that has an indirect relation to this subject, I should infer that the rule stated by Mr. Stevens, is more generally adopted in respect to the articles specifically enumerated in the memorandum. The different manner of introducing the general exception of all losses under five per cent, in some policies, which has been noticed above, would evidently in part, take a case out of the rule adopted in Boston.

6

A question occurs, whether the expenses of surveys, certifi- Whether the cates, protests, and of the adjustment of the loss are to be in- expenses of cluded in determining whether a loss comes within any exception. ascertaining and proving By the ordinance of Hamburg, the insurer is obliged to pay a the loss, are particular average if the same amount to three per cent after to be inthe commission of the despacheur of averages is deducted."(1) cluded. This is adopting the rule, that the charges for ascertaining the amount of the loss should fall upon the party who must have (1) Tit. xxi. sustained the loss, had its amount been ascertained without any art. 11. 2 expense. This rule seems to be perfectly reasonable and to Mag. 238. be founded upon the plainest principles, and it applies with equal propriety to all the expenses incurred for the purpose of (2) See Stevascertaining and proving the loss; that is, to surveys, protests, and the like.(2)

en's Essay on Av. Part IV. a. 3. p. 216.

(3) Steven's Essay on Av. Part IV. a. 3.

Mr. Stevens says he has been informed, that the intention of the memorandum, when first inserted, was, that the five or three per cent, should, in all cases, be deducted from the average, the underwriters paying the balance.'(3) But the practice in Eng- p. 213. n. land is, to consider the underwriters liable for the whole of the loss where it exceeds the rate at which the exception is fixed. The practice is the same in Boston, and other places in the United States, as far as I have been informed in this respect; unless the policy contains a provision that the insurer will pay (4) A Savanonly the excess of damage above the rates limited.'(4) I have, nah form. however, met with only one instance of such a provision.

6

CHAPTER XIX.

PRELIMINARY PROOF.

(5) 1 Mag.

Ir is a pretty general practice to allow some time, more or less, according to the law or usage of the particular place, from eight, to thirty, or sixty days, between the time of the claim and proof of a loss, and the payment of it.(5) The English marine 89. s. 76. policies, however, contain no provision on this subject. The policies made in England against fire, in some instances at least, contain a provision in regard to the proof, on the production of

(1) Routlidge which the loss shall be paid.(1) The American marine policies, . Burrell, I universally contain a provision, that a loss shall be paid in thirty, or sixty, or ninety days, or some other time, after proof of the loss. The time agreed upon in most policies is sixty days. The evidence of the loss under this provision of the policy is (2) Barker v. called preliminary proof.

H. Bl. 254.

Phon. Ins.
Co. 8 Johns.

237.

What is suffi

cient preliminary proof.

307, Anthon's Cas. N. P.

16. n.

The abandonment, and the furnishing the preliminary proof, are distinct acts, and must not be confounded.(2) We have already seen what constitutes an abandonment, and that it is made only in case of total loss, but preliminary proof is requisite in every description of loss.

In regard to the kind of proof requisite under this provision, Chief Justice Thompson said, in giving the opinion of the court, that it requires only reasonable information to be given to the underwriters, so that they may be able to form some estimate of their rights before they are obliged to pay. This clause has always been liberally expounded, and is construed to require only the best evidence of the fact which the party possesses at the time."(a)

The ordinary proofs of a loss are the invoice, bill of lading, &c. to show the interest of the assured; the of the vessurvey (3) 8 Johns. sel or cargo, protests, consular certificates, letters of the captain or other correspondents, &c. to show that a loss has taken place.(3) Where the captain had been made prisoner, and the assured, being informed of the loss by the pilot, communicated his information to the underwriters; Chief Justice Parsons said, in giving the opinion of the court, The evidence of the loss was sufficient. Nothing can be objected but the want of affidavit, which it is not usual to send. The master was a prisoner, and could make no protest, which is the usual evidence."(b) Letters from the master or other person, giving an account of a loss, have been held to be sufficient preliminary proof,(c) as also the protest of the master and mate.(4)

(4) Talcott v.

Mar.Ins. Co.

2 Johns. 130.

If the insurers demand a document, this may im

pose the obligation of producing it.

