In a time policy of marine insurance on ship the ordinary perils insured against (including ‘ barratry of the master ‘) were enumerated, and the ship was warranted ‘free from capture and seizure and the consequences of any attempts thereat.’ In consequence of the barratrous act of the master in smuggling, the ship was seized by Spanish revenue officers, and proceedings were taken to procure her condemnation and confiscation. In an action on the policy to recover expenses incurred by the owner in obtaining her release, it was argued that the master’s barratrous smuggling was the cause of the vessel’s loss, rather than the capture or seizure or its consequences from which the vessel was warranted free by the FC and S clause.
Held: affirming the decision of the Court of Appeal, that the loss must be imputed to ‘ capture and seizure ‘ and not to the barratry of the master, and that the underwriter was not liable. There is no question of dismissing a vessel’s capture and detainment in such circumstances as a mere incident of, or sequela to, an underlying cause such as barratry.
The Earl of Selborne viewed such a construction of the policy and the warranty taken together as ‘leading to consequences altogether destructive of the whole operation of the warranty’
Lord Blackburn said that it was true that the insurance had not been warranted free from barratry, but went on: ‘the barratry would itself occasion no loss at all to the parties insured. If it had not been that the Spanish revenue officers, doing their duty (they were quite right in that respect), had come and seized the ship, the barratry of the captain, in coasting along there, hovering as we should call it along the coast, in order that the small smuggling vessel might come and take the tobacco, would have done the assured no harm at all. The underwriters do undertake to indemnify against barratry; they do undertake to indemnify against any loss which is directly sustained in consequence of the barratry; and in this case, as I said before, I think the seizure was as direct a consequence of the barratry as could well be. But still, . . it was the seizure which brought the loss into existence – it was a case of seizure. Then why should it not be protected by this warranty?’
Lord Bramwell noted the argument that the loss was not from the seizure but in truth from the barratry, and the ‘ingeniously’ made suggestion that the seizure was ‘an intermediate step’, and responded: ‘But it was the ultimate and final step which occasioned the loss’
Lord Fitzgerald, after observing that barratry ‘may be either harmless or effect but a small loss’ put the question: ‘By what was the loss occasioned? I apprehend that there can be but one answer to this question, namely, that the loss arose from the seizure. There was no loss occasioned by the act of barratry. The barratry created a liability to forfeiture or confiscation, but might in itself be quite harmless; but the seizure, which was the effective act towards confiscation, and the direct and immediate cause of the loss, was not because the act of the master was an act of barratry but that it was a violation of the revenue laws of Spain.’
Earl of Selborne LC, Lord Blackburn, Lord Bramwell, Lord Fitzgerald
1882-1883) 8 App Cas 393, [1883] UKLawRpAC 22
Commonlii
England and Wales
Cited by:
Cited – Navigators Insurance Company Ltd and Others v Atlasnavios-Navegacao Lda SC 22-May-2018
The vessel had been taken by the authorities in Venezuela after drugs were found to have been attached to its hull by third parties. Six months later it was declared a constructive total loss. The ship owners now sought recovery of its value from . .
Lists of cited by and citing cases may be incomplete.
Updated: 26 July 2021; Ref: scu.666172 br>