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M ARINE INSURANOE.- RESPON
SIBILITY IN ORDER OF DATE
AND RETURN OF PREMIUM.
'riE practice that has a so'ong
prevailed in the case of over-in
surance, or double insurance, of
sharing the risk in proportion to the
sum insured, and returning the pre
mium according to the same pro
portion without respect to the dates
of policies, is at an end. It has
been ruled in the case Fisk v. Mas
terman that the law of England
corresponds with that of the conti
nent, and if the policies be of dif
ferent dates and a loss follows, the
one first effected will be responsible
to the full amount; and if the ad
venture arrive safe the first under
Writer will be entitled to retain the
whole of the premium received. The
old method of sharing losses aind
returning premiums hias been con
tinued up to 1856 in Australia, but
in that year the case of
was decided in Sydney,
and directed general attention to
the point. As the matter is of im
portance to every mercantile man,
as well as to those engaged in busi
ness of insurance, we shall, perhaps,
be performing a service by placing
the whole question before them.
Stevens and the author of the arti
cle "Inusurance" in AI'Culloch's
Dictionary, have both pointed out
that the foreign custom was more
equitable than the English. We
quote the latter :
Extract from McCulloch's Dictionary of
Commerce and Commercial Navigation
-page 747. Edition 1840.
Although we have treated separately of
returns for short interest and over-Insur
ance, we should observe that theso.terms
in practice. are used indiscriminately, and
indeed we cannot say that we perceive
much advantage in nmaking the distinction
or preserving the distinctive appellations.
It soumtlmi- t pl,.eus that the property
expected is a tsesel is not all insured at
one time or in one policy. But this makes
no diflereooce In the principle of settlement
accordiug to our law; although according
to the laws of most other countries the
piolicies take precedence of one another
according to their dates-the whole short
interest failing upon the policy or policies
last effected. The foreign law In this
instance appears to us the more equitable
and reasonable of the two; and that our
reason for thinking so may. be intelligible,
and thus gain assent or meet with refuta
tion, we shall state a case of short interest
upon a number of policies, such as not
unfrequently appears:-A merchant A,
orders his correspondent at Calcutta to
ship for his account a quanutity of sugar
not exceeding 1000 tons, at a price not
exceding £20 per ton. In duo time lihe
receives a letter from his correspondent,
acknowledging the receipt of his order, and
expressing confident hopes of being able to
purchase the quantity or the greater part
of it at the limits prescribed, and pro
mining to advise as lie proceeds. A, on
receipt of this letter-say on the first of
January-makes a provisional insurance
for £5000 upon sugar valued at £20 per
ton--continuing without further advices,
and fearing lest his correspondent's letter
should have miscarried and that he might
have property afloat uninsured, on the 1st
of February, ]st of iMarch, and Ist of
April he effects similar insurances, thus
covering the whole 1000 tons. He subse
quently receives advico that his correspon.
dent had not been able to purchlaso more
than one-half the quantity ordered at his
limit, and he recovers from his insurers
half the premium upon each policy. Now,
it was not at all improbable that lie might
have received advice from his correspon
dent, as he had expected, much sooner
and if he had received advice in the middle
of February of the shilpment of 500 tons,
and that the ship which eontalned them
was totally lost in the river IIooglily-the
Insurers upon the two first policies would
have been liable to ia total loss. And it
appears to us a defective arrangenment by
which a party, who is at one thimne exposed
to a total loss, should at another be com
pelled to return half his premium. It Is
true that the merchant may, if lie please,
Insert in his policies a clause by which the
policies shall be made to succeed one
another; but we should say that the law
in insurance cases, as in the disposal of the
property of deceased persons, ought to be
the best general disposition, leaving to
individuals the right of modification
according to particular circumstances.
Perhalps the best authority on
insurance is Arnould. Leoni Levi
in his Commercial Law of the
World, almost exclusively quotes
Arnould :
Extract front Arnould on tMarine Insurance
(1848), vol. I, sec. 5; p. 291, "of
double and over-insurance.'