It depends upon the provisions of the policy, and also in some degree, upon the demand made by the insurers, whether the production of any particular documents is necessary. Where it was agreed, that the insurers should not be liable for a loss on a vessel insured, if, upon a regular survey, she should be condemned on account of being unsound or rotten; on a claim being made for a loss, the insurers required the production of a survey which had been made upon the vessel. The assured did not produce the survey. The court said, 'We are of opinion, that the assured was bound to produce the survey, or give some account of its non-production. It is possible the survey might have shown that the vessel was unable to prosecute her voyage on account of her being unsound or rotten.

It was a

(a) Lawrence v. Ocean Ins. Co. 11 Johns. 259. See also Barker v. Phoen. Ins. Co. 8 Johns. 237; Talcott v. Mar. Ins. Co. 2 Johns. 130. (b) Munson v. New Eng. Mar. Ins. Co. 4 Mass. Rep. 88. See also Johnston v. Col. Ins. Co. 7 Johns. 315. (c) Craig v. Un. Ins. Co. 6 Johns. 226; Barker v. Phon. Ins. Co. 8 Johns. 237.

material document to the insurers in forming a judgment, whether (1) Haff v. the loss claimed was total.'(1)

Mar. Ins. Co.

See also S. C.

N. P. 14.

The conduct of the insurer may amount to a waiver of his 4 Johns. 132. rights in respect of preliminary proof. Where the assured pro- Anthon's Cas. duced to the underwriters the heads of the master's protest, and his letters, in proof of barratry, and the question made between the parties, was, whether the facts stated, amounted to barratry; Mr. Justice Thompson, giving the opinion of the court, said, 'Under these circumstances, even admitting the documents not to be competent preliminary proof, I should consider the under- (2) M'Intire writers as having waived the claim to more formal proof.'(2) Johns. 229. And the protest of the captain, relating to a loss, being produced to the insurers, but no proof of interest furnished, the court said, ' As the underwriter made no objection to the sufficiency of proof, and placed his refusal to pay, on the ground of deviation, he must be deemed to have waived the proof of interest.'(3)

v. Bowne, 1

(3) Vos v. Robinson, 9

Johns. 192.

ces from the

The thirty, or sixty days, or other time of credit for the loss, The term of must, of course, be computed from the time of the production of credit for the the proof, and not from that of abandonment. Where an aban- loss commendonment was made on the 5th of the month, and the prelimina- time of makry proof was exhibited on the 21st, the sixty days were com- ing prelimiputed from the 21st.(4)

Co. 8 Johns.

nary proof. As the loss must be total at the time of the abandonment, in (4) Barker v. order to entitle the assured to recover the value at which the Phoen. Ir. subject is insured ;(5) proof of the state of facts, at the time of 237. abandonment, might be considered to be a part of the prelimi- (5) Supr. 454. nary proof. But as this would very much extend the credit for the loss, in case of a constructive total loss at a great distance from the residence of the parties to the policy, and would give an indirect effect to the rules respecting preliminary proof, quite foreign to the object and principles of these rules, the construction which would give the different stipulations effect, without causing them to interfere with each other, seems to be, to consider the proof of the state of facts, at the time of abandonment, not to be a part of the preliminary proof. Property being captured, at a great distance from the parties, and abandoned, the assured has a right to recover, unless subsequent facts have defeated his right. The proof of the capture, may, in this case, be considered to be the preliminary proof, and the fact that the property has not been released in the mean time, is only necessary to show that the right of abandonment had not been devested before the time of abandoning. Upon this construction the credit will begin to run from the time of exhibiting proof of (6) 3 Binn. the capture.(6) If, at the expiration of the term of credit com- 289. puting from that time, the state of facts at the time of abandonment is known, the loss will be payable. But it can hardly be supposed that the assured can recover for a total loss, before it is known whether the facts authorized an abandonment at the time when it was made. To hold that he could recover in this case, would be to set aside the doctrine which makes the right of abandoning depend upon the existing facts. Although it has been in

་

(1) 3 Binn. ut timated that the assured may recover in this case,(1) yet this seems Supr. to be very questionable. The doctrine that abandonment must be authorized by the existing facts, seems to require that the right to payment of a loss, should be suspended, and the term of credit prolonged, until it appears whether the facts authorized an abandonment. To hold otherwise, seems to be adopting the doctrine, that the assured may recover for a total loss, without showing that he has a right to recover.

CHAPTER XX.

