Case Name: Thomas Lee, Jun. and Andrew Cabot versus The Massachusetts Fire and Marine Insurance Company
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1810-03
Citations: 5 Tyng 208
Docket Number: 
Parties: Thomas Lee, Jun. and Andrew Cabot versus The Massachusetts Fire and Marine Insurance Company.
Judges: 
Reporter: Massachusetts Reports
Volume: 6
Pages: 170–179

Head Matter:
Thomas Lee, Jun. and Andrew Cabot versus The Massachusetts Fire and Marine Insurance Company.
In an action upon a policy of insurance, containing a stipulation, that if the assured shall have made any other assurance upon the premises prior in date, the underwriters shall be answerable only for the amount not covered by such prior policy, it is competent for the assured to show that part of the subscriptions to another policy upon the same property and risk were actually made at a time posterior to the effecting of the policy in question, although the general date of such other policy is prior.
Case upon a policy of insurance, Nov. 3d, 1807, by which the defendants insure for the plaintiffs 10,000 dollars on merchandise on board the ship Meridian.
The following provision was contained in the policy : —
“ And it is hereby agreed, that if the said insured shall have made any other assurance upon the premises aforesaid, prior in date to this policy, then the said insurance company shall be an swerable only for so much as the amount of such prior insurance may be deficient towards fully covering the premises hereby assured ; and the said insurance company shall return the premium upon * so much of the sum by them assured [ * 209 ] as they shall be, by such prior assurance, exonerated from.
And in case of any assurance upon the said premises, subsequent in date to this policy, the said insurance company shall nevertheless be answerable, to the full extent of the sum assured hereby, without right to claim contribution from such subsequent assurers, and shall accordingly be entitled to retain the premium by them received, in the same manner as if no such subsequent assurance had been made.”
The parties agreed to submit the action to the determination of the Court on the following statement of facts : —
“ The plaintiffs, together with Charles G. Cabot, Patrick T. Jackson, and John Bromfield, shipped on board the Meridian, for the voyage mentioned in the declaration, merchandise which cost 38,620 dollars 39 cents, and which, including the premium of insurance, was, at the time of the ship’s sailing, of the value of 42,900 dollars. The said shippers were interested therein in the proportions following, viz.: — the plaintiffs, 27,885 dollars ; C. G. Cabot, 5362 dollars 50 cents; P. T. Jackson, 5362 dollars 50 cents; and J. Bromfield, 4290 dollars.”
“ When the ship was nearly ready to sail, viz., on the 21st of October, 1807, a policy of assurance, bearing date on that day, was opened by and in the names of all the said five owners, upon the said merchandise, for 40,000 dollars, without specifying their relative interests therein. This policy was not made in any office, nor by any insurance broker, but was presented by the said owners to the different persons who subscribed it; some of whom lived in Boston, some in Salem, and some in Newbwyport. The subscriptions were made by them on different days, without their specifying on the policy the particular days of their respective subscriptions; and the said owners, or some of them, gave their note for the premium to each underwriter at the time of his subscribing. The whole amount underwritten on this policy was 32,000 dollars.”
* “ On the third day of November, 1807, the plain- [*210] tiffs opened the policy set forth in the declaration, which bears date on that day, and was at the same time duly executed by the defendants. No insurance was ever made, or caused to be made, by any of the said owners, upon the merchandise aforesaid, except by the said two policies, which together amount to 42,000 dollars.”
“The said merchandise was totally lost during the voyage insured, and duly abandoned. The defendants have paid as for a total loss, as far as they admit the plaintiffs to have an interest in said merchandise not insured by any policy actually prior to that made by the defendants.”
“The plaintiffs allege that, when the. policy declared on was made by the defendants, there was underwritten on the first mentioned policy the sum of 10,000 dollars, and no more.”
“ The defendants contend that it. is not competent to the plaintiffs to give any evidence of that fact, and that the plaintiffs are concluded by the date of said first-mentioned policy. — It is agreed that either party may give any legal evidence of usage.”
