value of the property, it is called a VALUED POLICY; and, in general, this agreed estimate and valuation, is final and conclusive upon both parties; subject however to certain rules and principles. One of these is, that, as there must not be a wager policy, or an insurance without interest, so there must not be such a valuation of property as is wholly unreal, and is plainly a mere cover for a wager policy. But, as it is certain that all commercial property has a fluctuating value, which may rise greatly, and is generally purchased or held in expectation of a rise, there may be a valuation by the holder which might seem excessive to others, and yet be honest on his part. And the courts have gone very far in this direction; almost to the extent of saying that if the insured have any property actually at risk, of the kind indicated, and of a real and substantial value, no mere exaggeration of this value in the policy shall avoid it.3 The valuation is void if intended to cover an illegal interest or 1 In Hodgson v. Mar. Ins. Co. of Alexandria, 5 Cranch, 100, 6 Cranch, 206, the ship was valued at $10,000, and insured for $8,000. The court held that it would not necessarily avoid the contract, nor restrict damages to that sum, if it were proved that the actual value of the vessel was no more than $3,000, because she might have fairly cost her owners the whole amount of her valuation. See also, Miner v. Tagert, 3 Binn. 204; Haven v. Gray, 12 Mass. 71, 75; Coolidge v. Gloucester Mar. Ins. Co., 15 Mass. 341; Davy v. Hallett, 3 Caines, 16; Kane v. Commercial Ins. Co., Johns. 229; Whitney v. American Ins. Co., 3 Cow. 210; Brooke v. La. State Ins. Co., 16 Mart. La. 640, 681; Akin v. Mississippi Mar. & F. Ins. Co., 16 Mart. La. 661; Feise v. Aguilar, 3 Taunt. 506. But see the remarks of Lord Mansfield in Hamilton v. Mendes, 2 Burr. 1198, 1213; Protection Ins. Co. v. Hall, 15 B. Mon. 411. 2 Per Lord Mansfield, C. J., Lewis v. Rucker, 2 Burr. 1167, 1171; Mac Nair v. Coulter, 4 Brown, P. C. 450; Clark v. Ocean Ins. Co., 16 Pick. 289, 295; Wolcott v. Eagle Ins. Co., 4 Pick. 429, 438. In Catron v. Tennessee Ins. Co., 6 Humph. 176, 185, the court said: "We have no doubt from the proof that the property was grossly overvalued, having been estimated at some four thousand dollars more than it was really worth. This of itself would avoid the policy; for though it is true that slight overestimates, such as a man might in the valuation of his property honestly make, would not vitiate a policy, yet it is equally true that an overestimate such as shocks the sense, and shows that it could not have been made but by design, will. This, an overvaluation of one third, surely is." * See cases supra. In Alsop v. Commercial Ins. Co., 1 Sumner, 451, 473, which was a case of insurance upon profits, Mr. Justice Story said: "I do not know that any overvaluation, however great, if it steers wide of a wager and a fraud, can be otherwise impeached." See also, Robinson v. Manuf. Ins. Co., 1 Met. 143; Gardner . Col. Ins. Co., 2 Cranch, C. C. 550; Irving v. Manning, 1 H. L. Cas. 287, 304, 6 C. B. 391, 419, per Patteson, J. peril; or if it be made fraudulently in any respect. And in this case the fraud vitiates and avoids the whole contract, and the insured recovers nothing.2 Though an overvaluation is not of itself necessarily proof of fraud, yet if gross and excessive, fraud may be inferred.3 A person may, in the same policy, value one thing insured, as the ship, and not another, as the freight or goods; and he may insure the same thing, valued by one insurer and open by another; and a valuation in any one policy has no effect whatever in determining the value of the same thing in another policy. And the authorities appear to lead to the conclusion, that 1 See next section. 2 Mr. Phillips states the rule thus: "If the goods have been fraudulently overvalued, the valuation is not binding. Where an overvaluation is fraudulently made, with the intention on the part of the assured of destroying the property, for the purpose of recovering of the insurers the amount at which it is valued, such a fraudulent purpose will make the whole contract void." 2 Phillips Ins. § 1182. The case of Haigh v. De La Cour, 3 Camp. 319, is cited in support of this proposition. But we think that the rule is well settled that a fraudulent overvaluation for any purpose will avoid the policy in toto, and not merely open the valuation. Gardner v. Col. Ins. Co., 2 Cranch, C. C. 550; Ocean Ins. Co. v. Fields, 2 Story, C. C. 59, 77; Hersey v. Merrimack Co. Mut. F. Ins. Co., 7 Foster, 149, 155; Protection Ins. Co. v. Hall, 15 B. Mon. 411, 429; Catron v. Tenn. Ins. Co., 6 Humph. 