Case Name: Samuel Golde and Morris Golde, Appellants, v. Whipple & Co., Attorneys for The South and North American Lloyds, Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1896
Citations: 7 A.D. 48
Docket Number: 
Parties: Samuel Golde and Morris Golde, Appellants, v. Whipple & Co., Attorneys for The South and North American Lloyds, Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 7
Pages: 48–57

Head Matter:
Samuel Golde and Morris Golde, Appellants, v. Whipple & Co., Attorneys for The South and North American Lloyds, Respondents.
Insurance—"floating” policy — the companies must contribute prorata, 'subject to ■ ■ the limit of liability for the pm’ticular loss..
A policy of insurance was issued in an amount not to exceed §3,000 upon clothing and material for the same, while in the possession of parties to whom it had been intrusted for the purpose of being made up. A loss upon goods in any one building was limited to §600, and the policy contained the usual clause providing that the company should not be liable'for a greater proportion of any. loss than the amount insured by the policy should bear to the whole insurance.
There was in existence at the same time a policy of another company, the Hamburg-Bremen Insurance Company, for the same amount, which contained similar provisions, but stipulated that the company should not be liable upon a loss in any one building in a greater amount than $300. A loss occurred of §172.05.
Held, that the policies were floating policies, the goods covered by which were only ascertainable at the moment of the loss, and the amount of the liability only when the goods were ascertained; . .
That each company was liable for the pro rata share which the amount of its policy on the goods in the building bore to the whole amount of the insurance on the goods in that building;
That this rule was applicable as well to the case of a partial loss as where the loss was'total so' that the company which imposed the limit of §600 to the insurance upon the goods in any one building should pay two-thirds and the company which imposed the limit of §800 should pay one-third of the loss in question; N
That the object of limiting the amount of liability on a particular building was to-fix an amount beyond which ho indemnity could be claimed, but up to which the underwriter was liable;
That where several policies were issued to the same assured, upon merchandise similarly situated, the amount of liability fixed or attaching to the property in any one particular building became specific insurance, in amount, upon the merchandise situated in'that building;
That when the loss occurred and its amount was ascertained the policies must contribute precisely as in other cases of double'insurance.
Barrett, J., dissented.
Appeal by the plaintiffs, Samuel Golde and another, from a judgment of the Court of Common Pleas for the city and county of New York in favor of the defendants; entered in the office of the clerk of said court on the 1st day of April, 1895, upon the ver diet' of a jury directed by the court after a trial before the court and a jury on the 22d day of March, 1895.
This action was brought to recover the amount payable under a policy of insurance issued by the defendant, insuring certain propperty which was also covered by another policy in the same aggregate amount issued by the Hamburg-Bremen Insurance Company.
Jacob Manheim, for the appellants.
John Notman, for the respondents.

Opinion:
Rumsey, J.:
The company of which the defendants are the attorneys issued to the plaintiffs a policy insuring property therein mentioned to an amount not exceeding in the aggregate the sum of $3,000.. That which was covered by the policy was clothing and material for the same, manufactured, unmanufactured and in process of manufacture, the property of the assured, or held by them in trust or on commission, or sold but not removed, while the same is in the possession of parties to whom it has been intrusted for the purpose of being made up, contained in any building not used as a prison or-penal institution situate in the States of Hew York and Hew Jersey.. This was clearly a floating policy of insurance upon the material, mentioned in it to an amount not exceeding $3,000. The actual, amount of goods covered by such policy was ascertainable at the moment of loss only (Richards on Insurance, 19), and the liability - of the insurer of course can be ascertained only when the specific goods covered by the policy are ascertained.
The policy contained a further provision that it should not cover- or include any property on which the assured had specific insurance, and that the " company shall not be liable for a greater proportion of any loss than the amount of this policy bears to the total value of the property hereby insured, nor cover a greater amount than $600 in a/ny one building."
This action is brought to recover the amount which it is claimed the defendant company is liable for by a loss which occurred in one building. The questions which are presented arise because of the existence of another policy issued by the Hamburg-Bremen Insurance Company, "which contains practically the same provisions as those quoted above from the policy in suit, except that in the Hamburg-Bremen policy, the provision is that the company shall not be liable for a greater amount than $300 in any one building. Each policy also contains a provision that the underwriters should .not be liable for a greater proportion of any loss on the property described than the amount insured by that policy should bear to the whole insurance, whether valid or not, covering such property. The question is as to the construction of that particular clause of the policy.
The loss in this case was $172.05. It occurred upon property situated in one building, upon which the insurance under both of these policies applied, the amount of insurance by the'defendants being $600, and by the Hamburg-Bremen Company $300. The defendants claim that their policy up to the amount of $300 is concurrent with that of the Hamburg-Bremen' Company, and, there.fore, that until the loss reaches that amount each company is liable to pay one-half, and that beyond that siim the addition up to sufficient to make- the liability of the defendants $600 shall be paid by the defendants. Plaintiffs claim, on the contrary, that the policies are not concurrent, but that each company is liable for the pro rata share which its policy on goods in any building bears to the whole amount of insurance on the goods in that building.
