v.

ALLIANCE
MARINE

INSURANCE CO.

tors should be indemnified,—it is obvious, I say, that such con- 1873 signee can himself suffer no prejudice by the total or partial EBSWORTH destruction of a thing which forms no part of his property. In the safety of such thing such naked consignee can in this view have no interest. The persons prejudiced by the loss of property are his consignors, or those for whose benefit the property is to be disposed, and in them only in such case and in such light is there any interest." (1).

Lord Eldon, in giving judgment in the House of Lords, says (2): "With respect to the case of a trustee, I can see nothing in this case which resembles it. A trustee has a legal interest in the thing, and may therefore insure. So, a consignee has the power of selling; and the same may be said of an agent. I cannot agree to the doctrine said to be established in the Courts below, that an agent may insure in respect of his lien upon a subsequent performance of his contract; nor can I advise your Lordships to proceed, without much more discussion, upon authority of that kind. There are different sorts of consignees: some have a power to sell, manage, and dispose of the property, subject only to the rights of the consignor. Others have a mere naked right to take possession. I will not say that the latter may not insure, if they state the interest to be in their principal."

Lord Ellenborough and Lord Erskine concurred entirely in the views of Lord Eldon.

In the previous case of Craufurd v. Hunter (3), in the Court of King's Bench, where precisely the same points arose, it was considered that the commissioners were in the nature of consignees, and had therefore a right to insure and to recover the whole sum insured in their own names; and it appears to us that the correct opinion to be collected from the observations of all the learned judges and also of the peers who took part in the judgment in the House of Lords in Lucena v. Craufurd (4), is, that an ordinary consignee, who has made advances or come under acceptance, and has a beneficial interest in the subject-matter, is entitled to insure to the full value and recover the whole sum insured, and to aver the interest to be in himself.

(1) 2 B. & P. (N. R.) at pp. 306, 307. (2) 2 B. & P. (N. R.) at p. 324.

(3) 8 T. R. 13.

(4) 2 B. & P. (N. R.) 269.

1873

v.

ALLIANCE
MARINE

INSURANCE CO.

In Carruthers v. Sheddon (1), the plaintiffs by order from DowEBSWORTH rick & Way had effected an insurance upon coffee in which Dowrick & Way were interested to the extent of seven-sixteenths jointly with three other persons. The policy professed to be made by the plaintiffs as agents and by order of and for account of Dowrick & Way. The adventure was managed by Dowrick & Way, who made advances and paid what was required. Gibbs, C.J., held at the trial that, as Dowrick & Way were the managers of the adventure, if the policy was intended to cover the interests of the three other persons (of which the jury were to judge), the plaintiffs might, as the agents of Dowrick & Way, recover the whole amount insured; and he also thought "that Dowrick & Way, as consignees of the cargo, had an insurable interest to the whole amount, for that a consignee may insure as well as a principal:" and the Court confirmed his ruling. We are unable to discover any intimation of opinion by the Court in that case, or to see any inference that can properly be drawn from it, to the effect that a consignee who makes advances can insure and recover only to the extent of his own lien : and the language of Gibbs, C.J., which was adopted by the Court, seems to us to be exactly contrary to that view.

In Godin v. London Assurance Company (2), the only question was whether, where two persons having different interests had each insured by a separate policy, this was to be considered as a double insurance, so that the amount insured was to be apportioned between the two sets of underwriters; and, though some observations were made as to persons being entitled to insure for a lien, the case does not appear to us in any way to affect the main question in this case.

In Wolff v. Horncastle (3) the plaintiffs had, without orders in the first instance (though their act was adopted afterwards), effected the insurance for their correspondent Lund, for whom they were under advances, and for whom they were acting in respect of the shipment in question after it had been refused by the original consignee. They had also accepted for 3007. against the shipment. The declaration contained two counts, the first averring the interest (1) 6 Taunt. 14. (2) 1 Burr. 489.

(3) 1 B. & P. 316.

V.

ALLIANCE

MARINE INSURANCE Co.

in Lund, and the second averring it in themselves. Objections 1873 were taken, as to the first count, that it could not be supported EBSWORTH under the statute of 28 Geo. 3, c. 56, for want of a previous order to insure from Lund, the principal; and, as to the second count, that the plaintiffs had not an insurable interest, and that they made the insurance on account of Lund, and not of themselves. The Court supported the verdict for the plaintiffs on the first count for the full amount, upon the facts, on the ground of ratification by Lund; but they also held that the second count was supported; for, that the plaintiffs had a clear right to insure to the amount of 3007. for which they were interested in the goods. The Court considered that, upon the consignment being refused by the original consignee, the plaintiffs became the consignees for Lund; and Buller, J., said, in the course of his judgment (1), that "a debt which arises in consequence of the article insured, and which would have given a lien on it, does give an insurable interest;" and that "the case is not at all altered by the goods not having arrived." The plaintiffs in that case recovered the full amount of the insurance; and it does not seem to us that, because the Court thought it clear that the plaintiffs had an insurable interest to the amount of their acceptances sufficient to support the second count against the only objection that was taken to it, and gave judgment for the plaintiffs for the whole amount insured, that therefore it is to be inferred that the Court thought the plaintiffs had no insurable interest beyond the amount of their acceptances; and more especially as that point was never raised upon the argument.

