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CHAPTER VI

THE POLICY: PART II

The Perils Insured against

So far the policy has merely detailed the person and objects insured, the valuation, the amount of it covered by the underwriters concerned, the commencement, duration, and end of the adventure for which the insurance is made. The second part of the policy describes the kind of risk against which the underwriter grants the assurance, the perils insured against. The formula in which the risks are detailed is very striking: the underwriters or assurers are represented as being content to bear and as actually taking upon themselves certain risks here specified as adventures or perils. It is as if they were replying to definite questions put to them asking whether they agreed to accept the risk of each of the perils named one by one, and were answering to each question, "Content, we take that upon ourselves.” The result is that while the underwriters assent categorically to cover all the named perils, they are just as plainly exempt from liability to indemnify the assured against loss arising from any peril not specified. Care has therefore been taken to make the formula as comprehensive as possible. Arnould says (p. 31) of the words as we now know them: "The clause in its present state may fairly be regarded as affording a protection against almost every casualty which can possibly happen in the course of any voyage"; but when he adds the remark, "and for which it is meant that the

underwriter shall be answerable," he suggests the inquiry whose meaning or intention is to be taken as determining the perils that ought to be covered. That the formula contained in the policy has been found fairly adequate to the requirements of the commercial community is proved not only by its almost universal acceptance in English insurance, but even more from the fact that in all its essentials it is the form adopted in the United States.

This paragraph of the policy falls into two parts: the first enumerates certain definitely named adventures of perils; the second contains what are termed "the general words."

Touching the adventures and perils which we the assurers are contented to bear and do take upon us in this voyage, they are . . .

In this introduction to the description of the risks assumed by the underwriters there are two points to be specially noticed. First, the designation of these risks as "adventures and perils" indicates that contingencies contemplated are not the ordinary inevitable occurrences common to all navigation, but are such extraordinary fortuitous events as may be reckoned accidental. This principle will be found of great importance in the consideration of the amounts recoverable from underwriters, excluding as it does loss or damage arising from wear and tear and from inherent defect (vice propre). Next, the introduction of the seemingly unnecessary words "in this voyage" deserves attention; the words are not found in the Florentine form of 1523, but as they occur in a London form of 1613, the introduction of them may be entirely the work of English underwriters. Their effect is obvious: they give additional definiteness to the limitations of space and time within which the underwriter's liability is in force; they imply that not merely are the underwriters liable for the accidents occurring between certain termini in the course of navigation in the usual way between them, but that it is only for such accidents as do so occur, not for the consequences of earlier or the causes of later disasters. This sharp and insistent definition of what may be called the sphere of the

policy coming into view so early as the beginning of the seventeenth century, sufficiently indicates the frame of mind that is ready to accept and carry out in its entirety the maxim, "Regard the immediate cause and not the remote one" (causa proxima non remota spectetur).

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It is natural that the first class of perils enumerated in a marine policy should be perils of the seas; so natural, that it is more than probable that ninety-nine out of every hundred readers of a marine policy never pause to consider the exact intention of the words. The first impression of the meaning is usually that they cover everything that happens at sea. But clearly everything that happens at sea is not a peril, nor is it a peril "of" the seas. Evidently the framers of the policy (who in this section have most closely followed the Florentine model of 1523) were of this opinion, for they proceed to name other adventures, some of which could not happen except at sea-such as perils of men-of-war, pirates, jettisons, takings at sea-with others which could happen either on land or at sea, such as fire, restraints and detainments of kings, etc. In Cullen v. Butler, 1815, Lord Ellenborough distinguished strongly between "peril on the seas” and “perils of the seas.” It therefore becomes necessary to learn exactly what is covered by the words "perils of the sea," and since July 1887 assured and underwriters have been able to know what the House of Lords considers is contained in the words, and consequently to be sure of the sense in which the words will now be interpreted in every court inferior to the House of Lords.