There can be no doubt that the liability of the defendants for insurance upon any property covered by this policy cannot be ascertained until the loss has occurred. The policy is. a floating one; no specific property is insured; the liability of the company is $3,000 upon all property situated within certain limits. When the loss occurs, it must be a loss in some particular building, and then the provision of the policy attaches that the amount of it is $600 and no more. Such is the necessary construction of that provision of the policy which limits the amount of the loss upon property situate in any one building. The same construction, of course, must be applied to the same provision in the Hamburg-Bremen Company's policy. Therefore, we have this condition of affairs: At the time that a total loss takes place in any building the property in that particular building has insurance of $900; $600 is chargeable to the defendants and $300' to the Hamburg-Bremen Company. If the.property destroyed in that building were worth $900, it must be conceded that by the express terms of the policies the loss would be adjusted by requiring the defendants to pay $600, and the Hamburg-Bremen Company to pay $300, because only by the payment of these sums could the assured receive total indemnity. Clearly, in that case the liability would not be concurrent, as that word has been used, but proportional. Ho reason is seen why that liability, which is proportional when there is a total loss, should be changed into partly concurrent and partly proportional when there is but a partial loss, having in view solely the amount of loss. The rule is general that where several policies covering the same property contain pro rata clauses the underwriter of each policy is liable for that proportion of the loss if it is less than the total amount of insurance which the amount underwritten by him bears to the total amount underwritten. (2 Biddle on Ins. § 854.)
It is conceded on all hands that the amount underwritten by defendants on any one building is twice that of the Hamburg Company, and it is conceded that the rule applies if there is a total loss on the goods in any one building. Such concessions seem to be fatal to the defendants' claim here, and we can find neither principle nor authority to sustain it.
It. is said that these policies cannot be proportional because if they were so to be construed it would amount to a holding that the defendants' policy was a practical insurance of goods to the amount of $600 on each one of the five buildings, whereas the Hamburg-Bremen insurance would amount to practical insurance of goods to the amount of $300 on each one of ten buildings, and the result would be that upon the five buildings to which the defendants' insurance applied the defendants would be liable for $3,000, whereas the Hamburg-Bremen Company would only be liable for $1,500. This contention is founded upon the theory that the defendants' policy must apply to some particular buildings at the time when it is issued, which is not the case. It is purely a floating policy. It applies to goods situated generally throughout a particular locality. The amount of insurance "upon goods situated in any given place cannot be over $600, but that does not mean that at any particular time a special $600 portion of this policy is set apart to apply to goods in any particular building. It only means that when a loss shall have occurred in any one building, the entire liability for that loss, wherever the .goods may be, shall "be the amount of $600 and no more ; and the goods upon which that insurance is fixed are not ascertainable until such time as the loss has taken place. It may be that if it should happen that all the goods owned by the plaintiffs which were within the description of the policy should be destroyed at one time, the full amount of the insurance would take effect, and the same would be. the effect of the destruction of all the goods within the description of the Hamburg-Bremen policy, but that could only occur if those goods were in a sufficient, number of buildings and" the amount in each building was sufficient to require the insurer to pay up to the limit on that building. But in that case that would be a.total loss aiid no question such as is presented here' would arise. The only time when these questions can arise is when the loss is less than the whole amount of the policy and then the contribution clause must be held to be operative. In such case where the amount of thé concurrent insurance exceeds the loss the contribution clause is operative. (Richards on Ins. 185.)
The design of insurance of • this character is apparent. Manufacturers of clothing, having their material in the .hands of various persons and in various places to be made up into garments, procure these floating policies at a maximum amount of insurance, which is the measure of - the ultimate liability of each underwriter for all losses sustained by the assured anywhere. A limitation of liability to any one particular building in which the goods of the assured may be is a. distinctive feature of. the floating' policy; and the amount named as being the measure of liability for a loss in any one particular building is a specific amount, beyond which no indemnity can be claimed and up to which the underwriter is liable. Where there aré several policies issued to the same assured, upon his merchandise or material similarly situated* the amount of liability fixed as attaching to the property in any one particular building thus becomes specific insurance in amount upon the merchandise situated in that building. . When a loss occurs, therefore,, and the amount of the loss "is ascertained, the policies contribute precisely as in other cases of double insurance where it is permitted, each underwriter being responsible for the proportion which the amount of his policy bears to. the whole amount insured, which, in this case, is two-thirds and bne-third. (2 Biddle on Ins. § 854.)
The result is that the court erred in holding that defendants were liable for only one-half the loss, and the verdict should have been for two-thirds of it, being $114.70, with interest.
The judgment should be modified as claimed by plaintiffs, with costs.
Williams, Patterson and O'Brien, JJ., concurred; Barrett, J., dissented.