C. A. 1905 If it was the duty of the owners to take out a policy for the benefit of the charterers it is not necessary to prove intention, BOSTON FRUIT and in this case it is submitted that the relationship between COMPANY Craggs & Sons and the plaintiffs was such that the plaintiffs BRITISH AND are entitled to the benefit of the policy, whatever may have v. FOREIGN MARINE INSURANCE COMPANY. been the intention of Craggs & Sons. The cases cited in Arnould on Marine Insurance, 7th ed. vol. i. s. 173, in support of the proposition, that the intention of the person who directs the insurance to be effected is the test in determining who are entitled to the benefit of the policy, do not bear out that proposition. In Routh v. Thompson (1) the intention of the captors was to insure the ship for their own benefit; but Lord Ellenborough held that they must be taken to have insured for the benefit of the Crown, although the Crown was not mentioned. That intention is not the test appears from Lucena v. Craufurd (2) and Grant v. Hill. (3) The only case which points in a contrary direction is Irving v. Richardson (4); but in that case there was no duty on the part of the insurer, who was a mortgagee of the ship, to insure on behalf of the mortgagor. In Watson v. Swann (5) the plaintiff could not have been contemplated as being a person for whose benefit the policy should enure at the time when it was effected, and therefore it was held that he could not sue on the policy. Byas v. Miller (6) depends on the same principle. This policy is made on behalf of whomsoever it may concern, and if the plaintiffs fall under that description they are entitled to the benefit of the policy. In order to take a benefit under the policy a person must be named or sufficiently designated therein; but the question does not depend upon the undisclosed intention of the parties: Keighley, Maxsted & Co. v. Durant. (7) That is a general principle of law, and there is nothing in the law of marine insurance to take this contract out of the general rule. (1) (1809) 11 East, 428; (1811) 13 East, 274; 10 R. R. 539. (2) (1806) 2 Bos. & P. (N.R.) 269; 6 R. R. 659. (3) (1812) 4 Taunt. 380. (4) (1831) 2 B. & Ad. 193; 36 R. R. 541. (5) (1862) 11 C. B. (N.S.) 756. (6) (1897) 3 Com. Cas. 39. (7) [1901] A. C. 240. [They also referred to Hill v. Scott (1) and Scott v. Globe Marine Insurance Co., Ld. (2)] U. A. 1905 COMPANY v. FOREIGN INSURANCE COMPANY. Scrutton, K.C., J. A. Hamilton, K.C., and Maurice Hill, for BOSTON FRUIT the defendants. By the charterparty the owners took on themselves the risks referred to in clause 17 whether they insured BRITISH AND or not, and therefore the charterers have no interest in the policy. The person entitled to sue on a policy must be either the broker by whom the policy is effected or the person on whose behalf it is intended to be effected: Watson v. Swann (3), per Willes J. A purchaser of a ship cannot sue on a policy taken out by a previous owner, though he becomes a person having an interest in the policy and though he ratifies the policy: Arnould on Marine Insurance, 7th ed. vol. i. s. 174; and see Duer on Marine Insurance, vol. ii. pp. 28-38. [VAUGHAN WILLIAMS L.J. In Phillips' Law of Insurance, s. 179, it is stated that policies are frequently made in reference to a future interest.] Here all the substantial interest in the ship is in the owners. There is no duty on the owner under this form of charterparty to insure for the charterer: Aira Force Steamship Co., Ld. v. Christie. (4) If the charterer seeks to shew that an owner who has no duty to insure for his benefit did in fact insure for him, it is for him to prove it; but in the present case the owners did not effect this policy for the benefit of the charterers, and this is shewn by the proceedings in the United States. The policy is to enure for those only for whose benefit it was intended to be effected. Willes J., in Watson v. Swann (5), merely stated the law as it had been previously stated in the text-books: Phillips' Law of Insurance, 3rd ed. ss. 382, 385; Parsons' Marine Insurance, 1st ed. vol. i. p. 47; Arnould on Marine Insurance, 2nd ed. vol. i. p. 209; and the question whose interests were intended to be insured is a question for the jury: Irving v. Richardson. (6) Here the question for the jury would be, Did Craggs & Sons intend to insure on behalf of themselves alone, or did they intend to (1) (1895) 1 Com. Cas. 140, 200. (4) (1892) 9 Times L. R. 104. (6) 2 B. & Ad. 193; 36 R. R. 541. C. A. insure on behalf of the charterers also? In Byas v. Miller (1) 1905 it was held that the plaintiff, who was not the principal of BOSTON FRUIT a broker at the time when he obtained the slip from the COMPANY defendant, an underwriter, the defendant not being told who BRITISH AND the principal was, could not ratify the contract made by the v. FOREIGN MARINE INSURANCE COMPANY. broker, and could not maintain against the defendant an action [VAUGHAN WILLIAMS L.J. You