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necessary in England to show that there would have been som、 profit, and then the valuation attaches.

It is very common to insure profits, in fact, without saying anything about them, by a valuation of the goods sufficiently high to include all the profits that can be made upon them.

In an open policy, where the value insured is to be determined by evidence, the value of the property—whether ship or goods-which is insured, is its value when the insurance took effect, including the premium of insurance; as the law of insurance intends indemnifying the assured as accurately as may be for all his loss. If a ship be insured, its value throughout the insurance is the same as at the beginning, without allowance for the effect of time upon it. And all its appurtenances, in a mercantile sense of this phrase, enter into its value.

While the value of the property does not vary with time. the interest of the insured at. the time of the loss (which may be the whole, or half, or any other part) is that on which he founds his claim. Thus, if an owner of a ship is insured $20,000 on ship A. B., valued at $30,000, and afterwards sells half of the ship, and it is subsequently lost, he recovers only $10,000. But if he owned half originally, and insured that, and before the loss acquired the other half, he recovers only for the half insured.

Generally, the value of goods is their invoice price, with all those charges, commissions, wages, etc., which enter into the cost to the owner when the risk commences. The drawback is not deducted; and the expenses incurred after the risk begins, as for freight, etc., are not included. And the rate of exchange at the beginning of the risk is taken.

SECTION III.

THE INTEREST WHICH MAY BE INsured.

A MERE possibility or expectation cannot be insured, but any actual interest may be. If one has contracted to buy goods, he may insure them, and will recover if the property be in him at the time of the loss; for if they are then destroyed, it will be

his loss. (For what is meant by the property being in him, see the chapter on Sales.)

If one has taken on himself certain risks, or agreed to indemnify another for them, he may insure himself against the same risks. The policy may express and define the interest in such a way that any change in the nature of it will discharge the insurance. If it is not so defined and declared, a change, as from the interest of an owner to that of a mortgagor, or of a mortgagee, will not defeat the policy.

A mere indebtedness to a party on account of property gives the creditor no insurable interest; thus, one who repaired a house or a ship cannot insure the house or ship merely because the owner owes him; but if the creditor has a lien on the property, this is an insurable interest. And, generally, every bailee or party in possession of goods, with a lien on them, may insure them. And a lender on bottomry or respondentia may insure the ship or goods. And any persons who have possession of property, or a right to possession, and may legally make a profit out of it, as factors on commission, consignees, or carriers, may insure their interest.

If a mortgagee be insured, and recovers from the insurers, he, generally, at least, transfers to them the security for his debt, or accounts with them for its value; because, to the extent of that security, he has met with no loss, and, if he did not transfer it, would recover his money twice. It should, however, be added that where a mortgagee, or one having a lien, insures his own interest in property, a payment of a loss to him by the insurers does not discharge the debt for which the mortgage or the lien is the security. Where, however, the mortgagee is trustee for the mortgagor, as where the mortgagor causes insurance to be made on the premises, payable to the mortgagee in case of loss, or where the mortgagee effects insurance at the expense of the mortgagor, with his consent, payment by the insurers would go in discharge of the debt.

A policy usually adds to the description of the property, "lost or not lost." This phrase makes the policy retrospective; and attaches it to the property if that existed when, by the terms of the policy, the insurance began, whether this were for a

voyage or for a certain time, although it had ceased to exist when the policy was made.

An interest which was originally valid and sufficient cannot be defeated by that which threatens, but does not complete an actual divestment of the interest in property; therefore, not by attachment, or an execution for debt; nor by liability to seizure by government for forfeiture; nor a right in the seller to stop the goods in transitu; nor capture; because, after all these, the property may remain in or return to the insured. But sale on execution, actual seizure by government and forfeiture, stoppage in transitu, or condemnation by court as lawful prize, divest the property, and therefore discharge the insurance.

The insurance never attaches if the interest is illegal originally; and it is discharged if the interest becomes illegal subsequent to the insurance, or if an illegal use of the subjectmatter of the insurance is intended. And any act is illegal which is prohibited by law, or made subject to a penalty. The effect would be the same if the policy opposes distinctly the principles and the purposes of law, as wagering policies do.

