Insurance on or, if no regular postal commuication exists, then at the time when the last suitable opportunity of communication occured. 15°. If the insurance has been made on ships not yet arrived at the place from whence the risk must begin, or which are not yet ready to enter upon the voyage, or to take in the cargo,―or on goods not yet ready for immediate shipment, mention of this circumstance should be made to the insurer, or of the assured's ignorance thereof, with notice of the advice or letter of order, or the declaration that none exists; besides, mention of the date of the latest accounts he has received concerning the ship or goods. The assured and his mandatary are bound, in the case of damage, to confirm by oath this declaration of ignorance, at the demand of the underwriter. 16°. Bottomry is a loan upon the ship; if the Respondentia. ship be lost, the lender loses his money, but if the ship arrives in safety, then he receives back his principal and also the premium or maritime interest agreed upon. Respondentia is a loan upon the goods, to be repaid to the lender together with maritime interest if the goods arrive, but not to be paid if they are lost. The insurable interest therefore of the lender on respondentia, stands on the same ground with that of the lender on bottomry, viz.: that he has a direct interest in the arrival of the goods (§75). * Loans on bottomry and respondentia, though themselves a species of insurance, may yet be the subjects of insurance, in as much as they are an interest exposed to risk from the perils of the sea. In an insurance on bottomry and respondentia the amount of the capital lent and that of the * ARNOULD. Marine Insurance. Edit. 1877. Part II. Chapt. II., pp. 40 & 86. . 2 premium (Maritime Interest) must be mentioned, each separately, in the policy; if this has been omitted, the premium is held not to be insured. Policies of Insurance on bottomry should contain the following particulars: a. The name of the borrower, even if he be the master. b. The name of the ship by which the voyage is to be performed, and that of the master. c. The voyage and place of destination. 17°. If the master is, on the voyage, under the necessity of taking up money on bottomry, the money-lender can have such bottomry insured even if an insurance has previously been made on the thing hypothecated. 18°. If a ship or goods, already insured, are engaged for bottomry or respondentia, without necessity and only in the interest of the borrower, the money-lender acquires the rights (insurable interest) which the borrower would have had against the underwriter to the amount of the sum advanced. If, however, the moneylender has not had any knowledge of the insurance, and affirms this by oath, the underwriters on the bottomry or respondentia are not released, but the assured money-lender is bound, in case of damage, to cede to them the rights he would have on the insurers of the ship or goods, by virtue of legal subrogation. In case the money-lender directly sues the underwriters on the ship or cargo, the underwriters on the bot* See §§ 69 & 75. 62 . tomry will be released with the restitution of the premium of insurance. With regard to insurance on bottomry and respondentia, Arnould gives the following opinion. "The lender only, as appears by the nature of the contract, can insure the sum advanced. The condition of a bottomry bond is, that if the ship perishes the borrower pays him nothing; if it arrives safely, or perishes during or after deviation, or is sold or broken up at an intermediate port, he pays the capital and the maritime interest; the lender's capital and interest, therefore, being exposed to risk, are consequently insurable. It is otherwise if the terms of the loan make the money repayable in any event, it is then not insurable since there is no sea risk; but in that case it also ceases to be bottomry." "The borrower clearly cannot insure the sum advanced, for the risk is upon the lender and not upon him; and as in case of loss he has nothing to pay, were he to receive the whole sum from the underwriters, he would have a direct interest in the destruction of the vessel. Of course, if the value of the whole interest of the assured in the adventure exceeds the amount of the sum which he has borrowed in bottomry, he may insure this surplus, though not as bottomry." "Agreeably to the principles which guide. them in the case of future freight and expected profit, the French writers and the French Legislature declare that, though the capital lent on bottomry may be insured, yet the maritime interest, which the lender on bottomry is to receive on the prosperous termination of the voyage, cannot be insured; because, as Pothier expresses it, such interest is a gain, which the lender will fail to make if the ship perishes, and not a loss by the perils of the sea. * "In this country (England) and also in the United States, a more liberal practice has prevailed, and both bottomry and respondentia interests may be the subjects of insurance." "Respondentia and bottomry loans are not covered under the general denomination of goods and merchandise; they must be specifically named. Lord Mansfield put this on the ground that by the custom of merchants, respondentia is insured under a special denomination; but Kent, J., has also suggested, as a reason for the rule, that the risk is peculiar, as there is neither average nor salvage; and a capture does not mean a temporary taking only, but one that occasions a total loss.' "Yet, if it can be shown to be the usage in any particular trade to insure these interests under general words, they may be recovered under a policy containing such words only. On the ground of such a custom in the East India trade, a captain was permitted to recover, at respondentia interest, money he had laid out for the use of the ship,-under the general words goods, specie, and effects on board." "Of course if the instrument of hypothecation be not in law what it is described in the policy to be, the policy is invalid. The Court of Common Pleas, therefore, upon the construction of such an instrument, being of opinion that it was not in law a bottomry bond, because it made the lender's claim under it depend, not on the arrival of the ship, but on the arrival of the master, held *POTHIER. D'Assur. Ed. Estrangin No. 32, p. 40. In Hamburg such insurance is permitted, both by the Ordinance of 1731 and the Regulations of 1847. The same is the case in Prussia and in Holland. Spain and Sardinia follow the French rule. See the foreign law collected in Nolte's Benecke I. 295 and 296, Valuation of goods including Insurance, premium and that the lender could not recover under a policy 'on bottomry.' The Court of King's Bench, sitting in appeal, admitted that, had the Court of Common Pleas been correct in their construction of the instrument, the policy as framed would not have covered the interest of the lenders. Accordingly, where the money borrowed was secured by bills on the owner, and by an instrument which purported to be an hypothecation of ship, cargo, and freight, but, in effect, was an unauthorized mortgage of these interests, the Court held, that the lender had no insurable interest in the ship.' 19°. Goods may be insured for the full value they have at the time and place of shipment, with Customs duties. all charges till on board, including the premium of insurance. No separate valuation of each thing insured can be demanded. The actual value of the goods insured may also be augmented with freight, import-duties and other charges, which must necessarily be paid on their safe arrival, provided this be mentioned in the policy. If the thing thus insured, does not arrive at its destination, this augmentation is not binding, in so far as the payment of freight, the import-duties and other charges are then entirely or partly obviated. But if the freight has had to be paid in advance, according to the agreement made with the master before his departure, the insurance holds good with respect thereto. In case of disaster or damage, the fact of payment in advance must be proved. Insurance of expected profits 20°. With regard to expected profit and comand commissions. mission, as subjects of insurance, Arnould makes the following statements. "The same reason which led to the prohibition of insurance in France * ARNOULD, Marine Insurance. Edit. Maclachlan, 1877, p. 40 et seq. |