212 Mass. 75 | Mass. | 1912
The plaintiff is a corporation doing marine insurance. The defendants are importers of wool. The plaintiff seeks to recover an alleged over-payment on a cargo of wool duly insured by it and destroyed by fire under circumstances rendering the plaintiff liable to the defendants on its contract of insurance. The pivotal question is whether the policy of insurance issued by the plaintiff to the defendants was a valued policy or an open policy. The difference between the two is this: A valued policy is one where the parties by the contract of insurance fix for the purpose of the risk a definite value of the property insured so that dispute on that subject is foreclosed for all time thereafter, except in cases of fraud or wager, no matter how high the valuation may be. Coolidge v. Gloucester Marine Ins. Co. 15 Mass. 340. Irving v. Manning, 1 H. L. Cas. 287, 307. Marine Ins. Co. of Alexandria v. Hodgson, 6 Cranch, 206, 220. Barker v. Janson, L. R. 3 C. P. 303. An open or unvalued policy is one where the value of the property insured is not settled in the policy, and in case of loss must be agreed upon or proved. Hemmenway v. Eaton, 13 Mass. 107. The contract in the case at bar provided that “The said goods and merchandises, hereby insured, are valued (premium included) at as per form attached.” These words, as far as they go, tend to indicate that the parties contemplated a valued rather than an open
The question then arises as to the meaning of invoice value. The plaintiff alleges that the word as used in a contract of insurance to cover imports alone, as this one did, made in this Commonwealth means such an invoice as is required by U. S. St. of June 10, 1890, c. 407, (26 U. S. Sts. at Large, 131,) which governed all importations at the times of the events here in issue. That act provided in brief that no importation of merchandise exceeding $100 in value (with an exception not here material) should be made into this country, except upon an invoice and affidavit, which should show “the actual cost,” if purchased, or if obtained otherwise, “the actual market value or wholesale price thereof at the time of exportation to the United States in the principal markets of the country from which” the importation is made, verified by the oath of the owner or his agent. This act is general in its terms and applies to all importations of merchandise of every character. The use of the word “invoice” in the policy under these circumstances, in the absence of anything to show that there was any other invoice known or commonly employed in importations, must be held to refer to that required by this statute. Apparently this is not in dispute between'the parties. The defendants claimed and received their payment upon presentation of a paper which purported to be such an invoice. The defendants contend, however, that the policy takes effect as a valued policy to the same extent by reference to the invoice as it would if the figures of the invoice had been written into the valuation clause. The plaintiff alleges that the reference to the invoice value meant not the figures actually written into the invoice, but such valuation as should have been written into a true and just invoice, which in its statement of value actually conformed to the terms of the federal act. The plaintiff further alleges that the defendants procured the payment to them of loss by presentation to it of an invoice showing values of wool ranging from eight and one quarter to fourteen and one half pence per pound, when in fact it was worth only seven pence per pound in the general markets of England, from which the importation was made, and that it relied upon the truth of this invoice in making the payment, and that the invoice in fact
A valued policy is ordinarily one where the agreed value in terms of a money standard are written into the contract of insurance. It is still a valued policy, when the agreement by parties is that the value shall be fixed and defined by reference to some other instrument. Such an agreement must be based upon some standard certain in itself or capable of being made certain, and known to and accepted by both parties. It cannot be a valued policy, which by its terms means a value fixed by agreement, when the value is determined wholly by the volition of one party to the contract, and may be invoice based on value at place of lading or on expected value at place of import, including the anticipated profit and all intervening expenses. Where the reference in the policy for the standard of value is to a legal document, which by law has a fixed, definite and unchangeable method of ascertaining value, a value found by that standard, and by that alone, must be held to have been in contemplation of the parties. There could be no value stated in an invoice for importation save market value in the country of export. It is urged by the defendants that although the invoice may not have been in compliance with the federal statute, yet the value as stated in the actual invoice, when ascertained and declared to the plaintiff, became the agreed price for the purpose of the insurance. There is force in the argument. But the stronger reason appears to support the view that invoice meant the invoice required by law, a standard known to all parties. Otherwise, the insured would be enabled to fix any value, provided only he was willing to pay the premium. But this would greatly increase the moral hazard and the actual risk without giving the insurer any real knowledge of true value or of the sense in which value was used upon which to charge " premium. Carson v. Marine Ins. Co. 2 Wash. C. C. 468, 470. It would put it in the power of the insured to fix absolutely the value while the whole theory of a valued policy is that parties on an equality have come to an understanding as to value. The declaration alleges that the invoice values did not comply with the federal
11.' The plaintiff’s declaration sets out a cause of action, to recover excess of payment of insurance above the amount which should have been paid under an open or unvalued policy of insurance.
Demurrer overruled; defendants to answer over.