“ And if the Court shall be of opinion that the plaintiffs are con eluded by the written date of said first-mentioned policy, and could not by law be permitted to show in evidence that any of the subscriptions thereto were made after the second policy was executed by the defendants; — and if the Court shall further be of opinion that the said five owners were interested in the said first-mentioned policy, and were insured thereby, in proportion to their relative interests ; — then the plaintiffs are to recover a return of premium on the sum which will consequently appear to have been over-assured by them, without costs; but if the Court should be of a different opinion on either of said two points, then the plaintiffs are to recover the remainder, that would be due to them, as for a total loss on the whole sum insured by the defendants’ policy, with costs.” [*211] * “ If the parties cannot agree on the sum to be recovered according to the opinion of the Court, the same shall be assessed by the Court, or by assessors to be appointed by the Court. In either case, the defendants are to be defaulted.”
The cause was argued, at the last July adjournment, by Jackson for the plaintiffs, and Dexter and Hall for the defendants.
Jackson contended that it was competent for the plaintiffs to show that part of the subscriptions to the policy dated October 31st were actually made after the policy in the case at bar was executed, so that, at the time of effecting this latter, the plaintiffs were not fully assured by this sum of 10,000 dollars. Parties to instru ments more solemn and formal than policies of insurance, as deeds and writs, are permitted to aver and prove another date than that contained in the instrument. The very grammatical construction of the words used, “ if the assured shall have made any other insurance,” &c., is sufficient to entitle us to go into evidence of this fact. If it shall hereafter appear that another policy on this risk nos been, effected previously to this date, the proof of the fact is future, but the transaction itself must have been previous. This is obviously the intent of the parties; for the defendants could never have meant that the plaintiffs should, by antedating a policy actually posterior, avoid the defendants’ claim to the premium in case of the successful termination of the voyage; and yet this would be the effect, if the fact is not open to inquiry. “ Such prior assurance ” can never be held to mean assurance actually posterior, but will apply to insurance known at a future time, though really effected before. Indeed, the real and actual time of subscribing the policy constitutes its true date. Any other construction would be of mischievous consequence; and neither the rules of criticism or of common sense require any other.
* But if the policy of October 31st must be taken to [ * 212 ] be wholly effected on that day, still the two policies, taken together, not being more than sufficient to cover the whole risk, it is the right of the assured to divide the insurance as they see fit. The present plaintiffs had a right, for instance, to rely on the first policy to cover 17,800 dollars of their property, leaving the remainder for the benefit of the others assured, and protecting the remainder of their property by the policy in question. The underwriters have no concern in this arrangement, provided there is no over-insurance on the whole.
For the defendants, it was contended that the date was a very essential article in the policy; and unless it is held to be binding on all parties, a door is open for the practice of much fraud. Marshall says there are few instruments to which the true date is more necessary than a policy of insurance ; and he particularly suggests its importance as helping to discover any fraudulent concealment at the time of the subscription to the policy. As between two policies, upon a question of over-insurance, the date furnishes the only mean of adjustment, and must therefore, when fairly made, be absolute, and not to be contradicted.
In England, the underwriters upon these street policies, as they are frequently called, always add the date of their subscriptions to their respective names, and the sum assured by each ; and of course such policies have no date in the body of the instrument. This practice shows in a strong light the importance attached to the date. But in this country, all policies are dated before subscription, and the usage is established among underwriters to consider that date incontestable evidence of the real time of [ * 213 ] * subscription. By this principle much inconvenience and litigation are avoided.
The words of this policy, which are now in general use, were adopted by underwriters to meet such a question as is now before the Court — “If the assured shall have made any other assurance prior in date to this policy,” &c.; that is, if it shall appear, when the assured claim a loss upon this policy, that he has made insurance by another policy, purporting by its written date to be prior to this, then, &c.
