the faith of any particular appropriation of the money; and if it were otherwise, his security could not be avoided by any misapplication of the fund, where the risk was bona fide run upon other goods. The loan may be made, and the risk taken, upon the usual footing of policies of insurance, lost or not lost, and precisely as if the ship was then in port; and if, before the hypothecation be given, the property be actually lost by any of the perils enumerated in it, the loss must be borne by the lender. (a)

After the risk has ceased by the safe arrival of the ship, marine interest ceases, and gives place to the ordinary legal interest, on the aggregate amount of the debt due, consisting of the money lent with the maritime premium. This is understood to be the rule in the French law. The ordinary interest begins upon the accumulated sum when the marine interest ceases; and BoulayPaty follows the authority of Emerigon, and of the French judicial decisions, in support of this rule, and in opposition to the doctrine of Pothier and Pardessus, who insist that no interest whatever accrues between the cessation of the maritime interest and the judicial demand of the debt. (b)

363

*The French code (a) prohibits all loans, in the nature of bottomry or respondentia, upon seamen's wages or voyages. A sailor is not generally in a situation to expect any great profit which would justify a loan upon maritime interest, and wages are too slender a basis for a maritime loan, and the provision is dictated by sound policy. The English and American courts of admiralty have a broad equity jurisdiction over such (a) Conard v. Atlantic Insurance Company, 1 Peters, 386.

(b) Emerigon, ii. 414; Pothier, Traité du Pret, à la grosse Aventure, n. 51. M. Pardessus, Cours de Droit Com. iii. n. 917; Boulay-Paty, iii. 80-89. Marshall on Insurance, ii. 752, lays down the rule according to the opinion of Pothier, who holds that the ordinary interest, after the risk has ceased, commences only on the principal sum lent, and not on the joint principal and maritime interest, for that would be compound interest. There are no English decisions on the point, and if the French law is to govern, it is decidedly against the opinion of Pothier. There is ground for the conclusion, that when the risk has been run, and the peril ceases, the loan, with the extraordinary premium, becomes an absolute debt, which ought to carry interest if the payment be delayed. The French law declares, and it is also the doctrine of Casaregis, that a bottomry contract, if made payable to order or bearer, is negotiable, like a bill of exchange, and is to be dealt with and protested in like manner. Casaregis, Disc. 55; Boulay-Paty, iii. 97; Code de Commerce, art. 813.

(a) Code de Commerce, art. 319.

contracts. The bottomry bond may be good in part, and bad in part; and if the premium has been unduly enhanced from a knowledge of the master's necessities, the Court of Admiralty, which acts ex æquo et bono, may moderate it or refuse to ratify it. (b) But if marine interest has not been stipulated, no court can supply the omission, and it will be taken to be a contract upon ordinary interest; for no new obligation can be inferred or reasoned out by a commentary on the contract itself. (c)

(b) 1 Dods. 277, 283; The Ship Packet, 3 Mason, 255; The Nelson, 1 Hagg. Adm. 176, 326, 327; The Cognac, 2 id. 377; The Hunter, Ware, 255. [Brig Bridgewater, Olcott, 35; Furniss v. Brig Magoun, ib. 55.]

(c) Pothier, Traité du Pret, à la grosse, n. 19. See, for further information on the subject of maritime loans, Emerigon's Essay on Maritime Loans, which is the most complete treatise extant on the subject. The substance of it has been ably incorporated into the work of M. Boulay-Paty, on a Course of Maritime Commercial Law, and it has been closely and accurately translated by John E. Hall, Esq., of Bal timore.

[477]

LECTURE L.

OF INSURANCE OF LIVES, AND AGAINST FIRE.

1. Of Insurance of Lives. These insurances are liberal contracts, and while they create an advantageous investment of capital, they operate benevolently towards the public. Their usual purpose is to provide a fund for creditors, or for family connections in case of death. The insurer, in consideration of a sum in gross, or of periodical payments, undertakes to pay a certain sum, or an annuity, depending upon the death of a person whose life is insured. The insurance is either for the whole term of life, or for a limited period. Such is the nature of these contracts, that they are well calculated to relieve the more helpless members of a family from a precarious dependence, resting upon the life of a single person; and they very naturally engage the attention and influence the judgment of those thinking men, who have been accustomed to reflect deeply upon the past, and to form just anticipations of the future.