176, 185. There was in this latter case evidence of an intent to destroy the vessel, but the court considered that a fraudulent overvaluation of itself would be sufficient to annul the policy. The case of Haigh v. De La Cour, 3 Camp. 319, does not seem to us to warrant the distinction taken by Mr. Phillips. The insurance was on goods valued at £5,000. This valuation was obtained on false representations, by fictitious invoices, and by interpolated bills of lading, the value of the goods being only £1,400. The ship was afterwards run away with and carried to the West Indies, where the cargo was disposed of by a person whom the owners of the goods had put on board as supercargo. The action was brought by the assignees of the insured, they having become bankrupt, and it was contended that they had the right to recover the actual value of the goods on board; but Sir James Mansfield, C. J., said: "If the bankrupts intended from the beginning to cheat the underwriters, the assignees can recover nothing. The fraud entirely vitiates the contract." It does not appear that the owners had any thing to do with the running away of the ship, or that the act of the supercargo in selling the cargo was not, under the circumstances, for the best interest of all concerned. The case therefore seems a good authority in support of the proposition that a fraudulent overvaluation for any purpose avoids the policy. 3 See cases cited in the preceding notes. 4 Riley v. Hartford Ins. Co., 2 Conn. 368. 5 Higginson v. Dall, 13 Mass. 96. In this case a vessel was insured in Boston by an open policy, and afterwards insured by a valued policy in Calcutta. A total loss having occurred, it was settled under the Boston policy without regard to the value expressed in the other. See also cases in next note. if the valuation in the policy upon which the action is brought, is less than in the other, it is to be set aside. But if it be greater than in the other, it must be followed in estimating the loss. In our notes we shall endeavor to show the present position of this disputed question.1 1 It is difficult, if not impossible to deduce from the adjudicated cases clear and welldefined rules to determine the effect of valuations, where there are prior insurances, or amounts have been paid upon other policies. In England a loss is paid proportionally by the different sets of underwriters, and not according to priority as in this country, and it would seem that in an action upon one policy a valuation in another policy is disregarded. In Bousfield v. Barnes, 4 Camp. 228, a vessel valued at £8,000 was insured for £6,000. By a subsequent policy the same vessel was insured for £600, being valued at £6,000. Upon the happening of a total loss, the sum insured by the first policy, £6,000, was paid to the assured. In an action upon the second policy, it was contended that the plaintiff was estopped to say to the underwriters upon this policy that the ship was worth more than £6,000, and that by receiving that sum from the previous underwriters, the plaintiff was fully indemnified. Lord Ellenborough said: "I think it is not enough for the underwriters on a particular policy to show that the assured has received from another quarter the amount of the valuation in that policy, unless this amounts in point of fact to a complete indemnity. In the present case the ship is proved to have been worth above £8,000. The plaintiff has received only £6,000 from the London Assurance. He has therefore an interest of £2,000 to which he may apply the policy on which the action is brought." The doctrine of this case was somewhat modified by the subsequent case of Irving v. Richardson, 1 Moody & R. 153, 2 B. & Ad. 193. In this case a vessel was valued at the same sum, namely, £3,000 in two different policies. Losses were paid by both insurance companies to an amount greater than the valuation, and an action was brought by one company to recover its proportion of the excess. The case went off on a ground other than that of the effect of the valuation, but it was distinguished from Bousfield v. Barnes, by Lord Tenterden, C. J., in that "there the sum mentioned as the value was different in the two insurances; here it was the same." He further said: "I am of opinion that where a person effects two insurances, declaring the same value in each, he is bound by that sum, and cannot receive beyond that extent." The case of Kenny v. Clarkson, 1 Johns. 