expression has obtained this meaning according to any general (1) Jones v. usage.

Ins. Co. of N.

Dall. 246.

In a policy made in Philadelphia, about 1800, the freight is America, 4 valued at two thirds of the gross amount ;(1) the same propor- (2) Cheriot v. tion of the gross freight was also insured in a policy in New Barker, 2 York, (2) and insurers in some other places have adopted a simi- Johns. 346. lar rule, which shows some uniformity of practice in fixing the amount to be insured upon this interest.

But freight, as well as other subjects, may be valued above even the gross amount. In one case, the court said,' The par

ties agree that the freight shall be valued at a sum, which (3) Coolidge eventually proves to be three times the value of the carriage of v. Gloucester the goods. But we do not perceive that the estimate was un- Mar. Ins. Co. fairly made;' and it was adjudged that the underwriters should 15 Mass. Rep. pay a loss according to the valuation.(3)

341.

If the freight of a whole cargo is insured in a valued policy, The valuation and only a part of a cargo is put on board, the underwriter is of freight apliable only to the extent of the freight of the goods put on freight of a plies to the board. Insurance being made on freight, at and from Hayti to full cargo. Liverpool, valued at 6,500l.;' the vessel was lost, when only fifty-five bales of cotton were on board towards making up the cargo. The assured claimed the amount at which the freight (4) Forbes v. was valued. But the court said, that the valuation was made Aspinwall, 13 of the freight of a full cargo; and as only a part of the interest East, 323; see Montgomery valued had accrued, the assured could recover only a like pro- v. Egginton, portion of the amount at which the whole was valued.(4)

3 T. R. 362.

It seems by this case, and it is apparent in itself, that a valu- A valuation ation does not preclude the inquiry, whether the whole interest does not prevalued has been at risk; whether the valuation is of goods, clude the infreight, or profits. Lord Ellenborough says, in the same case, the whole inquiry whether 'If the ship would carry five hundred tons, and in fixing the terest valued valuation, the assured should calculate his freight upon five hun- is at risk. dred tons, but when he reaches the port of loading he can get ten tons only upon freight, and sails upon the voyage insured with those ten tons only; is it to be allowed, if the ship be lost, and he thereby loses freight upon ten tons, he shall be entitled to the valuation which includes the freight upon five hundred (5) 13 East, tons ?'(5)

327.

v. Gloucester

This case was cited in Massachusetts, in one under a policy on freight from Amsterdam to Philadelphia, valued at 3,000 dollars, where the freight actually at risk was 1,028 dollars. It was decided that the valuation could not be opened, and Mr. Justice Putnam gave as one reason, that 'It was not found that (6) Coolidge the ship did not take all the cargo which could have been pro- Mar. Ins. Co. cured at Amsterdam. In this it differs from the case of Forbes 15 Mass. Rep. D. Aspinwall.'(6) But upon the principle stated in that case, it 341. ought to have appeared that a full cargo was on board; for otherwise, under a valuation of freight, the insurers are made to assume the risk of not obtaining freight, as well as that of not (7) Riley v. earning it by reason of the perils insured against. Mr. Justice Hartford Ins. Swift says, the valuation has 'reference to all the goods intend- Co. 2 Conn. ed to be carried ;'(7) but according to the principle stated by Rep. 368.

Freight valued at so

much, 'carried or not car

ried.'

(1) De Lon

guemere v. Phoen. Ins. Co. 10 Johns. 127.

Valuation of

the freight of a voyage, for

which different freights are stipulat

ed, for the pas

sages of which

the voyage consists.

(2) Davy v. Hallett, 3 Caines, 16.

Lord Ellenborough, it applies to all that can be carried. There seems to be no obvious reason for valuing freight at any parti cular sum, except where the assured is owner of the cargo, unless it is valued below the amount known by the parties to be at risk. Such a valuation, where the amount of freight at risk is not known to the parties, may at least, unless it is very low, impose upon the insurers the risk of the rate of freight being so low, that a full cargo may not amount to the valuation. But to add to this risk that of not finding a cargo, seems to be departing very much from the usual purposes of this contract.

But where the policy was on the freight, valued at the sum insured, 'carried or not carried,' and, at the time of a loss only a part of the interest had accrued, a part of the cargo only being on board; it was held in New York that the amount was fixed at the full valuation.(1) In other words, by this clause, carried or not carried, the insurers were understood to assume the risk of not procuring goods to be shipped, on which the freight was to be earned.

