legislature intended rather to have said, that insurances on goods from ports belonging to Spain and Portugal in Europe to any ports in America belonging to those courts, and from such ports in America to such ports or places in Europe, shall be valid and effectual contracts, than to authorise insurances from the dominions of Spain and Portugal in Europe or America, to whatsoever place in the world the ship, in which these goods are to be carried, may happen to be destined. The words, however, certainly admit of that broad construction: for the place of destination is not ascertained.

Upon this section of the act, it may be observed, that the equitable construction of such contracts of insurance as are protected by it, seems to be, that they may be made without interest, notwithstanding the case of Goddart v. Garret, above Vide ante, cited: since in such instances it is impossible for the person P. 394. insured to bring any certain proof of interest on board.

Hitherto we have spoken merely of that part of this very salutary act, which requires, that every person making such a contract, should have an interest in that which is the object of the insurance. Another part of it still claims our attention -that which prohibits re-assurances. -What a re-assurance is; in what cases it is prohibited; and when it is allowable, will form the subject of the following chapter.

Roccus de

Assecur not. 12.

CHAPTER XV.

Of Re-Assurance, and of Double Insurance

RE-ASSURANCE, as understood by the law of England

may be said to be a contract, which the first insurer enters into, in order to relieve himself from those risks which he has incautiously undertaken, by throwing them upon other underwriters, who are called re-assurers. This species of contract has obtained a place in most of the commercial systems of the trading powers of Europe; and it is allowed by them at this day to be politic and legal. The learned Roccus has decided expressly in favour of it; and has cited many respectable authorities in support of his opinion. "Assecurator, post fac

tam assecurationem, potest se assecurari facere ab alio asse"curatore, et iste secundus assecurator tenetur pro assecura❝tione factâ à primo, et ad solvendum omne totum, quod "primus assecurator solverit, et ista secunda assecuratio "valet." By the ancient law of France such assurances were reckoned valid, and perfectly consistent with equity and good Le Guidon, conscience. The author of the Guidon observes, that if it so c. 2. art. 19. happen that the insurers, after underwriting the policy, repent of their engagement, or are afraid to encounter the risk, they are at liberty to re-insure; but still they cannot prevent the insured from making his demand upon them in case of loss; for having, by their signature, promised indemnity, they cannot, by any protestations to the contrary, discharge themselves from their responsibility, without the consent of the insured. Lewis the Fourteenth, when, by the assistance of the famous Colbert, he promulgated those ordinances, which will be a lasting honour to the French nation, adopted the idea that Assurance, prevailed when the Guidon was written: for by an article in that celebrated code of laws, he expressly declared, "that it "should be lawful to the insurers to make re-assurance, with "other men of those effects, which they had themselves pre"viously insured." It is not in France alone that this law

Ord. Lewis 14. tit.

art. 20.

prevails;

233.419.

prevails; for by the positive and express regulations and ordi- 2 Mag. 190. nances of Koningsberg, Hamburgh, and Bilboa, re-assurances are allowed to be effected, and consequently are lawful con

tracts.

By the passage cited from the Guidon it might be observed, that it was a distinguishing character of this species of contract, that notwithstanding a re-insurance, the first contract subsists as at first, without change or amendment. The re- 1 Emerigon insurer is wholly unconnected with the original owner of the P. 247. property insured; and as there was no obligation between Pothier, tit them originally, so none is raised by the subsequent act of the Assurance, first underwriter. The risks of the insurer form the object of the re-insurance, which is a new independent contract, not at all concerning the insured; who consequently can exercise no power or authority with respect to it.

Agreeably to the laws of those countries just referred to, and consistently with the opinions of those respectable writers, whose works we have had such frequent occasion to mention, the law of England adopted their regulations, and permitted the underwriters upon policies to insure themselves against those risks for which they had inadvertently engaged to indemnify the insured; or where perhaps they had involved themselves to a greater amount than their ability would enable them to discharge. Although such a contract seems perfectly fair and reasonable in itself, and might be productive of very beneficial consequences to those concerned in this important branch of trade; yet, like many other useful institutions, it was so much abused, and turned to purposes so pernicious to a commercial nation, and so destructive of those very benefits it was originally intended to promote and encourage, that the legislature was at last obliged to interpose, and by a positive law to cut off all opportunity of practising those frauds in future, which were become thus glaring and

enormous.

No. 96.