What will be

ADJUSTMENT OF A CLAIM FOR A LOSS

An adjustment of a loss, it seems, is, in London, usually made considered an by endorsing on the policy, adjusted this loss at' so much per adjustment. cent, or other note to this effect, which is signed by the under(2) Park, 192. writer.(2) But the form of the adjustment is not material, it is (3) Bell v. sufficient if the underwriter has acknowledged the claim, and Smith, 2 Johns. 98. the parties have agreed on its amount. An acceptance of an (4) M'Lellan abandonment is an adjustment of a loss as total,(3) and pay& M. Ins. Co. ments made on a claim of a total loss, being held to be equivalent to an acceptance of an abandonment, were in effect an adjustment.(4)

v. Maine F.

12 Mass. R. 246.

A policy contained a stipulation for a return of two per cent of the premium on arrival, and this return was demanded by the assured, and made by the underwriter, and a memorandum was made upon the policy to signify that it had been adjusted. After this the assured claimed an average loss. Gibbs, C. J. 'The return of two per cent on arrival, means, that if the adventure be safely terminated, and the underwriter free from all danger of loss, and discharged from all other claims, he will return a portion of the premium. If any thing of risk remained it should have been communicated to the underwriter when the return premium was claimed. If the assured intended to reserve a claim, they should have stipulated for it.' And he left it to the jury, being a special one, whether all claims under the policy, had not been adjusted by the demand and payment of a return of premium; who found that the insurer was thereby discharged from his liability under the policy.(5)

An award of arbitrators under a submission, not in writing, will be as binding in regard to a claim for a loss, as in other cases; that is, the circumstance, that the submission is by parol, is immaterial.(6)

An adjustment may be made conditionally. After an adjustment Conditional and payment of a loss by a part of the underwriters upon a poli- adjustment. cy, another underwriter subscribed an endorsement on the policy, Adjusted thirty-three pounds per cent, on account, upon my subscription to this policy, until the account of the proceeds of the goods insured can be made up, when a final loss is to be paid to the same amount, as by the other underwriters.' Dallas, J. 'The undertaking of the insurer appears to be prospective, and his subsequent liability depended on the making up of the account. The assured should have proved that they had made (1) Gammon and rendered to him an account of the proceeds. The under- Moore, 563; r. Beverly, 1 taking of the underwriter to pay the loss, is qualified by a con- S. C. 8 dition precedent, which has not been performed."(1)

Taunt. 119.

an adjust

ment.

An adjustment, when duly made, has the effect, like any other The effect of settlement, arbitration, or compromise, of concluding the parties. An adjustment being made in writing, or by award of arbitrators, the assured may bring an action upon it without setting forth the policy particularly, or he may bring an action upon (2) Rogers v. the policy in the same manner as if there had been no adjust-194; ChristMaylor, Park, ment, and give the adjustment in evidence of a loss and of its ian v. Combe, amount.(2) And if there be no evidence to impeach the adjust- 2 Esp. 489. ment, it will fix the rights of the parties.(a)

But where, immediately after signing the adjustment, doubts arose in the minds of the insurers as to the honesty of the transaction, and they called for other proof, the adjustment was held not to be binding.(b) This case cannot be consistent with those above cited, without supposing these doubts to have been expressed, and further proof to have been demanded, before the adjustment could be considered as concluded, and while something remained to be done, equivalent to the delivery of a deed after it has been executed; for the doubts or demands of one party, after a transaction is completed, cannot make it the less binding.

On an application to set aside an adjustment, the court in New An adjustYork said, It appears that, previous to the adjustment, all the ment can be set aside only facts were communicated to the underwriters. The adjustment for mistake or was made by the underwriters with their eyes open. An ad- fraud. justment cannot be opened, except on the ground either of fraud, (3) Dow v. or mistake, from facts not known.'(3)

Smith, 1

Any agreement which one party is led to make in consequence Caines, 32. of the fraud of another, is not binding upon the party who would not have made the agreement but for the fraud.

mistake of law does not

avoid an

In regard to mistakes, Lord Kenyon is reported to have inti- A mated to the jury, that an adjustment of a loss would not be binding upon a party who made it under a mistake of the law, adjustment. or of facts.(4) But Lord Ellenborough afterwards, with the concurrence of the other judges, expressed his dissent from this

(a) Da Costa v. Firth, 4 Bur. 1966; Hog v. Gouldney, Park, 193; Hewit v. Flexney, Park. 194; Shepherd v. Chewter, 1 Camp. 274; Rayner v. Hall, 4 Taunt. 662. (b) De Garron v. Galbraith, Park, 194. See remarks upon this case, Park, 195; Marshall, 635.

(4) Rogers v. Maylor 2 Esp.

489.