Sutherland v.
Pratt (1843)
Simple Facts
1. A man (the plaintiff) took out marine insurance for £2000 on 360 bales of cotton being
shipped from Bombay to London.
○ The policy said “lost or not lost” (meaning the insurance would cover the goods
even if they were already lost or damaged, as long as the insured did not know
that at the time).
2. The ship carrying the cotton faced bad weather, and the cotton was damaged by sea
water.
3. At the start of the voyage, the plaintiff did not yet own the cotton.
○ He only bought (acquired an interest in) the cotton during the voyage, after the
ship had already sailed.
4. By the time he became the owner, the cotton had already been partly damaged.
5. The plaintiff claimed insurance money.
○ The insurance company (defendants) refused, saying:
■ He had no interest when the goods got damaged.
■ Therefore, he should not get compensation.
Problem
● The insurers argued:
“You (the plaintiff) only became the owner after the cotton was already damaged. Since
you had no interest when the damage happened, you cannot recover.”
● The plaintiff argued:
“But the policy says ‘lost or not lost’. That means you promised to cover the goods even
if they were already damaged, as long as I had an interest during the voyage.”
Court’s Analysis
1. What does “lost or not lost” mean?
○ It is a special clause in marine insurance.
○ It allows someone to insure goods even if they don’t yet own them or if the goods
are already damaged — provided they did not know of the damage when insuring.
○ Purpose: to protect merchants who buy goods already at sea.
2. Plaintiff’s interest
○ The plaintiff did get an interest in the goods during the voyage (he bought
them after they had shipped).
○ The policy was made “for his benefit.”
○ So, once he owned the goods, he was entitled to claim for damage caused by sea
perils.
3. Timing of the damage
○ Even if the goods were partly damaged before he became owner, the insurers had
agreed to cover past as well as future losses under a “lost or not lost” policy.
○ The only exception would be if the plaintiff knowingly bought damaged goods —
but here, nothing showed he knew.
4. About the defendants’ other pleas
○ Their 2nd and 3rd pleas were just unnecessary denials (saying the plaintiff didn’t
pay premium, or didn’t cause the policy to be made).
○ The court said those matters were already covered by the main denial (“non
assumpsit”), so these pleas were bad.
Court’s Conclusion
● The “lost or not lost” clause protected the plaintiff.
● The insurers were liable to pay, even though the plaintiff bought the goods after partial
damage.
● Judgment was given for the plaintiff.
"Thames & Mersey Ins Co v Gunford Ship Co Ltd,
Main Facts
● The case involved a ship, Gunford, insured by Thames & Mersey Marine
Insurance against loss during a risky sea voyage.
● The ship's owners insured the ship for a much higher amount than its market
value, also taking out policies on the ship’s expected earnings (“freight”) and on
various expenses (“disbursements”).
● Some insurance policies were “honour/wagering” policies (meaning the insured
party could get paid even if there was no real financial loss).
● The ship was lost at sea.
Issues Raised
● Did the owners break the rule of “utmost good faith” by failing to share all
important information with the insurer?
● Specifically, should they have told the insurer:
○ About the captain’s poor history and lack of recent sea experience?
○ That they had insured the ship for far more than it was worth, and had
additional gambling-type policies?
Judgment Reasoning
● The court said the owners did not have to tell the insurer about the captain's
background in this case because it was not considered “material fact.”
● However, the court decided the owners should have disclosed the fact that
they had insured the ship for an exaggerated amount (over-insurance), including
the honour/wagering policies.
● The court explained that hiding these details might make an insurer think the risk
was lower than it really was.
● Because the owners failed to disclose this, the insurance contract became
voidable—the insurer was allowed to refuse payment.
Key Principle
● The case reinforced the rule that all information which would influence an
insurer’s decision (such as major over-insurance or gambling policies) must be
shared honestly—this is the core of "utmost good faith" in marine
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Outcome
● The insurer did not have to pay the claim for loss of the ship, because the owners
failed to share vital information that affected the risk.
Here is a simple summary of the case Forshaw v Chabert (1821):
● The case involved a marine insurance policy on a ship called Hope, sailing from Cuba to
Liverpool, with liberty to touch at any ports.
● After the policy was signed, the words “with leave to call off Jamaica” were added, but
one underwriter (the defendant) did not consent to this change.
