value, and not left it open to future inquiry and dispute as between themselves. a If the valuation should, however, be grossly enormous, as in the case put by Lord Mansfield, where cargo was valued at £2,000, and the insured had only the value of a cable on board, there is no doubt it would raise a strong presumption of fraud; and either the valuation or the policy would be set aside. A valuation, fraudulent in fact, as respects the insurer, or so excessive as to raise a necessary presumption of fraud, entirely vacates the policy and discharges the insurer; and the English, American and French law of insurance contain the same general doctrine on the subject.b *274 *There are cases which suggest that the valuation is applicable only to cases of total loss, aud does not apply to average losses. But the better opinion of the text * Shawe v. Felton, 2 East's Rep. 109. Lord Abinger, in Young v. Turing, 2 Manning & Granger, 593. Lord Mansfield, in Lewis v. Rucker, 2 Burr. Rep. 1171. Shawe v. Felton, 2 East's Rep. 109. Feise v. Aguilar, 3 Taunt. Rep. 506. Haigh v. De la Cour, 3 Campb. Rep. 319. Lord Ellenborough, in Forbes v. Aspinall, 13 East's Rep. 323. Aubert v. Jacobs, Wightwick's Rep. 118. Wolcott v. Eagle Ins. Company, 4 Pick. Rep. 429. Marine Insurance Company v. Hodgson, 6 Cranch's Rep. 206. Condy's Marshall, 290, 291. 1 Phillips on Insurance, 305—313, 1st edit. Valin's Com. tome ii. 147. Pothier, des Ass. n. 151. 159. Boulay Paty, tome iii. 397, 398. M. Delvincourt, in his Institutes de Droit Com. tome ii. 345, 346, contends, that though the valuation be made without fraud, if there be palpable evidence of mistake in the valuation, the policy may be opened; and Valin, Pothier and Emerigon are of that opinion. But Boulay Paty thinks that the excess in the valuation, by mistake, is not sufficient to open the policy; and there must be proof of actual fraud going to the destruction of the contract. Cours de Droit Com. tome iii. 401. The Ordinance of the Marine, h. t. art. 8, and the Code de Commerce, art. 336, make fraud the basis of opening the valuation. Le Guidon, c. 2. art. 13, and Valin, Com. tome ii. 52, consider an over valuation of a moiety, or one third, or even of one fourth, to be evidence of fraud; but other text writers justly conclude that every case will depend upon its own circumstances, without being governed by any such rule. Mr. Benecke has referred to the various and discordant provisions of the principal commercial nations of Europe, concerning valuations, and they are generally held to be conclusive, unless shown to be fraudulent. Benecke on Indemnity, 151, 152. • Lord Mansfield, in Le Cras v. Hughes, cited in 2 East's Rep. 113. Sewall, J., 7 Mass. Rep. 370. Allegre v. Insurance Company, 6 Harr. & Johns. 408. The New-York Board of Underwriters, May 20, 1837, resolved, that in cases of a technical total loss of a vessel, the only basis of ascertaining her value shall be her valuation in the policy, and if not so valued, her actual value at the time of the inception of the risk at the port to which she belonged. writers is, that in settling all losses, total or partial, the valuation of the property in the policy is to be considered as correct in the adjustment of the loss, and the true measure and basis of the valuation according to the contract of indemnity. (1) The adjustment is to be the same as if the goods had actually cost, or the ship and freight were actually worth, the sum at which they were valued. Mr. Benecke concludes, from a consideration of the cases, that the opinion, that in a case of a partial loss the valuation ought to be disregarded, is as destitute of authority as it is void of *275 justice and sound reason. A valuation does not preclude the inquiry, whether the whole interest valued has been at risk. If the valuation of freight of a whole cargo be made, the underwriter will not be liable beyond the extent of the freight of the goods put on board. This doctrine applies equally to an insurance upon cargo; and the insured, on a valued policy on cargo, will not recover beyond the interest he had at risk. There must be a total loss of the whole subject matter of insurance to which the valuation applied, whether the insurance was on goods or upon freight. The valuation fixes the price of the whole subject at risk, but it does not admit that the property on which the valuation was made was on board the vessel. If, • Stevens & Benecke on Average and Adjustment of Losses in Marine Insurance, Boston, 1833, 48-53. Stevens on Average, part 2, 168. Phillips on Insurance, vol. i. 313. 