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insurance in question was (in December, 1854) efiected by the plaintifis with the Globe Company for £35,000, of which £10,000 were declared to be on a warehouse occupied by Pickford & Co., at Camden Town Station; and £15,000 “ on goods the plaintiffs’ own, and on trust as carriers, in the said warehouse.” One of' the conditions attached to the policy was, that “ goods held on trust or on commission are to be insured as such, otherwise the policy will not extend to cover such property.” It was in respect of the goods to which, it was contended, this £15,000 referred that the dispute arose, the warehouse and goods having been consumed by fire during the existence of this policy.
The plaintiffs are common carriers, and through their agents, Pickford & Co., received certain silk goods, of the value of £10 and upwards, to be consigned to Edinburgh. Although the value and nature of this silk was not declared under the provisions of the Carriers’ Act (1 \Vill. IV.,c. 68), the plaintiffs paid its owners in respect thereof, it having been burnt in the warehouse. The decision of the court, whether the plaintiffs were entitled, under the policy, to recover the value of the silk,
_was to determine the general right of the parties.
By the case of lVater.s v. The M onarch Insurance Company (5 E. & B., 870), it was argued, should the present case be guided. There the plaintiffs were wharfingers and warehousemen, and insured flour, “ the propertyof the insured, or held by them in trust or commission.” The flour was the property of the customers, and left at the plaintiffs‘ warehouse tor the purpose of being carted as they might receive directions; and it was held that the flour intrusted to the plaintiffs were “goods on trust ;” that there was nothing illegal in such a policy, and that it extended beyond the plaintiffs’ personal interest or lien on such goods; that they were entitled to retain so much of the money paid them by the insurance company as covered their own interest, and they were trustees for the owners as to the rest, and were interested in every part of the goods.
On the other side, it was said the payment made by the plaintifls to the owners was voluntary. Who are the assured? What loss have they sustained? Why should carriers insure any interest but their own? The reference of “trust as carriers,” it was urged, pointed to the necessity of their divulging to the insurance company whether the goods belonged to them or to others; that the case of Waters v. Monarch Insurance Company was that of wlzar-fingers, and where it is a. custom of trade to have floating policies for the benefit of themselves and the owners of goods alike; that the Carriers’ Act removed the liability of the plaintifis to pay, and therefore deprived them of the right to recover. Further, it was contended that if the plaintiffs insured for the benefit of their customers, and if a policy happened to cover only the insurer's own property or personal interest, nevertheless they would have to share the sum so insured with the cestui que trust, and thus miss realizing a. secu~ rity for their own losses. The question, observed Erle, J., is, whether the plaintiffs, when intending to insure their own interest, made in the term of the policy a special stipulation with the insurance company, that if they had a defence against the owner and sender of the goods, under any provision of law relating to carriers, they would avail themselves of it. “I would add,” continued the learned judge, “that if, for the future, insurance companies, allowing a carrier to insure goods passing through his hands, mean to limit the liability that they incur to such liability as by law could be enforced against the carrier in invitum, more definite words to that efiect should be employed than are to be found in the present policy.”
On the authority of the case already cited, as well as on principle, judgment was given for the plaintiffs. Assuming that the respectable company which defended the action did not mean to enter on the contract as it has been thus interpreted by the court,
but had the effect of the Carriers’ Act in view when they framed‘
the terms of the policy, they should have taken pains to express their meaning clearly, and we commend the observation of Erle, J ., to the notice of their legal advisers.
An equitable plea had been pleaded in this case, which was for rent due for use and occupation. The effect of the plea was, that the value of the premises holden by the defendant of the plaintiff had been diminished by reason of certain buildings thereon having been burnt down; that, although the plaintiff had received his insurance money from a fire-ofiice, he had not rebuilt, and the defendant thereupon claimed to be exempt from paying the full rent. Among the authorities quoted in this case were Leeds v. Cheet/tam (1 Sim, 146), Brown v. Quilter (Ambl., 619), and Lord St. Leonards’ Handy-bonk (1st Ed., p. 101). The passage from the last authority is as follows :—
“ If, therefore, you mean that a tenant at rackrent shall insure at his own costs, you must make him agree to do so by the contract. If you omit this, the lease must be so framed as to exempt him from making good accidents by fire. But, even in
this case you are not bound to insure ; and although the house should be burnt down, yet the tenant must continue to pay the rent, so that each bears his burden——you lose your house, and the tenant loses his rent during the term. If, however, you have insured, although not bound to do so, and received the money, you cannot compel payment of the rent you decline to lay out the money in rebuilding.”
Lord Campbell concludes his judgment in Loft v. Dennis by expressing the deep respect he has for the opinion of Lord St. Leonards, but aflirms that what he states in the above passage does not appear to have been made law hitherto. “ If it were,” the Chief Justice adds, “I should support it.” So Crompton, J ., remarked-“ If it had not been for the passage in Lord St. Leonards’ Handy-book I should not have felt any difliculty in this case. There was no agreement to insure the premises, nor any thing to show any obligation to insure; but it merely appears that the plaintiff chose to do so, and then the tenant says, ‘Well, if you are going to insure, I will not l’ If any inducement had been held out to the defendant (not to insure the premises, the case might have been different.”