● The ship sailed with an insufficient crew for the entire voyage—only eight men were
engaged for Liverpool, and two were engaged for Jamaica.
● The ship touched Jamaica to drop off the two men and pick up replacements before
continuing to Liverpool, where the ship was lost.
● The court held that adding “with leave to call off Jamaica” was a material alteration to the
policy and without the defendant’s consent, the policy was void as to him.
● Further, the ship was not seaworthy at the start of the voyage for Liverpool because of
the insufficient crew.
● Since the ship was unseaworthy and there was a material alteration, the defendant
insurer was not liable to pay.
● The court distinguished this from cases where touching ports was justified or covered by
policy terms.
● The ruling emphasized strict compliance with warranties like seaworthiness and that
material changes to insurance contracts without consent void the policy in respect of
those insurers.
This case reinforces the strict rules around seaworthiness and contract integrity in marine
insurance law[attached_file:6c49b451-f635-4615-b7c5-02638c022a3b].
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No problem 😊 — let’s make Wilson v. Rankin (1865) super simple for you.
🧾 Basic Story (Facts)
● A ship was carrying wood and timber from Restigouch to Liverpool.
● The captain put some of the cargo on the deck instead of keeping it below deck,
even though the law said cargo must be below deck (for safety).
● The ship sank in a storm.
● The owner had insurance on the ship and asked the insurance company to pay for
the loss.
● The insurance company refused, saying the voyage was illegal because the captain
broke the law by carrying cargo on deck.
⚖️ Main Question (Issue)
👉
If the ship’s captain broke a law during the voyage (by carrying cargo on deck),
does that mean the insurance company doesn’t have to pay?
📚 What the Law Says
● A marine insurance policy (insurance for ships and cargo) is only valid if the voyage is
legal.
● If the ship breaks a law related to the voyage (like safety rules), the insurance
becomes invalid.
● But if the illegal act is something unrelated (like smuggling small goods for crew), the
insurance might still be valid.
🧠 Court’s Decision (Held)
● The court said: putting cargo on the deck when the law says it must be below deck is
illegal.
● Since the voyage started illegally, the insurance was void from the beginning.
● The insurer does not have to pay for the loss.
💡 Meaning (Significance)
● Insurance cannot cover illegal activities.
● If a ship breaks laws about how it must sail, the insurance becomes useless.
● Shipowners must follow all safety and loading laws to keep their insurance valid.
🧩 In One Line
Because the ship broke the law by carrying cargo on deck, the insurance policy was
invalid — the insurer didn’t have to pay.
Would you like me to explain how this case connects to marine insurance principles like
seaworthiness and legality of voyage (in very easy words)?
👇
Here’s a simple explanation of the case Quebec Marine Insurance Co. v. Commercial Bank of
Canada (1870) using your FILAC format
F (Facts)
A ship named West was insured for a voyage from Montreal to Halifax.
● At the start of the journey, the ship’s boiler was defective — it worked fine in rivers but
not in saltwater.
● The ship started its journey anyway, found the defect once it entered saltwater, and
stopped for repairs.
● After repairs, it continued and was later lost in a hurricane.
● The insurer refused to pay, saying the ship was unseaworthy at the start of the
saltwater voyage.
I (Issue)
Does the implied warranty of seaworthiness apply at the start of every stage of a voyage —
and if a ship is unseaworthy at that stage, does it make the insurance invalid even if repairs are
made later?
L (Law)
● Implied Warranty of Seaworthiness: The ship must be fit to face the ordinary perils of
the sea at the start of the voyage (and each new stage if there are multiple legs).
● If the ship is unseaworthy at that point, the policy becomes void — even if the problem
is later fixed.
● The insurer doesn’t need to prove a connection between unseaworthiness and the loss.
A (Application)
● When the ship began the saltwater part, it was not seaworthy because of the faulty
boiler.
● Even though it was repaired before the hurricane, the breach had already occurred.
● The law says once a warranty is breached, the policy is void — it cannot be “revived”
after fixing the problem.
C (Conclusion)
The court held the insurance policy was void because the ship was unseaworthy at the
beginning of the saltwater voyage.
The insurer was not liable for the loss.
