
    The New York Fire Marine Insurance Company v. Marshall O. Roberts.
    The assured in a policy against marine risks by electing not to commence the risks, may put an end to the contract, and entitle himself to a return of the premium, but he cannot put an end to the contract merely by serving a notice upon the underwriters of his intention to do so.
    When the risks are so commenced that by the terms of the policy the underwriters would be liable for a total loss, they are entitled to retain or recover the premium.
    An insurance upon shipments by steamers generally, cannot be limited to shipments in steamers in which the assured is interested, although such only were contemplated by him when he effected the policy.
    Judgmentfor plaintiffs affirmed, with costs.
    (Before Oaklet, Ch. J., Ddee and Campbell, J.J.)
    Dec. 12; Dec. 23, 1854.
    Appeal by tbe defendant from a judgment entered on tbe report of a referee, for tbe sum, including interest and costs, of $1,397.96.
    Tbe action was brought on a promissory note of $1,250.25, against the defendant as maker. The note was dated December 3, 1850; was payable eight months after date, to the defendants’ own order, and was endorsed by him to the plaintiffs.
    The only defence' set up in the answer was, that the note was given to secure the payment of premiums that might thereafter accrue and become due upon an open policy of insurance which the defendant effected with the plaintiffs, and that at the maturity of the note the whole amount of the premiums earned was $140.89, and no more, which sum the defendant was ready and willing to pay.
    In October, 1853, the cause was referred by the consent of the parties to Benjamin W. Bonney, Esq., as sole referee, who on the 19th April following, made the following report:—
    I, the subscriber, referee, to whom, by a rule or order made in the above cause, and dated the twenty-ninth day of October, 1853, this action was referred, to hear and determine the same, and to report to this court,
    Do certify and report, that I have been attended upon this reference by the attorneys and counsel for the parties, plaintiffs and defendant, and having read the pleadings in the action, and heard the allegations and proofs of said parties respectively, and the arguments of their respective counsel, and having duly considered the same, I find and report as matter of fact, that on the third day of December, one thousand eight hundred and fifty, the plaintiffs made and issued to the defendant their open policy of insurance of that date, whereby the plaintiffs made insurance, and caused to be insured to the defendant, on account of whom it might concern, (in case of loss to be paid to him,) the sum of fifty thousand dollars, on specie, gold, gold dust and bullion, at and from San Francisco, per steamer to Panama, thence overland to place of reshipment, and thence per steamer to New York. Shipments to be made after the twentieth day of October, 1850, and to come consigned to the defendant and Greorge Law, or either' of them, and the plaintiffs not to be liable for more than ten thousand dollars, at any one time, per any one steamer. That the promissory note in the complaint mentioned and set forth was a “premium note,” made and given by the defendant to the. plaintiffs, for and to secure the payment of the premium of insurance, at and after the rate of two and one half per cent.' upon said sum of fifty thousand dollars, mentioned in said policy of insurance, and so insured as aforesaid; and one dollar and twenty-fire cents for such policy of insurance; and was made or given for no other purpose or consideration. That at the time of the issuing of said policy, and of the making of said note, it was understood and agreed, by and between the plaintiffs and the defendant, and was and is the usage and custom in like cases in the city of New York, that said note should be held by the plaintiffs as security for the payment of said premium of insurance, or