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he elects to abandon the thing insured; otherwise the loss can only Chap. X. be treated as partial (q). Upon abandonment the insurer is entitled to all the interest and rights of the assured in the thing

insured (r).

By adjustment is meant the settlement in case of loss between Adjustment. the assured and the insurers of the amount to be paid by each insurer. The sum which the assured can recover in respect of a Measure of loss is called the "measure of indemnity" (s). indemnity.

clause.

The policy generally contains what is called the "suing and "Suing and labouring clause," which provides that, in case of loss or mis- labouring " fortune, the assured may "sue, labour and travel" for the defence or recovery of the ship or goods without prejudice to the insurance, and that the insurers will contribute to the expenses (t). This engagement is supplementary to the contract of insurance, and the insurer may recover these expenses, although he has been paid for a total loss (u).

The policy invariably contains the "memorandum," which pro- "Memovides that:

(1) Specified goods are "warranted free from average, unless general, or the ship be stranded."

(2) Other specified goods are warranted free from average under

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(3) All other goods, and also the ship and freight, are warranted free from average under 3 per cent., unless general, or the ship be stranded (x).

randum."

of insurer.

When the insurer pays for a total loss, he is entitled to all the Subrogation assured's interest in and rights and remedies in respect of the thing insured (y); and if he pays for a partial loss he is subrogated to all rights and remedies of the assured in respect of the thing insured, but he acquires no title to the thing (z).

When one person in good faith effects a contract of marine Ratification

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by principal of contract

Chap. X. insurance on behalf of another, that other person may ratify the contract even after he is aware of a loss (a).

made on

his behalf.

Policies of fire assurance.

Contracts of indemnity.

Insurable interest.

Ratification of contract

after loss.

Fire Assurance.

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Policies of fire assurance are not, in the nature of them, assignable, nor intended to be assigned, from one person to another, without the consent of the office" (b), nor have they been made assignable by statute. Upon a sale of the property insured, no interest in the policy or insurance moneys passes to the purchaser unless it has been so agreed (c).

They are contracts of indemnity, the assuror engaging to make good, within certain limited amounts, the losses sustained by the assured in their buildings and effects (d). And it follows, as in other contracts of indemnity, that, upon payment of the amount of the loss, the assuror is entitled to be put in the place of the assured, and to succeed to all the ways and means by which the assured might have protected himself against or reimbursed himself for the loss (e). Therefore, after a contract for sale of property insured under which the purchaser is not entitled to the benefit of the insurance, the vendor, if he is paid the full purchase-money without abatement, cannot also recover or retain the insurance money, for he has suffered no loss (f). And, as in all cases of assurance, whether on lives, ships, or other things, the assuror must be informed by the party effecting the assurance of all material facts affecting the subject-matter (g).

It is necessary that the party insuring should have an interest or property at the time of insuring, and at the time the fire happens (h).

When a contract of fire insurance is made by one person on behalf of another without authority, the person on whose behalf

(a) S. 86. See Boston Co. v. British Co., [1906] A. C. 336.

(b) Lynch v. Dalzell, 4 Bro. P. C. 431;
quoted by Lord Hardwicke in Sadlers'
Co. v. Badcock, 2 Atk. 557.

(c) Rayner v. Preston, 18 Ch. D. 1.
(d) Dalby v. India, &c. Assurance Co.,
15 C. B. 387, per Parke, B. See ante,
p. 146.

(e) Darrell v. Tibbitts, 5 Q. B. D. 560;
per Cairns, L. C., Simpson v. Thomson,

3 App. Cas. 284; West of England Co. v. Isaacs, [1897] 1 Q. B. 226; Phoenix Co. v. Spooner, [1905] K. B. 753; ante,

P. 154.

(f) Castellain v. Preston, 11 Q. B. D. 380.

(g) Lindenau v. Desborough, 8 B. & C. 586. Ante, p. 146.

(h) Sadlers' Co. v. Badcock, 2 Atk. 555; Rayner v. Preston, 18 Ch. D. 1, 7. And see 14 Geo. 3, c. 48, ante, p. 148.

it was made cannot, as in the case of marine insurance (i), ratify Chap. X. the contract after he is aware of a loss (k).

In 1774 the statute 14 Geo. 3, c. 78 (1), was passed, which, in Re-instatecase of fires within the City of London and certain other limits, ment of property enabled and required the assurors to expend the insurance money insured. upon the property upon request by any person interested in the property or upon suspicion of arson. It has been held that these provisions are not confined to property within the places mentioned, in the Act, but are of general application (m). This section does not apply to insurances of chattels (n).

(i) Ante, p. 159.

