policy; so that the rule of apportionment between the first and second sets of insurers, where both policies when taken together were sufficient to cover the whole insurable interest, was precisely the same as it would have been between the underwriters in the first policy and the assured, if the second insurance had not been made. If the object of the American clause was to restore this ancient rule of apportionment between the underwriters in successive policies, as it originally existed in the mercantile law of England as well as the rest of Europe, it is hardly possible to do it in more appropriate and explicit language than is used in the last paragraph of this clause."

Senator TRACY's opinion, in the last case, that the American clause applied only in cases of double insurance, was adopted in Whiting v. Independent M. Ins. Co., 15 Maryland, 297, citing the principal case. Mr. Parsons reviews this matter very elaborately.

IF the risk has never been entered on, the premium must be returned. But if the risk has once been entered on, although it has been determined before the contemplated period, then assuming the contract to be entire and indivisible- no part of the premium is repayable.

The contract is construed as indivisible where it is made for an entire premium, and no part of the voyage is expressed to be insured upon a contingency which does not apply to the rest.

But where part of the voyage is insured subject to an express warranty, which imports a contingency, as where the voyage is from A. to B., and thence with convoy to C.,

- then evidence of a usage may be admitted to show that the premium is apportionable and the contract divisible.

Tyrie v. Fletcher.

2 Cowper, 666-671.

Insurance. - Entire Risk.— Commencement of Voyage.—No Return of Premium. [666] Upon a policy "at and from such a port to any other port or place whatsoever for twelve months, at £9 per cent, warranted free from capture," the risk is entire; and therefore, if once begun, there shall be no return of premium.

This was an action on the case for money had and received to the plaintiff's use, brought by the plaintiff, the insured in a policy of insurance, against the defendant, the underwriter, for a return of part of the premium. The cause was tried before Lord MANSFIELD, at Guildhall, at the sittings after last Trinity Term, when, by consent, a verdict was found for the plaintiff, subject to the opinion of the Court upon the question, Whether, under the circumstances of the case, a proportionable part of the premium ought to be returned, or not? If the Court should be of opinion that a proportionable part of the premium ought not to be returned, then a nonsuit was to be entered. It now came before the Court upon a rule to show cause why a nonsuit should not be entered, and the case, as it appeared from the report, was shortly this: "The policy of insurance was upon the ship Isabella, at and from London to any port or place, where or whatsoever, for twelve months, from the 19th of August, 1776, to the 19th of August, 1777, both days inclusive, at £9 per cent, warranted free from captures and seizures by the Americans, and the consequences thereof." In all other respects it was in the common form, against all perils of the sea, &c. The ship sailed from the port of London, and was taken by an American privateer about two months afterwards.

Mr. Dunning and Mr. Davenport, for the plaintiff, showed cause, and insisted that a proportionable part of the premium in this case ought to be returned; that £9, the compensation estimated for the risk of twelve months, was much more than adequate to the risk actually run in this case, viz., only two months. That from the nature of the insurance both parties must know the risk was divisible; and of course intend, if it ceased before

No. 94. Tyrie v. Fletcher, 2 Cowper, 666, 667.

the twelve months, that the whole of the premium should not be retained. That this was the law in other cases, where, upon a suitable compensation for a given risk, the risk had turned out to be different from what was expected. In Stevenson v. Snow, 3 Burr. 1237, the risk ceased before the end of the voyage insured, and it was there held there should be a return of premium in proportion to the risk that had not been run. It is true, that was a policy upon a voyage, but it is as easy, or easier, to apportion the risk in a policy upon time, * as it is in a [* 667] policy upon distance. In the case of Bond v. Nutt, Trin.

17 Geo. III. B. R., which was a policy "at and from Jamaica to London," the underwriters paid into Court a part of the premium, in proportion to that part of the voyage from which they held themselves discharged. This case is not like the case of an insurance upon lives, to which it was compared at the trial, because that is in the nature of a wager. But this is, in the true spirit and use of an insurance, an indemnity against a loss. That loss, according to the terms of the policy, might accrue later, or earlier, or not at all; but in the case that has happened, namely, a capture by an American privateer, the risk of any such loss as that insured against must totally cease. The construction, therefore, of the policy, under these circumstances, ought to be that it was an insurance for twelve months, at the rate of so much per month; and as the risk, in fact, was only run for two months, the premium advanced upon the other ten ought to be returned.

