payment of the new, by deducting the value of them from the gross amount of the expenses for the repairs, and to allow the deduction of one third new for old upon the balance.a In England, if the injury be sustained, and the repairs made, when the vessel is new, and on her first voyage, no deduction of new for old is made; because, the vessel being new, it is not supposed that she is put in better condition by the repairs. But in this country that distinction has not been adopted, and the deduction of one third new for old is made, whether the vessel be new or old.c

The insurer is liable for all the labour and expense attendant upon an accident which forces the vessel into port to be repaired ; and in consequence of the general permission in the policy for the insured to labour for the re- *340 covery of the property, the insurer may be rendered liable for the expenses incurred in the attempt to recover the lost property, in addition to the payment of a total loss. It has been a question much contested in the French tribunals,

Savage, Ch. J., in Dickey v.

■ Burnes v. Nat. Ins. Company, 1 Cowen, 265. New-York Ins. Company, 4 ibid. 245. Brooks v. Oriental Ins. Company, 7 Pick. 259. Eager v. Atlas Ins. Company, 14 ibid. 141. See supra, 331. The rule applies equally to steam-vessels insured on our interior waters. Wallace v. Ohio Ins. Company, 4 Ohio Rep. 284. In Potter v. The Ocean Ins. Company, C. C. U. S. Mass., October, 1837, 3 Sumner, 27, it was held, that in case of repairs to the ship, by the perils insured against the deduction of one third new for old was applicable only to the labour and materials employed in the repairs, and to the new articles purchased in lieu of those lost or destroyed.

b Fenwick v. Robinson, 1 Danson & Lloyd, 8. 3 Carr. & Payne, 323.

• Dunham v. Com. Ins. Company, 11 Johns. Rep. 315. Sewall v. U. S. Ins. Company, 11 Pick. 90. Temporary repairs in the course of the voyage are held to be particular average; but other repairs abroad, from strict necessity, to enable the vessel to return, and which become useless afterwards, are general average. Brooks v. Oriental Ins. Company, 7 ibid. 259.

Shiff v. Miss. Ins. Company, 1 Miller's Louis. Rep. 304.

• 1 Caines' Rep. 284. 450. 7 Johns. Rep. 62. 424. 433. 4 Taunt. Rep. 367. Emerigon has taken notice of this stipulation in the English policies, by means of which the insurer may become chargeable beyond the amount of his subscription; and there is the same stipulation, by which they may be so charged, in the policies, at Antwerp, Rouen, Nantes and Bordeaux; and there is the same clause in the formula given by Loccenius. In the form used at Marseilles, there is no such clause; and without such clause, and as a general rule, the insurer is not chargeable beyond his subscription. But with such a special clause, Valin and Emerigon both agree, that the expense must be borne by the insurer, though it go beyond the effects recovered. This, however, is denied by Boulay Paty, who insists that the

whether the insurer can, in cases distinct from the above stipulation, be held chargeable at the same time, and cumulatively, with the amount of an average, and also with the amount of a subsequent total loss, in the same voyage. (1) This is said to be contrary to all principle, and the elements of the contract; and it was decided in the Court of Cassation, in 1823, after great litigation, that the insurer was not holden beyond the amount of his subscription, and for which he received a premium, notwithstanding the prior partial and subsequent total loss.a

(3.) Of the return of premium.

The premium paid by the insured is in consideration of the risk which the insurer assumes, and if the contract of *341 *insurance be void ab initio, or the risk has not been commenced, the insured is entitled to a return of premium. If the insurance be made without any interest whatever in the thing insured, and this proceeds through mistake, misinformation, or any other innocent cause, the premium is to be returned. So, if the insurance be made with short interest, or for more than the real interest, there is to be a ratable return of premium. If the risk has not been run, whether it be owing to the fault, pleasure or will of the insured, or to any other cause, the premium must be returned, for the consideration for which it was given fails. If the

sum subscribed limits all claim upon the insurer. 1 Emerigon, 484. 2 Ibid. 202-213. Valin's Com. tome ii. 99. Boulay Paty, tome iv. 312, 313. In some of our American policies, the stipulation is, that the assured may labour and trave 1, for, in and about the safeguard and recovery of the property, to the charges whereof the insurers will contribute, according to the rate and quantity of the sum insured.

Kermet v. La Campagnie Royal D'Assurance, reported in the Journal de Cassation, 1823, and quoted at large in Boulay Paty, tome iv. 519-532; and see, also, ibid. 272-276.

b Tyrie v. Fletcher, Coup. Rep. 666. Loraine v. Thomlinson, Doug. Rep. 585. 8 Term Rep. 156. arg. Holmes v. Union Ins. Company, 2 Johns. Cas. 329. Taylor v. Sumner, 4 Mass. Rep. 56.