Double insurances are not prohibited by
the law maritime, unless made fraudu
lently; in fact, a moment's consideration
will show that they are in many cases of
necessary use.
A merchant, who expects consignments
from abroad, may be ignorant of their
exact value; he may, in the first instance,
have'effected ani insurance on them only to
an amount which subsequent information
may lead him to think inadequate to cover
their full value, and on that grouitd he
may be desirous of effecting a lirther in
snrance; or he may have Insured as much
as he is able in one place, and being still
desirous of firther secnrlty may then pro
ceed to effect additionial insurances else
where; on these and olther grounds the
practice of double insurauce Is everywhere
permitted.
If it turns out that the whole amount
insured in the different policies is greater
thantlhe whole amount of thel interest nt
risk, this Isl called an over-insurance; in
such ease It is quite clear, and nowhere
disputed,that the assuredl can onlyrecover
upon all the pollcies put to ether (i.e. sup
posilg them to be open polcles) up to the
amount actually at risk; that is in this
couutry the pecise cost of the goods, or
their invoice cost, couled with the expcise
of jutting them on board aed tihe premium
of unsurrnce;.
SThius far the maritime laws of all states
are agreed: there exists, however, a differ
ence of practice as to the mode in which
this principle is to be applied to settliug
the claims of the assured against the lnder
writers on the different policies, and of it
these underwriters'inter se. I
TIh, rule that now prevails In this coun
try was established by Lord lanelsficld,
and is as follows:- v
In case of over-insurance, thie different f
sets of policies are considered as making v
but one insurance, and are good to the c
extent of the value of tile effects put in I
risk ; the assured can recover on the differ- s
out policies no more than their value, but i'
he may see the underwriters on either of t
the policies, and recover from those he so
suies to the full extent of his loss, supposing 1
it to be covered by the policy on which he t
elects to sue, leaving the underwriters on
that policy to recover a rateable sum, by a
way of contribution, from the'underwriters
on the other policy.-(Nowly v. Reid, 1 a
W. Bl. 416. Rogers v. Davis and Davis
v. Gildart, A.D. 1770. See Marshall on t
Ins. 140, 141. Park on Ins. 001, 602,
8th edition.) t
Hlence where a merchant, the value of t
whose whole interest was 22001., first
effected a policy on this interest at Liver
pool for 17001. and then (without fraud)
another policy on the same interest at
London for 22001. lie was allowed to re
cover the whole amouut on the London
policy, and the London underwriters were
allowed to recover a rateable amount, by
way of contribution, from the Liverpool
underwriters.-(Davis v. Gildart.)
The rule thus established by Lord
Mansfield must be taken to be the law of
the land, and is the only rule upon which
tile courts would allow parties to proceed,
unless an express stipulation were intro
duced to a contrary effect.
This rule, however, is not that which
formerly prevailed in this country, which
noiw prevails in France, and which in tile
United States is generally rendered binding
on ithe parties to the second policy, by an
express clause relating to prior Insurance.
That rule is, in the words of the Code de
Commerce, "that where there exist several
contracts (N.B.-not "policies") of itisu
rance effected without fraud on the name
subject If the first contract insures the
total value of the subject at risk, it alone
shall be enforced."
The insurers who have signed tile sub
sequent contracts are freed from liabiliry;
and only receive half per cent. on the sums
insured.
If the whole value of the subject insured
is not covered by the first contract, those
insurers who have signed the subsequent
contracts shall be responsible for the sur
plus, in the order of the date of their res- t
pective signatures.-(Codo do Cainterce
Art., 359.)
So in this country it was once pleaded I
and " proved by all the exchange" to be t
the custom of merchants "that wlhere a E
policy is subscribed by a number of under
writers, ansd the goods are not equal In
value to the sums subscribed, (taken
together) the underwriters its case of loss,
slhall be liable in the order in which they a
subscribe, and the remaining underwriters a
shall be exonerated from all liability, and a
returni the premium, deducting half petr
cent."-(The Afrie. Comnp. v. Bull, Show. I
132. See also Malynes Lex Ilercatoria,
112. But the rule in France was never
applied to several subscriptions to one
policy unless they bore different dates;
and this probably is the true meansing of
the English rule.)
