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the captain must satisfy the insurers of the purchase by means of the vendor's invoices, and of the shipping and carrying in the ship, by a certificate of the Spanish Consul, or, where there is none, of some other competent authority at the port of shipment, and by the other documents from the Custom-house shewing seaworthiness and clearance.
All persons assured who sail with their own goods are bound by the same obligation, unless otherwise agreed.
B. Bk. II., 174, 175, F. 344, 345, I. 628.
767. If the policy stipulates for an increase of premium in case of war breaking out, and the amount of increase is not fixed, it will be regulated, failing an agreement between the parties interested, by experts, appointed in the way laid down by the Law of Civil Procedure, who will take into consideration the circumstances of insurance and the risks incurred. B. Bk. II., 173, F. 343, G. 852, 853 diff., H. 661, I. 610, P. 604 (3).
768. A free restitution of the vessel or its cargo to the captain by the captors will enure to the benefit of the respective owners without any obligation for payment of the sums insured on the part of the insurers.
769. Any claim under the policy must be accompanied by documents in proof :(1.) The voyage of the ship by the captain's protest or
certified copy of the log. (2.) The shipment of the goods insured by the bill of
lading and Custom-house clearances. (3.) The contract of insurance by the policy. (4.) The loss of the things insured, by the same docu
ments as (1), and the depositions of crew, if required. Moreover, the diminution in value of the goods insured will be fixed by means of a survey by experts.
The insurers may oppose the claim and bring evidence into Court against it.
B. Bk. II., 214, 215, F. 383, G. 886, 888, I. 627, R. 1245, Sw. 268—271.
770. When the necessary documents are presented, the insurer, if they are in proper order and prove the loss, must pay the indemnity to the assured within the period agreed in the policy, and if there is no such period, within ten days of the claim.
But if the insurer repudiates the claim and resists it by law, he must deposit the sum claimed, or give sufficient security to the assured according to the decision of the Judge or Court, as the case may be. B. Bk. II., 215, F. 384, G. 897, 898 diff., I. 631, R. 1246, Sw. 268, 270.
771. If the insured vessel sustains damage from perils of the sea, the insurer will only pay two-thirds of the cost of the repairs, whether effected or not; in the former case the amount of the expenses will be proved by the recognised legal methods; in the latter by the valuation of experts.
The shipowner only, or a captain authorised by him can decide on not repairing the vessel. R. 1248, Sw. 151, 152, 250. Arn. 799, 940, 941. In England the rule only applies to wooden vessels.
772. If in consequence of the repairs the value of the ship is increased more than one-third of the value stated in the policy, the insurer will pay two-thirds of the cost of the repairs, and deduct therefrom the excess in value that has been given to the vessel.
But if the assured proves that the enhanced value of the vessel does not result from the repairs, either because the ship was new and the damage was done on her first voyage, or that the engines or apparel and furniture destroyed were new, the increase in value is not deducted, and the insured will pay the two-thirds of the repairs in conformity with Rule 6 of Art. 854.
773. If the cost of repairs exceed three-fourths of the value of the ship, she is deemed unfit for navigation, and may be abandoned, and if the assured does not make such
139: a declaration (i.e., if he does not give notice of abandonment), the insurers pay the sum insured less the value of the damaged ship or its remains. G. 444, I. 632. Arn. 1046 diff.
774. When the matter concerns indemnities arising out of General Average losses, on the conclusion of the business of making out the average statement, its adjustment and payment, the assured will hand over to the insurer all accounts and documents proving the claims to indemnification of the sums corresponding thereto. The insurer will in his turn examine the average adjustment, and if it agrees with the conditions of the policy, he must pay to the assured the sums corresponding thereto within the specified time, or if there is no specified time, within eight days. After this period the money owing begins to bear interest. If the insurer does not find the adjustment in accordance with the terms of the policy, he may dispute it before a Judge or competent Tribunal within the same term of eight days, on placing the disputed sum on deposit.
775. The assured cannot in any case demand more than the whole sum insured, whether a vessel is saved, and, after putting into a port of distress to repair damages, is subsequently lost, whether the sum payable as General Average exceed the sum insured, or the expense of several distinct damages and repairs in one voyage, or during the time for which the insurance is valid, exceed the sum insured. G. 844 diff., I. 624, P. 603, R. 1252, Sw. 232. Arn. 985, 986 diff.
776. In cases of Particular Average on goods insured the following rules will be observed :(1.) Everything that has disappeared in consequence of
theft, loss, sale on the voyage, deterioration, or any other peril of the sea covered by the policy, will be
valued at its price per invoice, or, failing that, at the value stated in the policy, and the insurer will pay
the amount. (2.) In cases where on arrival of the ship in a safe port
the goods are found partially or completely damaged, experts will assess the value they would have had if they had arrived in good condition and what they are worth in their damaged state. The difference between the values arrived at by those means, after deducting customs duties, freights, and other similar charges, will make the amount or sum of the damage; adding thereto expenses of survey and any others there may be. If the whole insured cargo is damaged, the loss will be paid in full; but if the damage is confined to a part, the assured will receive the corresponding portion of the insurance. If anticipated profits of the shipper be the subject of
the special insurance it will be separately adjusted. G. 879—881, R. 1249, Sw. 251-253.
777. When the amount of Particular Average on ship is fixed by experts, the assured will prove his claim in accordance with the provisions of the final clause of the 9th section of Art. 580, and the insurer will pay in conformity with the provision of Arts. 858 and 859.
G. 876, R. 1248, Sw. 250.
778. The insurer cannot compel the assured to sell the thing insured for the purpose of fixing its value. G. 877, 879, R. 1249.
779. If the valuation of the things insured takes place in a foreign country, the laws, practices, and customs of the place where it is made must be observed, without prejudice to the provisions of this Code for the proof of facts. G. 839, 841. Arn. 910--912.
780. When the sum insured is paid by the insurer, he is subrogated to the assured in all rights and actions pertaining to them against persons by whose wilful act or default the loss of the things insured has been caused.
H, 284, G. 872, 809, Sw. 225. North of England Ins. Ass. v. Armstrong, L.R. 5, Q.B. 248. Simpson v. Thomson, 3 App. Cas. 284.
Of cases in which the Contract of Insurance is annulled,
rescinded, or modified. 781. A contract of insurance is null which is made :(1.) Upon ships or goods which are already the subjects
of a loan on bottomry for their full value;
portion outside the loan on bottomry. (2.) Upon the lives of the crew and passengers. (3.) Upon the wages of the crew. (4.) Upon contraband goods in the country of the ship's
flag. (5.) Upon a vessel habitually used in a contraband trade,
where the damage or loss is occasioned by such use, in which case the insurer will recover } per cent. of
the sum insured. (6.) Upon a vessel which, without the intervention of
force majeure does not go to sea for six months following the execution of the policy, in which case, over and above the annulling of the policy, the insurer will proceed to take a share of } per cent. of the sum
insured. (7.) Upon a vessel which does not undertake the agreed
voyage, or which goes to a different place from that agreed on, in which case also the insurer will proceed to take a share of } per cent. of the sum insured.