Detailed Analysis of Anderson v Morice and Marine Insurance Act

This report provides a critical analysis of the Anderson v Morice case, which addresses marine insurance law and the concept of insurable interest. The analysis begins with an introduction to the case, where a purchaser of rice cargo sought an insurance claim after the cargo was lost at sea. The main body of the report delves into the specifics of the case, examining the court's ruling that the purchaser lacked insurable interest due to not bearing the risk or ownership at the time of loss. The report then integrates statutory law and case law, including the Sales of Goods Act 1979 and the Marine Insurance Act, to justify the court's decision, emphasizing the importance of contractual agreements and the timing of risk transfer. The report further supports the decision by referencing cases like Stock v Inglis and Lucena v Craufurd. The conclusion reinforces the importance of clear insurance contracts and aligns the Anderson v Morice decision with preventing fraudulent activities. The report highlights the relevance of proprietary rights and the rightful insurance claims, ensuring that losses are correctly compensated.

QUESTION 2

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Critical analysis of the case and the relevant law........................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The study of various cases is necessary to develop a better understanding against the laws
that have been developed and upheld. In the present report, the case of Anderson v Morice
(1876) will be evaluated where the Marine insurance law will be discussed majorly and the case
will be critically analysed in the similar context. Lastly a valid conclusion will be presented
regarding the key points that were covered in this report.
MAIN BODY
Critical analysis of the case and the relevant law
The current case being analysed in the case of Anderson versus Morice was addressed in
the supreme court of Washington in 1876. Plaintiff here was the person who purchased the rice
cargo from a Rangoon vendor but the chartered ship in which the cargo was loaded i.e. Sunbeam,
sank1. The defender however maintained that plaintiff i.e. assured did not have any insurable
interest and therefore could not claim any amount because of the lack of adequate risk. Under
this case, there was a purchaser of the cargo of rice who did not had any rights to the property
and nor he was the risk bearer of the cargo. When the cargo was destroyed however, the cargo
holder could not claim the insurance policy amount despite the fact that such policy was acquired
before the cargo i.e. rice was destroyed. It was ruled out that the cargo holder lacks the insurable
interest and therefore could not lay any claim o the insurance amount despite incurring loss
because the loss was not in his personal capacity and the ultimate bearer of the loss was someone
else. It was stated that the purchaser of the cargo does not have an insurable interest and
therefore the cargo holder had no right over the insurance claim2. The ruling was laid that the
purchaser of the cargo only has an insurable interest in the cargo on the profits that are earned
from the sale of such cargo that was purchased. Until the risk is passed on to the cargo holder
after the cargo is loaded, there is no direct interest or risk of the cargo purchaser and therefore,
the claim on the insurance amount was held negligible by the court’s decision. This decision can
be evaluated in the context of the statutory law and case law as well.
In international transport passage has dynamic nature of risk and ownership of goods so
either buyer or seller may deem as having ownership of cargo and associated risk. As per
1 Guo, 2017
2 Soyer and Tettenborn, 2016
3