The common law rule in tile United
States, is tlhat laid down by Lord ilans
field; but ithe law, as it anciently Iprevailed
in England, and is now established inl
France, is deemed by the American mer
chants so preferable itsn point of si uplicity,
and convenience, that clauses are very
generally introduced into their policies, to
i prevent the rule of contribution, and to
make the insurers responsible according to
the order of date of their subscriptions.
SThe clause adapted to the seeond policy,
is to this effect: "it Is further agreed,
that if the assured shall have made any
other assurance upon the premises prior in
date to this policy, tile assurers shall be
answerable only for so much as the amount
of such prior insurance may be deficlent."
The form adapted to the first policy runs
thus: "in case of any subsequent insur
ance, tile insurers shall, nevertheless, be
answerable for the full extent of the sum
subscribed by hIim, without right to claim
5 contribution from subsequent assurers."
(Kent's Comm., vol. 11., pp. 280, 281, ed.
1 1844 ; Phillils oil Ins., vol. II., p. 59, 65.)
T 'there appears no reason why some
such clause might not be adopted in our
l own country.-(That our mercautile ment
would find the convenience of such a
clause see A?ICulloch's Comi. Die. Art.
Malr. Ins., p. 70, ed. 1837)
In France and tile United States, (in
cases where this rule has been adopted) it
has been decided, that, even where the
second policy is dated on the same day as
the first, illquiry may be made as to which
of tile two was actually first effected in
point of time, and that which was so will
alone bear the loss.-(Boulay-Paty Cours
de Droit, Comm. AIar., tom. IV, pp. 122,
123; edition 1834; t Brown v. Hartford,
Ins. Comp., 3 Day's SRep., 58; t Potter v.
Aitar. Ins. Comp. 2 Mason's Rep., 275,
cited in Kent's Comm., vol. III, p. 281,
ed. 1844.
This rule, however, does not in France
exteud to different subscriptions of uniform
date to the same policy; forif they all bear
one date, they make but one contract, and
the whole body ot the underwriters in case
tile suns insured it sucll policy, exceeds the
value at risk, contribute rateably to the
lons, ntd return a rateable share of prem
ium for the excess.-(Boilay-Paty, Cours
de Drolt Mar. tom. 1V, pp. 116, 117, ed.
1834.)
If the subsequent Insurance be made
with thefraudelent intent on the part of the
assured to recover more than indemnity,
e and this fraudulent intent behprovedby the
-undelwriters, the law of France is and
a that of this country, it is apprehended,
Swoniuld be thie same, that he slhall pay the
whole premium oni thCe secondt policy, and
- recover nothingl under it.-(If ihe sues on
e tle second policy hie miay in France be
e proceeded against criminally; see the ge
nieral French law ou tile subject of frau
C dulent over-insurance, Emerigon chap.
r IX, sect. 2, vol. I, pp. 270, 272, and tle
essmmtentary of Boulay.Paty, Ibid, pp. 272,
n 273, ed. 1827; for the application of thei
e law to the ease of double insurance see
SBoulay-raty Cours de Droit Comm. MSar.
- tom. IV, pp. 124, 125, ed. 1834.
If tile underwriter and the assured are
Sboth aware at tile theu of elfectinig the
second policy, that ithe whole amount of
Sinterest has already beens fully covered by
a the first, this would be a mnere wager, nad
void, and the principle would apply cusr
Sdtritaqne surpittrlo versatutr censanl r'epetiio;
- tile assured ,woul recover nothing on osch
I policy; and it the premleum lhad been paid
g the assured colthl not demand a return; if
siot paid, the underrwriter could stot clnhis
it.-(BoulanPoty, Cours do Drolt Comm[
Mar. tom. V, p.114, ed.1834.
