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place in the interior of Spain or Portugal, including all risks whatever from the time of leaving the warehouse in the United Kingdom, and all risks of every kind until safely delivered at the warehouses of the consignee, with liberty to touch and stay at any ports or places whatsoever for any purpose necessary or otherwise." There was a marginal note in these terms. "Deviation and/or change of voyage and/or transhipment not included in the policy to be held covered at a premium to be arranged." The goods in question were on or before 2nd March 1892 despatched from Leeds to Madrid. On former occasions goods of the same shipper for Madrid were shipped at Liverpool for Seville and carried thence by land to Madrid. On 3rd March the shipper declared these goods on his policy: on 7th March he learnt that the goods would go by the Lope de Vegas: on 10th March he caused that vessel's name to be inserted in the declaration, and intending the same course to be observed with those goods as with former shipments to Madrid, he instructed the insurance broker that the voyage was to Seville. The vessel had left Liverpool on 6th March and was lost on that part of the voyage, common to vessels bound for the Atlantic ports of Spain and those for the Mediterranean ports. It was then discovered that the Lope de Vega, was not going to Seville at all, but only to Carril and Huelva on the west coast of Spain, and to Carthagena and other ports on the east coast; and that the bill of lading for these goods had been made out for Carthagena. The shipper informed the underwriter of his mistake, tendered the customary extra premium for Carthagena, which was refused, solely on the ground that the voyage to Carthagena was not covered by the policy. Without the deviation or change of voyage clause there could have been no question on this point; but the assured, relying on that clause in their policy, contended that when the goods left the warehouse, being intended by the shippers to proceed by a route covered by the policy, the declaration was rightly made and the policy attached; and further, that the assured were entitled to change the voyage in terms of

the clause, and on paying a proper extra premium for Carthagena, the amount of which was not in dispute. The underwriters contended that the words "change of voyage" in the clause apply only to a change after the policy has once attached by the commencement of a voyage of such a kind that, if not changed, it would have been within the policy, that a shipment of goods and an initial declaration of insurance on any other voyage is outside the policy, and that therefore the "change of voyage' "" never takes effect at all in such a case. Mr. Justice Wright's decision in favour of the underwriters was confirmed by the Court of Appeal. The law therefore now stands (in absence of reverse of the Court of Appeal's judgment by the House of Lords, to which as far as is known this case is not intended to proceed) that the deviation or change of voyage clause in a floating policy on merchandise is restricted to apply only when the policy has attached by the commencement of a voyage which, if not changed, would be within the policy.

There does not appear to be anything in the decision limiting the application of the principle to open policies only; it seems to bear the wider general application that the words "a changed voyage" are not equivalent to the words a "different voyage"; the former did at one period attach to the policy, while the latter did not at any period attach.

CHAPTER IV

THE POLICY: PART I—continued

Common English Policy continued, Valuation

The said ship, etc., goods and merchandises, etc., for as much as concerns the assured, by agreement between the assured and the assurers in this policy, are and shall be valued at £

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English law does not impose any obligation on assured or underwriter to fill up the blank at the end of this clause with any sum. Policies consequently fall into two classes —(1) open, in which no value is given; and (2) valued, in which a value is given.

The earliest Italian and English policies make no statement of the value of the goods or vessel insured; at the most they provide that a certain proportion, usually 10 per cent of the value, shall remain uninsured, stated to be “at the assured's adventure." This provision was embodied in the Guidon de la Mer, and it was stipulated in the Ordinance of Louis XIV. (Tit. vi. Art. 18) that the assured should always bear the risk of the tenth of the goods which they shipped, unless there was an express declaration on the policy that they meant the whole value to be insured. The French Code de Commerce of 1807 did not reproduce this restriction, which had fallen into disuse, express declaration of complete insurance having become usual.

In consideration of the subject of valuations it soon becomes apparent that some regard must be had to the intention of the contract of insurance. The aim of the

contract being to secure indemnity to the assured, indemnity should be the limitation of the obligations of the underwriter. As Lord Mansfield put it in Godin v. London Assurance, 1758: "Before the introduction of wagering policies it was upon principles of convenience, very wisely established, that a man should not recover more than he had lost. Insurance was considered as an indemnity only in case of a loss, and therefore the insurance ought not to exceed the loss. This rule was calculated to prevent fraud, lest the temptation of gain should occasion unfair and wilful losses." But the application of this principle is not easy. What constitutes indemnity in case of loss to a merchant engaged in oversea trade? He conducts certain commercial operations, acting on his knowledge of foreign markets and his skill in estimating the course of trade. If he ships goods and loses them by marine perils, whether is he indemnified by recovery from his marine underwriters of the sum he paid for these goods plus all the shipping expenses or of the sum which, but for the perils of the sea, he would have obtained for them at destination? It is evident that all the impetus would be removed from trade if the merchant had at the commencement of a venture no expectation of obtaining more at the end than he expended at the beginning. Therefore there is considerable reason for asserting that any repayment for lost goods which leaves the assured in a worse plight than he would be if the venture had been completed is an imperfect indemnity. The first person who drew public attention to the ambiguity of the word "indemnity” was Wilhelm Benecke of Hamburg, who published between 1805 and 1821 his great System of Marine Insurance and Bottomry.1 Removing to London about 1814 or 1815, he published in 1824 his Treatise on the Principles of Indemnity in Marine Insurance, Bottomry, and Respondentia. Benecke concluded that

to secure perfect indemnity the merchant must word his valuation thus: "Valued at so much as the gross proceeds of the goods specified will be at the port of discharge," 1 2nd edition, edited and rearranged by Vincent Nolte. 2 vols. Hamburg, 1851 and 1852.

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stipulating specially whether the duty-paid price or the price in bond is intended. As a merchant would hardly ever be able to determine exactly what price his goods would fetch at destination, he would need for his own protection to insure an amount in excess of his expectation, and to reduce this at the close of the venture by declaring a short interest and getting a return of premium. Then, from the nature of this method of valuation, it is plain that it will not act fairly between assured and underwriter, unless the goods insured are such that the market to which they are shipped is neither raised by their loss nor depressed by their arrival ; in other words, it is hardly applicable except “in the conveyance of current merchandise to and from important commercial places" (Benecke, p. 12). A middle course between the somewhat elaborate and inconvenient system proposed by Benecke, and the stricter ancient system of permitting the merchant to insure nothing beyond the cost of his shipment, is often adopted, namely, the valuing of the goods at invoice cost and an agreed percentage, which may be taken to represent out-of-pocket expenses and anticipated profit. The adoption of such a system simplifies the matter immensely, but it involves the abandonment of the idea of indemnity in either sense, and if the assured covers the whole sum of his valuation he is left either under-insured or over-insured as the market at destination goes up or down. It has, however, become the almost universal practice in England to use valued policies for goods and ships, while of freight policies a considerable proportion is open.

1. Open policies.

Between 1760 and 1825 various cases went to the courts; we are consequently in possession of a series of decisions by Lord Mansfield and his successors on the valuations attached by English law to different interests. As might be expected, from the date of the earliest of this series of decisions, they are based on practices founded on the theory and jurisprudence of the French system of maritime and commercial law. As French legislators before that period based their work on such maxims of Roman law as Nemo debet aliena jactura

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