CHAPTER XI. OF THE ADJUSTMENT AND SETTLEMENT OF LOSS, AND OF REBUILDING. § 249. FIRE INSURANCE, as was suggested in an early portion of the work,' is a prototype of marine insurance; and it is true that a number of very important questions arising under both fire and life insurances, are determined by analogous decisions of the courts in expounding the general law which govern marine policies, the obligation, for instance, of the assured, to communicate material facts, the necessity of his having an interest, &c., have very naturally been imparted to fire policies. But the difference between the mode of adjustment and satisfaction in the contract of marine insurance and that of fire insurance, in the event of loss, (as has been stated by a very learned judge, whose attention, through a long course of judicial duty, has often been directed to both branches of insurance law,) is distinct and obvious. The following is his language: "In fire policies, the assured recovers the whole loss, if within the amount insured, without regard to the proportion between the amount insured, or the value of the property at risk. Whereas, in marine policies, the insurer pays only such a proportion of the actual loss as the sum insured bears to the value of the property at risk. For instance, on fire policies, if the sum insured be $2,000 on property worth $10,000, and the assured sustains an actual loss on the whole, he recovers the whole $2,000. But in a like case in a marine policy, he would recover one fifth only, or $400; being the proportion which the sum insured bears to the value at risk; the assured himself bearing the other four fifths of the risk. The result is, that every settlement of a loss by fire is in the nature of the adjustment of a partial loss, although it may amount to the whole sum insured. It is the payment of the whole actual loss sustained on the whole property at risk, not exceeding the sum insured, without regard to any apportionment between the sum insured and the property at risk, or to any abandonment or technical or constructive total loss, or salvage." The right to recover must be commensurate with the loss actually sustained, and any evidence conducing to show that the damage consequent upon fire was less than that claimed, would be admissible; though the doctrine relative to the mitigation of damages has no application to cases of this description.2 In marine insurance, in estimating losses, the practice, both in England and in the United States, is, to add the premiums to the invoice value; but this is but a commercial usage of long standing, which may be controlled or modified by a different custom, well sustained by proof, a knowledge of which is brought home to the party, either by positive and direct proof, or by the constructive proof of circumstances.3 § 250. Though settlements of losses by fire are by custom made on the principle of particular average, and the estimated loss is paid without abandonment of what has been. I Per Shaw, Ch. J., in Trull v. Roxbury Mutual Fire Ins. Co. 3 Cush. (Mass. R.) 263; in which the learned judge refers to Liscom v. Boston Mutual Fire Ins. Co. 9 Met. (Mass.) R. 205, and Holmes v. Charlestown Mutual Fire Ins. Co. Co. of Appeals. 2 Franklin Ins. Co. v. Hamill, 6 Gill, (Md.) R. 87, 3 Mercantile Mutual Ins. v. Wilson, 2 Mag. (Md.) R. 217,-Co. of Ap peals. saved, yet there may be a general average, for a sacrifice made by the assured for the common good, in case of necessity, such being analogous to the law of contribution in the case of co-sureties.1 § 251. If, for instance, a fire happen in the neighborhood of the assured, and he, with the approbation of the underwriters, procures blankets and spreads them on the outside of his building, whereby the building and its contents are preserved, and the blankets are rendered worthless, the assured may then claim, but only claim, on the ground of a sacrifice made by him for the preservation of the property endangered by the fire, and for a proportion of which sacrifice, he is equitably, if not legally, entitled to recover. If it be contended, that such a case is not proper for contribution, it being customary on fire policies to pay the whole loss, it may be replied that, as such claim is not within the contract, it is reasonable that a proportion of the sacrifice be made for the common benefit. But it will not do to take so wide range in the application of the principle of contribution, that the two parties are not the only parties who ought to contribute, on the ground that all the property in the neighborhood was protected by the expenses in question. Buildings at a remote distance might have been protected, and to draw the line would be an impossibility.2 § 252. In England, in consequence of the numerous fires which had taken place in the agricultural and manufacturing districts by the acts of incendiaries, the offices in general have been under the necessity of adopting an average clause in their policies upon farming stock, by which, where a person insures property collectively of larger value than the 1 3 Kent. Comm. 375; and see, as to the general principle of co-suretyship, and as to the extent of its application, ante, 88. 