Court Opinion

ID: 9299400
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:05:58.823652+00
Date Added: 2024-06-11T17:13:37.575311
License: Public Domain

WASHINGTON, Circuit Justice.
The parties to this suit have agreed; by the policy on which ithe action is founded, that the property insured ivas worth six thousand dollars: and the defendants bound themselves to the extent of four thousand dollars, the sum subscribed to cover so much of the agreed value, as had not been covered by any prior assurance. It turns out, that four -thousand dollars of that value had been previously insured in New-York. As to that sum, therefore, the defendants are not liable; but they would have been liable to that amount, had the agreed value of the property been eight thousand dollars; because so much of the value was uncovered by any prior policy. But, as in the present case, only two thousand dollars of the value was uninsured when the last policy was effected, the defendants cannot be called upon for a sum exceeding that so left uncovered. This is the plain im-
*1049- port of the contract between these parties; .and why should not the defendants comply with it? The reasons assigned are, that the first policy being valued, the insured, in case of a total loss, must have abandoned the whole property saved, to the first underwriters, and were thereby incapacitated to cede any thing to the defendants; without doing •which, they could not demand a total loss from the defendants; and that the omission to communicate to the defendants the existence of the first policy, is such a concealment ■as renders this policy void in its inception. In answer to these objections, it is sufficient to say, that the plaintiffs do not claim for a total loss; and in point of fact, if this were material, they have not abandoned to the New-York Company. Claiming only for a partial loss from these defendants, they ■are not entitled to an abandonment. It is not the incapacity or the failure to abandon, which can defeat the right of the insured to recover, unless he goes for a total loss. But if the law were otherwise, still the insured is not incapacitated to abandon to the second underwriter, until he has deprived himself of the power of doing so, by having previously abandoned to some other underwriter. It was correctly observed, by one of the plaintiffs’ counsel, that he might, if he chose, •and sometimes it might be his interest, abandon to the underwriters on the second policy, and take from them so much as such .policy, from the terms of it, covered. It follows from these principles, that whether there was or was not a prior policy, was a •circumstance of no consequence to the underwriters on the second, except as to the amount for which the latter, in case of loss, might be liable; and,therefore, notice of such prior policy to them, was unnecessary and idle. Be■sides, the very terms “in case the assured shall have made any prior assurance” imply, that whether he has made such or not, is a fact unknown to the underwriter on the second .policy. The case of M'Kim v. Phoenix Ins. Co. [supra] is, so far as it resembles the present case, against the defendants. In that case, the first policy was underwritten by the Philadelphia Insurance Company, to the -amount of twelve thousand dollars, and was ■clearly open. The Phoenix Company after-wards underwrote fifteen thousand dollars, .on the return cargo of coffee, valuing the mme at twenty-two cents per pound; and "the question before the court was, whether the plaintiff could recover any thing upon the latter policy; and-if any thing, how much? The court decided, that the first policy covered as much of the coffee, as twelve thousand dollars would absorb at prime cost, •and charges, instead of the value fixed on that article in the second policy; which, of -course, would leave to be covered by the second policy, as much less of the cargo, as the difference between the prime cost and charges, at twenty-two cents per pound, •would amount to. Por so much of the cargo,' the Phoenix Company was held to be answerable. The court also decided, that the subsequent agreement of the Philadelphia Company to waive all their right to the property, which might be saved, could not change the nature of the contract entered into by the plaintiff with the Phoenix Company, because, at the moment the latter was made, no more of the cargo was insured than that which the first policy left uncovered, and was void, as to so much as was so covered. If so, the subsequent agreement with the Philadelphia Company was, in relation to the Phoenix Company, res inter alios acta, and could not affect the rights of the Phoenix Company. The notice spoken of, in that case, was not in relation to the existence of . a prior policy, but the nature and extent of it. The case of Yard’s Assignees v. Murgatroyd, is very imperfectly stated; but it appears, so far as we understand it, to resemble this as little as the one just noticed. The opinion of the court is, that the plaintiffs are entitled to recover the sum reported by the referees.