Mariners, or mates, are not permitted by the law-merchant to insure their wages, but may insure goods on board, bought with their wages; and one legally interested in the wages of a mariner may insure them; as one to whom they are assigned by order or otherwise. A master may insure his wages, commissions, or any profit he may make out of his privilege.

An unexecuted intention of illegality, if not distinctly acted upon, will not defeat a policy; nor a remote and incidental illegality; as smuggling stores on board, or not having on board the provisions required by law; nor a change from legality to illegality, which cannot be proved or supposed to be known to the insured. And upon these questions, the court, if the case be balanced, will incline to the side of legality. A cargo may be insured which is itself lawful, but was purchased with the proceeds of an illegal voyage.

If a severable part of a cargo or a voyage is legal, it may be insured, by itself, although other parts are illegal. But if a part of the whole property insured together is illegal, this avoids the whole policy.

A compliance with foreign registry laws is not necessary, and with our own probably is not, to sustain the insurance of an actual owner in good faith

Freight is a common subject of insurance. In common conversation, this word means sometimes the cargo carried, and sometimes the earnings of the ship by carrying the cargo. The latter is the meaning in mercantile law, and especially in the law of insurance. It includes in insurance law the money to be paid to the owner of a ship by the shipper of goods, and also the earnings of an owner by carrying his own goods; and the amount to be paid to the owner by the hirer of his ship, and also the profits of such hirer, either by carrying his own goods, or by carrying, for pay, the goods of others.

An interest in freight begins as soon as the voyage is deter. mined upon, and the ship is actually ready for sea, and goods are on board, or are ready to be put on board, or are promised to be put on board by a contract which binds the owner of the goods to put them on board, for that voyage.

If a ship is insured on a voyage which is to consist of many passages, and sails without cargo, but a cargo is ready for her, or contracted for her at the first port she is to reach and sail from, the owner has an insurable interest in the freight from the day on which she sails from his home port.

If one makes advances towards the freight he is to pay, and this is to be repaid to him by the ship-owner if the freight is not earned, the advancer has no insurable interest in what he Advances; but if he is to lose it, without repayment, if the ship be lost or the freight not earned, he has an insurable interest.

SECTION IV.

PRIOR INSURANCE.

OUR marine policies generally provide for this by a claus ☛ the effect that the insurer shall be liable only for so much of the property as a prior insurance shall not cover. The second covers what the first leaves, the third what the second leaves, and so on; and as soon as the whole value of the property is covered, the remainder of that policy, and the subsequent poli

cies, have no effect. This priority relates not merely to the date of the instrument, but to the actual time of insurance. Sometimes the policy provides that the insured shall recover only the same proportion of the whole loss which the amount insured in that policy is of the whole amount insured by all the policies on the whole property.

Where no provision is made in the policies as to priority, all are insurers alike, but all together only of the whole value at risk. The insured, therefore, may recover of any one insurer at his election, and this insurer may compel the others to contribute to him in proportion to their respective insurances.

Insurances may be not successive, but simultaneous, and then no clause as to prior policies has any application, for then no policy is prior to another, and all the insurances are liable pro rata. They are simultaneous, if said to be so in the policies, which is common; or if made on the same day, and bearing the same date, and there is no evidence as to which was, in fact, first made.

SECTION V.

DOUBLE INSURANCE AND RE-INSURANCE.

If there be double insurance, either simultaneously or by successive policies in which priority of insurance is not provided for, we have seen that all are insurers, and liable each in proportion; thus, if all the policies cover twice the value of the property insured, each policy is valid for one-half of its own

amount.

But there is no double insurance, unless all the policies insure the very same subject-matter, against the same risks, and, taken together, exceed its whole value.

Many insurances of the same subject-matter, for the benefit of different parties, do not constitute double insurance.

Re-insurance is lawful; for whoever insures another has assumed a risk against which he may cause himself to be insured. This is often done by companies who wish to close their accounts, to lessen their risks, or get rid of some special risk.

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