although the duration of a policy upon enemy property which is current upon the outbreak of war may possibly outlive a short war, yet the policy will not revive but is completely abrogated.

Janson's case makes it clear that a loss occurring before war, though during strained relations, is recoverable by an enemy subject from a British insurer at any rate after peace is declared, and that capture by the enemy subject's own government before war is quite a properly insurable risk.

Potts v. Bella shows that insurances by a British subject upon property involved in illegal trading against any risks, belligerent or not, are illegal and void.

But insurances in respect of licensed trade are valid, whether effected by the person licensed or by his correspondents in the enemy country, for the Crown in licensing the end impliedly licenses all the ordinary means of obtaining that ends.

1 (1902] A. C. at p. 502. 2 (1800) 8 T. R. 548.

Usparicha v. Noble (1811) 13 East, 352.

The same principles will apply to enemy property on land", so that a fire policy effected with a British company before the war upon German property in Germany becomes valueless, so far as British courts are concerned, upon the outbreak of war in respect of claims which have not already accrued.

British or allied subjects' property on land is insurable, either before or during the war, against all belligerent risks, whether the loss or damage is caused by enemies or by British or allied forces, provided the property is not the subject of illegal trading.

We have stated that an underwriter may, apart from any provision to the contrary which may be embodied in the Treaty of Peace, pay to an enemy after the war losses which accrued before the war, though in most cases he will probably be found to have paid them during the war to the Custodian of enemy property. It is, however, worth noting that before the recent war it was the public and avowed intention of Lloyd's underwriters and also of most of the companies to waive the plea of alien enemy and hold themselves subject to an honourable obligation to pay to enemies during the war losses which accrued before or during the war. The avowal, so far as Lloyd's is concerned, is contained in a statement made by the then chairman of Lloyd's at the International Conference on maritime law at Copenhagen on the 16th May, 19134. This honourable undertaking which was made in the fullest good faith was it is submitted) based on a misconception in the minds of the underwriters' advisers as to the nature of the plea of alien enemy and the prohibition of intercourse with enemies. These rules, now at any rate, rest on public policy and not on the protection of the British subject which he can waive at will, and it would be illegal, even apart from the express provisions of the Trading with the Enemy Proclamations, to carry out this undertaking. The excuse for the prevalence of such lax views, which remind one of Lord Mansfield's heresy above quoted?, must be laid at the door of the House of Lords who in Janson's case? ought not to have condoned the action of the underwriters sued by an enemy plaintiff during war in waiving the plea of alien enemy and permitting themselves to be sued. The fact that the war was over when the case reached the House of Lords should (it is submitted) have made no difference, and the case should have been stopped. Even after the declaration of peace, the underwriter cannot be compelled to pay to those who were enemies losses upon pre-war policies which accrued during the war.

1 See also Nigel Gold Mining Co. v. Hoade (1901] 2 K. B. 849, where a Company registered in Natal had insured with the defendant its gold coming from its mine in the Transvaal against capture, detention, etc.; after war was declared, the Transvaal Government seized certain of the plaintiff's gold; held the property was not stamped with hostile character, and the plaintiff company could recover, as it had closed down its mine as soon as war was declared and so had not carried on business in an enemy country during the war.

? Printed as an Appendix to this chapter.

2. The emergency legislation. The effect of the principal relevant provisions of the emergency legislation are as follows:

The Trading with the Enemy Proclamation of 9th September, 1914, . 5 (1) (revoking in this respect the Treasury announcement3 of 21st August, 1914, s. 4) clearly prohibits the payment to an enemy during the war of any claim on a policy which has arisen before the war; and as we have seen no claim during the war can arise.

Section 5 (6) is replaced by s. I of the Proclamation of 8th October, 19144 which prohibits the entering into of any new 1 pp. 100, 135.

2 [1902] A. C. 484. 3 Times Newspaper, 22nd August, 1914.

4 Trading with the Enemy Proclamation of 8th October, 1914. 'I. Paragraph 5 (heading 6) of the Trading with the Enemy Proclamation (No. 2) is hereby revoked and in lieu thereof the following heading shall be inserted in the said Paragraph 5 as from the date hereof:

'6. Not to make or enter into any new marine, life, fire or other policy or contract for insurance (including re-insurance) with or for the benefit of an enemy; nor to accept or give effect to any insurance of, any risk arising under any policy or contract of insurance (including re-insurance) made or entered into with or for the benefit of an enemy before the outbreak of war; and in particular as regards Treaties or Contracts of re-insurance current at the outbreak of war to which an enemy is a party or in which an enemy is interested not to cede to the enemy or accept from the enemy under any such Treaty or Contract any risk arising under any policy or contract of insurance (including re-insurance) made or entered into after the outbreak of war or any share in such risk.'

insurance of any kind (marine, life, or fire) or giving effect to any old ante-bellum insurance with or for the benefit of an enemy.

Further, it must be noticed that, as regards insurance and re-insurance, section 6 of the Proclamation of 9th September, 1914, is seriously modified by section 5 of that of 8th October, 1914, so that 'branches' of enemy insurance businesses situate in British, allied, or neutral territories are, despite the 'line of war' theory, to be treated as possessing enemy character.

3. Some changes during the past five years. The particular section of the law governing the insurance of property, upon which the events of the past five years have left the deepest mark, is undoubtedly the principles of Constructive Total Loss.

We begin with a legacy from the war between Greece and Turkey which was declared on the 17th October, 1912. The British steamer Polurrianwhile carrying a cargo of coal to Constantinople was captured by Greek men-of-war on the 25th October, 1912, and her cargo was removed. There appears to have been some doubt in the minds of the Greek authorities whether the captain knew of the war or not, and after six weeks the steamer was released without her cargo. She was insured with Lloyd's underwriters against 'capture, seizure and detention and the consequences nereof or any attempt thereat, piracy excepted, and also from all consequences of hostilities ar warlike operations whether before or after declaration of war.' Her owners now claimed for a constructive total loss. The relevant portion of the material section of the Marine Insurance Act, 1906, is as follows:

'$ 60 (1). Subject to any express provision in the policy, there is a constructive total loss where the subject-matter insured is reasonably abandoned on account of its actual total loss appearing to be unavoidable.... (2) In particular there is a constructive total loss—i) where the assured is deprived of the possession of his a peril insured against and (a) it is unlikely that he can recover the ship.'

1 Polurrian Steamship Co. v. Young (1915] 1 K. B. 922 (C. A.).

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