2 Wells v. Boston Ins. Co. 6 Pick. (Mass.) R. 182. amount insured, he shall only recover in the proportion which the whole value bears to the part insured. For example, if having property worth £10,000, he insures it only for £1,000, in case of a fire producing loss or damage to the amount of £1,000, he will recover only £100. As an encouragement to the assured to use active diligence in the preservation of property after a fire has broken out, it frequently forms a part of the proposals, that the office will repay all real and actual expenses incurred in the removal of the goods in case of fire. Ellis on Fire and Life Insurance, 16, 17. That author truly adds: "It is, indeed, difficult to conceive any conduct more nearly approaching to fraud, if not partaking of it, than for the assured to abstain himself, or prevent others, from using every possible means to extinguish the fire or save the property from destruction." 2 § 253. The distinction there is between a valued and an open policy in determining the amount for which the underwriters are liable to pay in case of loss, has already been adverted to; and it appears, that it has long been considered in marine insurance, that the former is one in which a value has been set upon the property or interest insured, and inserted in the policy; the value thus agreed on being in the nature of liquidated damages, and so gives no occasion for any further proof of damages. The latter, or an open policy, is one in which the amount of interest is not fixed by the policy, but is left to be ascertained in the event of a loss.3 The valuation in a policy is conclusive upon the underwriters, when there is no suggestion of fraud or imposition ; but, as loss by fire is not generally a total loss, the valuation in the policy is rather the fixing of a maximum beyond which 1 See Appendix 1. 2 See on this particular subject, ante, § 116, and 127, et seq. 3 See ante, Introd. § 5, and Treat. § 11. 4 Kane v. Commercial Ins. Co. 8 Johns. (N. Y.) R. 229–236. the underwriters are not to be liable, than a conclusive ascertainment of the value. Still, a policy against fire may be a valued one by the terms of the contract, and the doctrine in relation thereto is the same as that in marine insurance, which is, that where the subject-matter is clearly set forth in an instrument, other expressions are to be taken in reference to that subject-matter, which, in case of doubt or ambiguity, is to govern in ascertaining the meaning of particular expressions. Policies on profits always are, and necessarily must be, valued.3 § 254. As the rules applicable to marine insurance, so far as the analogy between that and fire insurance will hold, ought to, and do, govern; according to those rules, a fire policy was held to be a valued one in the following case: Among the articles insured, there were 380 kegs manufactured tobacco, worth $9,600; this was the rate at which the tobacco was estimated, in making up the $20,000, the amount of the insurance. The premium was paid according to this valuation, and the 157 kegs lost were expressly stated to be of the same kind and quality as the whole 380 kegs; so that there was an infallible rule to estimate the several and distinct value of each keg of tobacco. There being no pretence that there had been any fraud or over valuation, it was held by the court to be a valued policy. Again, a policy, 1 3 Kent, Comm. 375. 2 Marsh. on Ins. 164. 3 Mumford v. Hallett, 1 Johns. (N. Y.) R. 433. 4 Harris v. Eagle Fire Ins. Co. 5 Johns. (N. Y.) R. 368, the court relying upon the authority of Lewis v. Racker, 2 Burr. R. 1167-Lord Mansfield. That there may be a valued policy of fire insurance, was admitted by Jones, C. J., in Lawrent v. Chatham Fire Ins. Co. 1 Hall, (N. Y.) R. 41; Borden v. Hingham Fire Ins. Co. 18 Pick. (Mass.) R. 523, and cited ante, § 190, n. Profits may be insured by a fire policy if they were insured as such. Niblo v. North American Ins. Co. 1 Sand. (N. Y.) Sup. Co. R. 557, Sandford, J., and see ante, § 105, and Chap. IV., "Of the Interest of the Assured." Howell v. Cincinnati Ins. Co. 7 Ham. (Ohio) R. 398; and see Liscom v. Boston |