Opinion ID: 594404
Heading Depth: 3
Heading Rank: 1

Heading: Implied Warranty of Seaworthiness in Voyage Policies

Text: 49 It is well-settled under maritime law in England and America that there is an implied warranty of seaworthiness in voyage insurance policies. 10 In The Caledonia, 157 U.S. 124, 131, 15 S.Ct. 537, 540, 39 L.Ed. 644 (1895), the Supreme Court stated: 50 Every person who proposes to any insurers to insure his ship against sea perils, during a certain voyage, impliedly warrants that his ship is, in every respect, in a suitable condition to proceed and continue on that voyage, and to encounter all common perils and dangers with safety.    This warranty is strictly a condition precedent to the obligation of insurance; if it be not performed, the policy does not attach; and, if this condition be broken, at the inception of the risk, in any way whatever and from any cause whatever, there is no contract of insurance, the policy being wholly void. 51 Id. at 131, 15 S.Ct. at 140 (quoting PARSONS, 91 MAR. INS. 367). Similarly in England, section 39(1) of the Marine Insurance Act of 1906 provides: In a voyage policy there is an implied warranty that at the commencement of the voyage the ship shall be seaworthy for the purpose of the particular adventure insured. 52 The implied warranty of seaworthiness in a voyage policy is absolute in nature. See 1 ALEX L. PARKS, THE LAW AND PRACTICE OF MARINE INSURANCE AND AVERAGE 258 (1987) (The cases are legion establishing that in a voyage policy, the law implies a warranty on the part of the assured which amounts to a positive undertaking--an absolute condition--that the vessel at the commencement of the voyage is seaworthy). The word warranty in this context, according to Professors Gilmore and Black, has its most drastic meaning. GRANT GILMORE & CHARLES L. BLACK, THE LAW OF ADMIRALTY § 2-6, at 63 (2d ed. 1975). If the implied warranty of seaworthiness in a voyage policy is breached--that is, if the vessel is not in fact seaworthy at the beginning of the voyage or at the inception of the risk--then no recovery can be had on the policy. This result does not depend on the knowledge or fault of the assured. Id. (citing Richelieu & Ontario Nav. Co. v. Boston Marine Ins. Co., 136 U.S. 408, 429, 10 S.Ct. 934, 940, 34 L.Ed. 398 (1890), and Bullard v. Roger Williams Ins. Co., 1 Curt. 148, 4 Fed.Cas. 643 (C.C.D.R.I.1852) (No. 2122)). Nor does this result depend on the subsequent loss being directly attributable to the lack of seaworthiness. See Gregoire v. Underwriters at Lloyds, 559 F.Supp. 596, 598 (D.Alaska 1982) (citing GILMORE & BLACK, supra, at § 2-6). 53 The absolute nature of this implied warranty of seaworthiness is grounded in a public policy choice. The warranty is intended to take away all temptation to expose life and property to the dangers of the seas in vessels not fitted to encounter or avoid them. The Caledonia, 157 U.S. at 134, 15 S.Ct. at 541 (quoting the jury charge given in Bullard v. Insurance Co.). It is premised on the notion that, because the insured is best able to foresee the nature, extent, and necessities of a specific voyage, the insured is also best able to have the vessel adequately prepared for that voyage. See Langhauser, supra, at 449 (citing Hoxie v. Pacific Mut. Ins. Co., 89 Mass. (7 Allen) 211, 225 (1863), and Capen v. Washington Ins. Co., 66 Mass. (12 Cush.) 517, 536 (1853)). In short, the absolute warranty implied in every voyage insurance policies represents an early attempt by the law to place the risk of loss on the cheapest cost avoider. See also GILMORE & BLACK, supra, § 2-6, at 65 (absolute nature of the implied warranty of seaworthiness in a voyage policy doubtless had a wholesome effect on the discipline of the shipping industry in early, less well-policed days); cf. GUIDO CALABRESI, THE COSTS OF ACCIDENTS (1970). 54