over-insurance. are considered as making but one insurance, and are good to the Of double and extent of the value of the effects put in risk; the assured can recover on the different policies no more than their value, but he may sue the underwriters on either of the policies, and recover from those he so sues to the full extent of his loss, supposing it to be covered by the policy on which he elects to sue, leaving the underwriters on that policy to recover a rateable sum, by way of contribution, from the underwriters on the other policy. (h) dart. Hence where a merchant, the value of whose whole in- Davis v. Gilterest was 22007., first effected a policy on this interest at Liverpool for 17007., and then (without fraud) another policy on the same interest (¿) at London for 22007., he was allowed to recover the whole amount on the London policy, and the London underwriters were allowed to recover a rateable amount, by way of contribution, from the Liverpool underwriters. (j) The rule thus established by Lord Mansfield must be taken to be the law of the land, and is the only rule upon which the courts would allow parties to proceed, unless an express stipulation were introduced to a contrary effect. A different rule formerly prevailed in this country, and is still acted on in France and the United States. This rule, however, is not that which formerly prevailed in this country, which now prevails in France, and which in the United States is generally rendered binding on the parties to the second policy, by an express clause relating to prior insurance. That rule is, in the words of the Code de Commerce, What that rule "that where there exist several contracts (N. B. not policies') (k) of insurance effected without fraud on the same subject, if the first contract insures the total value of the subject at risk, it alone shall be enforced." several subscriptions have the same date they make one contract: in this country most of the subscriptions to any one policy bear the same date. (h) Newby v. Reid, 1 W. Bl. 416. Rogers v. Davis, and Davis v. Gildart, A.D. 1776. See Marshall on Ins. 140,141. Park on Ins. 601, 602. 8th ed. (i) But for a different risk, see Rogers v. Davis, quâ suprà. (j) Davis v. Gildart, quâ suprà. (k) Each subscription to the policy forms a new contract if it bears a sepa rate date. is in France. Of double and over-insurance. Formerly in this country. In the United The American The insurers who have signed the subsequent contracts are freed from liability: and only receive per cent. on the sum 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 surplus, in the order of the date of their respective signatures. (1) So in this country it was once pleaded, and "proved by all the exchange," to be the custom of merchants, "that where a policy is subscribed by a number of underwriters, and the goods are not equal in value to the sums subscribed (taken together), the underwriters, in case of loss, shall be liable in the order in which they subscribe, and the remaining underwriters shall be exonerated from all liability, and return the premium, deducting per cent." (m) The common law rule in the United States is that laid down by Lord Mansfield; but the law, as it anciently prevailed in England, and is now established in France, is deemed by the American merchants so preferable, in point of simplicity and convenience, that clauses are very generally introduced into their policies, to prevent the rule of contribution, and to make the insurers responsible, according to the order of date of their subscriptions. The clause adapted to the second 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, the assurers shall be answerable only for so much as the amount of such prior insurance may be deficient." The form adapted to the first policy runs thus: "In case of any subsequent insurance, the insurers shall, nevertheless, be answerable for the full extent of the sum subscribed by him, without right to claim contribution from subsequent assurers." (n) (1) Code de Commerce, art. 359. bore different dates; and this probably is the true meaning of the English rule. (n) Kent's Comm., vol. iii. pp. 280, 281. ed. 1844. Phillips on Ins., vol. ii. pp. 59–65. There appears no reason why some such clause might not of double and be adopted in our own country. (0) In France and in the 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, inquiry may be made as to which of the two was actually first effected in point of time, and that which was so will alone bear the loss. (p) This rule, however, does not in France extend to different subscriptions of uniform date to the same policy; for if they all bear one date, they make but one contract, and the whole body of the underwriters, in case the sum insured in such policy exceeds the value at risk, contribute rateably to the loss, and return a rateable share of premium for the excess. (4) over-insurance. In France and States, of policies the same which are prior in point of time alone bear the the United in date, those loss. This, however, is not so in the case of different subscriptions to one policy. dulent, double, or over-insur If the subsequent insurance be made with the fraudulent Law as to frauintent on the part of the assured to recover more than an indemnity, and this fraudulent intent be proved by the under- ance in France. writers, the law of France is, and that of this country it is apprehended would be the same, that he shall pay the whole premium on the second policy, and recover nothing under it. (r) If the underwriter and the assured are both aware at the time of effecting the second policy, that the whole amount of interest has already been fully covered by the first, this would be a mere wager, and void, and the principle