of so much thereof as should be earned, or as the plaintiffs should be entitled to receive upon and for the amount of specie, gold, gold dust and bullion which should be shipped, and for which the plaintiffs should become insurers, in pursuance of the terms of said policy. That after the twentieth day of October, one thousand eight hundred and fifty, there was shipped from San Francisco, for New York, specie, gold, gold dust and bullion, consigned to the defendant and George Law, or one of them, to the amount of thirty-six thousand seven hundred and sixty-nine dollars and nineteen cents, which was covered by the said insurance ; and upon and for which the plaintiffs were entitled to receive such premium of insurance, amounting to nine hundred and nineteen dollars and twenty-three cents. That all said specie, gold, gold dust and bullion, shipped as aforesaid, arrived at New York, and was there received by said defendant and George Law, or one of them, before the seventh day of June, one thousand eight hundred and fifty-one. That no other specie, gold, gold dust or bullion, has, since the twentieth day of October, one thousand eight hundred and fifty, been shipped from San Francisco to or for New York, consigned to said defendant and George Law, or either of them, which was covered by such insurance. That in the month of June, 1851, (and after the said seventh day of June, 1851,) the defendant was willing and desirous to cancel and surrender the said policy of insurance; and the plaintiffs were willing and desirous to have such policy cancelled and surrendered ; and proceedings were then had and taken by and between said parties, for cancelling said policy, and adjusting and settling the amount of premium which plaintiffs were entitled to receive, upon, for, or under the same; but such policy was not delivered up to the plaintiffs, for the reason that the same was lost or mislaid; and the amount of premium to wbicb tbe plaintiffs were so entitled was not tben adjusted or settled; but the parties disagreed as to the amount of such premium; and that since the said seventh day of June, 1851, the plaintiffs have been subject to no risk or liability, and have earned or become entitled to no further premium upon, under, or by reason of the said policy of insurance.
    And I do farther find and report, as matter of law, upon the facts found as above stated, that there is now due to the plaintiffs upon said promissory note the sum of nine hundred and twenty dollars and forty-eight cents, with interest thereon from the sixth day of August, 1851, amounting, in the aggregate, at the date of this report, to the sum of one thousand and ninety-four dollars and twenty-seven cents. And that upon the filing of this report, judgment be entered in favor of the plaintiffs against the defendant for the last mentioned sum, ($1,094.27,) and for plaintiffs’ costs of this action.
    Dated, New York, 17th April, 1854.
    B. "W. BONNEy, Referee.
    In addition to the facts so found by the referee, it was proved upon the trial before him, as appeared by his report of the evidence, that when' the policy was effected, the defendant and G-eorge law were the owners of a line of steamers navigating the Pacific, from San Francisco to Panama, and were also interested in a line of steamers on the Atlantic, from Chagres to New York, and that they effected an insurance with the plaintiffs, in order to cover shipments of gold, gold dust, bullion, &c., which they expected to be made to them by those lines. That on the 1st of April, 1851, the defendant and George Law ceased to.be the owners of the steamers on the Pacific line, having transferred the same to the Pacific Mail Steamship Company, and that notice was then given to the plaintiffs that the defendant would no longer use the policy, and wished the same to be cancelled, and that from that time no returns of shipments were made to the plaintiffs. The premiums earned to the 1st April, amounted only to $457.85.
    
