A "BONELESS" CLAIM

Evening Star, Issue 14250, 27 December 1909, Page 8

A "BONELESS" CLAIM

.•;-*• FARMERS" CO-OP:" v. THOMPSON. TO~S"STJRANCE COMPANIES. The following ia tho fall text of Mr Jxis/ Lice Hamilton's decision in the ■ tewhieh brief reference} ;was ■made in %our London correspondence/;published in -last. Tuesday's issue: ". •:' ---.■. - This action is brought by the assured on frozen meat, to recover a-total loss measured by the full amount of the policy," £1,116, upon a policy subscribed, among others, by Mr Thompson, 1 the defendant. There are no pleadings, but the action is tried as regards the loss upon agreed facts.' The essential fact is that the cause of the loss was that the carcasses arrived'in such a condition that they were condemned unfit for human food,"and had to be'de-. stroyed, and that that condition arose some time during the'"voyage. "They started in good condition.' 'lt was'not caused by improper dressing before sailing. They arrived in bad condition. Under the circumstances; the question is pno of construction of the policy; which'is in the ordinary Lloyd's form, modified in two ways by having pasted upon it a printed f.p.a. clause, which, in its turn, has been altered by deleting some of the words with a pen and substituting 6ome words in typewriting, and the policy is also modified by stating/that it is subject to the Institute clauses attached as far as." they apply, and they are attached on the leaf of the policy, and are in the form of the frozen meat clauses of 1905. That particular risk and cause of loss' in this case is mentioned in the third paragraph of the frozen meat clauses; "The insurance covers loss from defective condition of the meat from every cause (except improper dressing) which shall arise during the currency of the insurance." That would be incorporated by the reference into the body of the policy unless the words "as far as they apply" would exclude i it. _ Under the circumstances the question is whether, having regard to the modified f.p.a. clause, "as far as they apply" prevents that clause being read into the insurance, and leaves the f.p.a. clause standing in such a form and witli a meaning as to exclude any claim for the loss in question. The plicy, as far as form goes, raises familiar difficulties as iar as Lloyd's policies go. The unfortunate, and. I think, the inevitable, result of the practice as regards a number of policies in relying on an ancient form modified by the attachment of printed clauses, which in their turn are again modified in writing, always raises difficulties in construction, and the difficulties here arise upon the words " as far as the Institute clauses 6hall apply." The case has to be dealt with on the policy as it stands, and I think in each of these cases the exact words -used and the collocation of tho words must Teally be what guides us. There is no question of following any authority upon the particular construction of a particular instrument. The first question is upon the construction of the words in the body of the policy, and the plaintiffs say in terras that the risk commences at the freezing station works, and includes a period not exceeding sitxv days after the arrival of the vessel, and that in terms the insurance is subject to the Institute clauses attached, including the ones I have mentioned. Prima facie, the loss is covered unless the f.p.a. warranty as modified excludes it. As a matter of construction the f.p.a. warranty is vcrv ambiguously expressed, but upon the plain construction of it it is confined to particular iverage,and does not deal with the case in question, which is a case of total loss, ft is 6aid that "warranted free from particular average and loss " means warranted free from particular average and from particular loss unless caused, and so forth. It is pointed out that the clause as modified is very ambiguous, because, apparently in endeavoring to alter the printed words from a -warranty free from particular average, which would bo deleted if the event happened of the ship or craft being stranded, sunk, on fire, or in collision, they have sought to modify into a deletion of the warranty only when the loss is caused by the stranding, sinking, or burning of the ship or craft, and when they have further in the printed clause had a different clause that there is to be a deletion if the nature of the collision is such as may reasonably be supposed to have caused or led to the damage claimed. They altered it rery inartistically, and, indeed, confusedlv, by having a co-existent provision that the deletion is to take place only if the loss caused by the collision, and not merely that there has been a collision which might reasonably be supposed to have caused the loss. It is further pointed out that the words " including all risk of craft" in the printed form are left in, and the words as to the inclusion of "partial loss arising from transhipment" are also left in. As a matter of construction, I am invited to say that thus is an exceedingly inartistic "f.p.a. clause. It contains redundancies; but then there are, of course, always redundancies if you have a f.p.a. clause grafted into a Lloyd's form, which makes the minimum warranty free from average at 3 per cent. It is pointed out it might be very difficult to ascertain, in case of collision, what exactly -were the circumstances under which the f.p.a. clause would be deleted; but it is said as a matter of construction that it is a particular average clause, and nothing eke. On the other hand, it is said : No, this can be construed quite reasonably as meaning warranted free from particulaV average and from loss, unless caused by the stranding sinking, burning, or collision of the ship or craft, and that is the real meaning, and that anything else is repugnant to the words. I think at first sight one would have sought a way out of the difficulty bv supposing that the word "and," between "average and loss," had got in by mistake and that it should have run " free from particular average loss, unless caused," but in the absence of any evidence of mutual or common error or claim for rectification I should be only reforming the contract, and not interpreting it, if I did that, and therefore that short cut is not open to me. It seems to me, as a matter of construction, that the plaintiffs construction is right, and I think the natural grammatical con! itruction is " warranted free from particular average and particular loss." It is quite true that "particular loss," as far as I know, is a term unheard of in insurance • but it is perfectly good English. It is true also, if you warrant free from particular loss, ( the words "free from particular average i are surplusage It seems to me that the words " warranted free' from particular average make the words "and loss" surplusage, and it seems to.me the natural construction m to attach to the word " Ices " the Same adjective which qualifies "aver?£" ii- L alt€rnatlve presents formidable difficulties, but counsel for the defendant and witnesses all agree that this is a policv against general average. But genera' average is only a special kind of loss, not as a rule total, caused bv perils of the E eaa- Therefore when thev say "■ -warranted rco rom particular mm* and j ree * rom loss, silicet from all loss, they are contradicting the tenor of the policy which'it i 5 admitted eomehow or other gives the assured the right to recover for general average. If the object was to make this an insurance only against general average and a, loss caused by the stranding, sinking burning, or collision of the ship or craft I think some lera roundabout and less confused way of expressing it would have been chosen. Aa a matter of construction it appears to me that the plaintiff's contention is right. Upon the body of the policy the premium is 12a 6d per cent, and evidence was given, without objection, to prove that 12s 6d was inadequate remuneration for undertaking the risk of total' loss for the cargo going bad on the- voyage. I accept the evidence of how mueh the -underwriter ought to have charged with some doubt Whether it_ is 40s for aU'risksj or for riaks including defective condition of the meat, but f.p.a., I think it is clear as a matter of business that if the underwriter intended to insure against the risk now sued for in this action he would have adted for more than 12s 6d. I am not asked to rectify thi6 policy, they have taken their chance'at 12s 6d, and Ido not think the evidence given, though I accept it, affects the construction of the policy. Now, it is said even though as a matter of grammatical* tEnglish the defendants' construction fails, that the words "warranted free from 'jbart-^^f^g^a

