of exportation as decided by Judge Washington in 2 Wash. C. C. R. 468; or the invoice price, 1 J. C. 120, or prime cost with the usual charges, 7 J. R. 355. Goods. The value of the goods is to be estimated according to the invoice price; an insurer is not liable for the rise or fall of the market, or for a loss that may arise from the difference of exchange. Insuarance is a contract of • indemnity against the perils of the voyage; the insurer engages, so far as the amount of the prime cost, or value in the policy, "that the thing shall come safe," he has nothing to do with the market; he has no concern in any profit or loss which may arise to the merchant from the goods; if they be totally lost, he must pay the prime cost, that is, the value of the thing insured at the outset he has no concern in any subsequent value. So likewise, if part of the cargo, capable of a several and distinct valuation at the outset be totally lost; as if there be one hundred hogsheads of sugar, and ten happen to be lost, the insurer must pay the price of those ten hogsheads, without any regard to the price for which the other ninety may be sold. But where an entire individual, as one hogshead, happens to be spoiled, no measure can be taken from the prime cost to ascertain the quantity of such damage; but if you can fix whether it be a third, fourth, fifth worse, the damage is fixed to a mathematical certainty. How, then, is this to be found out? Not by any price at the outset port, but by that at the port of delivery, where the voyage is completed, and the whole damage known. Whether the price there be high or low, in either case it equally shews whether the damaged goods are a third, fourth, or a fifth worse than if they had come sound; consequently, whether the injury sustained be a third, fourth, or fifth of the value of the thing, and as the insurer pays the whole prime cost if the thing be wholly lost, so if it be only a third, fourth, or fifth worse, he pays a third, fourth, or fifth of the value of the goods so damaged." (2 Burr, 1170; Hughes Ins., 370.) It was held in case of a partial loss on tobacco that though the sale of both the sound and damaged hogsheads might be the most certain means of ascertaining the difference and calculating the amount of the loss; yet the valuing of the sound hogsheads by a regular broker, the parties acting bona fide, was sufficient. 2 Dow, 545. Appeal from Scotland. And the rule for calculating a partial loss on goods by sea damage, is to estimate the difference between the respective gross proceeds of the same goods when sound, and when damaged, and not the net proceeds; this rule being adopted chiefly to prevent the underwriter's liability from being affected by the fluctuation of the market, or by the port duties, or charges after the arrival of the goods at their port of destination. 2 East, 581 3; B. & P. 308. Nor is there any difference with regard to the mode of estimating the loss between a valued and an open policy; for the effect of valuation is to fix by agreement the amount of the prime cost. 2 Burr, 1170. The rule for estimating the loss in the case of an open policy, is to take the invoice price at the loading port, together with the premium of insurance, (4 Taunt. 5, 11.) and commission, as the basis of calculation; and when a partial loss occurs, the amount is ascertained by taking the proportional difference between the selling price of the sound, and that of the damaged part of the goods, at the port of delivery, and applying that propor 11 That 195. Mule 7. tion, (be it a half, a quarter, an eighth, &c.) with reference to such estimated value at the loading port, to the damaged portion of the goods. 2 East, 639. In the case of an open policy, the invoice price at the loading port, including premiums of insurance and commission, is, for all purposes of either total or average loss, the usual standard of calculation resorted to for the purpose of ascertaining this value. The selling or market price at the port of delivery cannot be alone the standard, as that does not include premiums of insurance and commission, which must be brought into the account, in order to constitute an indemnity to an owner of goods, who has increased the original amount and value of his risk by the very act of insuring. The proportion of loss is necessarily calculated through another medium, namely, by comparing the selling price of the sound commodity with the damaged part of the same commodity at the port of delivery. The difference between these two subjects of comparison affords the proportion of loss in any given case, i. e. it gives the aliquot part of the original value, which may be considered as destroyed by the perils insured against, and for which the assured is entitled to be compensated. When this is ascertained, it only remains to apply this liquidated proportion of loss to the standard by which the value is calculated, i. e. to the invoice price, being itself calculated as before stated; and we then obtain the one-half, the one-fourth, or one-eighth of the loss to be made good in sums of money. This rule of calculation is generally favorable to the underwriter, as the invoice price is less in most cases than the price at the port of delivery; but the assured may obviate this inconvenience by making his policy a valued one; or by stipulating that, in case of loss, the loss shall be estimated according to the value of like goods at the port of delivery. ib. In the absence of any express contract on the subject, the general usage of the assured and underwriters supplies the defects of stipulation, and adopts the invoice value, with the additions I have mentioned, as the standard of value for this purpose. 