315. Benecke on Indemnity, 152, 153. 157. In the case of Allegre v. Insurance Company, the court considered it to be an open and unsettled question, whether, in the case of a partial loss on a valued policy, the insured was to be indemnified according to the valuation, or the actual value of the subject at the port of shipment, and they omitted to express any opinion on the point, though it had been warmly contested in the argument. Mr. Benecke says that the question, whether a valuation should be opened in cases of partial loss, had never occurred in the English courts. Forbes v. Aspinall, 13 East's Rep. 323. • Parker, Ch. J., Haven v. Gray, 12 Mass. Rep. 71. Wolcott v. Eagle Ins. Company, 4 Pick. Rep. 429. Brooke v. Louis. Ins. Company, 4 Martin, N. S. 640.681. If much less property was shipped than was expected to be on board, the assured, though it be a valued policy, can recover only, in case of loss, a proportion pro rata. Alsop v. The Comm. Ins. Company, 1 Sumner, 451. (1) The law of valued policies has been put at rest in England, by a solemn decision in the House of Lords. The opinion of the commentator, as expressed in the text, is now the established English law. Irving v. Manning, 9 Man. G. & Scott's R. 391. therefore, certain articles be comprised in a valuation, and part are safely landed before the ship is lost, the valuation must be opened, and the claim of the insured reduced in the proportion to which the articles actually lost bore to the valuation of the whole at the commencement of the risk.a (6.) Of wager policies. A mere hope or expectation, without some interest in the subject matter, is wager policy, and all such marine policies are, by statute, in England, declared void. But the English courts have refined greatly, in considering what is an interest sufficient to sustain a policy, and to place it out of the reach of the prohibition. If a person be directly liable to loss in the happening of any particular event, as if he *276 be an insurer, or *be answerable as owner for the negligence of the master, he has an insurable interest.c A creditor, to whom property is assigned as collateral security, has an insurable interest to the amount of his debt.d In the case of Lucena v. Craufurd,e the distinction between a reasonable expectation of gain in the shape of freight, commissions or profits, founded on some interest in the subject matter which was to produce them, and a mere shadowy hope or expectation, was fully and very ably investigated in the court of common pleas, and in the House of Lords, and great talents were displayed and exhausted upon that litigated point. The decision was, that commissions to become due to public agents, and all reasonable expectation of profits, were insurable interests. The interest need not be a property in the subject insured. It is sufficient if a loss of the subject would bring upon the insured a pecuniary loss, or intercept a profit. Interest does not necessarily imply a right to, or property in, the subject insured. (1) It may consist in having Benecke on Indemnity, 146. b 19 Geo. II. c. 37. • Walker v. Maitland, 5 Barnw. & Ald. 171. d Wells v. Philadelphia Ins. Company, 9 Serg. & Rawle, 103. A lien, or an interest in the nature of a lien, is an insurable interest. Hancox v. Fishing Ins. Company, 3 Sumner, 132. e 3 Bos. & Pull. 75. 