Common Pleas.-Aldrich agst. Ketchum and Owens.

By the 401 section of the code, in this district any motion may be made to a judge out of Court that might be made at a Special Term, except motions for new trials. This section is comprehensive enough to embrace the present motion, although it is not desirable to adopt such a practice at this time. As the Special Term is always in session while the judge is holding Chambers in this Court, it is more desirable for uniformity that the notice of motion should in all cases be made before the judge at Special Term-where a motion, however, is thus made through inadvertence, it is no reason for denying it.

There is no ground, however, for any order against the justice. The weight of testimony is against the appellant as to the payment of the costs. The whole of the costs must be paid before the justice is bound to make the return, and the proof is conclusive that neither the justice or clerk has received more than $20 of the costs, leaving a balance of six dollars or more unpaid It may be that the clerk who was directed to make the payment committed some mistake, and if so, the appellant should be relieved.

It can never be the intent of the framers of the code to prohibit the Court from giving relief against errors of the parties appealing, where the notice of appeal has been served in good faith. The notice of appeal now is the substitute for the writ of error as formerly used, and where that is sufficient, all other errors, such as not paying costs, or giving sufficient security, may be corrected by the Court. If the appellant gives the notice of appeal within the proper time, he puts the respondent in a condition to prepare for the appeal. A correction of errors in other matters connected with the appeal is no enlargement of the time for appealing. This is clearly allowed by the provisions of the $327. The payment of the costs is an act necessary to perfect the appeal. In this case, it has been in part omitted, and the Court may permit it to be done after the time for appealing has expired.

Several cases are cited to the contrary, but they do not contradict this view of the subject. In all of them the want of payment of the costs and fee for return is held sufficient to render the appeal a nullity. But in none of these cases was a motion made to the Court for leave to perfect the appeal by correcting the error.

As the motion now made is only for the attachment against the justice, and for the extension of the time to procure the return, permission to pay the balance of costs cannot be granted now. The appellant must make a motion for leave to pay the balance of the costs, nunc pro tune, in order to perfect the appeal. In the meantime the motion for any order against the justice is denied, and further time is granted to the appellant to obtain the return from the Court below. As a motion, such as I have suggested will be necessary; fifteen days further time is allowed. On a proper application to the justice after leave is granted to pay the costs, I doubt not a return can be procured without any refusal on his part.

*Subsequently on a motion made as suggested by the Judge, an order was made that the appellant have liberty to amend his appeal by paying the balance of the costs.

THE

New York Legal Observer.

VOL. XII.]

[DOUBLE NO.

NEW YORK, NOVEMBER AND DECEMBER, 1854.

[Entered according to the Act of Congress, in the year 1854, by the Honorable John Duer, one of the Justices of the Superior Court of the city of New York, in the Clerk's Office of the District Court of the United States for the Southern District of New York.]

LECTURE XVII, FROM THE THIRD UNPUBLISHED VOLUME OF DUER ON INSURANCE.

PARTIAL RETURN OF PREMIUM.*

§ 1. We are next to consider the cases in which the contract is only partially dissolved, and the underwriter, is, consequently, bound to restore only a part of the stipulated premium. These cases may be divided into two general classes.

1. Where the value of the property, or of the interest, upon which the policy attaches is less than the amount of the insurance, so that the underwriter, in the event of a total loss, cannot be rendered liable for the whole sum that he insured; and

2. Where the premium, in its application to distinct risks, is susceptible of a division and apportionment, and some of the distinct risks are not commenced.

The first class of cases will be considered under the general head of "Short Interest," the second under that of" Divisibility of the risks."

SHORT INTEREST.

2. A deficiency of interest, entitling the insured to a proportionate return of premium, may arise from one of two causes: either the whole property or interest that the insurance is intended to cover, may not be at risk, or, where the whole is at risk, its real value may be less than the sum insured; and this distinction is necessary to be borne in

This cture is now published with the view of eliciting the opinions of lawyers and practical insurers in respect to the doctrines which it contains.