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In the case of the Xantho,, 1887,2 an action was brought

1 5 M. & Sel. Phillips remarks (§ 1099): "The distinction is fanciful, since it would put winds and lightnings out of the class of perils of the seas, as being those of the atmosphere," etc.; but this seems over subtle, as Lord Ellenborough was merely showing that one could only claim under the general words and not as "perils of the sea," damage resulting from being fired into through mistake in being taken for an enemy.

2 L. R. 12 App. Cases 503.

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against the owners of the Xantho, by owners of cargo on board that vessel lost by a collision with the Valuta,, arising from the careless navigation of the Xantho. The question arose out of the contract of affreightment, in which the words "perils of the seas occur. In his judgment Lord Herschell put his view of the meaning of the words "perils of the seas " in the following terms: "I think it clear that the term 'perils of the seas' does not cover every accident or casualty which may happen to the subject matter of the insurance on the sea. It must be a peril 'of' the sea. Again, it is well settled, that it is not every loss or damage of which the sea is the immediate cause that is covered by these words. They do not protect, for example, against that natural and inevitable action, which results in what may be described as wear and tear. There must be some casualty, something which could not be foreseen as one of the necessary incidents of the adventure. The purpose of the policy is to secure an indemnity against accidents which may happen, not against events which must happen." The judgments of the other Lords practically concurred with this; and it was clearly laid down that as respects the casualty of collision, "perils of the seas had the same meaning in a contract of affreightment as in a policy of insurance. These expressions of Lord Herschell are almost a reproduction of what was said by Mr. Justice Lush in Merchants Trading Company v. Universal Marine Insurance Company, 1870:1 "The term 'perils of the sea' denotes all marine casualties resulting from the violent action of the elements, as distinguished from their natural, silent influence upon the fabric of the vessel-casualties which may, and not consequences which must, occur." Lowndes (Law of M. I. p. 107) justly objected to the word "violent" in this definition, for he said a calm or a fog may be as dangerous as a storm. In reality a far greater objection attaches to the word "natural," for surely tempest and mist are as natural as gentle breezes and brightness. But the second part of the definition is, with the exception

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1 M'Arthur, p. 111, refers L. R. 9 Q. B. 596.

of one word, admirable. It is not clear what induced Mr. Justice Lush to use the word "consequences," involving as it does reference to unnamed causes, instead of some less intensive and merely descriptive but perfectly adequate word, such as "incidents." This definition completely disposes of the adequacy of such explanations as make inevitableness 1 of an occurrence the test of its being a peril of the sea; if it is really inevitable, it is too completely a part of the ordinary, necessary routine of the voyage to be accidental. Similarly, Mr. Justice Lush's definition excludes from perils of the sea all ordinary tear and wear arising from the nature of the objects insured, and all the incidental results of such ordinary occurrences as must take place in the course of the specified adventure. In the Inchrhona case (Hamilton v. Pandorf, House of Lords, 14th July 1887 2) Lord Bramwell said, "I think the definition of Lord Justice Lopes very good. is a sea damage, occurring at sea, and nobody's fault."" "sea damage seems vague.

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To illustrate the class of damage excluded by the definitions of Mr. Justice Lush and Lord Herschell. If a vessel undertakes a voyage to a port, the approach to which is notoriously such that the vessel must ground every low water, loss or damage from such grounding is not chargeable to underwriters as the consequence of a peril of the seas. Using the words of Lord Tenterden in Wells v. Hopwood, 18323 (Lowndes, Law of M. I. p. 198), the ground is not "taken under any extraordinary circumstances of time or place, by reason of some unusual or accidental occurrence." Of such a character is the approach to Limerick. There are also many tidal harbours in which it is impossible for vessels above a certain size to lie safely always afloat. If a vessel above that size is sent to such a harbour the underwriter is not responsible for the results of such grounding as occurs in the ordinary course of such a vessel's stay at that port. But the intervention of a comparatively

See Phillips' definition below, p. 99.

2 L. R. 12 App. Cases 518.

3 3 B. & Ad. 20.

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