5 ibid. 269. (1) A common carrier has a sufficient interest to entitle him to insure the cargo, and he may some relation to, or concern in, the subject of the insurance, and which relation or concern may be so affected by the peril as to produce damage. Where a person is so circumstanced, he is interested in the safety of the thing, for he receives a benefit from its existence, and a prejudice from its destruction, and that interest is, in the view of the English law, a lawful subject of insurance.a It was admitted by the judges of the Court of K. B., in Craufurd v. Hunter, that, at common law, prior to the statute of Geo. II., wager policies were not illegal; and the courts have been very much embarrassed in their endeavours to draw the line of distinction between wagers that were and were not admissible in courts of justice. The law has been *thought to descend from its dignity when it lends its *277 aid to recover the fruits of an idle and frivolous wager. In Good v. Elliot,c Mr. J. Buller made a vigorous but unsuccessful stand, against suits upon wagers in any case; and nothing could have been more impertinent than the wager in that case, which was, whether one third person had purchased a wagon of another. Many of the cases stated by Mr. J. Buller were of a nature to draw into discussion, and unnecessarily affect, the character or feelings of third persons; and to sustain suits upon such wanton wagers, would be a disgrace to any administration of justice. The case of Jones v. Randall, went quite far enough, when it sustained an action upon a wager, whether a decree in chancery would be reversed on appeal to the House of Lords. If wagers are to be allowed in any case, as valid ground for a suit, the betting on the return of a ship, in the shape of a policy without interest, is harmless as any that could be devised. In Egerton v. Furzeman,e it was ruled in the English courts, that a wa ■ Lawrence, J., in 5 Bos. & Pull. 302, 303, 304. Hughes on Insurance, 30. An equitable, as well as a legal interest, and an interest held under an executory contract, are valid subjects of insurance. Columbian Insurance Company v. Lawrence, 2 Peters' Sup. C. Rep. 25. b 8 Term Rep. 13. • 3 Term Rep. 693. a Coup. Rep. 37. • 1 Carr. & Payne, 613. recover to the extent of his interest. Van Natta v. The Mutual S. Ins. Co. 2 Sandf. (Law) R. 490. ger on a battle between two dogs was illegal, and not the ground of action. In New-York, the courts had formerly assumed it to be a clear and settled principle of the common law, that a policy, in which the insured had no interest, and which was, in fact, nothing more than a wager or bet between the parties to the contract, whether such a voyage would be performed, or such a ship arrive safe, was a valid contract. It was only required that the wager should concern an innocent transaction, and not be contrary to good morals or sound policy.b *278 *But now, by statute, all wagers, bets or stakes, made to depend upon any lot, chance, causualty or unknown or contingent event whatever, are declared to be unlawful, with the exception of contracts on bottomry or respondentia, and all insurances made in good faith for the security or indemnity of the party insured. The statute has effectually destroyed wager policies; for they are not within the exception. (1) In Massachusetts, the supreme court expressed a strong opinion against the validity of a wager policy, and the doctrine there is, that all gaming is unlawful, according to the general policy and laws of the commonwealth. In Pennsylvania, every species of gambling policy, and all actions upon a wager or bet, are reprobated, and they follow the principles, while they do not acknowledge the authority of the English statute in the reign of George II. Wager policies, without any real interests to support them, are con Juhel v. Church, 2 Johns. Cas. 333. Abbot v. Sebor, 3 ibid. 39. Clendening v. Church, 3 Caines' Rep. 141. Buchanan v. Ocean Ins. Company, 6 Cowen's Rep. 318. b Bunn v. Riker, 4 Johns. Rep. 426. Mount & Wardell v. Waites, 7 ibid. 434. Campbell v. Richardson, 10 ibid. 406. • New-York Revised Statutes, vol. i. 662. sec. 8, 9, 10. Amory v. Gilman, 2 Mass. Rep. 1. Babcock v. Thompson, 3 Pick. Rep. 446. Pritchett v. Insurance Co. of North America, 3 Yeates' Rep. 464. Craig v. Murgatroyd, 4 ibid. 168. Adams v. Pennsylvania Ins. Company, 1 Rawle, 107. In Vermont it is held, that no suit will lie to recover property won of another by a bet or wager. Collamer v. Day, 2 Vermont Rep. 144. Wager contracts, or bets on elections, are void. Lloyd v. Leisenring, 7 Watts, 294. No action upon any wager or bet can be sustained. Edgell v. M'Laughlin, 6 Wharton, 176. (1) See Like v. Thompson, 9 Barb. R. 815. |