ance may be deficient in covering the premises hereby insured" if the loss does not exceed the amount of the prior policy, the subsequent insurers are not liable.' Under such a policy, the prior policy cannot be cancelled without the consent of the subsequent insurer.'

In case of double insurance, the assured may sue upon all the policies and is entitled to judgment upon all, but he is entitled to but one satisfaction; therefore, if, during the pendency of suits on several policies covering the same risk and interest, the loss is paid in full by one company, the actions against the others must fail,' and the insurer paying the loss has a remedy against the other insurers for a proportionate share of the loss. If there is any doubt as to whether the policies cover the same property or interest, evidence is admissible to show the fact."

4

If a subsequent policy contains no provision in respect to prior insurance, the amount of insurable interest in it will be the same as for the first policy; for the insured may insure again and again the same property, but can recover but one indemnity, and he may proceed for that purpose against either the prior or subsequent insurers, or both, leaving the one from whom indemnity is ultimately obtained to pursue the others for contribution."

Re-insurance.

SEC. 382. It is held that an insurer has an insurable interest in the property covered by its policy,' and consequently it may re-insure to 1Peters v. Delaware Ins. Co., 5 S. & R. (Penn.) 473; Kent v. Manufacturers' Ins. Co., 18 Pick. (Mass.) 19; American Ins. Co. v. Griswold, 14 Wend. (N. Y.) 399. In Fairchild v. The London F. & M. Ins. Co., 51 N. Y. 65, the defendants issued a floating policy upon merahandise in any of the warehouses and while in transitu in any of the streets of New York, Brooklyn and Jersey city, subject to a condition, in substance, that the policy should not extend to cover goods upon which there were any specific insurances, except as far as relates to any excess of value beyond the amount of such specific insurances, which excess was declared under the protection of the policy. A fire occurred in a warehouse wherein plaintiffs had merchandise to the amount of $386,026, covered by specific insurances to the amount of $324,000; the amount of the loss was $274,192.46. Held, that the intent of the condition was to throw the loss upon the specific insurances unless it exceeded them in amount, and as the specific insurances exceeded the value of the goods destroyed, the interest insured by the policy was not affected and defendant was not liable to contribute any portion of the loss.

2

Marcy v. Whaling Ins. Co., 9 Met. (Mass.) 354.

'Newby v. Reed, 1 W. Bl. 416; Wiggin v. Suffolk Ins. Co., 18 Pick. (Mass.) 145; Etna Ins. Co. v. Tyler, 16 Wend. (N. Y.) 385; Lucas v. Jefferson Ins. Co., 6 Cow. (N. Y.) 635.

Wiggin v. Suffolk Ins. Co., ante.

Vose v. Hamilton Ins. Co., 39 Barb. (N. Y.) 302; Peoria F. & M. Ins. Co. v. Anapaw, 45 Ill. 85.

Willardson v. Western M. & F. Ins. Co., 9 La. 27; 1 Ben. F. I. C. 562; WADDWORTH, J., in Lucas v. Jefferson Ins. Co., ante.

'Yonkers, etc., Ins. Co. v. Hoffman, 6 Robt. (N. Y.) 316.

2

8

6

the extent of the risk it holds upon the property. It cannot insure for more than it may be liable for, nor against any other or different casaulty. If the original insurer settles the loss for a less sum than that covered by re-insurance, the re-insurer is only liable for the sum paid. Whether if the original insurer becomes insolvent before the loss, and compromises for a less sum than is covered by the policy of reinsurance, the re-insurers are entitled to the benefit of such compromise, is an open question. It has been held in New York,' and in Indiana," and in Maryland,' and in the United States Circuit Court; but this doctrine is denied in Illinois,' and upon the principle that a contract of insurance is merely a contract of indemnity, the doctrine of the latter State would seem to be more consistent and consonant with principle. But it must be admitted that the weight of authority is the other way. In New York the court held that the insurer was not obliged, in order to maintain an action against its re-insurer, to show that it had paid the loss, but might at once bring its action, and was only obliged to show a legal liability on its part to respond for the loss upon its policy. In the Maryland case the policy contained a clause "loss, if any, payable pro rata to them, at the same time and in the same manner as they pay." The policy of the original insurers covered $10,000, and the policy of re-insurance one-half the risk. It was held that the re-insurer was bound to pay one-half the loss, notwithstanding the original insurer had become bankrupt and paid only a small dividend." Where the policy of re-insurance provides that the "loss, if any shall be paid pro rata, and re-insurance, in case of loss, to be settled in proportion as the sum re-inssured shall bear to the whole sum covered by the re-insured company," the re-insurer is only liable to indemnify the re-insured in the same proportion that it is liable to indemify the assured in the original policy." The re-insurer is not