The defendants do not contest the right of the assured on the first policy to distribute, so far as concerns themselves only, the interest therein as they please, and the underwriters have no concern in the question, so that, on the whole, there is not an over-insurance. But where there are two distinct policies, as in this case, and the effect of one construction is to make the defendants liable for a further sum than, on what they conceive to be the true construction, they would be liable for, then they have an interest in the question. And they contend that it is not in the power of the plaintiffs now to say, that they did not take upon the first policy in proportion of their respective interests in the subject of the insurance. Such a declaration, to avail them, should have been made at the time of effecting the second policy. In that case, the defendants would have acted with a full knowledge of the circumstances, and would have been now estopped.
The cause standing over to this term for advisement, the opinion of the Court was now delivered by
1 Johns. N. Y. Cases in Errorr, 313.
Page 241.
Appendix to Marshall, 711.
The defendants, having stated that there was an established usage upon the subject, by permission of the Court, examined several merchants and underwriters upon the question; but it did not appear from their testimony, that there existed any genera, established usage or custom: if there was any such, it was nut known to the witnesses

Opinion:
Sewall, J.
This is an action upon a policy of insurance, dated and made November 3d, 1807, whereby the defendants assured for the plaintiffs 10,000 dollars on merchandise on board the ship Meridian. The dispute more immediately referred to the decision of the Court, upon a state of facts agreed between the parties, respects the sum recoverable upon the policy. The defendants contend that the interest of the plaintiffs in the risk insured had been so far covered hy a policy j. rior in date, that the [ * 214 ] sum *of 10,000 dollars, added to the sum assured in the former policy, exceeded the amount of their property in merchandise on board the ship Meridian.
The policy, executed by the defendants, upon which this action is brought, contains the following clause: " And it is hereby agreed that if the said assured shall have made any other assurance upon the premises aforesaid prior in date to this policy, then the said insurance company shall be answerable only for so much as the amount of such prior assurance may be deficient towards fully coy ering the premises hereby assured ; and the said insurance company shall return the premium upon so much of the sum by them assured, as they shall be, by such prior assurance, exonerated from."
And by the state of facts it appears, that the plaintiffs, together with Charles G. Cabot, and several others, shippers of merchandise on board the ship Meridian, effected an insurance thereon, for their joint account, by a policy dated October 31, 1807, and proposed for the sum of 40,000 dollars, but finally closed at the sum of 32,000 dollars, after several subscriptions by individuals, underwriters to that amount.
The plaintiff's contend that the actual subscriptions upon this joint policy did not exceed, at the time their separate policy was effected, the amount of 10,000 dollars; and so it is to be understood in deciding this case, if it is competent to the plaintiffs to give evidence of the facts, notwithstanding the written date of the joint policy; and they contend, further, that no over-insurance appears in the case, because the assured in the joint policy are at liberty to apportion the sum insured thereby among themselves.
The whole amount of merchandise on board the Meridian belonging to the plaintiffs and the other shippers assured by the joint policy, was 42,000 dollars, of which the distinct shares of the plaintiffs amounted to 27,885 dollars. It is obvious, therefore, that the sum insured by the two * policies, [ * 215 J applied at large to the benefit of those whom they may concern, does not exceed the amount of the risk insured. The objection now to be considered is made, however, against those who were assured by the separate policy; and their distinct interest in the joint policy is, therefore, to be ascertained. What is to be considered the amount of the joint policy at the time the separate insurance was made, is the other question arising upon the facts stated.
The defendants contend that the interest of the plaintiffs in the joint policy must be taken, and estimated, in the exact proportion of their shares in the adventure insured ; there being no special agreement proved, to show any other appointment among the concerned. And it is argued that a question of over-insurance made by the underwriters upon a subsequent policy, gives them a sort of interest in the prior policy, and an authority to control those who are insured by it in the application of their insurance.
The questions and difficulties apprehended in the case at bar, arise altogether from certain alterations recently made in the forms of policies of insurance within this state. It may be useful, therefore, on this occasion, and especially on determining the effect of the novel stipulations cited from the policy in question, to have some recourse to the forms in use with us prior to these alterations.