Duer's Marine Insurance.

mind, since, in each case, the rights of the assured and the liability of the underwriter will be found to vary according to the form of the policy, as valued or open. When the policy is valued, and the entire subject to which the valuation refers is at risk, the assured is never entitled to demand a return of premium on the sole ground of deficiency of value. The valuation, if made in good faith, is conclusive on the parties, and neither is permitted to allege an over-insurance. The assured is as much precluded from averring an excess in the valuation, as entitling him to a return of premium, as the underwriter from making a similar averment to diminish his liability for a loss. But where only a part of the entire subject to which the valuation refers is at risk, whatever may be its real value, there must be a proportionate return of premium, since the underwriter, in the event of a total loss, would only be liable for a proportion of the sum that he insured.* Thus, where an insurance is made on freight, valued at the sum insured, the freight to which the valuation must be applied, is construed to mean the freight of all the goods intended to be loaded on the voyage insured, and consequently, if a part only of the intended cargo is laden, as the underwriter is relieved from his liability in proportion to the deficiency, he is bound, in the same proportion, to return the premium; + but if all the goods in reference to which the freight is claimed are actually shipped, the assured would never be permitted to allege that the freight stipulated to be paid fell short of the sum at which it was valued in the policy, and the same rules are applicable where the insurance is on cargo or on goods, generally or specifically, described. So in the case supposed of a valued policy on goods or freight, if only a part of the intended cargo is loaded, the assured would certainly never be permitted to show, in order to establish a claim for a total loss, that the value of the goods shipped, or of the freight stipulated, was equal to the sum insured, since a valuation can no more be set aside by proof of its inadequacy than by proof of its excess. Consequently, the underwriter would not be allowed to give evidence of the same facts as barring a claim for a proportionate return of premium. Nor would the application of the rules that have been stated be varied where the insurance is made for a less sum than the amount of the valuation. Thus, if an insurance were made, say for $5,000 on 100 hhds. of sugar, valued at $10,000, the policy, if 50 hds. only were shipped, would attach only upon an undivided moiety of the interest of the assured, precisely as it would have done had the whole 100 hhds. been at risk. Consequently the liability of the underwriter would be reduced to $2,500, and the assured be entitled to reclaim a moiety of the premium.

* Stevens on Average, p. 185, (Phil. ed.,) Marsh, 653; 2 Magins, 127; Arnauld, 1227. Forbes v. Aspinall, 13 East., 323; Patrick v. Eames, 3 Camp., 44; Haven v. Gray, as to goods; Rickman v. Coxstans, 5 B. and Ad., 651; 3 Mass., 71; Wolcott v. Eagle Ins. Co., 4 Pick,, 429; Brook v. Louis Ins. Co., 4 Martin N. S., 640-681; Alsop v. Com. Ins. Co., 1 Sumner, 45, as to goods.

Holmes v. Charleston M. F. Ins. Co., 10 Metcalf, 415.

Duer's Marine Insurance.

The rights of the parties under an open policy on goods or freight are materially different. Although the whole of an intended cargo, where such is the form of the insurance, may not be loaded, yet, if the value of the goods actually shipped, or of the freight to be paid for their transportation, where freight is the subject insured, is equal to the whole sum insured, it is not to be doubted, that the underwriter is answerable for the whole amount of a total loss, and, consequently, must be entitled to retain the entire premium; while, on the other hand, if the whole of the intended cargo is shipped, yet if its value, or of the freight to be received, falls short of the sum insured, the premium must be returned on the deficiency.

Where the terms of the policy are not general, but the subject on which it is meant to attach is exactly defined and limited, as where the insurance is on 100 bales of cotton, or upon the freight of 100 hogsheads of sugar, it is probable that the same construction must be given to an open as to a valued policy. The sum insured will then be construed to refer to the entire subject, as described, and, as a necessary consequence, must be proportionally abated, when it is only on a part of the subject that the policy attaches. Thus if $5000 are insured upon 100 bales of cotton, and 50 bales only are shipped, the underwriter will be answerable in the event of a total loss only for $2,500, and must return a moiety of the premium, although the value of the bales actually shipped may equal or exceed the sum actually insured. The practice of the underwriters in England, as we learn from Mr. Stevens, and other writers, corresponds with this interpretation of the contract*. But the usage in the United States is probably unsettled. Some of the insurance companies, it is believed, act upon the principle that the liability of the underwriter in this, as in all other cases where the policy is open, is governed solely by the value of the property

at risk.