12 East, 647. The nature of the contract, as observed by Lord Mansfield is, that the goods shall come safe to the port of delivery, or if they do not, to indemnify the insured to the amount of the prime cost, or value in the policy. If they arrive, but lessened in value, through damage received at sea, the nature of an indemnity speaks demonstrably that the merchant must be put into the same condition (relation being had to the prime cost or value in the policy,) which he would have been in if the goods had arrived free from damage; that is, by paying such proportion or aliquot part of the prime cost or value in the policy, as corresponds with the proportion, or aliquot part of the diminution in value occasioned by the damage. No private scheme or project in trade of the insured can effect the insurer. If speculative destinations of the merchant, and the success of such speculations were to be regarded, it would introduce great injustice and inconvenience. The underwriter knows nothing of them. The underwriter is not affected by the price; and the right of the insured to a satisfaction where goods are damaged arises immediately upon their being landed at the port of delivery. Hughes Ins., 373. The term, partial loss, is in mercantile practice, adapted to what is called a total loss of a part; as for instance, in an insurance of twenty hogsheads of sugar, if one hogshead be washed out, the amount lost is to be paid for at the prime cost, or at the value in the policy, if it be fixed. Stev. 135. Le Cras v. Hughes, Park, 174. There is a material distinction between a deterioration in value of the thing insured, or particular average in a stricter sense, and expenses incurred for the preservation of the same thing; for such expense: may be claimed, although there be no claim for particular average, either because the policy was warranted free from particular average, or because the per centage was short of that for which the underwriter becomes liable. Benecke, 424; 4 Taunt. 367. 5. Payment of loss. The insurance companies in general, reserve to themselves an option of reinstating the premises, or paying the amount of the insurance money. And the building act, (stat. 14, Geo. 3, c. 76. s. 83.) empowers the governors or directors of the several insurance offices, upon the request of any persons interested in or entitled to any houses or buildings which may be burned down, demolished, or damaged by fire,—or upon any grounds of suspicion that the owner or occupier, or other person, who has insured, has been guilty of fraud, or of wilfully setting houses or buildings on fire, to cause the insurance money to be laid out and expended as far as the same will go towards rebuilding, reinstating, or repairing the property burned or damaged, unless the parties claiming the insurance money, do within sixty days after the claim is adjusted, glve sufficient security to the governors or directors of the office, that the insurance shall be laid out and expended, or unless the insurance money be within that time settled, and disposed of amongst the contending parties, to the satisfaction and approbation of the governors and directors. Although, therefore, a policy, as a personal contract, does not pass with the property insured, yet a covenant to insure to a certain amount entered into by a lessee or other person having an estate in land is so far beneficial to the property, that in cases to which this statute applies, it will run with the land. and an assignee entitled to the benefit of covenants real may obtain an action on the covenant to insure if be not observed. So insurance money received by a tenant for life in respect of a house burned down, and kept distinct by him as such, was held in a court of equity to be applicable to the uses of a settlement of real property, and not to pass with a be quest of the personalty. CHAPTER IX. OF THE PROCEEDINGS ON POLICIES. 1. Of Preliminary Proof. 2. Of the Jurisdiction of the Courts of Common Law. 3. Of Arbitration. 4. Of the Declaration. 5. Of Pleas to a Declaration under seal. 6. Pleas to a Declaration not under seal. 7. Of the Evidence upon the trial. 