Page:History of merchant shipping and ancient commerce (Volume 3).djvu/574



A contract of marine insurance is in its essence a contract of indemnity, and the spirit of the contract is violated if the assured can make the occurrence of a loss the means of gain. But the law has allowed a very considerable deviation from this fundamental principle. Mr. T. H. Farrer, in his evidence, happily illustrates this in the case of a ship with a chartered freight, bound from London to Calcutta and back. He supposes her to be lost on her outward passage in the Bay of Biscay. Presuming that the owner only insured her prudently and not exorbitantly, he would recover in this case not merely the value of the ship at the commencement of the voyage, but also the freight of the outward and homeward voyages, while he would be exempted from paying the seamen's wages from the date of the disaster, the expenses necessary to carry his ship to Calcutta, to remain there, and to return on her homeward passage, so that he would be, actually, a very considerable gainer by the loss. Nor is the matter less flagrant in the case of valued policies, when the value of the property is fixed by agreement beforehand between the assured and the underwriter. The effect of this, as the Commissioners justly remark, is, "that unless the policy is altogether void, on account of fraud, or the concealment of a material fact, the assured can, in the case of a total loss, receive the value which has been