      W. M. Evarts, for the defendant,
    now contended that it was only for this sum of $457.85, with interest, that the report of the referee ought to have been given, and that the judgment ought to be reduced accordingly. He insisted that the insurance was terminated by the change of the ownership of the steamers on the Pacific, on the 1st of April, and by the notice then given to the plaintiffs that the defendant would no longer use the policy. The referee erred in supposing that the assent of the Company was necessary to discontinue the insurance.- The defendant had a right to discontinue it, by giving a proper notice whenever he pleased.
    
      G. A. Peabody, for the plaintiffs, contra,
    insisted that if there was any error in the report of the referee it was in his not ordering judgment for the whole amount of the note, since there was no satisfactory proof that the contract had ever been discontinued.
   By the Court.

Oakley, Ch. J.

There is one respect in which an insurance against marine risks seems to be distinguished from all other contracts. Even when the policy has been signed and delivered, and the premium paid or secured to be paid, the contract may be dissolved at the election of one of the parties without the consent or knowledge of the other. It is to the assured alone, however, that this privilege belongs, and it is only in one mode that it can be exercised by him. He has not an unlimited discretion to annul the contract when and how he pleases. The, contract can only be dissolved so as to exonerate him from the payment of the premium, or entitle him to demand its return, by his electing not to commence the voyage or adventure to which the insurance relates. If a ship insured to Havre sails for Liverpool, or goods insured to one port are shipped for another, or are not shipped at all, the contract is at an end, and the underwriters lose their premium. But if the voyage or adventure insured is not abandoned nor broken up, the assured cannot put an end to the contract by a mere declaration and notice of his intentions. He cannot dissolve the contract because he is dissatisfied with its terms, and prefers to become his own insurer, or believes he can effect a new insurance covering the same risks at a lower rate of premium. Where the risks described in the policy are so commenced that by the terms of the insurance the underwriters would be liable for a loss, they are entitled to retain or reeoyer the premium, unless it is proved that before the risks commenced or terminated they had consented to dissolve the contract; and we apprehend that these rules are just as applicable where the policy covers successive risks, as where it is confined to a single voyage, although when the risks are not merely successive, but distinct and independent, so that the premium may be apportioned, the non-inception of a portion of the risks will doubtless warrant a proportionate return or diminution of the premium.

It is not denied in the case before us that shipments, such as are described in the policy, were made to the defendant and Law between the 1st of April, 1851, and the 7th of the following June, and that the premiums on these added to the premiums before earned amounted to the full sum that the referee reported to be due. The argument, therefore, for the defendant rests entirely on the truth of the assertion that the insurance was terminated on the 1st of April. — First, By the change which then took place in the ownership of the 'steamers by which shipments covered by the policy were expected to be made, and second, By the notice then given to the plaintiffs that the defendant would no longer use the policy. It is manifest that neither of these grounds was considered to be tenable by the referee, and as we are entirely of the same opinion, we can see no reason for disturbing his report.

We cannot say that the change in the ownership of the steamers made any change in the rights or contract of the parties, without giving a construction to the policy that its terms plainly forbid. It is very probable that the defendant, when he effected the insurance, believed that all the shipments he meant to cover would be made in the steamers in which he was interested, and. of which,.it seems, he was the agent; but if he intended to limit the insurance to shipments so made, it is an intention that the policy ought to have expressed, and, if its expression was omitted by accident or mistake, we have no power upon the pleadings and evidence before us to supply the defect. The answer does not seek a reform of the policy, npr does the evidence show that it could be reformed. We must, therefore, construe it as it is. By its terms it covers every shipment made to the defendant or Law; by a steamer on the route described, without any reference whatever to the ownership of the vessel, so that had a loss happened of a shipment so made in a steamer, in which the defendant had no interest whatever, it cannot be doubted that the plaintiffs would have been responsible for the payment — an intention not to be collected from the terms of the policy, however probable in itself, would have been no defence. Hence, as the plaintiffs assumed the risks of all the shipments described in the policy that should be made to the defendant or Law until the sum mentioned in the policy should be exhausted, they are entitled to the premium upon all that were in fact made.

Now as to the notice that is alleged to have been given to the plaintiffs, the silence of the referee renders it probable that he deemed the evidence insufficient to establish the fact, and upon looking into the evidence, we are not surprised that he arrived at this conclusion. But admitting the notice, as stated, to have been given on the 2d April, as there is no proof that its terms were then assented to by the plaintiffs, it was, as has already been shown, wholly ineffectual. It was not in the power of the defendant to discontinue the insurance, in other words, rescind the contract, without discontinuing the risks that the insurance covered. Until shipments were made to the full amount of the sum mentioned in the policy, ($50,000,) it was only by the consent of both parties that the contract could be rescinded. The referee has found that this mutual consent was not given until the month of June, nor until after the 9th of that month, and we cannot say that his finding is against evidence or the weight of evidence. Hence, as the insurance remained in force until, after the day mentioned, it is a necessary consequence, and is not denied to be so, that the plaintiffs became entitled, as premiums earned, to the full sum reported by the referee, and for which, with interest, this judgment has been tendered.

The judgment is therefore affirmed, with costs. 
      
       The doctrine of the Italian jurists is, that the assured can never put an end to the contract by his own choice or act, and that it is only where the non-inception of the risks is owing to force or accident that he is excused from the payment of the premium; hut this doctrine is peculiar to Italy. — (Casariges, Dis. 1, N. 82, 585, Benecke 133, 2 Emerigon 181.) — R.
     