say it means the expenses which are covered by the bargain contained in clause 2?] Yes. "Stress of weather," unless it causes damage to the ship, is excluded, and that damage is covered by clause 1. Clause 3 is a common one, but it is not easy to understand the reason for it. Unless clause 1 applies, the charterer has to continue paying the hire of the ship. Clause 22 was inserted because of the very general words of clause 3; it was for the protection of the owners, and to shew that that clause did not (1) 3 Com. Cas. 39. (2) 13 East, 274, 276; 10 R. R. 539. (3) (1814) 2 M. & S. 485; 15 R. R. 317. C. A. 1905 COMPANY V. FOREIGN include insurance. The charterers may have a contractual right as against the owners, but they have no direct right as against the underwriters. Clause 22 is very similar to that in BOSTON FRUIT Aira Force Steamship Co. v. Christie. (1) There the action was brought by the owners against the charterers for injury to the BRITISH AND ship caused by their negligence, and the defendants unsuccessfully raised the point which is raised by the present plaintiffs. COMPANY. If primâ facie the charterers have an interest under the general words of the policy, there is, it is submitted, abundant evidence to rebut this presumption. If, when a ship is in the hands of the charterer, the owner comes forward and gives bail in order to prevent the seizure of the ship, is this a voluntary payment which the owner cannot recover under the collision clause, because he is under no personal liability for the collision? Is it a proper inference that the collision clause was inserted for the benefit of the charterers? It is said that the insurance must have been for the benefit of the charterers, because the owners had a very limited interest in the ship. But the interest of the owners was really the greater. The collision clause clearly contemplates the liability of the ship in rem. Ratification must be within a reasonable time: Pollock on Contracts, 7th ed. p. 98. In the present case the collision took place in 1896. It is conceded that there may be ratification after the loss, but here the time which elapsed exceeded any possible limit of reasonableness, and the right to ratify is excluded. Even if the onus is on the defendants, it is shifted when it is shewn that the instructions for the policy were given by the agents of the owners. On the construction of the charterparty it is not clear that there is an obligation on the owners to insure, and, even if there is, it does not follow that there was an obligation to have a collision clause inserted in the policy. Carver, K.C., in reply. A great part of general average would fall upon the charterers, and that liability, it is contended, is covered by the policy. There is really no evidence as to "intention" one way or the other. The admissions (1) 9 Times L. R. 104. MARINE INSURANCE C. A. 1905 which were made in the American action were made only for the purposes of the argument in that case. BOSTON FRUIT acting on behalf of the adventurers. COMPANY v. FOREIGN The brokers were Aira Force Steamship Co. v. Christie (1) is distinguishable. BRITISH AND In that case the charterparty provided that the owners "shall MARINE pay for the insurance on the vessel (if any)." Moreover, the COMPANY. report of the case does not state that there was a demise of the ship, as there was here. INSURANCE The charterparty imposed on the owners an obligation to insure the ship, and, when they effected a policy the terms of which are wide enough to include the charterers, it must be assumed that they intended thereby to fulfil that obligation. If A. effects an insurance upon dynamite to be carried by a specified ship, that would primâ facie mean his own goods, and the policy would not cover dynamite belonging to B. This explains the decision in Byas v. Miller. (2) If there is nothing else to shew what was intended, the Court would be driven to evidence of intention. In the present case there can be no doubt as to the subjectmatter of the policy, and primâ facie every one who has an interest in that subject-matter is covered by the policy. It must be shewn that it was intended to exclude the charterers. The charterers have in effect paid the owners for the insurance. Until the present action there had been no litigation between the charterers and the owners; the charterers were brought into the American proceedings, and they cannot have given up their rights under the policy by an admission which they made in that litigation for a different purpose. A contract may be ratified at any time before it has come to an end. The plaintiffs did not know what were the terms of the policy until they sought to obtain the benefit of it. Knowledge is essential to election. Cur, adv. vult. Feb. 6. VAUGHAN WILLIAMS L.J. read a judgment in which, after stating the facts as above, he continued:-The name of the Boston Fruit Company, the plaintiffs, nowhere (1) 9 Times L. R. 104. (2) 3 Com. Cas. 39. |