Mr. Wallace and Mr. Baldwin, contra, for the defendant, and in support of the rule, contended, that as soon as the ship sailed from the port of London the policy attached for the whole time insured against; that there was no calculation of the premium at so much per month, but it was one entire gross sum of £9 per cent, stipulated and paid for twelve months. The contract, therefore, was entire, without any intention or thought of division or apportionment. That the case of Stevenson v. Snow did not at all apply; for there the Court went upon the ground of its being a policy upon two distinct voyages, separately and distinctly in the contemplation of the parties at the time, and the premium calculated accordingly. Of course, if either of the voyages were prevented from taking place, the risk upon it could not attach; and therefore the premium ought to be returned. Upon the principles laid down on the other side, every policy for time might be

No. 94. Tyrie v. Fletcher, 2 Cowper, 667, 668.

divided. Suppose an insurance for a month, would the plaintiff have been entitled to restitution for a number of days? It is absurd; and there would be no drawing the line. If there had been a recapture, the policy would have revived. The fault of the party is not the true ground upon which a return of premium is or is not allowed; but it rests upon this: Whether the risk, or the voyage insured, has begun? If it has, there can be no return of premium. 2 Magens, 267, No. 1071. There are many cases

where, notwithstanding the fault of the party, a return of [* 668] premium is allowed. For instance, if a ship is insured at and from such a port to such a port, and the party goes on another voyage, the premium must be returned; because the risk never commenced. So if he is to sail with convoy, and stays behind. But with respect to the present case, it is not distinguishable from an insurance upon a life for a year, with an exception of suicide, where the party destroys himself within a month. No one ever thought of requiring a return of premium in that case, because the risk is entire. So here it is one entire, indivisible risk, which being once begun, there can be no return of premium. And, consequently, the plaintiff is not entitled to recover.

Lord MANSFIELD. - It was very proper to save this case for the opinion of the Court, because in all mercantile transactions certainty is of much more consequence than which way the point is decided; and more especially so in the case of policies of insurance, because, if the parties do not choose to contract according to the established rule, they are at liberty as between themselves to vary it. This case is stripped of every authority. There is no case or practice in point, and therefore we must argue from the general principles applicable to all policies of insurance. And I take it there are two general rules established applicable to this question. The first is, that where the risk has not been run, whether its not having been run was owing to the fault, pleasure, or will of the insured, or to any other cause, the premium shall be returned; because a policy of insurance is a contract of indemnity. The underwriter receives a premium for running the risk of indemnifying the insured, and whatever cause it be owing to, if he does not run the risk, the consideration for which the premium or money was put into his hands fails, and therefore he ought to return it. 2. Another rule is, that if that risk of the contract of indemnity has once commenced, there shall be no

apportionment or return of premium afterwards. For though the premium is estimated, and the risk depends upon the nature and length of the voyage, yet, if it has commenced, though it be only for twenty-four hours or less, the risk is run; the contract is for the whole entire risk, and no part of the consideration shall be returned; and yet it is as easy to apportion for the length of the voyage as it is for the time. If a ship had been insured to the East Indies agreeably to the terms of the policy in this case, and had been taken twenty-four hours after the risk was begun, by an American captor, there is not a colour to say that there should have been a return of premium. So much, then, [*669] is clear, and, indeed, perfectly agreeable to the ground of determination in the case of Stevenson v. Snow. For in that case the intention of the parties, the nature of the contract, and the consequences of it spoke manifestly two insurances, and a division between them. The first object of the insurance was from London to Halifax. But if the ship did not depart from Portsmouth with convoy (particularly naming the ship appointed to be convoy), then there was to be no contract from Portsmouth to Halifax: why, then, the parties have said, "We make a contract from London to Halifax, but on a certain contingency it shall only be a contract from London to Portsmouth." That contingency not happening, reduced it, in fact, to a contract from London to Portsmouth only. The whole argument turned upon that distinction. Mr. Yates, who was for the plaintiff, put it strongly upon that head; and all the Judges, in delivering their opinion, lay the stress upon the contract comprising two distinct conditions, and considering the voyage as being, in fact, two voyages: and it was the equitable way of considering it; for though it was at first consolidated by the parties, there was a defeasance afterwards, though not in words. I think Mr. Justice WILMOT put it particularly upon that ground, but it was the opinion of the whole Court. There was a usage also found by the jury in that case, that it was customary to return a proportionable part of the premium in such like cases, but they could not say what part. The Court rejected this as a usage for the uncertainty; but they argue from it, that there being such a custom, plainly showed the general sense of merchants as to the propriety of returning a part of the premium in such cases; and there can be no doubt of the reasonableness of the thing. There has been an instance put of