policy for the whole voyage, or other period of the risk in a marine policy; for the whole or a certain period or proportion in a fire policy; and for one year in advance in a life policy, though not always then wholly payable.-See Rule in England, id., Sub. Sec. 506; and then see Sub. Sec. 507. Premium is due from the broker, but not so necessarily in the U. S.-Id., Sub. Sec. 508.

2617. A person insured is entitled to a return of premium paid, or a ratable proportion thereof, if no part of his interest in the thing insured is exposed to any of the perils insured against; or, where the insurance is made for a definite period of time, if it is not exposed to such peril for the whole of that time.

NOTE. The premium, although due and payable in one sense as soon as the policy is made, is in another not due unless that risk is incurred for insurance against which the premium is paid. If, therefore, there has been no such risk, the premium cannot be claimed if it has not been paid, and if it has been paid, by cash or by a note, it must be returned.-2 Pars. Mar. Law, p. 185; Waters vs. Allen, 5 Hill, p. 421. As to return ratably, see 2 Pars. Mar. L., pp. 188, 191; Holmes vs. United Ins. Co., 2 Johns. Cas., p. 329. "Where made for a definite time-if not exposed, the whole thereof." This is a settled usage, as far as fire insurance is concerned. As to marine insurance, the law appears to be now the other way.-Tyrie vs. Fletcher, 2 Cowp., p. 666. In this case, Ld. Mansfield, C. J., states the law substantially as follows: There are two general rules established applicable to this question-the first is, that when the risk has not been run, from whatever cause, the premium shall be returned, because a policy of insurance is a contract of indemnity; and, as a consequence, if there is no risk incurred the consideration for the premium fails, and therefore he ought to return it. Another rule is, that if the risk of the contract of indemnity has once commenced there shall be no apportionment or return of premium afterwards. See, also, Loraine vs. Thomlinson, 2 Doug., p. 585, and 2 Phil. Ins., Sub. Sec. 1819: "If the thing insured has never been brought within the terms of the contract, so that the insurer might have been liable for a loss, the premium must be returned." [Italics are those of Phillips.-Ed.] See, also, notes and cases therein referred to.-Id. See the entire question of the return of

premium discussed.-2 Arnould Ins., p. 1004, et seq.,
giving two principal rules affecting it, being Ld. Mans-
field's supra. Id., p. 1005. If risk begun, whole is due.
Id., p. 1007. If illegal and begun, not returned.-Id.,
p. 1009; Secus, if not begun.-Id., p. 1010.

none

2618. If a peril insured against has existed, and the When insurer has been liable for any period, however short, allowed. the insured is not entitled to a return of premium, so far as that particular risk is concerned, unless the insurance was for a definite period of time, in which case he is entitled to a proportionate return under the preceding section.

2619.

NOTE. "If peril existed and the insurer was liable for any period, however short, the insured is not entitled to a return of the premium" (Waters vs. Allen, 5 Hill, p. 421; Hendricks vs. Commercial Ins. Co., 8 Johns., p. 1), "so far as that particular risk is concerned" (see Waters vs. Allen, 5 Hill, p. 421), "unless the insurance is for a definite time; in which case he is entitled to a proportionate return under preceding section." The cases above cited refer to marine insurances only, which are usually made for a voyage. Fire insurances, being made for a fixed term, do not fall within the same strict rule.-2 Phil. Ins., Sub. Sec. 1820, p. 487. Exposed to risk, for however short a time, return cannot be claimed.

for fraud.

A person insured is entitled to a return of Return the premium when the contract is voidable, on account of the fraud or misrepresentation of the insurer, or on account of facts, of the existence of which the insured was ignorant without his fault; or when, by any default of the insured other than actual fraud, the insurer never incurred any liability under the policy.

NOTE.-Delavigne vs. United Ins. Co., 1 Johns. Cas., p. 310; Elbers vs. United Ins. Co., 16 Johns., p. 128. He is not entitled to a return of premium where the policy was ineffective by reason of his own or his agent's fraud.-Waters vs. Allen, 5 Hill, p. 421.

2620. In case of an over-insurance by several insurers, the insured is entitled to a ratable return of the premium, proportioned to the amount by which

Over

insurance

by several

insurers.

Contribution.

the aggregate sum insured in all the policies exceeds the insurable value of the thing at risk.

