Before the declaration of war, against the United Provinces, His Majesty’s ships took possession of several ships belonging to Dutch East India men, and took them to St Helena. The Commissioners then insured the ships for their journey from St Helena to London. War followed shortly. The ships were declared as prizes to his Majesty, having ‘belonged, when taken, to subjects of the United Provinces, since become enemies.’ A loss occurred and the Commissioners sought to claim under the policies, saying the interest was in the King.
Held: An insurance taken out on the profits of a ship or other goods which was in its true nature a wager was merely an attempt to evade the 1745 Act. Even though the contract did not come within the word of the Act, it came within its spirit, and was avoided by the Act.
Lord Eldon rejected the argument based on moral certainty: ‘In order to distinguish that intermediate thing between a strict right, or a right derived under a contract, and a mere expectation or hope, which has been termed an insurable interest, it has been said in many cases to be that which amounts to a moral certainty. I have in vain endeavoured however to find a fit definition of that which is between a certainty and an expectation; nor am I able to point out what is an interest unless it be a right in the property, or a right derivable out of some contract about the property, which in either case may be lost upon some contingency affecting the possession or enjoyment of the party.’ and ‘That expectation [of the insured in the case], though founded upon the highest probability, was not an interest, and it was equally not interest, whatever might have been the chances in favour of the expectation . . If moral certainty be a ground of insurable interest, there are hundreds, perhaps thousands, who would be entitled to insure. First the dock company, then the dock master, then the warehouse-keeper, then the porter, and then every other person who to a moral certainty would have anything to do with the property, and of course get something by it.’
Lawrence J (advising their lordships) ‘A man is interested in a thing to whom advantage may arise or prejudice happen from the circumstances which may attend it; and whom it imports, that its condition as to safety or other quality should continue; interest does not necessarily imply a right to the whole or part of the thing, nor necessarily and exclusively that which may be the subject of privation, but the having some relation to, or concerning the subject of the insurance; which relation or concern, by the happening of the perils insured against. may be so affected as to produce a damage, detriment or prejudice to the person insuring. And where a man is so circumstanced with respect to matters exposed to certain risks or dangers, as to have a moral certainty of advantage or benefit, but for those risks or dangers he may be said to be interested in the safety of the thing. To be interested in the preservation of a thing, is to be so circumstanced with respect to it as to have benefit from its existence, prejudice from its destruction. The property of a thing and the interest devisable from it may be very different; of the first the price is generally the measure, but by interest in a thing every benefit and advantage arising out of or depending on such thing may be considered as being comprehended.’
Lawrence J, Lord Eldon
(1806) 2 Bos and Pul MR 269, [1806] EngR 12, (1806) 2 Bos and Pul 269, (1806) 127 ER 630
Commonlii
Marine Insurance Act 1745
England and Wales
Citing:
Appeal from – Lucena v Craufurd CEC 1802
Enemy ships which had been captured were insured for their return to England. A claim arose. The insurance provider said that the claim failed under the 1745 Act as a wager since the claimant had no insurable interest in the ships.
Held: . .
Cited – L Cras v Hughes 1782
Two Spanish register ships had been captured by a squadron of ships of war assisted by men at arms. . .
Cited by:
Adopted – Mark Rowlands v Berni Inns Ltd CA 1985
The plaintiff owned the freehold and had let the basement to the defendant. The plaintiff insured the building. The defendant covenanted to pay to the plaintiff an insurance rent equal to the proportionate cost of insuring the part of the building . .
Cited – Feasey v Sun Life Assurance Company of Canada and Another: Steamship Mutual Underwriting Association (Bermuda) Ltd v Feasey ComC 17-May-2002
The fact that there was more than one insurance policy in place for the same interest would not preclude a claim under one of them. A mutual underwriting group insured members against personal injury and so forth through ‘lineslip’ policies. The . .
See Also – Lucena v Craufurd HL 29-Jun-1808
Commissioners were authorized by a commission granted in pursuance of a statute, to take into their possession ships and goods belonging to subjects of the United Provinces, which had been or might be detained in or brought into the ports of this . .
Cited – Glengate-KG Properties Ltd v Norwich Union Fire Insurance Society Ltd and Others CA 12-Jan-1996
NU the insurer of a consequential loss insurance policy, appealed against the decision, on a claim brought by G, the owners of a property under redevelopment, which had suffered a fire as to G’s resultant loss of rental income from the property. The . .
These lists may be incomplete.
Updated: 09 July 2021; Ref: scu.184480