The practice in Europe, of life assurances, is in a great degree confined to England, and it has been introduced into the United States. (a) It is now slowly but gradually attracting the public attention and confidence in our principal cities. According to a maxim of the civil law, the life of a freeman was above all valuation; liberum corpus æstimationem non recipit; and 366 the nautical legislation of some parts of Europe, on this

subject, has been founded upon the principle, that it was unfit and improper to allow insurances on human life. They have been tolerated in Naples, Florence, and by the ordinances of Wisbuy, but they were condemned in the Le Guidon, as contrary to good morals, and as being the source of infinite abuse. So, insurances for life were expressly forbidden by the ordinance (a) The Massachusetts Hospital Life Insurance Company was incorporated in

1818.

of Louis XIV.; and the prohibition was made to rest on the reason given in the civil law. The ordinances of Amsterdam, Rotterdam, and Middleburg adopted the same rule, which, though true in some respects, was in this case very absurdly applied. (a) The new French code has omitted any express provision on the subject, though Boulay-Paty thinks that a prohibition is covertly but essentially contained in art. 334 of the code; and he inveighs vehemently against policies upon human life, as being gambling contracts of the most pernicious kind. (6) Most of the commentators on the new code, as Delvincourt, (c) Locré, (d) De Laporte, and Estrangin, concur in the same opinion. Pardessus, (e) on the other hand, is in favor of the legality of such insurance; and this must have been the opinion of the French government, for a royal * ordinance of 1820 established a company for *367 the purpose of insuring lives.

There are two chartered life assurance companies established in France, and though the terms of insurance are moderate, and the companies extremely respectable, they have met with very little encouragement; and this grave species of insurance does not seem to be congenial to the taste and habits of either the French or Italians. In the Netherlands, life assurance societies are established with reasonable anticipations of success. An ordinance of the government gives them a monopoly by excluding all foreign companies from interfering with the business on their native soil. The same exclusion exists in Denmark, while the life assurance institutions in that kingdom are said to be nothing. They are more likely to flourish in Germany than in any other part of Continental Europe, judging from the experiment already made, and the character and dispositions of the people. (a)

(a) Le Guidon, c. 16, art. 5; Ord. of Wisbuy, art. 66; Ord. de la Mar. tit. Assurances, art. 10; Valin ii. 54; Pothier, h. t., n. 27; Emerigon, i. 198.

(b) Cours de Droit Com. iii. 366, 368, 496-506. Istæ conditiones sunt plenæ tristissimi eventus, et possunt invitare ad delinquendum. Grival, dec. 57, n. 48. BoulayPaty says, that these life assurances ought to be left to their English neighbors. The English are willing they should be so left, and exult in the distinction; for Sergeant Marshall, in his Treatise on Insurance, ii. 768, suggests that the prohibition of insurance on lives in France and Italy proceeds from motives of policy, founded on a startling sense of the great infirmity of their public morals, which would expose to hazard lives so insured.

(e) Inst. de Droit Com. Français, ii. 345. (d) Esprit du Code de Commerce, iv. 75.

(e) ii. 303.

(a) Edinburgh Review, xlv. 488-490. In 1828, a life insurance company was established at Gotha, in Germany, and has been attended with great success.

The life assurance companies in England commenced with the Amicable Society, in the beginning of the last century; and in 1827, there were in the United Kingdom forty-four life assurance companies, all maintaining a zealous and dangerous competition. The companies used formerly to select and take only lives of health and vigor; but now it is said to be the practice to accept all lives proposed, where no positive disease is manifested. So, residence in any part of Europe is universally admitted, and the companies are very much exposed to frauds, and the consequent diminution of credit and confidence, by the assurance of bad 'ives, and sinking the average duration of lives insured much below the average duration of human life. (b) There is no doubt a good deal of intrinsic difficulty in the subject; and it requires no ordinary degree of science, skill, and experience to form just and accurate rates of insurance, or tables of annuities *368 on scales measuring truly the probabilities and value of life, in its various stages of existence, in different climates, in different employments, and in the vicissitudes of action to which it is subject.

*

(1.) The party insuring must have an interest in the life insured. The English statute of 14 Geo. III. c. 48, prohibited insurances on lives, when the person insuring had no interest in the life, and it prohibited the recovery under the policy of a greater sum than the amount or value of the interest of the insured in the life, and required the insertion in the policy of the person's name interested therein, or for whose benefit the policy was made. A bona fide creditor has an insurable interest in his debtor's life to the extent of his debt, for there is a probability, more or less remote, that the debtor would pay the debt if he lived. (a) The insurance is frequently made a part of the creditor's security in loans of money. A person may insure his own life for the benefit of heirs or creditors, or he may insure the life of another in which he may be interested, and assign the policy to those who have an interest in the life. The policy is good for the creditor as a collateral security, though he may have other security; and being substantially a contract of indemnity against the loss of the debt, it ceases, as to the creditor, with the

(b) Edinburgh Review, xlv. 498, 500.

(a) Anderson v. Edie, Park on Insurance, 6th ed. 575.