(1) It was declared by Lord Campbell, in a recent case, that the insurers would not be liable for such prior partial loss which had not been repaired, or which did not prove prejudicial to the assured. If a total loss happen after the expiration of the risk, this does not exempt the insurers for a partial loss happening before the expiration of the risk. Knight v. Faith, Law Journal Rep. 2. b. p. 509, Dec., 1850.

vessel never sailed on the voyage insured, or the policy became void by a failure of the warranty, and without fraud, the policy never attached; but if the risk has once commenced, though the voyage be immediately thereafter abandoned, there is to be no return or apportionment of premium. And if the premium is to be returned, it is the usage in every country, where it is not otherwise expressly stipulated in the policy, for the insurer to return one half per cent. by way of indemnity for his trouble and concern in the transaction.a

The insurer retains the premium in all cases of actual fraud on the part of the insured or his agent. So, if the trade be in any respect illegal, the premium cannot be reclaimed.c If the voyage be divisible, there may be an apportionment of the premium; and if the risk as to the one part of the voyage has not commenced, the premium may be pro- *342 portionably retained. But the premium cannot be divided and apportioned, unless the risks were divisible and distinct in the policy. If the voyage and the premium be entire, there can be no apportionment. It is requisite that the voyage, by the usage of trade or the agreement of parties, be divisible into distinct ranks; and, in that case, if no risk has been run as to one part, there may be an apportionment of premium.d

The French code provides for the apportionment of premium, in the case of an insurance on goods, when part of the voyage has not been performed. M. Le Baron Locre, in his commentary upon this article, vindicates it by very ingenious reasoning, which M. Boulay Patyf thinks, however, does not remove the difficulty; and he contends that such a provision is contrary to a principle of the contract, that when the

• Emerigon, tome ii. 154. 2 Phillips on Insurance, 526. art. 349. Hendricks v. Com. Ins. Company, 8 Johns. Rep. 1.

Code de Commerce,

b Tyler v. Hern, Park on Insurance, 285. Chapman v. Fraser, Marshall on Insurance, 652. Hoyt v. Gilman, 8 Mass. R. 336.

• March v. Abel, 3 Bos. & Pull. 35. Van Dyck v. Hewitt, 1 East's Rep. 96.

d Stevenson v. Snow, 3 Burr. Rep. 1237. Long v. Allen, Marshall on Insurance,

660. Donath v. Ins. Company of North America, 4 Dallas' Rep. 463. Ogden v. Firemen's Ins. Company, 12 Johns. Rep. 114. 2 Phillips on Insurance, 538. • Code de Commerce, art. 356.

Cours de Droit Commercial Maritime, tome iv. 98, 99.

risk has once commenced, the right to the entire premium is acquired. (1)

(1) Insurance companies, differing in some material particulars from those heretofore existing in New-York, and probably from those existing in the other states of the Union, have lately been introduced, and have, as to marine insurance, become the more numerous class of underwriters in the former state.

The peculiar features of these companies have led to some litigation; and decisions have been made which demand a brief notice.

The old companies possessed a specific capital stock, defined in their charter, and paid or secured at the organization of the companies. The new companies have no such capital stock. Their capital at the commencement of the business consists essentially of the pledge or loan of the credit of those who are insured in the company, or who loan their individual credit with the expectation of taking out policies, or to enable the company to gain credit with the community. The ultimate capital stock of the companies is the accumulation of earnings above the losses. An act of 1849 (Laws of New-York, 1849, ch. 217. § 7. § 12,) contains provisions which define the character of this capital. § 7 provides" that a book may be opened to receive applications for insurance; and after receiving applications for insurance, to be approved by them, (the trustees,) to the amount of five hundred thousand dollars, the company may be organized." § 12 provides that "the company, for the better security of its dealers, may receive notes for premiums in advance, of persons intending to receive its policies, and may negotiate such notes for the purpose of paying claims or otherwise, in the course of its business," &c.

The notes above mentioned, being intended to constitute a fund for the security of creditors, and the statute securing to the makers a participation in the profits of the business transacted on the faith and credit of the notes, would seem to be given upon a sufficient and even valuable consideration. The mutual agreement and association of the parties, each giving his notes upon the condition of the others giving theirs, would also, it would seem, form a valid consideration. It has accordingly been held, that the notes are available securities, though the premiums received by the makers amounted to only a part of the note, or the company failed to underwrite for the makers. Deraismes v. The Merch. Mut. Insurance Company, 1 Comst. R. 871. Hone v. Folger, 1 Sandf. (Law) R. 177. Brown v. Crooke, 4 Comst. R. 51.

