A defeasible interest is insurable, and so also is a contingent interest. Accordingly, where the buyer of goods has insured them, he has an insurable interest; and this would be so even though lie might, at his election, have rejected the goods, or have treated them as at the seller's risk, because of the latter's delay in making delivery or otherwise. A partial interest of any nature is insurable ; consequently the owners of shares in ships may insure them. An underwriter has a rcinsurable interest in his risk, and, unless the policy otherwise provides, the original assured has no right or interest in respect of such reinsurance. In like manner the assured has an insurable interest in his underwriter, but the system of double insurance renders this interest of little practical value. The lender of money on bottomry or respondentia has an insurable interest in respect of the loan ; so has the master or a member of the crew in respect of wages; and in the case of advance freight, the person advancing it, so far as the freight is not repayable in case of loss ; and so also has the assured himself in respect of the charges of any insurance which he may effect. Where the subject-matter insured is mortgaged, the mort gagor has an insurable interest in the full value thereof, and the mortgagee has a like interest in respect of any sum due or to become due under the mortgage. But where a mortgagee insures for the benefit of the mortgagor as mell as for himself, he lia.s an insurable interest in respect of the full value. A consignee having an interest in the con signment, who insures for the benefit and with the authority of other persons interested as mell as for himself, has an insurable interest in respect of the full value of his and their interests in the consignment. In order to have an interest in a consignment the consignee must have made advances or accepted bills against it, or have been instructed to sell it on commission, or have a general balance against the consignor. A pledgee of the bill of lading from the consignor as security for advances has an insurable interest, and may sue in his own name on a policy made under his instructions, " for account of whom it may concern," and deposited with him as an additional security. The owner of insurable property has An insurable interest in respect of its full value, notmithstanding that some third person may have agreed, or be liable, to indemnify him in case of loss. In the case of a transmission of interest by operation of law, as in the event of a death, there is a consequent transfer of the rights under the contract of insurance. I3ut there must be an express or implied agreement between the assignor and the assignee to transfer those rights in the ease of any other transmission of interest in an insurance.
Insurable value.—A policy may coat:tin an express provision regulating the ascertainment of the insurable value of the subject-matter insured ; or it mar even contain an actual valuation. The courts recognise the many con veniences attached to valued policies, but where such a policy is used merely as a cover to a wager it mill be considered as an evasion and treated accord ingly. .As lord Alansfield said, in Lewis v. Rucker, "If it should come out in proof that a man bad insured 1'2000 and had interest on board to the value of a cable only, there never has been, and I believe there never will be, a determination that by such an evasion " the law against gaming policies may he defeated. When the over-valuation is so exaggerated as to show to the satisfaction of a jury that it must have been designed in order to obtain more than a just and complete indemnity, then the insurance is void. But
otherwise, and in the absence of a fraudulent intention to cheat the under writer, the latter is bound in case of total loss to pay the agreed sum.
Apart, however, from a provision for valuation or an actual valuation itself, the insurable value is ascertained according to certain rules based upon the principle th:tt the assured should be indemnified only to the extent of the actual cost and expenses of his adventure. These rules are as follows :—(1) In insurance of a ship, the insurable value is the value, at the commencement of the risk, of tl:e ship, iacluding her outfit, provisions and stores for the officers and crew, money advanced for seamen's wages, and other disburse ments (if any) incurred to make the ship fit for the voyage or adventure con templated by the policy, plus the charges of insurance upon the whole ; the insurable value, in the case of asteamship, includes also the machinery, boilers, coals, and engine stores, if owned by the assured, and in the case of a ship en gaged in a sp-cial trade, the ordinary fittings requisite for that trade; (2) In insurance on freight, whether paid in advance or otherwise, the insurable value is the gross amount of the freight at the risk of the assured, plus the charges of insurance ; (3) In insurance on goods or merchandise, the insurable value is the prime cost of the property insured, plus the expenses of and incidental to shipping and the charges of insurance upon the whole ; (4) In insurance on any other subject-matter the insurable value is the amount at the risk of the assured when the policy attaches, plus the charges of insurance.
Warranties, &c.—A warranty, in marine insura.nce, is a promise or under taking by the assured that some particular thing shall or shall not be done, or that some condition shall be fulfilled ; or it is an affirmation or denial by him of the existence of a particular state of facts. It is a conc/ition which renders the contract voidable in case of non-compliance ; not a stipulation for the breach of which an action would lie. It creates exceptions to the general terms of the policy, and so exempts the underwriter from certain risks. In no other class of contract does a breach of warranty entitle the party pre judiced to avoid or rescind the contract, his rights under such circumstances being only an action for damages for the breach or a set-of in respect thereof. And a warranty in marine insurance is always a condition which must be precisely complied with, whether it is material to the risk or not. If it is not so complied with, then, subject to any express provision in the policy, the underwriter is discharged from liability as from the date of the breach of warranty, but without prejudice to any liability incurred by him before that date. The validity of the contract depends entirely on the literal truth or fulfilment of the warra.nty, and unless it is performed there is no contract. A non-compliance with, or breach of a warranty, though it may be waived by the underwriter, Ca11110t in general be excused, and the assured is not allowed to rely upon the fact, where it exists, that the breach has been remedied and the warranty complied with, before loss. Only when the warranty ceases to be applicable to the contract because of a change of circumstances, or when compliance is rendered unlawful by reason of subsequent legislation, can a non-compliance or breach be excused. The following are examples of warranties in use :— Liverpool Slip Warranties.