The first in place upon the instrument is the precise naming of the assured, and the restriction of the policy to the party named. Formerly, with us, policies of insurance, in their most usual form, after naming the assured, or the party effecting the insurance, ran to him as well in his own name " as for and in the name and names of all and every other person or persons, to whom the same doth, may, or shall appertain." And this latitude of expression had its conveniences. A set and mechanical form of words, comprehending well enough the party or parties authorizing an insurance, and concerned therein, through all the various combinations [ * 216 ] of interest which may be lawfully insured, * removed, in some degree, the danger of mistakes, arising from the misapprehension or inadvertence of brokers and parties; and the contract was less liable, either to a defence against a loss, or a reclamation of premium, which may now be made not only on a supposed defect of insurable interest, but an unsuitable or defective naming of the party or parties requiring the insurance.
This new precision may be requisite, and seems to be in part directed, to the purpose of enforcing the other alteration alluded to; that is, the stipulation providing for cases of over-insurance. These have been cited, and need not be repeated ; they are by no means peculiar to the policy now in question, but are so much in use, as to have become, with a little variety of shape, a part of all our printed forms. Their more general effect is to abolish the contributions among insurers, formerly employed as the most equitable and convenient methods of distributing the savings upon losses, and the charges for return premiums, in cases where an over-insurance was discovered. And the benefit to insurers, which seems to be expected from them, is that, in the event of a loss, the failure of a bankrupt insurer may be fixed upon the assured ; and to that extent he loses the indemnity intended to be secured to him, his right to it not being taken away by any legal principle, but only by his express stipulation.
Apart from this, and by the forms of insurance used before these stipulations were introduced, underwriters depended on the general principle of law, that an insurance is a contract of indemnity; and, therefore, without a risk of property there is no lawful insurance, and to recover a loss the assured is holden to prove an interest in the risk insured. What is an insurable interest, has been always a question of some difficulty. Hence the advantage of a general form, in naming the assured, and extending the effects of the insurance, as far as the contract may be found to have been author ized by mercantile usages; thus comprising the cases of consignees, factors, * trustees, and agents, and persons [*217] having a qualified interest in the property insured. And courts of law have been liberal in the construction of policies in this respect, to the purpose of giving effect to the contract, whenever it might be done, without opening a door to wager policies and gaming insurances.
If the stipulations, cited from the policy in question, are referable to the same general purpose, and are to be restricted in their operation to the mode of adjustment provided among the underwriters concerned in one or more policies, their supposed interest or authority to control the assured in the application of their insurance, is inadmissible. The inquiry still is, as it was before the forms of insurance were altered, Is there proof of an over-insurance ? And although the surplus, when found, is no longer a saving to be averaged among all the underwriters concerned, but avails to the last underwriters in the order of time exclusively, yet the fact of an over-insurance depends upon the same principles.
In the case at bar, two policies — the joint and the separate policy — are before us. Taken together, the sums insured upon the same risk, described alike in both instruments, do not exceed the full amount and value of the interest and property of the parties in sured, who are named in the two policies ; all of them in one, two only of the concerned in the other. A right in the assured to appropriate their insurance among themselves, puts an end to the questions raised in the case at bar; and that they have this right, when not restricted by any circumstance in their mode of insurance, or any declared intention, or previous agreement among themselves, and to the extent requisite to give validity to both contracts, I can have no doubt; and this even after a loss is known.