Anderson v Morice it stated that whether insured person has ownership or at risk at time of loss
so either buyer or seller will get benefit from insurance3. It is also essential that both parties have
agreed contract between each others that clearly illustrate that who is the owner and legally bear
risk or damage related to cargo so that owner of the cargo can be identified at time of loss. So it
can be stated that insurable contract should be made between seller and buyer for period of
transportation to get insurable interest of cargo. Various acts are as follows:
Sales of goods Act 1979: It respected to good bought and sold and stated that both ownership
and risk related to goods takes places at same time but it should not agreed between party that
both ownership and risk to takes place at different time.
Marine Insurance Act: As per section 14(3) the person or owner of insurable property and
cargo is person that is identified to given full value of cargo as it have full interest in insurable
amount of company. It have been seen that person have insurable interest limited to ownership
only but it term of ordinary business offers two sources such as property rights of cargo and its
associated risk for damage for point of view of buyers and sellers. Suppose some third party has
agreed to bear loss or liable for damage then it should be prescribed in the agreement so it can be
cleared that who will actually bear associated risk with cargo 4. Associated risk and ownership
stated that insurable interest of buyer and purchase of cargo and benefit of insurable claim that it
will get from insurance. Therefore as per these two laws Supreme Court has made appropriate
decision not to give insurable claims to insurable interest of properties. As sales and good acts
stated that ownership and risk associated with goods need to be takes at appropriate time but in
this case of Anderson versus Morice both were taken at different time. At the same time there
was no agreement made between seller and buyer of products regarding associated risk and
ownership of goods so as per the law they are not liked to gain benefit of insurable amount.
Another law named Marine insurance stated that there should be clear and appropriate agreement
between seller and buyer of cargo so that insurable claim given to the person can be easily
identified. But in this case as no agreement is made between seller and buyer about who will bear
associated risk and ownership court has announced not to give insurable claim to both of them.
The damage to cargo has caused before it has acquired the ownership so it stated that person was
not eligible for insurable claims. Insured has not able to get benefits of insurable claim despite
3 Abrahamsson, 2019
4 Gauci, 2017
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the policy was made before good have been destroyed because no contract was made regarding
ownership and risk that was important for getting benefit of insurable claim 5. It can also be
stated from the above case that Seller and buyer should have definite agreement between each
other in order to get benefit of insurance claim. As because there is no agreement regarding two
main sources that is ownership and its associated risk insurable claim cannot be given to both
seller and buyer of cargo. It can also be learned that judge was right in its decision making as the
purchaser has no interest in insurable amount that was against the law as the law stated that
purchaser and seller both should have interest in insurable properties. Sales of goods act stated
that if the insurable interest want to get its benefit of insurable amount has to conduct ownership
and risk associated with cargo at same time. But as the purchase has no right in ownership and
associated risk so no insurable claim is provide to it by insurance company6. From the case of
Anderson v Morice there are two sources that can stated that whether insured person have
insurable interest or not such as it has proprietary rights or its has incurred any risk at time of
cargo insured. Therefore, it can be illustrated that Supreme Court has make accurate and
appropriate decision by not providing benefit of claim to buyer and seller as they have no
agreement regarding associated risk and ownership.
Based on the Marine Insurance Act, there are certain other cases that can be used to
highlight the relevance of the case and the decision that was taken. The Stock versus Inglis
(1884) is the major case that can be illustrated in the context of present case. This upheld the
same decision as in the Anderson v Morice case that the buyer of the goods who does not have
adequate title cannot be said to possess or claim any insurance amount. This is until the risk
passes on to their hand. However, in the case of Stock v Inglis, the risk had already passed7. The
underwriters of a sugar manufacturing company claimed that the buyers of sugar had no claim on
the insurance amount that the company was bound to receive because they did not held the
product i.e. sugar. However, the court stated that even though the buyers of the sugar did not
have the actual product but the risk of the product had already passed on it such purchasers of
sugar and therefore the decision was ruled out in favour of the buyers. Therefore, it was
concluded that since the buyers were the owners of the risk related to the sugar that they had
5 Petrinović, Mandić and Siriščević, 2016
6 Mudrić, 2016
7 Doyle, 2018
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brought, they had avail reason for putting forward their claim on the insurance amount received
by the company.
Through there is nonspecific case law that was referred in the current case, however the
reference to the contract can be clearly signified through such decision that was taken in the
context of Anderson v Morice. The case law of Lucena v Craufurd (1802) can be quoted here
where the decisions in similar peripheral were taken in context of the wagering contracts8. It was
stated that the law earlier clearly eased the process where gambling could take place in the guise
of the insurance contracts because earlier even if the person did not lose and neither gain from
such wager, they had a claim on the insured properties. Therefore, it is necessary to ensure that
such contracts are not enforced that are wager contracts and therefore, the peril of loss for the
actual party could be avoided adequately.
In accordance with the decision that has been taken, it can be said that the framing of the
insurance document must be very clear and precise. This includes names of both the parties i.e.
sellers and buyers clearly and therefore, when a proper contract exits with clearly defined terms
and conditions that have been agreed upon by both the parties, the decision making in such
critical cases becomes easier or simplified9. Similarly, another prominent case i.e. Macaura
versus Northern Assurance Co Ltd., the decision was again repeated based on the same argument
that the person having insurable interest is the only party viable for receiving claims. Through
this claim, it was highlighted that a person who is the sole shareholder in the company or if they
are unsecured creditors then there are not deemed to be having an insurable interest in the
company. This was developed so that the chances of gambling in the business could be avoided
under the pretext of insurance contracts. Therefore, it can be said that the decision that has been
taken in the present case of Anderson v Morice is in accordance with the law and is totally
practical because of the correct justice that is provided in different case scenarios as it was
highlighted above by taking two different examples.
Therefore from the discussion above, it can be clearly stated that the decision that was
taken by the court in the context of the case, Anderson v Morice, was relevant and necessary o
that the fraudulent activities in the disguise of the insurance contracts could be avoided and
8 Owen, A., 2019
9 Kendall and Wright, 2017
6