In Brown v. Quilter the plaintiff had rented a house for a term of years, and in the lease he covenanted to repair, &c., accidents by fire excepted, and the defendant entered into the usual covenant for quiet enjoyment. The house was burnt down, and the defendant, who had insured, received the insurance money, but did not rebuild the house ; insisting, nevertheless, upon his right to the rent. The defendant having brought an action for the rent, the plaintiff filed his bill for an injunction to compel the defendant either to rebuild or pay to the plaintiff the insurance money. The defendant, by his answer, offered to take back and cancel the lease; but the plaintiff, choosing to continue tenant without having the house rebuilt, rather than to give up the lease, he consented to the dismissal of the bill. The main point, therefore, was not decided otherwise than in the remarks
y Lord N orthington, which we will now quote :—
“The justice of the case is so clear, that a man should not pay rent for what he cannot enjoy, and that occasioned by an accident which he did not undertake to stand to, that I am much surprised it should be looked upon as so clear a thing, ihat there should be no defence to such an action at law; and that such a case as this should not be considered as much an eviction as if it had been an eviction of title, for the destruction of the house is the destruction of the thing. Though this covenant does not extend to oblige the defendant to rebuild, yet when an action is brought for rent after the house is burnt down, there is a good ground of equity for an injunction till the house is rebuilt.”
Turning now to Leeds v. Oheetham: the defendant had there demised by indenture to the plaintiff a factory for twenty-one years. The plaintiff covenanted to pay the rent, and to repair the inside of the factory, and the defendant covenanted to maintain all the outer part of the premises in good repair. There was no exception with respect to accidents by fire, either in the covenant for payment of the rent, or in the covenants to repair. The premises were burnt down, and defendant, \vho had insured, received the insurance money. Under this state of facts, Leach, V.C., held that there being in the lease no exception as to the case of accident by fire, the plaintiff by law continued bound to pay his rent, he continued bound also by his covenant to keep in repair the inside work of the fa.ctory. On the other hand, the defendant, for want of the like exception, eontinuedbound by his covenant to repair the outer part of the building; and, from the particular terms of the defendant’s covenant, the judge said that he was “ bound to rebuild the factory, and to cover in the same with proper roofing and slating, or tiling . . . It appears to me that, in this respect, equity must follow the law. The plaintiff might have provided in the lease for a suspension of the rent in the case of accident by fire; but, not having done so, a court of equity cannot supply that provision which he has omitted to make for himself, and it must he intended that the purpose of the parties was according to the legal effect of the contract. With respect to the equity \vhich the plaintiff alleges to arise from the defendant/s receipt of the insurance money, there is no satisfactory principle to support it. The defendant having so contracted with the plaintiff as to render himself liable to rebuild the outer work of the factory in case of accident by fire, has very prudently protected himself by insurance from the loss he would otherwise have sustained by such an accident. But upon what principle can it be that the plaintiffs situation is to be changed by that precaution on the part of the defendant, with which the plaintiff had nothing whatever to do? The plaintiff has sought his protection in the contract by the covenant which he has required from the defendant; and to those covenants must he alone resort.” To which he adds, “The remedy is at law, and this court cannot interfere.”
The statement of the law in Lord St. Leonards’ book, which we have printed in italics, was founded on the ruling in Brown, v. Quilter, and the learned lord in his new edition (7th, p. 127, n.) distinguishes his statement of the law from that in Leeds v. O’/teetham, and Loft v. Dennis. 1n the first place, in Leeds v. C’/teetham there was no exemption from casualties by fire; while Lord St. Leonards is referring to cases where the tenant is exempt from such casualties. Again, in Leeds v. Cheetham the plaintiff and defendant were left to their remedies at law, as distinctly pointed out by the judge, and it was a mere act of prudence on the part of the landlord to protect himself against liabilities by insuring; but in the case proposed by Lord St. Leonards, the tenant would have no remedy whatever at law against the landlord. there being no covenant on the part of the latter to rebuild. In Lojft v. Dennis, the tenant, it would seem, was merely a tenant from year to year; therefore “ the decision in that case was not opposed to any rule of equity, for equity would not compel a lessor to lay out the money on rebuilding when either party might put an end to the relation of landlord and tenant before the foundation could be well ]aid.”—(Handy book, 7th edit., P. 128, note.) Lord St. Leonards, accordingly, has retained his original text; but remarks, in the note from which we have just quoted, that the decision in Loft v. Dennis was supposed to overrule it-, though we may observe that the court of Q. 13., on consideration, will probably see that it does no such thing.
. A curious phenomenon may be observed in the judicial proceedings which we have referred to. Thirty years ago, a V.C. came to his decision in Leeds v. Oheetham, on the ground that “ equity must here follow the law." The Court of Queen’s Bench, instead of deducing from legal principle the result they should arrive at, considered itself “ bound ” to follow “ the solemn judgment” of the V.C. in Leeds v. C’/ieetham, and thus, contenting itself to follow equity, completed a vicious circle.
Though the judgment in Loft v. Dennis may perhaps, considering the fact of the tenant being a yearly one, be pretty generally acquiesced in, yet the processes by which the Lord Chief Justice (closely followed by his puisnes) arrived at the particular results reported, do not afford overwhelming evidence of judicial acumen.
We will take the opportunity also of drawing the reader's attention to the diflerence between the law of England and the Scotch law on this head--one of which only can be founded on genuine equity; for it is stated in the judgment of Lofiii V. Dennis, that “ by the law of Scotland, if premises are burnt down by an accidental fire, the tenant is relieved from payment of the rent ;” which is not so by the law of England, where, if there is an absolute covenant to pay rent, such covenant must be per~ formed.