Suppose the voyage to have intermediate stages at which freight up to the time is earned, and becomes due, independently of the circumstance of the vessel's arriving at subsequent stages; and the freight of the whole voyage is valued in gross. Is this a valuation of the amount of all the freights, or of the amount of each severally? A case of this description has occurred in New York. Insurance was made on freight valued at 2,000 dollars, at and from Philadelphia to Omoa and Golfo Dolco, and at and from thence to Philadelphia.' The assured was owner of the ship and cargo. In the outward voyage the ship earned freight to the amount insured. A return cargo was taken on board, the freight of which would have amounted to the same sum. This freight was lost. The assured insisted that the outward and homeward freight were each valued by this policy at 2,000 dollars, the insurers said both freights were valued at that sum, and as half of the whole amount of freight for the voyage round, had been earned, it was a loss of only fifty per cent of the amount insured. It was held to be a valuation of each successive freight separately at the amount of the valuation.(2) It was contended that the valuation applied to the amount of freight at risk at one time; and the reasons for this construction seem to be very strong, since the assured would otherwise be obliged to pay a premium on double the amount that he could recover in a total loss, which would be altogether anomalous. And yet something may be said in favour of the construction contended for by the insurers, since if one entire freight is to be at risk, during the period for which the insurance is made, there is a chance of a greater pro ratâ freight, in nature of salvage, in case of total loss. For example, if one entire freight, outward and homeward, on an India voyage, is to be paid only on the delivery of the homeward cargo in the United States, and the whole freight is insured to the full amount; though a total loss might happen by the ship's being damaged and disabled from pursuing her homeward voyage fur

Erether than to one of the West India Islands, and an abandon

།

ment should be made; still the actual loss to the insurers would be only the expense of transporting the goods from the West Indies to the United States, by which they would be entitled, in the nature of salvage, to the whole freight; whereas, if half of the whole freight had been earned and paid on the delivery of the outward cargo in India, and insurance had been made to half of the amount of the two freights, that is, to the full amount of what would be at risk at any one time, and a total loss should happen as before supposed on the homeward voyage, the actual loss to be paid by the insurers would be the same as before; though they would, by paying for the transportation of the goods from the West Indies to the United States, entitle themselves only to the homeward freight in the nature of salvage. This would be a reason, therefore, for demanding a higher premium in the latter case.

at the amount

Insurance on profits is usually made by a valuation. Mr. Whether proJustice Livingston, giving the opinion of the court in New York, fits are implisaid, Every insurance on profits must of necessity be consider- edly valued ed a valued, and not an open policy. If it were otherwise, it insured. would be next to impossible to prove their value. How are (1) Mumford you to ascertain what is often imaginary, and must depend on. Hallett, 1 so many contingencies ?'(1)

Johns. 439;

v. Hart

The prevailing practice of agreeing to settle a loss, under a po- Riley Hart licy on profits, by the same rules, and at the same rate, as a loss 2 Conn. Rep. on the goods, is conformable to this principle; for it admits 368. that the ownership of the goods gives, of itself, an insurable interest in profits, independently of the circumstance that the § goods would actually have afforded a profit at the port of destination. It is consistent with this practice to go still further, and admit that the amount insured on profits in a policy in an open form, is the value of the interest; for if a proof of the amount of interest is required in this case, as in an open policy on goods, it would be requiring the proof of a fact to show the amount of the interest, which if required at all, should be required to show the existence of the interest; for if the amount depends on what profit would be actually made at the port of destination, it seems to follow that if no profit would be made, there is no interest. And as the interest is admitted without this proof, so should be its amount. This is also conformable to what is universally understood of an insurance on profits, namely, that it is the same thing as the insurance of goods at a valuation above the prime cost. But the same question might arise here as in case of a policy upon freight, namely, whether all the goods, of which the profits were intended to be insured, had been put at risk. But a different doctrine prevails in England. There it is East, 544; held, (2) that the property in the goods does not necessarily give Hodgson v. an insurable interest in profits; to constitute such an interest, it East, 316. S. must be shown that there would have been a profit, had the C. 3 Camp. goods arrived at the port of destination.(3) The interest being 277, considered of a kind, the amount of which can be ascertained

(2) Supr. 46.

(3) Barclay v. Cousins, 2

Glover, 6

(1) Eyre v. Glover, 16 East, 218.

In policies against fire the value of the property must be proved, unless it is expressly

agreed upon.

An open policy in form on an indefi

and proved, the same proof is required of the amount of this interest, as of that in goods or a vessel.(1) In England, therefore, under a valued policy on profits, the assured must show that the whole of the goods were at risk, and that there would have been some profit; the valuation will then attach to it, and determine the amount as between the parties. But if the insurance be in the form of an open policy, the amount of interest must be proved, and a return of premium may be claimed for short interest, as in other cases. But according to the principle adopted by the court in New York, the assured on profits has only to prove an interest in the goods, which of itself gives an interest in profits, and that the whole of the goods, of which the profits were insured, were at risk; and the sum insured will determine the value of the interest between the parties, whether the policy be open or valued in its form.