This case confirms that each stage of a voyage requires a new warranty of seaworthiness,
and any breach cancels coverage immediately.
Would you like me to make a comparison chart showing how this case differs from Complete
Insulation Pvt. Ltd. v. New India Assurance Co. Ltd. (since both deal with exclusion or warranty
issues)?
No problem 😊 — let’s go step by step in very simple words.
🧾 Facts (What happened)
● A man named Dilip Kumar Ghosh had marine insurance for his goods (cargo).
● His goods were sent by ship to Bombay Port.
● But some goods were short-landed — meaning the ship did not unload all the goods
properly.
● Later, the goods that were unloaded were burnt in a fire at the port.
● So he asked the insurance company (New India Assurance) to pay him for the loss.
⚖️ Issue (Question before court)
Was the insurance company responsible for paying for the fire loss
even though the carrier (ship company) had protection under law?
📚 Law (Rules used)
1. Marine Insurance Act – says an insurer must pay for losses caused by insured risks
(like fire).
2. Major Port Trust Act – says that if you want to make a claim against a port or carrier,
you must give them written notice within a certain time.
If you don’t give notice, they are not liable.
3. Joint and several liability – means more than one party can be responsible for paying
the same loss.
🔍 Application (Court’s reasoning)
● The court said: The fire was a risk covered by the insurance policy.
● Even though the carrier could not be sued (because the claimant didn’t give notice
under the Port Act),
the insurance company still had to pay,
because their duty comes from the insurance contract — not the Port Trust Act.
● The insurer could not use the carrier’s immunity as an excuse.
✅ Conclusion (Final decision)
The insurance company (New India Assurance) was held liable to pay for the fire loss.
It was also said that the insurer, carrier, and port could be jointly and severally liable —
meaning the insured can recover full compensation from any one of them.
💡 Easy Summary
Part Simple Meaning
What happened Goods insured, short-landed, then burnt at port.
Main question Does insurance company have to pay for the fire loss?
Court said Yes — insurer must pay. Carrier’s legal protection doesn’t stop
that.
Why important Shows insurer’s duty is independent of carrier or port laws.
Would you like me to explain what “short-landed” and “joint and several liability” mean
next?
Here is the FILAC (Facts, Issue, Law, Application, Conclusion) analysis of the case Priya Blue
Industries Ltd v New India Assurance Co Ltd (2005) CPJ 94 (NC):
Facts
Priya Blue Industries Ltd, engaged in shipbreaking and scrap dealing, purchased a large vessel
("Vloo Arun") for demolition. The vessel was insured by New India Assurance Co Ltd for a short
voyage from Alang Anchorage to the shipbreaking yard at Alang. During this "funeral voyage,"
the vessel was damaged and could not be beached at the yard, frustrating the purpose of the
purchase and insurance.
Issue
Whether the insured sustained an actual total loss or constructive total loss of the vessel under
the Marine Insurance Act, given the vessel's damage and inability to complete the intended
voyage to the breaking yard.
Law
● Marine Insurance Act, particularly provisions relating to total loss and constructive total
loss under Sections 57 and 60.
● Principles governing marine insurance claims for shipbreaking vessels on short voyages.
● Consumer Protection Act, 1986 jurisdiction over insurance disputes.
Application
The National Consumer Disputes Redressal Commission (NCDRC) examined evidence,
including surveyors' reports and witness statements, and found:
● The vessel's damage was caused by perils of the sea during the insured voyage.
● The insured could not bring the vessel to the designated breaking yard, frustrating the
contract's fundamental purpose.
● Accordingly, there was an actual total loss or constructive total loss under the policy
terms.
● The insurer's repudiation on grounds other than non-disclosure was found unjustified,
and the insurer was liable for the claim.
Conclusion
The NCDRC held that Priya Blue Industries Ltd was entitled to compensation under the
insurance policy as there was an actual or constructive total loss of the vessel. The insurer, New
India Assurance Co Ltd, was directed to pay the claim amount with interest.
This case highlights important principles on actual and constructive total loss in marine
insurance, especially in the context of short voyage policies for shipbreaking purposes, and the
jurisdiction of consumer forums in insurance disputes.
If further detailed excerpts or analysis of specific legal principles from the judgment are needed,
please let me [Link]+2
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