9

1 Phila. Ins. Co. v. Washington Ins. Co., 23 Penn. St. 25. Ill. Mut. Ins. Co. v. The Andes Ins. Co., 67 Ill. 362.

'Howe v. Mut. Safety Ins. Co., 1 Sandf. (N. Y. S. C.) 137; Affd. 2 N. Y. 234. See Sec. 85.

504.

Eagle Ins. Co. v. Lafayette Ins. Co., 9 Ind. 443.

Consolidated Ins. Co. v. Cushaw, 41 Md. 59.

Cashaw v. N. W. Ins. Co., 5 Biss. (U. S. C. C.) 476; ex parte Norwood, 3 id.

Illinois Mut. Ins. Co. v. Andes Ins. Co., ante.

Howe v. Mut. Safety Ins. Co., ante.

Consolidated F. Ins. Co. v. Cushaw, 41 Md. 59.

10 The same doctrine was held in Blackstone v. Almenia Ins. Co., 56 N. Y. 105. See Sec. 85.

"Norwood v. Resolute F. Ins. Co., 4 J. & Spencer (N. Y. S. C.) 552.

liable at all, if the re-insured is not liable, and may make any defense to an action brought by the original insurer against it, that the reinsured might have made in an action against it upon the original policy.' It may avail itself of the breach of any of the conditions of the original assured therein, for if the re-insured is not liable upon the original policy, it has no insurable interest to be covered by the re-insurer's policy. The re-insured must establish its liability upon its policy to the person originally insured, and show compliance on the part of such original assured, with all the conditions of the policy, or a waiver thereof without any fraudulent intent on its part. It must also comply with the requirements and conditions of the policy of re-insurer in all respects, as to proofs of loss, and in ull respects. The contract is personal between the companies, and the person insured under the original policy has no privity therein. He can maintain no action thereon, or claim any benefit therefrom. When the insurer, at the request of the re-insurer, and for its benefit, defends against an action upon its policy, the re-insurer is bound by such judgment, although not a party to the action.*

3

Delaware Ins. Co. v. Quaker City, etc., Ins. Co., 3 Grant's Cas. (Penn.) 71; Eagle Ins. Co. v. Lafayette Ins. Co., 9 Ind. 443; New York, etc., Ins. Co. v. Protection Ins. Co., 1 Story (U. S.) 458; Merchants', etc., Ins. Co. v. N. O. Ins. Co., 24 La. An. 305; Carpenter v. Providence Ins. Co., 16 Pet. (U. S.) 495; St. Nicholas Ins. Co. v. Merchants' Ins. Co., 11 Hun (N. Y.) 108.

The Yonkers, etc., Ins. Co. v. Hoffman Ins. Co., 6 Robt. (N. Y.) 316; Carrington v. Com'l Ins. Co., 1 Bos. (N. Y.) 188; Bowery F. Ins. Co. v. N. Y. F. Ins. Co., 17 Wend. (N. Y.) 359; Alliance, etc., Ins. Co. v. La. State Ins. Co., 8 La. 1; 1 Ben. F. I. C. 447.

Herckenrath v. American, etc., Ins. Co., 3 Barb. Ch. (N. Y.) 63.

Strong v. Phoenix Ins. Co., 62 Mo. 289; 21 Am. Rep. 417.

CHAPTER XII.

AGENTS.

SEC. 384.

SEC. 383. Powers and functions of.

Illustration of the rule.

SEC. 385.

SEC. 386.

SEC. 387.

Insurer cannot make its agent, agent of assured.
Limitations upon authority of-When assured is bound by.
When insurer not estopped by acts of.

As to nature, situation or condition of risk.-Estoppel.
Illustration of rule.

Mere rumors known to agent, not imputable to principal.
No power implied to settle losses.

SEC. 410. Firm may be agents-Effect of death of one.

Powers and functions of.