and loss," etc., constitute a well-knov-.n. formula used for a particular purpose and understood as effecting that purpose, and believed to express a particular meaning —at any rate understood as expressing the meaning whether it succeeds m doing so or not. That is to say, it is not a cree in which parties have 'used ordinary English inords, possibly net expressing their meaning, but it' is a case in which a particular well-known phrase, having a particular -well-known meaning has been inE erted, and it niflQviN untotooa a&'liaYi ing - thafc meaning. Evidence has been given upon that by Mr Poland and four. other gentlemen, whoso experience, capacity, and desire-to assist the Q>urt are beyond question. Their evidence is in the main- in agreement, though it differs in sorqe details. They say that this phrase which finds expression first of all in 6lips in the shape of "f.p.a. and loss except." or " f.p.a. and loss unless eaused by s sb anc c " —these cabalistic expressions which had been in use among individuals ten or fifteen years ago, and in the last five or six years have come into use with respect to the heavy insurance- on meat cargoes in respect of breakdowns at sea and'so on—they say it was intended to mean that the underwriter takes what is marins risks and not the specific risks, but the underwriter is not only free from average unless it is caused by those risks or stranding, sinking, burning, or collision of ship or craft, but is also froe from loss of the subject matter total or partial unless eaused in the samo way. It is true that this matter does not appear to have been in controversy very much so far. Mr Wright swid specifically he had not known of a case m which the point of total loss on board 'the 6hip, or total loss before or after' the goods hacl quitted the ship—before they reached the ship or after they quitted the was discussed. Mr Poland.said he did not prsenallysee. policies in -whieh the slips, which were re-insurance dips, were fitSJBKBk Si £efeUs4 the form, and it