It may be laid down generally, that these notes are valid, like other notes, in the hands of all bona fide holders, whether before or after maturity, whether negotiated by the company itself or by receivers after its insolvency, or whether given before or subsequent to the time the company goes into business. And notes given in renewal of the original notes stand on the same footing as the original notes. Howland v. Myer, 8 Comst. R. 290. Aspinwall v. Meyer, 2 Sandf. (Law) R. 180. Brouwer v. Appleby, 1 Sandf. (Law) R. 158. Hone v. Allen, id. 171. Hone y. Folger, 1 Sandf. (Law) R. 177. Merch. Mut. Ins. Co. v. De Puga, 1 Sandf. (Law) R. 184. Brower v. Harbeck, 1 Duer R. 114. If after a note is given, the maker pays premiums to the company on insurances made, he is entitled to have such sums endorsed on the note. Merch. Mut. Ins. Co. v. Leeds, 1 Sandf. (Law) R. 188. But if, before the maturity of such note, premiums have become due, which, at its maturity, he pays, and renews the note without any deduction for such premiums, he cannot, at the maturity of the second note, demand a deduction from it of the premiums paid before the renewal of the first note. Hone v. Ballin, 1 Sandf. (Law) R. 181.

If a note be given to the company to enable the maker to vote, and with a knowledge, express or implied, that the note would appear on the statement of the assets of the company, the maker will be liable on such note. Brouwer v. Hill, 1 Sandf. (Law) R. 629.

These notes being given to the company for the security of parties dealing with it, the trustees or president have no right to return the notes to the makers, unless for a valuable consideration; and, it seems, a court of equity will compel an endorsement in favour of the company by any maker who may thus have obtained possession of notes loaned to the company. Brouwer v. Crosby, 1 Sandf. (Law) R. 546. Same v. Hill, id. 629. Hone v. Allen, id. 175. Brouwer v. Appleby, id. 159. See Emmet v. Reed, 4 Sandf. S. C. R. 229. The maker of the premium note is not liable to assessments to meet the deficiencies of other members. Bangs, Matter of, 15 Barb. R. 264. Herkimer County M. I. Co. v. Fuller, 14 Barb. R. 873.

The Legislature of New-York, at its session in 1849, (Laws 1849, ch. 308,) enacted a general insurance law, containing minute and comprehensive provisions for the formation and government of companies, for the insurance of lives, buildings and vessels, either with or without a

IV. Of the writers on Insurance Law.

I have now finished a survey of the leading doctrines of marine insurance, which is by far the most extensive and complex title in the commercial code. There is no branch of the law that has been more thoroughly investigated, and more successfully cultivated in modern times, not only in England, but upon the European continent. Maritime law in general, partakes more of the character of international law than any other branch of jurisprudence; and I trust I need not apologize for the free use which has been made, for the purpose of argument or illustration, not of English authorities only, *but of the writings of other foreign lawyers, and *343 the decisions of foreign tribunals, relative to the various heads of the law-merchant. I am justified, not only by the example of the most eminent of the English lawyers and judges, but by the consideration that the law-merchant is part of the European law of nations, and grounded upon principles of universal equity. It pervades everywhere the institutions of that vast combination of Christian nations, which constitutes one community for commercial purposes and social intercourse; and the interchange of principles and spirit and literature, which that intercourse produces, is now working wonderful improvements in the moral and political condition of the human race.

The general principles of insurance law rest on solid foundations of justice, and are recommended by their public utility; and yet it is a remarkable fact, that none of the nations of antiquity, though some of them were very commercial, and one of them a great maritime power, appear to have used, or even to have been acquainted with this invaluable contract.a

• Bynkershoeck and Emerigon both agree, that the contract of insurance was not to be found in the Roman law, though some traces of it have been supposed to be perceived in the Roman history. Bynk. Quæst. J. Pub. lib. 1. c. 21. Emerigon, des Ass. Pref. John Duer, Esq., has recently bestowed a learned examination and able argument upon the question, whether marine insurance was known to the ancients, and he gives strong presumptive reasons in favour of the use of that insurance among the Romans. See his Preliminary Lecture to a Course of Lec

specific capital stock. See Laws of New-York, March 30, 1849, p. 289, imposing a duty of two per cent. on premiums annually earned by fire insurance, by persons not incorporated under the laws of the state. See Act, April 8, 1851, Laws, p. 167.