relevant decisions that are correct and justified could be taken10. The decision can also be
justified by the general rule that is applicable in the cargo trading that the person with the Bill of
lading is the rightful owner and also has a rightful claim to the insurance amount. The rule of
proprietary rights was illustrated in the case law here the right to insure and further the right to
indemnity was also discussed. On the basis of these terms, the case law decision was taken that
the owner of the cargo did not have adequate rights or ownership over the rice cargo thus making
him loose the rights to the insurance claim. This helps in ascertain that the correct person who
has actually suffered losses receives the amount of insurance claim and the loss that is actually
incurred can be set of. The case of Anderson v Morice therefore, helped in developing the correct
basis for ascertaining the person having insurable rights.
CONCLUSION
The research conducted in the report above regarding the Anderson v Morice helps in
ascertain that the right of the insurable claim lies with the risk holder or the product holder. The
discussion of the Marine Insurance Act also concluded that the owner of the insurable right is the
person who has insurable interest. Therefore the entire case law helped in concluding that
discovering the nature of the insured party os the key behind taking decisions regarding
insurance claim.
10 Huda, Khairandy and Hernoko, 2018
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REFERENCES
Books and Journals
Abrahamsson, B. J., 2019. International Ocean Shipping: Current Concepts and Principles.
Routledge.
Chen, C.C., 2016. Insurance Act 2015 in the UK and Lessons for Singapore. Available at SSRN
2928418.
Doyle, H., 2018. Doyle, H., to GA Rounsefell, US Bureau of Fisheries, regarding the early
history of the Fraser River sockeye fishery, with enclosed notes.
Gauci, G. M., 2017. The Rights of a Ship’s mortgagee in English Law. In Security Interests in
Mobile Equipment (pp. 155-180). Routledge.
Guo, J., 2017. The Study of Marine Insurable Interest: A Comparison of Laws in China and the
United Kingdom.
Huda, M.K., Khairandy, R. and Hernoko, A.Y., 2018. The Principle of Good Faith inLife
Insurance Contract: A Comparative Study of Indonesia and The UK. The Social
Sciences. 13(1). pp.80-86.
Kendall, D. and Wright, H., 2017. A practical guide to the Insurance Act 2015. Informa Law
from Routledge.
Mudrić, M., 2016. Faculty of Law, University of Zagreb. International Transport Law
Review, 1(1). p.54.
Owen, A., 2019. The Law of Insurance Warranties: A Problem Incapable of Solution?.
Petrinović, R., Mandić, N. and Siriščević, E., 2016. The importance of maritime law in seafarer
training pursuant to amendments to the STCW Convention. Transactions on maritime
science, 5(01). pp.53-64.
Soyer, B. and Tettenborn, A., 2016. The evolving nature of builders’ risks cover. In Ship
Building, Sale and Finance (pp. 116-134). Informa Law from Routledge.
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