would apply cum utriusque turpitudo versatur cessat repetitio: the assured would recover nothing on such policy: and if the a Case in which second policy when the is effected, amount of in terest is, to the knowledge both of the as sured and underwriter, (r) If he sues on the second policy, by a prior powholly covered he may in France be proceeded against licy. criminally see the general French : law on the subject of fraudulent overinsurance, Emerigon, chap. ix. sect. 2. vol. i. pp. 270-272., and the commentary of Boulay-Paty, ibid. pp. 272, 273. ed. 1827. For the application of the law to the case of double insurance, see Boulay- Paty, Cours de Droit Comm. Mar., tom, iv. pp. 124, 125. ed. 1834. Of double and premium had been paid the assured could not demand a over-insurance. Rule in this country as to rateable return of premium in case of overinsurance by several policies of different date without fraud. Fisk v. Masterman, return; if not paid, the underwriter could not claim it. (8) It has been laid down by Mr. Marshall, as following from Lord Mansfield's rule, that, where by several policies made without fraud, the total sum insured exceeds the whole value at risk, "all the underwriters on the several policies would be equally bound to make a return of premium for the sum insured above the value of the effects in proportion to their respective subscriptions." (t) The rule, however, as to this point, must be now taken 8 Mee. & Wels, with this limitation, viz. that, where two sets of policies of 165.. Where an overinsurance has thus been effected by two valued policies, the rule is, that if the value in the two policies is different, the value in neither is binding; if it be the same in both, the assured can only recover on both policies to the extent of such agreed value. different date are effected on the same property, and the amount insured in the first set is not equal to the value at risk, though the aggregate sum insured in the two sets exceeds it; in such case, the underwriters on the last set of policies, in point of date, shall alone be called on for a rateable return of premium; on the equitable principle, that, as the 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. (u) Where a double insurance has thus been effected in two valued policies, a question has arisen as to the effect of the valuation in one policy, in limiting the amount to be recovered under the other. The rule appears to be that, if the same. value is declared in both policies, the 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 where the value declared in the two policies is different, the fact that the assured has already recovered under the first policy to the full extent of the value declared in the second, shall not prevent him from recovering a further sum under the second policy, if the real value of the subject exceeds the amount recovered under the first policy. (s) Boulay-Paty. Cours de Droit Comm. Mar., tom. iv. p. 114. ed. 1834. (t) Marshall on Ins. 649. (u) Fisk v. Masterman, 8 Mees. & Wels. 165,; thus establishing the rule on the footing contended for by the able author of the article on Marine Ins. in M'Culloch's Dictionary, p. 702. ed. 1837. over-insurance. Bousfield v. Barnes, Thus, where a party, having recovered 6000l. which he of double and had insured with the London Insurance Company on a ship valued in that policy at 8000l., brought his action against a private underwriter for 600l. which he had insured with him 4 Campb. 228. on the same ship in another policy in which she was valued at 6000l.: the recovery of the 6000l. under the first policy, was held no bar to his recovering in addition the 6007. insured by the second policy, proof having been given that the real value of the ship was upwards of 6600l., the aggregate of the sums recovered on the two policies. (v) But where a party having insured 17007. on his ship in one policy, in which she was valued at 30007., afterwards insured a further sum of 20007. on the same ship in a second policy, in which she was also valued at 30007.: Lord Tenterden held that this valuation, being the same in both policies, was conclusive, and he would not permit the assured to recover more than 30007. on both policies together, although it was proved that the value of the ship exceeded 37007, the aggregate of the sums insured in both. (w) Although, as we have seen in cases of double insurance, properly so called, i. e. where the same person insures the same interest by several policies on the same risk, he cannot recover more than an indemnity; i. e. more than the real or declared value of the thing insured, under all the policies put together; yet it is different where two or more persons insure the same thing, against the same risks on distinct interests. In such case each of the parties, having such distinct interests in the thing insured, may effect insurance in respect thereof to the full value of the thing insured, and each, in case of loss, may recover to the full extent of his interest. This, as Lord Mansfield remarks, "is by no means within the idea of a double insurance, which is where the same man is to receive two sums instead of one, or the same sum twice over for the same loss by reason of his having made two insurances upon the same goods or the same ship;" whereas this (r) Bousfield v. Barnes, 4 Camp. 228. (w) Irving v. Richardson, 1 Mood. & Rob. 158. See also S. C. in 2 B. & Ad. 193. Irving e. Rich ardson, 1 Moo. & Rob. 158. Where two or insure the same thing against more persons the same risks on distinct in terests, this is not a double insurance: in such case, each of the several parties may in sure in respect of of their distinct interests, and recover to the full extent of their respective interests. |