1. Of Preliminary Proof. Most offices have a condition endorsed on their policies to the following effect: IX. All persons insured by this Company, and sustaining loss or damage by fire are forthwith to give notice thereof to the Company; and as soon after as possible to deliver in a particular account of such loss or damage, signed by their own hands, and verified by their oath or affirmation, and also if required, by their books of account and other proper vouchers; they shall also declare on oath whether any and what other insurance has been made on the same property, and procure a certificate under the hand of a magistrate, notary public, or clergyman, (most contiguous to the place of the fire, and not concerned in the loss,) that they are acquainted with the character and circumstances of the person or persons insured, and that having investigated the circumstances in relation to such loss, do know or verily believe thta he, she or they, really and by misfortune, and without fraud or evil practice, hath or have sustained, by such fire, loss or damage to the amount therein mentioned; and until such proofs, declarations, and certificates are produced, the loss shall not be payable. Also, if there appear any fraud, or false swearing, the claimant shall forfeit all claims by virtue of this policy. The offices usually undertake to pay the loss "in sixty days after the loss shall have been ascertained and proved, without any deduction whatever; and in case differences shall arise, touching any loss or damage, it may be submitted to the judgment of arbitrators, indifferently chosen, whose award in writing shall be binding on the parties." The clause in the policy, that the loss is to be paid, thirty days after proof thereof, gave rise to what is termed, in our books, preliminary proofs, and as its object was to furnish reasonable information to the insurer, so that he might be able to form some estimate of his rights and duties, before he was obliged to pay, it has always been liberally expounded, and is construed to require only the best evidence of the fact that the party possesses at the time. Per Kent, C. J. in Barker v. Phænix Ins. Co., 8 John. R. 307; Talcot v. Mar. Ins. Co., 2 J. R. 130; Haff v. Same, 4 J. R. 132. The sufficiency of it, is always a question of law, to be determined by the judge at the trial; and no evidence can be there received to alter the character or effect of the proofs exhibited to the defendants. Per Oakley, J. in Rankin v. The American Ins. Co. of N. Y. 1 Hall, 619. In this case the judge was called upon to hear evidence of a usage controlling the construction of the policy, so as to render necessary the production of a particular document as a part of the preliminary proofs; this was held to be clearly inadmissible. ib. "Persons sustaining loss or damage by fire, shall forthwith give notice thereof, &c. and as soon after as possible, they shall deliver as particular an account of their loss and damage as the nature of the case will admit, &c.; and they shall accompany the same with their oath," &c. Held, that the contract in respect to notice, oath and certificate of magistrate only required the party originally insured to give notice, &c. to his immediate insurers, who are only bound to transmit the same to the re-insurers, 17 Wend. 359. In Catlin v. The Springfield Fire Ins. Co., 1 Sumner's R. 434, the policy was against fire; and contained the condition that "all persons insured, and sustaining loss or damage by fire, are forthwith to give notice thereof to the company, and as soon after as possible to deliver in a particular account of such loss or damage, signed with their own hands, and verified with their oath or affirmation, and also, if required, by their books of account and other proper vouchers :"-And to procure a certificate under the hand of a magistrate, notary public, or clergyman, most contiguous to the place of fire, and not concerned in the loss, nor related to the insured or sufferers, that they are acquainted with the character and circumstances of the person or persons insured; and do know and verily believe he, she, or they, really and by misfortune, and without fraud or evil practice, hath or have sustained by such fire, loss and damage to the amount therein mentioned. And until such proofs, declarations and certificates are produced, the loss shall not be deemed payable; also, if there be any fraud or false swearing, the claimant shall forfeit all claim by virtue of this policy :"-Held, that the particular account required, meant only an account of the loss, that is, of the thing or value lost; or of the damage, that is, of the amount of the injury sustained. But the insured was not required to state how the loss happened, or the cause or occasion of it. Good faith and the true spirit and intention of the contract requires the insured to disclose, at least, all the documentary evidence in his possession touching the nature and extent of the loss. 4 J. R. 132. The statement presented by the assured as to his loss will not preclude him from recovering what is actually due, where it appears that he was under a mistake as to the extent of his legal rights. 14 Wend. 399. If the underwriter when applied to for payment of a loss, replies that he |