The subject appears to have been much considered in America; ; and in the year 1836 a case came before the Superior Court of New York, of De Forest v. Fulton Insurance Company. (2) In that case a commission-merchant had effected insurances against fire upon goods in his own warehouses, "as well the property of the assured as held by him in trust or on commission," and a fire had destroyed goods belonging to his consignors as well as his own goods and it was held that the plaintiff had an insurable interest in the goods held on commission for his consignors to their full value, and might recover the whole amount under an averment of (1) 1 B. & P. at p. 323. (2) 1 Hall, 84.

1873

v. ALLIANCE

INSURANCE Co.

interest in himself, though he would be accountable as a trustee EBSWORTH to his consignors for any sums beyond his own individual claims. Very elaborate judgments were delivered by the learned judges in MARINE that case, which are well worthy of perusal; and the general principles applicable to insurable interests as regards marine insurances, as well as terrene policies against fire, are fully and very ably discussed. Mr. Duer, in his Law of Marine Insurance, vol. 2. pp. 108, 109, refers to this case in the following terms: "It must, however, be admitted that it has been held by a Court of high authority that a consignee, as such, has in all cases an insurable interest co-extensive with the value of the property, and consequently that, when he has effected a policy in his own name, he is entitled to recover the entire loss that is claimed, on an averment in himself of a sole and exclusive interest; and this without any evidence of an authority express or implied, or of any previous advances, or of any subsequent adoption of the contract. It is true that this decision was made in relation to a policy against fire: but the reasoning of the judges was just as applicable to a marine insurance, and has been so considered by an eminent jurist (1), who seems to have given to their doctrine the sanction of his approval. I am, however, constrained to express the conviction that the decision thus interpreted is not sustained by prior authorities. My researches have not enabled me to discover a single case in the English reports in which a consignee, on an averment of a sole interest in himself, has been permitted to recover beyond the amount of his own advances; but, on the contrary, there are several decisions from which the opposite doctrine, viz. that in such a case his right to recover is limited to his own beneficial interest, seems a plain and necessary deduction."

At the date when this was published,-in 1846,-the English cases upon fire policies had not been decided. This decision of the Superior Court of New York is afterwards elaborately controverted by Mr. Duer in a long note at p. 161 of the same volume. With his views, however, we are entirely unable to concur. A great portion of his reasoning is founded upon the assumption which he makes at p. 167 with reference to Lucena v. Craufurd (2), that "it is not to be denied that the assured in this case

(1) Mr. Justice Story.

(2) 3 B. & P. 75. 2 B. & P. (N. R.) 269.

1873

v.

ALLIANCE

MARINE INSURANCE CO.

(that is, in Lucena v. Craufurd,) were consignees." It seems to us, however, that this assumption, and the argument of Mr. Duer EBSWORTH which rests upon it, are not well founded. It is quite true that the Court of Queen's Bench in Craufurd v. Hunter (1), and the whole of the judges except Chambre, J., in the Exchequer Chamber, in Lucena v. Craufurd (2), and all the judges except Chambre, J., and Lawrence, J., in the same case in the House of Lords (3), considered that the commissioners were in the position of ordinary consignees of the Dutch vessels and goods, and as such entitled to insure them on their own account. But the two dissentient judges whose views ultimately prevailed, and the peers who decided the case in the House of Lords (though upon a point which applied to one only of the vessels), expressly repudiated that view of the position of the commissioners under the Act of Parliament, and considered that they had no right, interest, or power of interference or control in or over the property in any way until its actual arrival in this country; and that, if they were consignees in any sense, it could only be as mere agents, or, as it was termed, naked consignees, having no beneficial interest whatever in the property, and having merely a right to take possession of it and act as agents for the owners after its arrival in this country.

We think, therefore, that it not only can be, but after the decision of the House of Lords must be, denied that the commissioners were consignees; and, if so, a great portion of Mr. Duer's argument as to the insurable interest of consignees, which is founded on this assumption, necessarily fails.

We also think that the other conclusions which Mr. Duer has drawn from those English cases which he cites, and which have been already noticed, are not warranted by those decisions, and that he has failed to establish that the decision of the Superior Court of New York in De Forest v. Fulton Insurance Co. (4), which proceeded in a great degree upon the doctrines of Lucena v. Craufurd (5), was not well founded. (6)