§ 3. Where an insurance is made on goods by certain ships named in the policy, and a specified sum is insured on the goods by each ship, if all the goods are loaded in one ship, and are totally lost, the underwriters are only liable for the specific sum that by the terms of the contract was applicable to the particular ship, and, consequently, must return the premium on the residue of the sum insured. But if in such a case there is no specification of the sum insured by each ship, the policy will not be construed as requiring that the amount of the insurance shall be equally distributed; but if all the goods are laden in one vessel and are lost, the underwriters are liable to the full extent of the sum they insured, and, consequently, in the event of a safe arrival, as well as of a loss, are entitled to retain the entire premium.t

§ 4. Where an insurance is made by a single policy upon a single

* Stephens, on Average, Phil. ed.. 188; Arnould, p. 1226.

Emerig. p. 176; Pothier, n. 68; Pardessus, T. 3., n. 867, p. 222; Code de Com.

art. 368..

Pardessus, ubi sup., £. 423.

Duer's Marine Insurance.

subject, there can seldom be any difficalty, where a return of premium is claimed upon the ground of "short interest," in ascertaining upon what proportion of the sum insured the return is due. Where a single policy, containing an over insurance, is subscribed by several underwriters for distinct sums, the sums insured by each must be proportionally abated, until the total amount of the insurance is reduced to an equality with the interest of the assured, and, consequently, each underwriter must return the premium on that proportion of the sum he insures from which he is discharged.* Where different subjects are included in the same policy, or there are several policies not identical in the subjects they embrace, there are cases of apparent difficulty which it will be necessary to consider and resolve. Where a distinct sum is insured upon each subject, the construction is the same as if that subject were alone insured; but where different subjects are insured for an entire sum, or are covered by a gross valuation, the perplexing questions to which I have referred will be found to arise.

§ 5. Where an insurance is made on vessel, freight and cargo, or any two of them conjointly, that is for an entire sum, or at a gross valuation, it has been asserted by some that there is no established rule for distributing the sum insured among the different subjects of the policy, or, in other words, for determining in what proportion the policy attaches upon each subject, and, consequently, that the contract is either wholly void for uncertainty, or that the underwriters are only answerable where there is total loss of all the subjects insured; while it is supposed by others that the only rule that can reasonably be applied is that of an equal division or apportionment of the sum insured among the several subjects that the contract embraces; but, in reality, these positions are equally groundless. The contract is valid in respect both to partial and total losses, since there is a rule deducible from its very nature, by the application of which the liability of the underwriter, in respect to each subject insured, may, in all cases, be readily determined. This rule, however, is not that of an equal division of the sum insured. Such a division would be purely arbitrary, and in all cases, where the different subjects are unequal in value, would defeat the intentions of the parties, and lead to manifest injustice. The true rule is only to be found by adverting to the nature

*2 Marsh, p. 639; Arnould, p. 1228.

+ Vide note at end of section.

+ Suppose an insurance, say for $30,000, upon vessel, freight and cargo, the cargo to be worth $20,000, and the vessel and freight only $5,000 each, here the entire value corresponds with the sum insured, but upon the principle of an equal division, the policy would be construed as an insurance of $10,000 on each subject insured; consequently, there would be a deficiency of interest on the vessel and freight, and an excess on the cargo; the underwriters would be compelled to return one-third of the premium, and the owner would remain uninsured as to a moiety of the cargo; but by distributing the sum insured in proportion to the relative value of the subjects the assured is fully covered, and the underwriters retain the premium. The rule of an equal apportionment seems for a time to have existed in France; but Emerigon has fully exposed its injustice, and the error was corrected in 1779, by an or linance of Louis XVL (1 Emerig. ch. 10, sec. 1, pp. 289, 290.)