It has been laid down by Mr. Marshall,
as following from LordManafield'srule that
whore, by several policies made without
fraud, the total sum isnured exceeds the
whole value at risk, "all the underwriters
on the several policies would lie equally
bound to make a return of prom. for the
sum insured above the valto of the effects
in proportion to their respective subscrip
tions.-(Marshall on Ins., 649.)
The rule, however, as to this point, must
be now taken with this limitation, viz,
that, where two sets of policies of different
date are effected on the same property,
and the amount insured il tile first set is
not equal to tihe value at risk, though the
aggregate sum Insured in the two iots ex
ceeds it; in such case the underwriters on
the last set of policies, in point of date,
shall alone be called on for a rateable re
turn of prem.; on the equitablo principle,
that, as thire underwriters on the first set of
policies were, at one time, liable to the
whole extent of the sum therein insured,
so they are fairly entitled to retain the
whole premium. (Fisk v. Mastermann, 8
Moos. & Wels., 165; thus establishing the
ruls on the footing contended for by the
able author of the article!on Marino Ins.
in Ml'Culloch's Dictionary, p. 702, ed.
1837.)
Where a double insurance has thus been
effected inl two valued policies, a quostiou
has arisen as to tihe effect of the valuation
in one policy, ill limiting the amount to he
recovered under the other. The rule ap
pears to be that, if the same vsluo is
declared in both policies, tihe party who
has recovered to the full extent on one of
the policies, can recover nothing on the
other; even though the thing insured be
proved to be worth really more than the
value so declared; but whero thie value
declared in tihe two policies is different,
the fact that the assured nhas already re
covered under the first policy to the fill
extent of the value declared ill the second,
shall not prevent himn fron recovering a
farther sum under tihe second policy, if the
real value of the subject exceeds the
amount recovered under the first policy.
Thus, where a party, having recovered
£6000 which lie had insured with the
London Insurance Company on a ship
valued in that policy at £8000, brought
his action against a private underwriter for
£600 which he had insured with inm on
tile same ship in another policy in which
she was valued at £6000: the recovery of
tile £6000 under the first policy, was held
no bar to his recovering inl addition the
£600 insured by the second policy, proof
having been given that tihe real value of
the ship was upwards of £006600, the aggre
gate of the sumus recovered on the two
policies.-(Bonsfleld v. Barnes, 4 Camp.
228.)
But where a party, having insured
£1700 on his ship in one policy, inl which
site was valued at £3000, afterwards in
sured a farther sum of £2000 on the same
ship in a second policy, in which she was
also valued at £3000: Lord Tenterdon
held this valuation being the same in both
policies was conclusive; and he would not
permit tihe assured to recover more than
£3000 on both policies together, although
it was proved that tile vano of the ship
exceeded £3700, the aggregate of the sums
insured inl both.-(Irving v. Richardson, 1
Mood. & Rod. 168; see also S. C. in 2
B. & IId. 19t.)
Although, as we have seen, in cases of
double insurance, properly so called, i.e.,
where the same person insures tile same
interest by several policies on the same
risk, lie cannot recover more than all
indemnity, i.e., more that the real or de
clared value of the thing assured, untrder
all the policies put together; yet is is
different where two or more persons in
sure the same thing against the same risks
on distinct interests.
In such case each of the parties, having
such distinct interests in the thing In
sured, umay effect Insurance ill respect
thereof to the full value of the thing in
sured, and each, in case of loss, mnay re
cover to the full extent of his Interest.
This, as Lord Mansfield remarks, " ts
by no iceans within tihe idea of a double
insurance, which is where the same mall is
to receive two sums instead of one, or tihe
same sum twice over, for tihe same loss, by
reason of his having made two insurances
upon the same goods or the same ship;"
whereos this case now referred to is the
insurance by two different persons of two
different interests, each to the whole
value.
The following case affords a good illus
tration of this printciple:
Meybohm, a Russian merchant, carry
ing on business in St. Petersburgh, was in
debt for advances both to Amyand, of
Lonton (his general agent and factor in
this country), and also to Samesz, of
Moscow.