There are, however, in the case at bar, circumstances to be considered, which have a strong tendency to show an appropriation by the concerned, made and understood when the insurances were effected. All the concerned in the adventure * to be insured were parties to the proposal, in the joint [ * 218 ] policy of insuring to the amount of 40,000 dollars : then the separate policy was commenced, and after that was effected, the joint policy was closed at 32,000 dollars. It must be understood, therefore, upon these facts, that the insurance effected by the two policies was appropriated in some manner consistent with the validity of both contracts ; and the most obvious appropriation ia one that effectuates the declared intentions of all the concerned; that is, by considering the joint policy as availing to those not separately assured, to the extent of their shares in the original proposal; and to those separately insured, for the balance of the 32,000 dollars. This, I apprehend, would be the result of the same evidence, nothing more being proved, in a controversy among themselves, if any should arise, respecting the expense of the premium, or the distribution of the avails upon the joint policy. And this evidence is at least sufficient to change the burden of proof, and to make it incumbent upon the defendant, to prove some other appropriation, such a one as would give to the insurance demanded of them the effect of an insurance without interest.
Any further inquiry as to this fact becomes unnecessary, when we consider the other question arising in the case at bar. What amount had been insured upon the joint policy when the separate policy was effected ? If a greater amount than 10,000 dollars had not been then subscribed, the defence fails in the other view which has been taken of it. The defendants suppose this question determined by the written date of the joint policy, and by the words cited from the policy in the case at bar, particularly the reference to a policy prior in date. The plaintiffs contend that this reference is, constructively, to a policy prior in effect, of which the written date is only the presumptive evidence, liable to be controlled by other evidence, when it can be had, of the actual subscriptions of each underwriter.
[ * 819 ] * The general principle is, that every subscription is a
new contract. Marshall [page 241] states this in speaking of the importance of the true date, when necessary to compare it with the dates of facts connected with the transaction; and, in this view of the subject, he commends the practice in England, where each underwriter dates his own subscription. By the true date, in contradistinction to some other date, he must intend the time of the transaction, as distinguished from any date which may be affixed to the writing containing the contract: and, because this last is presumptively the time of the transaction, although liable to be controlled when it is not truly so, he commends the practice which avoids a general date, and gives to each contract, made by every distinct subscription, its true date.
The rules of law, as applied in construing the dates of other instruments, even the most solemn, such as deeds and writings under seal, certainly are, that the written date is not conclusive evidence of the time of the transaction. This, when controverted and material, may be proved by extraneous evidence, notwithstanding a written date. A deed, and without doubt a policy of insurance, executed without any written date, are nevertheless valid ; and the .•alter may happen to be a policy of a prior date, within the meaning of the stipulation cited ; that is, an insurance by a prior transaction.
This construction seems indispensable in another view of the facts stated. The joint policy also contains a stipulation respecting over-insurances, where every ambiguity arising from the use of the word date, has been avoided. It is an express condition of the joint policy, that the subscribers shall be discharged, in case the same property shall be wholly assured by any policy actually prior, &c.; or, if the sum assured by this policy should exceed the true value of the property at risk, then the first subscriber, and the next in succession, shall be held, &c., until the real amount, &c., shall be fully assured; and the subsequent subscribers * shall be discharged. By the effect, therefore, of the [ * 220 J separate policy, and as to those concerned in it, if actually effected prior to the latter part of the subscriptions upon the joint policy, all those subscriptions are discharged; and then it is not an insurance, as it respects the question to be decided, to the amount finally subscribed, but to the amount only of the subscriptions actually prior to the effecting of the joint policy.
And, upon the whole, the construction contended for by the plaintiffs is enforced by recurring again to the general purpose of these stipulations; which are only to be considered as providing a particular mode of adjustment for the case of an over-insurance, when it happens in one or more policies, but not otherwise con trolling the assured, or operating by any construction to produce the event.
The evidence offered of a usage applicable to these stipulations is entirely inconclusive. The case has never happened, or no attention was paid to the effect of them in the adjustments testified by some of the witnesses.
It is the opinion of the Court that the plaintiffs are entitled to recover as for a total loss; and judgment must be entered accordingly.
Kewley & Al. vs Ryan, 2 H. Black. 343.
[Pacific Ins. Co. vs. Catlett, 1 Wend. 75. — Pridge. vs. Niagara Ins. Co., 1 Hall, 217. — Foster & Al. vs. U. S. Ins. Co., 11 Pick. 85. — Ed.]