(k) Grover v. Mathews, [1910] 2 K. B. 401. (7) S. 83.

(m) Ex p. Goreley, 4 De G. J. & S.
477. But see Westminster Fire Office v.
Glasgow, &c. Soc., 13 App. Cas. 699.
(n) Lees v. Whiteley, 2 Eq. 143.

11

G.P.P.

Chap. XI.

Debt must

be ascertained
sum-and
due.

Contract to lend money.

Equitable debts.

CHAPTER XI.

DEBTS-GUARANTEES.

Debts.

A DEBT is an ascertained sum of money due from one person to another. As a debt must be an ascertained sum, damages that may be recovered in an action are not a debt until their amount is ascertained by judgment (a). As the money must be due, rent, or the gale of an annuity, is not a debt till it becomes due (b). But a debt is not the less a debt because the payment is deferred until the happening of an event which must happen (c). On the other hand, a contract to pay a certain sum of money on the happening of an event which may never happen does not create a debt unless and until the event happens (d). A liability of this nature is sometimes called a contingent debt. A contract to lend money does not create a debt, and if the money is not lent the intended borrower is only entitled to damages for the actual loss caused by the breach of contract (e); but a contract with a limited company to take up and pay for any debentures of a company may be enforced by specific performance (ƒ).

An "equitable debt" is a liquidated sum of money owing in equity from one person to another (g), e.g., where a trustee holds a sum of money in trust for his cestui que trust absolutely; but "a trustee is not an equitable debtor to the cestui que trust until there is money in his hands which he ought to pay to his cestui que trust,

(a) Re Charles, 14 East, 197; Jones v. Thompson, E. B. & E. 63.

(b) See Co. Litt. 292 b. Per Lind-
ley, L. J., Webb v. Stenton, 11 Q. B.
D. 526.

(c) Co. Litt. 292 b; Goss v. Nelson,
1 Burr. 226.
may mean either

"owing "

"Due

or "payable," according to the context; Ex p. Kemp, 9 Ch. 383;

Re Stockton, &c. Co., 2 Ch. D. 103.

(d) Ex p. Kemp, sup.; Booth v. Trail, 12 Q. B. D. 8.

(e) South African Territories v. Wallington, [1898] A. C. 309.

(f) Companies Act, 1908 (8 Edw. 7, c. 69), s. 105.

(g) Per Lindley, L. J., Webb v. Stenton, sup.

or until he has made himself personally liable to pay money to his Chap. XI. cestui que trust by reason of some breach of trust or default in the performance of his duties as trustee " (h).

woman.

A married woman is not in the position of an ordinary debtor, Married even though she has separate estate (i); she cannot be made a bankrupt unless she trades separately (k), and she cannot be committed to prison under the Debtors Act (1).

Before 1854 there were many laws against usury, that is, lend- Moneying money at interest, and restricting the rate of interest which lending. might lawfully be taken (m), but in that year all the statutes and existing laws against usury were repealed (n). The Court of Chancery, however, continued to exercise its jurisdiction to relieve the class of persons known as "expectant heirs" from what it might consider to be unrighteous money-lending bargains (o).

Then, in 1900, the legislature thought it desirable to again Moneylenders impose restrictions upon money-lenders, and in that year the Act, 1900. Moneylenders Act (p) was passed. That Act applies to every person whose business is that of money-lending; but pawnbrokers,

lender."

in respect of business carried on under the Pawnbrokers Act (q), "Moneybankers, insurance offices, friendly societies, and some other similar businesses are exempted from the Act (r).

unconscion

The effect of the Act of 1900 is shortly as follows: When a Harsh and money-lender sues to recover a loan or enforce a security, or a able transborrower applies to the Court for relief, the Court, if satisfied that actions. the interest or charges are excessive and the bargain harsh and unconscionable, or that the transaction is such that a Court of Equity would give relief (s), may relieve the borrower upon the terms of payment of what the Court adjudges to be fairly due, and to be reasonable in respect of the principal, interest and

(h) Per Fry, L. J., Id. p. 530. (i) Re Grissell, 12 Ch. D. 490, per Cotton, L. J.; Pelton v. Harrison, [1892] 1 Q. B. 118.

(k) Re Lynes, [1893] 2 Q. B. 113; Re Hewett, [1895] 1 Q. B. 328; Re A Debtor, [1898] 2 Q. B. 576; Re Frances Handford & Co., [1899] 1 Q. B. 566; Re Worsley, [1901] 1 K. B. 309; Re Simon, [1909] 1 K. B. 201.

(1) Scott v. Morley, 20 Q. B. D.

120.

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