385, goes still further than Bousfield v. Barnes, in setting aside a valuation. A vessel, worth $7,000, was insured, valued at $2,000. There were prior insurances to the amount of $5,000, and upon the happening of a loss, there was a recovery upon one policy to the amount of $3,000. Held that the assured might recover. In Watson v. Ins. Co. of North America, 3 Wash. C. C. 1, a vessel worth $15,000 was insured for $12,000, and valued at the same sum. It was held that a prior bottomry bond, which was substantially an insurance for the amount of the bond, should, in estimating the amount covered by the policy, be deducted from the real value and not from the agreed value. There are, however, cases in favor of upholding the valuation where there have been prior insurances. Thus in Murray v. Ins. Co. of North America, 2 Wash. C. C. 186, a vessel was insured in one policy for $4,000, and valued at that sum; and in a subsequent policy for $4,000, and valued at $6,000. In an action on the second policy, held that the defendants were liable for so much of the agreed value of the vessel as was not covered by the prior insurance, that If the insured owns only a proportion of the property insured, as one fourth, one half, or the like, the valuation will, generally, be taken to be of that proportion. But if only a part of the goods intended to be at risk and to be included in the valuation are put on board and at risk, the valuation applies to them, only pro rata.2 And a valuation of an outward cargo may be held to is, to the extent of $2,000. In Kane v. Commercial Ins. Co., 8 Johns. 229, insurance was made to the amount of $15,000 on "goat-skins valued at fifty cents each,” and the policy contained the usual clause as to prior insurance, A prior insurance had been made by an open policy on the cargo on board the same ship, for the same plaintiffs, to the amount of $22,000. The prime cost of the skins was ten cents each. Estimating the skins at fifty cents each, and the rest of the cargo at the invoice prices, the amount was sufficient for both policies; but the cargo exclusive of the skins was not sufficient to absorb the prior insurance. In an action on the second policy, it was held that the whole of the goat-skins were to be valued at fifty cents each, and after deducting from this amount, the difference between the invoice price of the cargo and charges, exclusive of the goat-skins, and the $22,000 or amount of prior insurance, the residue would be the interest covered by the second policy; that it was immaterial whether the first policy was open or valued, if the skins, at fifty cents each, would furnish interest sufficient for both policies. Thompson, J., said: "The policy is not that as many of the goat-skins as remain uncovered by the former policy, at the invoice price, shall be covered by this policy at the valuation. This is not the sense and meaning of the contract. It is that the goat-skins laden on board shall be valued at fifty cents; and in determining how far the plaintiff's interest was covered by it, all the goat-skins on board are to be reckoned according to this valuation." See Minturn v. Columbian Ins. Co., 10 Johns. 75; Pleasants v. Maryland Ins. Co., 8 Cranch, 55. A different rule was laid down in M'Kim v. Phoenix Ins. Co., 2 Wash. C. C. 89. It was held in that case, that a valuation of coffee at twenty-two cents per pound, was to be applied only to that part of the coffee which was uncovered by a prior policy. It would seem, however, from the opinion of Mr. Justice Washington, that the second policy, in addition to the ordinary clause, making the insurers answerable for, as much as the prior insurance was deficient towards covering the property, contained a clause making it null and void so far as property had been previously insured. Where it is clear that the valuation applies to the whole thing insured, and not to the sarplus after deducting the prior insurances, as was clearly intended in Kenny v. Clarkson, it is difficult to see upon what principles it can be set entirely aside. 1 Feise v. Aguilar, 3 Taunt. 