In case of insurance on merchandise, furniture, or buildings, against fire, the rules as to valuation are the same as in relation to a ship or cargo; if the policy is open in its form the value of the interest must be proved.

Insurance on lives is made without a valuation. If the interest is a debt due to the assured, or any interest that can be definitely ascertained, then the amount of it is determined, and a return of premium is made for over insurance, as in other cases.(2) But if the interest be of a kind, the amount of which cannot be ascertained, such as the support of the assured by the person whose life is insured, or the receipt of an annuity valued policy. from him, or the expectation of some future pecuniary benefit from the continuance of his life; the sum insured fixes the value of the interest between the parties; that is, the policy, though open in its form, receives the same construction as if the interest had been expressly valued at the sum insured.

nite interest in a life, is construed as a

(2) Stat. 14 Geo. III.

c. 48.

The amount

of the insura

ble interest

the property at the commencement of the risk.

If the value of the interest insured is not agreed upon in the policy, it must be proved by the assured before he can recover is the value of a loss, and certain rules are adopted in ascertaining its amount. The greater number of insurances, and especially those on ships or cargoes, have relation to an interest, the value of which may change. It is accordingly necessary to fix on some period at which the value is to be estimated; and as this must be done by a general rule, the time fixed upon for this purpose can be no other than the commencement of the risk. No subsequent time can be taken, since the interest may cease directly after the commencement of the risk, by the destruction of the thing insured. The value of the interest is therefore to be estimated at the time of the commencement of the risk.(a)

(a) 2 East, 109, 116; 7 Mass. Rep. 365, 369; 9 Mass. Rep. 436; 7 Johns. 343; 13 Mass. Rep. 250; Lewis v. Rucker, 2 Burr. 1167; Usher v. Noble, 12 East, 639; Snell v. Del. Ins. Co. 4 Dall. 430; Carson, v. Mar. Ins. Co. Wharton's Dig. 340. h. t. n 205.

surable inte

In all cases the premium paid for the insurance constitutes a The premium part of the insurable interest,(1) which shows that the amount constitutes a of insurable interest is not precisely the price current or market- part of the inable value. And since the assured pays a premium for insuring rest. the part of his interest that consists of the premium given, it (1) 1 Mag. 37. follows, that the shorter the duration of the successive risks, s. 37. Poth. the less expensive is the insurance. But it is hazardous to divide h. t. n. 43. the same continuous risk into different portions, as the assured may lose his indemnity between the underwriters successively for one portion and the other, where the cause of a loss exists during one portion of the risk, and the loss actually happens after the commencement of another portion.(2) The risk is (2) Supr. therefore usually made to commence at times at which the con- c. 13. s. 15. dition and value of the property can be most satisfactorily proved.

to put the as

The general principle, by which the amount of insurable inte- The indemnirest is computed, is the same that runs through the whole sub- ty proposed by ject of insurance, namely, that of indemnity. It is not intend- insurance, is, ed by the contract of insurance to put the assured in the same sured in the situation, in case of a loss, that he would have been in, had the situation he adventure terminated successfully. He must take the chances was in when of his speculation on the state of the markets. The indemnity the risk berefers to the beginning of the risk upon the specific subject insured, and losses are adjusted upon the principle of replacing him, as nearly as may be, in the situation he was in at that

time.

gan.

ship continues

The amount of the insurable interest in the ship is accord- The amount ingly its value at the commencement of the risk; the insurable of insurable value in an open policy being once determined, continues to interest in the be the same during the continuance of the risk. The ship be- the same durcomes of less value by decay, and wear and tear, but as be- ing the risk. tween the parties to the policy it continues to be of the same value, and the same amount will be recoverable in a total loss, at whatever period of the risk it may happen, as will more distinctly appear under the head of total losses.

80.

The ship, as a subject of insurance, includes the tackle, boat, (3) 1 Johns. provisions, and whatever is necessary to equip her for the voy- (4) 2 Val. 55; age.(3) The guns, ammunition, &c. of an armed ship, consti- ì Emer. 277. tute a part of its insurable value.(4) If a ship has been re- (5) Wesk. tit. Interest, n. 9. cently purchased, its cost with the addition of the premium is (6) Puller v. its value in the policy.(5)

Staniforth, 11

The amount of the insurable interest which a charterer has in a East, 232; vessel, depends on the amount he is liable to pay in case of her Horncastle being lost;(6) the insurance of his interest is in effect a rein- East, 400.

surance.

v. Stewart, 7

The substantial part of the insurable interest in goods is their Amount of cost to the assured. This is the most satisfactory proof of the interest in value, in case they are purchased near the time when the risk goods. commences upon them. Accordingly, if an open policy is made. upon successive passages from port to port, and upon shipments successively made at different ports, though the subsequent shipments are only the proceeds of the first, yet the insurable