Chandler v. Insurance Co. of North America

Taft, J. The plaintiff held a fire insurance policy in the defendant company covering specific sums on three items, viz: — $562.50 on item a, $612.50 on item b, $325.00 on item c. He held in the Home Company a like policy for $262.50 on item a, $375.00 on item b, and $112.50 on item c. He held policies in the Lloyds Association for $12,700.00, called blanket policies, insuring the same property as one item. The property was totally destroyed, the loss being the full value, and was less than the total amount of insurance. The loss on the respective items was as follows: $3,491.48 on item a, $6,230.37 on item b, and $2,014.70 on item c. The question presented is, what proportion of the loss shall the respective companies pay. The rule which must be [564] applied to determine this, is a legal, just, and equitable one, and is found in the policies. It is, that each company shall pay such proportion of the loss as the sum insured by it bears to the total insurance. The difficulty in adjusting the proportion which each company shall pay arises from the fact that some of the policies are specific and others blanket. As by the terms of the specific policies, they cannot be converted into blanket policies, it necessarily follows that the only way in which the loss can be adjusted is to turn the blanket policies into specific ones, i. e., determine how much of the full amount of a blanket policy shall be apportioned to each of the three respective items, according to their respective values. The value of the items as shown by the loss is as follows: Item a, $3,491.48, item b, $6,230.37, item c, $2,014.70, equals $11,736.55. Apportioning the amount of the blanket policies, $12,700 upon the amount of the loss by using the proportion, as the value of the whole property is to the whole blanket insurance, so is the value of each item to the insurance on each item, we find the insurance on each item to be: Item a, $3,778.09, item b, $6,741.82, item c, $2,180.09, equals $12,700; and the total amount of the insurance upon each item to be, item a, $4,603.09, item b, $7,729.32, item c, $2,617.59. As each company pays in the ratio that the amount of its policy bears to the total amount of insurance, the defendant is liable in respect to item a, $426.66, item b, $493.73, item c, $250.14, equals' $1,170.53, the amount for which judgment was entered below. The judgment was correct and is affirmed.