wte for has clerks to apply it. Mr Bolton said distinctly the' form used in this | policy ia the regular way in which this 'specific formula is expressed, which I accept, though I regret to hear it, and Mr Wright giivo evidence to the same efiect, and so did tha other witnesses. This constitutes a considerable body of experience. Of course, i am bound to distinguish carefully between witnesses who sav that the underwriters use these words" with the object of excluding particular liability, and that underwriters use these words with the meaning that a particularl liability is excluded. Very .often one finds the evidence amounts only to this—that that is how •they try to express themselves, and .not that they understand one another as having expressed their meaning in those., words. They say this is a well-recognised form expressing a well-recognised meaning, and they agree. The evidence upon the other side is that of Mr Richards, • who is experienced, no doubt, as an average, adjuster, and who deals with .claims after loss, and whose experience one knows must be of claims adjusted to-day .under risks written eighteen months or two years ago. His experience does not bring" him into contact with the use of this form to any extent comparable to that used by the defendants. No other witness was called on the other side, and they had no evidence from Lloyd's. Evidence was given by Mr Hatchett as to the negotiations for this policy, and witnesses have been called to show where the words have been added, and that satisfies me that evidence to the contrary could not possibly have been obtained. _ Therefore I think I am justified in finding npon this evidence that these words have a particular meaning, well understood, and which is the meaning that the policy is warranted free from particular average and free from loss. Now it is quite true that cases were put to these witnesses, some of which they answered illogically and some of which they could not answer at all. They say that underwriters disclaiming any knowledge of the law would make a "practice they think of paying for fire loss in store either before or at the end of the voyage. They say .with some diffidences that the same course would be pursued if a fire wero on the quay during transhipment. They all say though the words mean free from loss they do not treat the policy as being free from general average, and then there is the fact that the policy in terms includes partial loss arising from transhipment, and all risk of craft and otherwise to and from the vessel. I do not think it is necessary that I should discuss or decide what would be the rights of the parties if this loss had occurred before shipment or after arrival. These conundrums only go to the credibility of the witnesses; that is to say, they "are only material for saying there'cannot be really and well-established meaning if there are cases that might arise on this policy if you do not know the answer, or if it does not logically square with your view of the \vord6. I do not think,' as a matter of fact, that the admission that general average is covered in 6pite of this formula, or the admission that fire would be paid for though it had not occurred by reason of the burning of the ship or craft, ought to lead me to doubt the accuracy of the witnesses in speaking uncontradictedly of the recognised meaning of the phrase. Then this dce6 not quite conclude the matter, because, although the particular words may have in general a special meaning, I have to treat them as embodied in this policy, and it is therefore possible there may be something in the policy when construed" all together which would make it impossible to attach to the wolds here that specific meaning which among underwriters they are understood to have. But I do not think on the construction of the policy for the purposo of this claim there is any such inconsistency. One would naturally, first of all, subordinate the conference clauses on the fly-leaf of the page of the policy to the words "as far as they apply," because if the bodv of tho policy contains an f.p.a. warranty which is inconsistent with the application of the conference clauses, the conference clauses go by the board. Secondly, as tc the existence of the words left in the printed clauses which do not go with the typewritten words, and which produce a confused result, although not inconsistent with the typewritten words, I should attach primary importance to the word; inserted by way of alteration rather thar to the common form. But it appears t< me that it may be read thus: " Warrantee free from particular average and free fron loss unless caused by the stranding, sink ing, burning, or collision of the "ship 01 craft, except that particular loss arising from that shipment will be covered, anc all risk of craft or otherwise to and fron the vessel will be covered notwithstand ing:" There is a serious ambiguity wit! regard to the collision, and whether thai is the same the occurrence of a collisioi which may reasonably bo supposed to hav< caused the damage, but cannot be prove( to have caused it—whether that will giv< vise to a right to recover or not I exprea no opinion. As in point of fact 'the los< occurred on the voyage it does not occui to me the difficulty touches the case, noi does it appear to me the contention th< assured would have difficulty in knowing how far he was covered in those respect; touches the case either. I dare 6ay hi would have considerable difficulty in know ing how far he was covered, commencing at the free-sing station works, and if he could sue for loss for fire there to bo mel by the answer, though it might be the custom it was not the law. Ido not care to inquire what the lights are or how fai this instrument was a disappointment tc the assured, but I think on this specific instrument this policy is warranted free from not only particular average but loss, including total loss, unless caused by the events which have happened. The result, therefore, is that there is judgment for the defendants, with'costs. There is a possibility of Mr Justice Hamilton's decision being appealed against.