Muirhead v The Forth and North Sea Steamboat Mutual Insurance Association: HL 17 Nov 1893

A mutual steamboat insurance company passed a special resolution altering one of its articles of association by inserting a regulation that it should be a condition of any insurance effected by the company on any vessel that the assured should keep one-fifth of the value of such vessel uninsured. The resolution was confirmed on the same day as it was passed contrary to the provisions of section 51 of the Companies Act 1862, which require a fortnight to elapse between the passing and confirming of a special resolution. After the resolution was registered a shipowner insured a vessel with the company for pounds 1000. The declared value of the vessel was pounds 3750, and it was provided in the policy that the articles of association should be deemed part thereof. The shipowners subsequently insured the same vessel with another company for pounds 3000.
In an action by the shipowner, held ( aff. the judgment of the First Division) that as the regulation contained in the special resolution was not contrary to the original articles of association, and was perfectly legal in itself, it was quite within the power of the company to make it a condition of the policies issued by them; that though the regulation had not validly been made part of the articles of association, the pursuer having accepted it as part of his contract, and having violated the condition it contained, could not recover under his policy.
A shipowner insured a steamer with an insurance company, the policy providing that the steamer for the purposes of the agreement between the insurers and the assured was and should be valued at pounds 3750.
Held ( aff. the judgment of the First Division) that in considering whether the assured had violated a condition of the policy which required him to keep one-fifth of the value of the steamer uninsured, the value of the steamer must be taken to be the value declared in the policy.


Lord Chancellor (Lord Herschell)), and Lords Watson, Ashbourne, Shand, and Bowen


[1893] UKHL 467, 31 SLR 467





Company, Insurance

Updated: 31 January 2022; Ref: scu.633308