NOTE.-Over-insurance and double insurance defined as the same.-2 Phil. Ins., p. 49, Sub. Sec. 1250; 1 Phil. id., p. 187, Sub. Sec. 359; p. 119, id., Sub. Sec. 207. The grounds for and consistency in this rule is manifest from an examination of Sub. Secs. 1828, 1829, 1836, of 2 Phil. Ins., pp. 491-497; see id., Sub. Secs. 1838, 1839. Double insurance is where two or more insurances are made by one insurer on the same interest and subject and against the same risks.-1 Phil. Ins., p. 187, Sub. Sec. 359. May insure with and recover once of whom he pleases. "If there be many simultaneous policies on the same subject matter, no one of which is beyond the interest, but altogether are, as all make but one insurance, with mutual claim of contributions, there is a return premium paid pro rata by all. If the policies are not simultaneous the same rule seems to apply, except in cases where the later ones (Sec. 2622, post) were not made until after the former ones attached. Then it would seem that as a part of the earlier policies might have been held, without claim of contribution, for the loss of the whole property they insured, if that has taken place before the later policies were made, there should be no return of premium from these earlier policies; and it should follow that the later policies, made after the whole interest was covered, should return pro rata, according to the excess of the premium over what they could in any event have been liable to pay. But we think this whole subject (says Parsons) stands in an obscure position, and needs further adjudication."-2 Pars. Mart. Law, pp. 191, 192, referring at length in Note 1, p. 192, to pp. 98, 99, ante, id. Since there were grave doubts in the mind of Mr. Parsons as to these rules, the necessity for the adoption of this and the succeeding two sections is apparent.

66

2621. When an over-insurance is effected by simultaneous policies, the insurers contribute to the premium to be returned in proportion to the amount insured by their respective policies.

NOTE.-See note to preceding section, and 2 Pars. Mart. Law, pp. 191, 192, there quoted. In 2 Arnould Ins. (3 ed., 1866), p. 1017, it is stated that the rule is laid down by Mr. Marshall, that "all the underwriters upon a policy in which the effects are insured beyond

their value must bear any loss that may happen, and
repay a part of the premium in proportion to their
respective subscriptions, without regard to the priority
of their dates." It is also stated by Emerigon, and so
considered in this country (England), "that several pol-
icies effected on the same date are considered to form
but one policy." A distinction arose which Parke, in
Fisk vs. Masterman, 8 M. & W., p. 165, pointed out,
but which Arnould overlooked, by which the rule laid
down by Marshall, and supposed by Arnould to be
discarded, applies. See Marshall's rule, supra. And
again, on pp. 1017, 1018, 2 Arnould: "If by several
policies, made without fraud, the sum insured exceeds
the value of the effects, these several policies will in
effect make but one insurance, and will be good to the
extent of the interest of the assured, and in case of
loss, all the underwriters on the several policies shall
pay according to their several subscriptions; and it fol-
lows from thence that all the underwriters on the sev-
eral policies would be equally bound to make a return
of premium for the sum insured above the value of the
effects, in proportion to their respective subscriptions.

ato contri

2622. When an over-insurance is effected by suc- Proportioncessive policies, those only contribute to a return of bution. the premium who are exonerated by prior insurances from the liability assumed by them, and in proportion as the sum for which the premium was paid exceeds the amount for which, on account of prior insurance, they could be made liable.

NOTE.-2 Arnould Ins., p. 1018 (3 ed.), continuing from preceding note: "If, however, of the several policies effected on the same subject, at different dates, the earlier have attached before the latter have been underwritten ("issued," under the Code), the latter only are subject to a claim of return of premium in case of over insurance, because until their execution the earlier sustained a risk equal to the full amount of their subscriptions."-See, also, 2 Pars. Mart. Law, pp. 97-99, and pp. 171, 192, that portion quoted in note to Sec. 2620, ante; and Fisk vs. Masterman, 8 M. & W., p. 165.

ARTICLE IX.

LOSS.

Perils, remote and proximate.

SECTION 2626. Perils, remote and proximate.

2627. Loss incurred in rescue from peril.
2628. Excepted perils.

2629. Negligence and fraud.

2626. An insurer is liable for a loss of which a peril insured against was the proximate cause; although a peril not contemplated by the contract may have been a remote cause of the loss; but he is not liable for a loss of which the peril insured against was only a remote cause.

NOTE.-Loss is defined by Bouvier L. Dic., Vol. 2, p. 81, to be "the destruction of, or damage to the insured, subject by the perils insured against, according to the express provisions and construction of the contract." These accidents, or misfortunes, or perils, as they are usually denominated, are all distinctly enumerated in the policy. And no loss, however great or unforseen, can be a loss within the policy, unless it be the direct and immediate consequence of one or more of these perils.-1 Marshall Ins., Chap. 12, p. 373 (5th ed.) "The underwriter is liable for no loss which is not proximately caused by the perils insured against. Causa proxima non remota spectatur' is necessarily a fundamental rule of law in general, but peculiarly obvious in its application to contracts of marine insurance; and this for the reason given by Lord Bacon, that it were infinite for the law to consider the causes of causes, and their impulsions one on another, therefore it contented itself with the immediate cause.'"-2 Arnold Ins., p. 670 (3d ed., 1866.) See, also, Matthews vs. Howard, 11 N. Y., p. 9. The preceding, though declared applicable to "marine loss," yet the maxim must of necessity apply to all losses insured against. And this is the case, notwithstanding a cause not contemplated by the contract may have been the remote cause of the loss.-2 Pars. Mar. Law, p. 221. "If goods are damaged by actual contact with seawater the underwriters are certainly liable.-Baker vs. Manufg. Ins. Co., Sup. Jud. Ct., Mass., March Term, 14 Law Reporter, p. 203; Coggswell vs. Ocean Ins. Co., 18 La., p. 84. "And it has been held that if part of the cargo is damaged by sea