Orient Mutual Insurance Company v. Wright - 64 U.S. 401 (1859)
U.S. Supreme Court
Orient Mutual Insurance Company v. Wright, 64 U.S. 23 How. 401 401 (1859)
Orient Mutual Insurance Company v. Wright
64 U.S. (23 How.) 401
An open or running policy of insurance upon
"coffee laden or to be laden on board the good vessel or vessels from Rio Janeiro to any port in the United States, to add an additional premium if by vessels lower than A 2, or by foreign vessels,"
contained also the following clause, viz:
"Having been paid the consideration for this insurance by the assured or his assigns, at and after the rate of one and one-half percent, the premiums on risks to be fixed at the time of endorsement, and such clauses to apply as the company may insert, as the risks are successively reported."
This is different from an ordinary running policy, in which the rate of premium to be paid is ascertained and inserted in the body of the policy at its execution, and in which species of policy the contract becomes complete, and the policy attaches upon the goods from the time they are laden on board the vessel, as soon as the ship is declared or reported, provided the shipment comes within the description in the policy.
The rules explained which govern this class of policies.
But in the policy in question there is something more to be done, in order to make the contract complete, than merely to declare the ship. The assured must pay or secure the additional premium, which the underwriter has reserved the right to fix at the time of the declaration of the risk in case the vessel rates lower than A 2.
Unless the assured paid or secured this additional premium fixed by the underwriter, the contract of insurance, in respect to the particular shipment, did not become complete or binding.
Hence, the instruction of the court below was erroneous which held that the contract was complete and binding as soon as the vessel was reported, and that if the parties could not agree as to the additional premium, the question was one for the courts to settle.
The parties stipulated that the additional premium should be fixed when the risk was made known.
The cases upon this point cited.
The facts are stated in the opinion of the court.