Legal Subject: Insurance

Case Date Legal Subject Abstract
Clay v. Coulter 1770 Insurance Pursuers Clay and Midgley, merchants in Liverpool, purchased tobacco on several occasions from McKittrick and Company, located in Virginia. To pay a balance due to Clay and Midgley, McKittrick and Company sent a shipment of tobacco to them in November 1761. Clay and Midgley obtained insurance on this shipment from defender James Coulter, a merchant in Glasgow. The ship sailed from Virginia for Liverpool, but it was captured by a French privateer in February 1762. Learning of the capture, Clay and Midgley sought to recover their losses from the insurance policy. Coulter insisted on retaining the sums he underwrote in the insurance policy, claiming that he was also a creditor of the McKittrick Company. Coulter argued that the insurance payments were debt payments to him. He contended that the cargo remained the property of McKittrick and Company until it was delivered at Liverpool to the consignees. As such, the cargo was claimable by creditors. Clay and Midgley respond that, under the established law of merchants, the consignees had an exclusive interest in the goods that the consignor's creditors could not defeat.
Hamilton v. Hunter and Co. 1782 Insurance, Contract This case was about the purchase of an insurance policy by a broker. Robert Hunter and Company, in Saltcoats, asked James Hamilton, an insurance broker in Glasgow, to procure an insurance policy for a ship sailing to the Firth of Clyde. Hunter and Co. specified that the policy should not cost more than eight guineas per cent. However, Hamilton was unable to find insurance at this price, so he procured a policy at nine guineas per cent, paying the difference himself. He then wrote Hunter and Co. to inform them of the action he had taken. In the letter, Hamilton stated that if Hunter and Co. did not approve of the policy, they could have it vacated by sending a return letter "in course of post." Hunter and Co. wrote back two days later to reject the policy; in the meantime, the ship in question had arrived safely. Hamilton sued for payment of the premium. In response, Hunter and Co. argued that their rejection of the policy was valid.
Innes v. Stuart 1771 Insurance, Shipment Pursuer Robert Innes, a merchant in Elgin, purchased an insurance policy in September 1769 from defenders James Stuart and James Stodart, merchants in Edinburgh. The policy covered a shipment of oats and grain from Elgin to the Firth of Forth. During the trip, the ship sprang a leak and was forced to stop at the nearest port in the harbor of Montrose. The ship also touched upon a rock in the port. The goods in the ship were considerably damaged, so Innes sought payment from Stuart and Stodart under the insurance policy. Stuart and Stodart refused to pay, finding that neither the insurance policy nor the practice of merchants covered this ship's situation. The insurance policy at issue covered damage when the ship was stranded. Stuart and Stodart maintained that the damage to the ship occurred before the ship was stranded, when the ship sprung a leak. Innes disagreed, arguing that the damage to the cargo only occurred after the ship was stranded, thereby triggering coverage under the insurance policy.
John Steven and Company v. John Douglas 20 Dec 1774 Insurance, Deviation Defender John Douglas provided an insurance policy to pursuer John Steven and Company for a shipment of goods on the Belfast Trader. The planned shipment route was from Belfast to Greenock or Port Glasgow. Before the ship set sail, however, merchants in Stranraer requested that the ship transport some goods from Belfast to Stranraer. The owner of the Belfast Trader agreed to transport these goods. In the course of trying to reach Stranraer, the ship encountered a storm and sank off the coast of Girvan in Ayrshire. Douglas refused to reimburse Steven and Company. Douglas claimed that the voyage taken by the Belfast Trader was different than the voyage provided for in the insurance policy. Steven and Company sought reimbursement, arguing that the voyage to Stranraer on the way to Greenock or Port Glasgow was not a significant deviation from the original route.
Mackies v. Houston and Others 1774 Insurance, Deviation Pursuers Alexander and John Mackies obtained insurance for their ship, the Marshall of Gardenston, and its cargo. Although the ship was bound for Dundee, it docked at Down (now known as Macduff) during the voyage, and the cargo was stolen by a mob. The pursuers applied to the insurance underwriters for indemnification and eventually brought suit against them. However, the underwriters argued that they were not required to pay because the ship-master had deviated from the insured voyage by going to Down and taking on cargo there. Relevant documents are reproduced in an appendix to the defenders’ court filing.
Richardson and Co v. Stoner, Hunter, and Ker 20 Nov 1783 Jettison, Insurance This case was about apportioning liability for a cargo of salmon that was partially jettisoned and partially sold for a lower-than-expected price before reaching its planned destination. The owners of the salmon raised an action for damages against their underwriters, as well as the merchants who sold the salmon and the shipmaster-owner of the vessel; they argued that the shipmaster lacked authority to make the sale. The underwriters argued that although the relevant policy covered the jettisoned cargo, it did not apply to a partial loss such as the allegedly premature sale.