Accordingly by the fourth section of that statute, which 19 Geo. 2. formed the subject of the preceding chapter, it was enacted, 37. S. 4. "that it should not be lawful to make RE-ASSURANCE, unless "the assurer should be insolvent, become a bankrupt, or die;

19 Geo. 2. C. 32. 5. 2.

"in either of which cases, such assurer, his executors, admi"nistrators, or assigns, might make re-assurance to the amount "before by him assured, provided it should be expressed in "the policy to be a re-assurance.”

From this act it is apparent that all kinds of re-assurance are not prohibited; but wherever such a contract tends to the advancement of commerce, or to the real benefit of an individual, in such a case it shall be permitted. Thus in case of insolvency or bankruptcy, it is advantageous to the credi tors in general, as well as to the individual, that a re-assurance should be made; for by these means the fund of the bankrupt's estate is not diminished in case of loss, and the insured has a better security for the payment of the amount of his da mage, or at least a proportion of it. (a) If the insurer die,

it

(a) Formerly, if an underwriter became a bankrupt after he had subscribed the policy, and before a loss happened, the insured was not entitled to a dividend out of the bankrupt's estate. This being found a heavy inconvenience, and a discouragement to trade, parliament was obliged to interpose, and to alter the law in this respect. The statute recited," that merchants and traders frequently lend money on bottomry,

or at respondentia, and in the course of their trade frequently cause "their ships or vessels, and the goods and merchandizes loaded thereon, to be insured; and that where commissions of bankruptcy have issued against the obligor in such bottomry or respondentia bond, or the under"writer, or assurer in such insurance, before the loss of the ship or goods, "in such bond or policy of insurance mentioned, had happened, it had "been made a question, Whether the obligee or obligees in such bond, or the assured in such policy of insurance, should be let in to prove their "debts, or be admitted to have any benefit or dividend under such com"mission? which might be a discouragement to trade." It was therefore enacted, “that the obligee in any bottomry, or respondentia bond, and the "assured in any policy of insurance, made and entered into upon a good "and valuable consideration, bona fide, should be admitted to claim; and "after the loss or contingency should have happened, to prove his, her, or their debt and demands, in respect of such bond or policy of insurance, in like manner as if the loss or contingency had happened before "the time of the issuing of such commission of bankruptcy against such obligor or insurer; and should be entitled unto and should have and receive a proportionable part, share, and dividend of such bankrupt's estate in proportion to the other creditors of such bankrupt, in like manner as if "such loss or contingency had happened before such commission issued: "and that all and every person and persons against whom any commission of bankruptcy should be awarded, should be discharged of and from the

"debt

it is no less necessary and beneficial to his successors, that there should be a re-assurance, than it was in the former case of a bankruptcy: because it will provide assets to satisfy the insured in case a loss should happen, and thus secure the estate of the deceased for the benefit of his heirs. Indeed, in both cases, the intention of the legislature seems to have been, to provide a fund for the payment of that proportion, which, in case of an insolvency, the insured will have a right to demand, in common with the other creditors; and for the payment of the whole, without prejudice to the heir, even in cases where the ancestor, at the time of his death, was in solvent circumstances.

c.

This act is worded in such express terms, excluding every species of re-assurance, except in the three instances of death, bankruptcy, or insolvency, that a doubt, as it should seem, Vide ante, could hardly be founded upon it. But as it was held, that 14. the first clause of the statute, prohibiting insurances, interest or no interest, did not extend to foreign ships: so it was argued, that re-assurances made here on the ships of foreigners did not fall within the act. It might have occurred, however, that the first clause of the statute is qualified, and only prohibits such insurances when made on His Majesty's ships, or the ships belonging to His Majesty's subjects: whereas the clause in question is general, and without restriction; the inference from which is, that the legislature had both objects in view, and meant wholly to prohibit the one, but not the other.

Fletcher,

This point came on to be considered by the Court of King's Andree v Bench, in the year 1787, in the form of a special case, stating, 2 Term that a re-assurance was made by the defendant on a French Rep. 161. vessel, first insured by a French underwriter at Marseilles,

"debt or debts, owing by him, her, or them, on every such bond and

policy of insurance as aforesaid, and should have the benefit of the "several statutes now in force against bankrupts, in like manner, to all "intents and purposes, as if such loss or contingency had happened, and "the money due in respect thereof had become payable before the time of "the issuing out the commission."

who