This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If a contract of life insurance contains a provision that the policy shall be void if the insured is in active service, the insurance company is liable if the death of the insured is caused by pneumonia while he is in a training camp.1 An insurance against loss "directly caused by war, bombardment, military or usurped power, or by aerial craft (hostile or otherwise) * * * and fire * * * directly caused by any of the foregoing," but not against "destruction by the government of the country in which the property is situated," includes a loss due to fire which was caused by a bombardment by the government of buildings which were seized by the so-called provisional government of the Irish Republic.2 If a lease contains a covenant on the part of the lessee to keep the premises insured against loss by fire in a certain named insurance company, such covenant is performed if insurance in the usual form in which such company issues insurance is taken out;3 and such lease is not broken by the fact that the lessee, after taking such insurance which contains an exception against " invasion, foreign enemy * * * military or usurped power," refuses to comply with the demand of the lessor that he insures premises against loss by fire occasioned by hostile aircraft.4 A policy which insures against loss by fire, excepting fire "resulting from insurrection, riots, civil commotion or military or usurped power," does not cover a loss by fire which was caused by a bombardment from a German Zeppelin.5 If goods are insured against perils, including "takings at sea, arrests, restraints and detainments of all kings, princes and people," and such goods are bound in a British vessel from the Argentine Republic to Germany, when the war between England and Germany broke out, the owner may recover on the theory of constructive total loss if he is instructed by his government or by a French cruiser to put into an English port.6 In a case in which an English merchant shipped goods on a German vessel before the outbreak of the war, and insured them with an insurance company against the customary perils, including "men-of-war * * * enemies * * * takings at sea, arrests, restraints and detainments of all kings, princes and people," and on the outbreak of war the master put into a neutral port to avoid capture by a British cruiser, the merchant was not entitled to recover upon his policy of insurance, since the frustration of the adventure was not due to the peril itself, but to the precautions taken to avoid the peril7 An insurance against "loss of and/or damage or misfortune to" a stock of jewelry, is not payable by reason of the fact that the jewelry is in territory which has been seized by the Germans in the absence of evidence to show that the Germans had stolen or confiscated such jewelry.8 Since the goods and not the commercial venture were insured, the fact that the owner of the jewelry can not get possession thereof does not amount to a loss on the policy.9
13 Standard Silk Dyeing Co. v. Roess-les & Haeslacher Chemical Co., 244 F4ed. 250.
14 Tennants v. Wilson , A. C. 495 [reversing, Wilson v. Tennants (1917), 1 K. B. 208]; In re Boston Opera Co., 249 Fed. 271.
In re Boston Opera Co., 249 Fed. 271.
16 In re Boston Opera Co., 249 Fed. 269.
17 New Zealand Shipping Co. v. So-ciete des Ateliers et Chantiers de France , A. C. 1.
1 Redd v. American Central Life Ins. Co., 200 Mo. App. 383, 207 S. W. 74.
2 Curtis v. Mathews , 1 K. B. 425 [affirming (1918), 2 K. B. 825].
3 Upjohn v. Hitchens , 2 K. B. 48 [affirming (1018), 1 K. B. 1711.
4 Upjohn v. Hitchens , 2 K. B. 48 [affirming (1018), 1 K. B. 171].
5 Rogers v. Whittaker , 1 K. B. 042.
6 British and Foreign Marine Ins. Co. v. Sanday , 1 A. C. 650 [affirming (1915), 2 K. B. 781].
"A declaration by His Majesty that there was a state of war was issued on August 4, 1014, and thereupon a number of things theretofore lawful became unlawful. Among other things, trading to German ports became unlawful, and an instant duty arose for these two ships to discontinue their voyage to Hamburg. The adventure of carrying this merchandise to its destination became in law a serious offense, and, in fact, impracticable. That the declaration was an act of State can not be doubted. The real point made by the underwriters was that the declaration of war did not directly restrain the ships from proceeding to Hamburg, or the owners of goods from taking them there. They argued that the declaration set up a state of war, and the general law ap-plicable to that state thereupon came into force, and it was not the declaration, but the consequence of it, which destroyed their enterprise. To hold otherwise, they said, would be to throw upon the underwriters an insurance against the consequences of war. In their contention, though the actual exercise of force might not be necessary , yet fear of its being used must be present if there is to be a loss by restraint of princes, and here there was neither force nor the fear of it, for the voyage was abandoned simply because it had become unlawful, and the assured obeyed the law. The proximate or direct cause of the loss was, they said, simply the law of the land.
"My lords, I am not pressed by the circumstances that force was neither exerted nor present, for force is in reserve behind every State command. And it would be a strange law which deprived the assured, if otherwise entitled to his indemnity, upon the ground that he had not resisted till the hand of power was laid upon him, an order which it was his duty to obey. If it were an order which he was not bound to obey, and which he might have successfully resisted either by violence or by process of law, a question might arise whether or not there had been in fact a restraint. But that is outside the present case, and I say nothing of it. What has given me, some anxiety is the argument that His Majesty's declaration was not the direct cause of these adventures being destroyed The maxim, 'Cause proxima non remota snectatur.' has been strictly applied in marine insurance cases And properly so. for there are a variety of perils that may lead to a loss either partial or total, some of them, it may be, covered and others not covered by a policy, and a variety of events or causes that may contribute to a loss, so that without straining language it will be possible to treat it as due either to an insured or to an excepted
"That. I take it, is the reason why this maxim is pushed to considerable lengths in marine insurance law. In view of that, ought we to say that His Majesty's declaration was the direct cause of these adventures being frustrated, or ought we to say that it merely created a state of war which brought into activity a new set of duties and prohibitions, and that one of them, the prohibition against trading with the enemy, necessitated the adventure being wholly given np7 Did the interruption directly come from the declaration or from the law which it awakened! In a sense it came from both, but we must choose which was the proximate cause, for one is the subject of insurance and the other la
"I can see how far-reaching a decision in the former of these senses may prove, but I think it is the right decision. I do not see my way to separating the act of State from its sequel and treating the advent of war conditions as a last distinct link in the chain of causes which brought these voyages to an end. No new law or ordinance was made after the risk commenced. No event occurred to impede the adventure except the declara-
"In my opinion, the clause Ineuring these goods insures their safe arrival at Hamburg, and the destruction of that adventure was directly caused by His Majesty's declaration. It was therefore a loss within the clause which Insures these goods at and from losses against restraint by kings, princes or peoples." British and Foreign Marine Ins. Co. v. Sanday , 1 A. C. 650 [affirming (1915), 2 K. B. 7811.
7Becker v. London Assurance Corporation , A. C. 101.