Under these circumstances, M\eybohm
wrote to Amyand, who was then in expec
tation of a consignment from him, to the
effect that Ihe should scud him goods, as
per invoice, and dlrecting him to insure.
A?myand, accordingly, who had already
insured to a certain extent on the expected
consignment, upon the receipt of this ad
vice effected a further insurance, thus
making tihe aggregate sum insured by him
more than sulticient to cover the full value
of the consignment, but less than the
amount of the balance then due to him
from Meybohin in the general account be
tween them. Meybohm shipped the goods
as per invoice; but instead of endorsinu
the bill of lading to Amyand, lie endorsed
it to Samiesz, to whom at that time hie
was also indebted to a greater mouunt
than the value of the goods sllipped.
Samniesz, through his London agents,
procured a policy to be effected with the
London Assurance Company to tihe full
value of the goods, but to a less amount
C than his balance against IMeybohm.
This policy was subsequent to any of those
effected by Amyandd; and the broker in
i formed tle Company at the time, that a
Sprior insurance had been effected on tohem
by a prior consignee, and that both parties
- wilshed to be safe.
Tile shiip and goods Ihaving been lost,
thte questiou made was, whether Samtiesz,
Sunder tihe circnumstances ahlove detailed,
hbad a right to recover nganilst the Com
a paony tile whole amount of his assurance;
3 and the Court (the judgmtent of whichI wsas
delivered by Lorld itansfield) were clearly
of opinion that he had.-(Godin v. London
SAssurance Comp., ot Ins. 603 sea. 8th
a ed.; Marshall on t Burr. 4890; 1 \IV. Bl.
i ep. 103; Park Ins. 143.)
SSamesz indeed as indorsce of tile bill of
I lading and in advance to Meybothm to a
Sgreater nmount than the sum insured in
;tle policy, lhad a clear insurable interest
to the full extent of hlia claim, and there
1 fore might recover thie wltole sunt insured.
So Amnyand, a the factor of Meybolhm,
and also tis creditor on tihe holauco of ac
count between them, had a right to laser
on his own account, or at all events, if the
insurance effected by him was to be re
garded as originally effected on account of
Meybohm; still Amyand having the
policy in his possession had as such factor
and creditor a lien upon it, in respect of
which he too might recover on the policy
to tile full extent of his claim.
Mr. Marshall indeed dissents from this
latter position, oil the ground that as Mey
bolhm aftecr he had indorsed the bill of
lading to Samese, had no insurable inte
rest in the goods, so Amyand could recover
nothing on the policy, which could not
possess a greater validity in his hands than
in those of Meaybohm; but it appears to
me clear that Amiyand, as consignee of the
goods and as a factor in advance to Mey
bol m on the general balance of accounts,
had a distinct insurable interest in the
goods on his own account, up to the
amount of his claimn; which as it did not
require the indorsement of the bill of lad
ing to perfect it, could not be divested by
the indorsoment of that instrument over to
a third party.
To enable the defendant to discover
whether there be in any case a double or
over insurance, he may by tie 19.G. 2, c.
37, s. 6, call upon the plaintiff to declare
in writing within 15 days what sum he has
Insured on the whole, and how much he
has borrowed on bottomry and respon
dentina for the voyage in question or any
part of it.
No means are provided in the: act of
compelling the delivering of this declara.
tion, though Mr. Marshalt thinks tile court
would probably after tihe expiration of the
15 days stay the proceedings in the action
till a satisfactory declaration were de
livered : no case, however, of the kind has
ever occurred in practice.-(Marshall on
Ins. 702.)
In Park the matter is put in a
very clear ligiht:
.Extract from Park on Mlfarine Insuranee
with alditionas b Franeiallihlyard,Esq.,
M.A., of the Inner Temple, Barrister
iat Law, Londons, 1842; chap. 19, p.
707.
If, therefore, an insurance be bona fide
effected by several policies,and the interest
tnrn out to be less thitan the amount Insured
by the whole, there must be a return of
premium upon all the policies, and the un
derwriters must refund rateably acc6rding
to their respective subscriptions. This is
not the rule of law in France and in many
other countries, for there they look to the
priority of the dates of the subscriptions;
but if several policies have tile same date
they make one policy.--(See chap. 156, and
tihe authorities there quoted.)