506. But this is a question of construction, and if it appear from the face of the instrument that the valuation applies to the whole property it will be so held. Dumas v. Jones, 4 Mass. 647; Mayo v. Maine Fire & M. Ins. Co., 12 Mass., 259; Murray v. Columbian Ins. Co., 11 Johns. 302. See also, Post v. Phoenix Ins. Co., 10 Johns. 79. 2 "The valuation, in the case of goods, looks to all the goods intended to be loaded; and in case of freight, it looks to freight upon all the goods the ship is intended to carry upon the voyage insured. If, for instance, the insurance be generally upon goods, and the goods intended to be protected be five hundred hogsheads of sugar, and a valuation be made accordingly, but the ship by accident takes on board one hundred only, and sails, and is afterwards lost by one of the perils in be a valuation of a return or intermediate cargo substituted for the whole outward cargo by purchase.1 In general, a valuation of the whole subject-matter, will be held to be a valuation of the insured's whole interest in it, including the premium paid by him; but the contrary may be expressed or shown by the terms of the policy.2 sured against with those one hundred on board; can it be contended that the assured shall recover to the full amount of the valuation, that is, for the whole five hundred, when he has lost only one hundred?" Per Lord Ellenborough, C. J.; Forbes v. Aspinall, 13 East, 323. See Rickman v. Carstairs, 5 B. & Ad. 651; Haven v. Gray, 12 Mass. 71, 76, per Parker, C. J.; Wolcott v. Eagle Ins. Co., 4 Pick. 429; Clark v. Ocean Ins. Co., 16 Pick. 289, 295; Whitney v. American Ins. Co., 3 Cow. 210; Brooke v. La. State Ins. Co., 16 Mart. La. 640, 681. 1 Haven v. Gray, 12 Mass. 71. In this case, an insurance was effected for $11,000, "upon one hundred bales of Louisiana cotton, valued at ninety-four dollars each, and twenty-five tons of logwood, valued at eighty dollars per ton," out and home. Held that the valuation would apply to a return cargo, provided and advanced by the consignees of the outward cargo, in consideration of the assignment and on the account and credit of the assured. Where, however, there was an insurance of $12,000 upon the cargo of a vessel out and home, and the policy contained a memorandum at the bottom, by which it was declared that the insurance was "on flour, dry goods, wine, and provisions, etc. etc., valued at $12,000," Mr. Justice Washington held, on the ground that the valuation should be restricted to the articles enumerated, that the outward cargo alone was valued. M'Kim v. Phoenix Ins. Co., 2 Wash. C. C. 89. This is in all cases a question of construction; of the intent and meaning of the parties as expressed upon the face of the policy. Very slight circumstances would show that a valuation should be confined to the outward cargo; as, for instance, that the valuation, as in M'Kim v. Phoenix Ins. Co., is contained in a memorandum apart from the policy. Where the insurance is effected upon the cargo of a vessel out and home, and the valuation is applied generally to such cargo, there is no difficulty in applying such valuation to a return cargo. Whitney v. American Ins. Co., 3 Cow. 210, affirmed on error 5 Cow. 712. 2 Brooks v. Oriental Ins. Co., 7 Pick. 259. This was a case of a valued policy upon a ship, by which the insurer was not to be liable for a partial loss unless it should amount to five per cent. It was held, that the percentage should be reckoned upon the valuation after deducting the premium. In Mayo v. Maine Fire & Mar. Ins. Co., 12 Mass. 259, an insurance was effected for $9,000 on a ship, at a premium of fortyfive per cent. The vessel was valued at $18,000, which was its real value. The assured owned only one third of the vessel. Held, that the premium was not included in the valuation, but should be added to the interest of the assured in determining the amount of his insurable interest under the policy. The assured recovered the whole amount insured. There seems to be no good reason for disputing the authority of this case. Where the subject is insured in gross, at a round sum, and the assured owns the entire subject or interest valued, there is, no doubt, a very strong presumption that the premium is included in the valuation. Such, in the absence of opposing indications, is the rule of law. Where, however, the assured owns only a part of the subject insured, the whole of which is valued, the presumption would seem to be the |