SEC. 383. The same rules apply to insurance companies as apply in the case of individuals, and a person who is clothed with power to act for them at all, is treated as clothed with authority to bind them as to all matters within the scope of his real or apparent authority.1 Persons

Bodine v. Exchange F. Ins. Co., 51 N. Y. 117; Ecletic Life Ins. Co., v. Fahrenkrug, 68 Ill. 463; Warner v. Peoria M. & F. Ins. Co., 14 Wis. 318; Ins. Co. v. Wilkinson, 13 Wall. (U. S.) 222; Ide v. Phoenix Ins. Co., 2 Bis. (U. S.) 333; Taylor v. Germania Ins Co., 2 Dill. (U. S. C. C.) 282; Clark v. Manufacturers

dealing with them in that capacity are not bound to go beyond the apparent authority conferred upon them, and inquire whether they are, in fact, authorized to do a particular act for the company. It is enough if the act is within the scope of their apparent power, and beyond this, third persons are not bound to make inquiry.

Illustration of the rule.

SEC. 384. Thus, where an insurer entrusts applications in blank for insurance to a person who forwards the same to the insurer, and is the medium through whom the insurer delivers the policy and receives the premium, the person so entrusted there with is treated as clothed with the requisite authority to effectuate the duties confided to him, and to that extent represents the company, and can bind it. The applicant would not, upon these facts, be justified in treating him as having authority to make contracts of insurance binding upon the company, because the very fact that an application is required to be made and forwarded to the company, is notice to him that the insurer reserves the right to judge and determine for himself, whether or not the risk shall be taken, but the assured has a right to rely upon it, that the agent has authority to explain the inquiries put in the application, and to determine what facts are required to be stated, as well as how they shall be stated, and acting upon his direction, if any error is committed, it is chargable to the insurer, and not upon the assured,' and if he fills out the

Ins. Co., 8 How. (U. S.) 235; Baubic v. Etna Ins. Co., 2 Dill. (U. S. C. C.) 156; Roth v. City F. Ins. Co.. McLean (U. S.) 524; Goit v. Nat. Protection Ins. Co., 25 Barb. (N. Y.) 189; Gloucester Mfg. Co. v. Howard F. Ins. Co., 5 Gray (Mass.) 497; Baker v. Cotter, 45 Me. 236; Citizens' Mut. F. Ins. Co. v. Sartwell, 8 Allen (Mass.) 217; Union, etc., F. Ins. Co. v. Keyser, 32 N. H. 313; Hotckiss v. Germania F. Ins. Co., 5 Hun (N. Y.) 90; Rowley v. Empire Ins. Co., 36 N. Y. 550; Perkins v. Washington Ins. Co., 4 Cow. (N. Y.) 645; Peck v. New London, etc., Ins. Co., 22 Conn. 584; Cabot v. Given, 45 Me. 144; De Groot v. Fulton F. Ins. Co., 4 Rob. (N. Y.) 504; Conover v. Mut. Ins. Co., 1 N. Y. 290; Bush v. Westchester F. Ins. Co., 2 T. & C. (N. Y.) 629. But it is competent for the insurer te limit the powers of an agent, and when the policy contains a notice of such limitation, it is operative as to all matters after notice. Van Allen v. Farmers', etc., Ins. Co., 64 Ñ. Y. 469.

'Malleable Iron Works v. Phoenix Ins. Co., 25 Conn. 465; and when the agent, through fraud or mistake, misstates facts in the application which he fills up himself, and which is made a part of the policy, a court of equity will reform the instrument according to the contract. Woodbury Savings Bank v. Charter Oak Ins. Co., 31 Conn. 519. And at law the insurer will be treated as estopped from setting up the errors or fraud of the agent in avoidance of the policy. Com. Ins. Co. v. Spanknable, 52 Ill. 53; Keith v. Globe Ins. Co., id. 518; Rowley v. Empire Ins. Co., 36 N. Y. 550; Combs v. Hannibal, etc., Ins. Co., 43 Mo. 148; Ayres v. Home Ins. Co., 21 Iowa, 185; Ins. Co. v. Throop, 22 Mich. 146; Kelly v. Ins. Co., 3 Wis. 254. In May v. Buckeye Ins. Co., 25 Wis. 291, the court say: "The whole truth in relation to these matters was fully disclosed to the agent of the company by the assured, ad that he himself prepared the papers, filled up the application, and wrote down such portions of the answers as he considered material or important. The assured explicitly informed him that the night watch was kepi