It is however observed that the above
rule applies only to tie case of soveral
policies effected before the commencement
of tihe risk, for where all insurance has
been effected by one or more policies and
the risk has commenced, and subsequent
policies are afterwards signed; if a loss
were to happen between the signing of the
first and subsequent policies, the under
writers on the first would be liable ini pro
portion to their subscriptions to the extent
of the whole sum insured; and therefore
the risk laving been incurred by them no
claim ought to be nindo for a return of
premium. And, therefore, the Court of
Exchequer iu a very recent case decided
that where an insurance was effected on
tihe 12th April, on a cargo of' cotton, then
at sea, by live several policies, at the rate
of fifty guineas per cent., and on
tile 13th April, news of the vessol's safety
having arrived, a fturther insurance was
bona-tide effected by six different policies,
at tell and five guineas per cent.; and the
latter insurance, added to the former, ex
ceeded in amount the value of the subject
matter insured, but the former, of itself,
did not; the assured were entitled to a
return of premium on the amount of the
over lnsuanuce, to which the underwriters
who subscribed tile policies of the 13th
April were to contribute rateably in pro.
portion to thesums subscribed by them
respectively, the amountof the over insur
ance having first been nscertainedby taking
into account all the policies: but that no
return of premium was to be made with
respect to those policies which had been
subscribed on tihe 12th.-(Fisk v. Master
man and others, 8, M. & W., 165).
Tlhat not the shadow of a doubt
may remain, we turn again to
Arnauld :
Se4. 25. With regard to return ofprnemium
for short interest, over Insurance and
double insurance, the prinlcipl on which
tihe cases depend is simply this: that if the
underwriter could at any time and under
any conceivable circumstalnces have been
called on to pay the whole sum on which
lie has received premium, in such case the
whole premiuml is earned, and tlhere shall
be no return ; if on the other hand lie could
never in anly event have thus been called
on to pay the whole, but only a part of the
amount of his subscription, say a half or a
fourth, lie ought not to retain a larger pro
portion than one half or one fou'ti of the
premium, and must return the residue
-(Stevens on Average, 200, 203, 5th ed.,
Marsall on Ins. 049; see this text applied
in Fisk v. ltastertatn, 8 Mees and Wets
1065; and acsee also 2 Mlagens,' 137, note to
No. 564).
It remains only to consider heow the re
turn of premium in such cases is appor
tioned amongst the underwriters them
selves.
In the first place it is clear that where
the over insurance is by a single policy all
the underwriters contributo rateably to
the return of premium, without regard to
tihe date of their subscription. Ins this re-
spect the rule is accurately laid down by
IMr. 1larshall--"All tile underwriters
upon a policy ill which the effects are in
sured beyond their value, must bear any
loss that miay happen, and repay a part of
the preaium in proportion to theilt re
Sspective subscriptions without regard to
the priority of their dates.-(Mareshall on
Ins. 042).
It is also stated by Emerigon as thie rule
of thie liaw maritine, and is so considered
in this country, that several policies ef
fected on the same date are considered to
formn but one policy, and the rule tlhere
fore, as to thie return of premium in this
case is the same as in thine last.- (Enmerion,
chlap. 10, sec. 4, vol. 2, page 100, edl. 1837;
see also thie case of Flsk v. lMastcrman, 8
Mees & Wels, 106, ill whlich the sets of
r dilferent policies effected on tile sanm day
whiis dilierent oIlices and underwriters
were regarnded as all one).
The dilliculty is, noas to thie case where
several policies, or sets of policies, are ef
fected on the same subject at' different
dates.
As to tin s it wass long snpposed that tie
rule of the continental law differed from
our own. By the foreign law maritime, in
such case, the policy or policies first in
point of date are alone to be considered
bhndleg up to the amount of the value ns
turlly at risk, and the return of premium
is confined to the underwriters on the
other pollcies.-(Emerigon, chap. 10, sect.
4, pp, 140, 141).
The rule of the English law as it was I
supposed to result from that hldd down by
Lord Monsfield in Davis v. Gildart, is thus I
expressed by Mr Marshall--" If by several
policies made without fraud the sum in- I
sured exceed the value of the effects, these I
several policies will in effect be but one
insurance, and will be good to the extent I
of the interest of the assured, ond in case
of loss all the underwriters on the several I
policies shall pay according to their re
spective subsoriptios; ;.and It follows from r
thence that all the .underwriters on the
several policies would be equally bound to
make a return of premium forthe sum In
nured above the value of the effects in pro- i
portion to their respective eubscriptions."-
(Marshall on insurance, 649.)
Theruleasthusstated hasbeen recognised
as the law of this country by subsequent
writers, especially MIlr Stevens and the
able author of the article on AMarine Insu
ranse in ".lecCulloch's Commercial Dic
tionary," who point out the practical incon
venience and injustice of the regulation,
and the superiority of that which prevails
on the continent.-(Stevenes on average,
tit. Return of premium, p. 205-5th ed.;
and see' case 1, 2, 3, IbId, p.p. 207, 215.
See "also McCulloch's . Com. ' Diet, tit.
Matrine Insurance, p. 702, ed. 1837.)
Sincd theti the Court of Exchequer has
introduced an Important modification, and
assimilated tile English to the conti
nental rule. Founding itself upon the
equitable principle, that those underwriters
who have at any time been liable to pay
the whole amount 'of 'their subscriptions
are entitled to retain the whole amount of
the preinlum, that Court has established
the position that where two sets of insu
rances are effected at different rates, and
with different sets ol underwriters, on* the
same.property, and the amount of the first
insurance is not equal to the value at
risk; though the nggregate amount of both
insurances exceeds it, in such case the
underwriters ontthe last of tihe two sets of
insurances in point of date, shall alone be
called on for a rateable return of premium;
the underwriters on the prior set of Insu
rances retaining the whole.
The facts of the case were shortly these;
-A merchant' in New Orleans having
shipped a large consignment of cottons to ea
Liverpool house, directed them to effect an
insurance which they immediately did on
the twelfth of April by several policies In
London to the amount of £14,150, and on
the thirteenth of April by several other
policies, both in Liverpool, and, also nt
London (the agents in one place being
unaware of.what was being done at the
other), to the amount of £22,300 more,
thus the total amount insured was £36,450
(£14,150 on the 12th of April and £22,300
on the 13th), the value of the cottons as
fixed by the different policies, was £830,333
which left £6,116 10s. as the amount of
over insurance on the aggregate of all the
policies. The cottons having arrived
safely, the Court, after argument, decided
that as, in case a loss had occurred before
the policies of the 13th of April were
effected, tile underwriters upon the policies
of the 12th of April would have been liable
to the full extent of their subscriptions, so
they were entitled to retain the wholo
anmunt of their premiums.
The court directed accordingly, 1st, that
the assured should have a return of pre
mium to the amount of tile over insurance;
such amount to be ascertained by taking
into account all tile policies; 2nd, that no
return of premium was to be made in
respect of the policies effected on tile
twelfth of April; 3rd, but that all the
underwriters who subscribed the policies
of the thirteenth, should contribute rate
ably to the return in proportion to the sums
insured by them respectivelyon that day.
(Fisk e. Manstermann, 8 MIces . Wels, 105.)
In the United States where the common
law rule is as stated by MIr. Marsbhall, it
has been customary to insert into their
policies an express stipulation to the effect
that "if the assured ihas made any prior
insurance on the property,tthe insurers shall
be answerable only for so much as the
amount of such prior insurance may be
deficient towards covering the property,
and shall return the premiumt upon so
much of the sum Insured as they shall be
exonerated from by such prior insurance
excepting half per cent., &c.-(2 Philips
on insurance, 5:11.) This clause
establishes, by express stipulation the rule
which since Fisk v. l7asterman, may in
this country be regarded as part of our
common law.
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