{
  "id": 820083,
  "name": "The Illinois Mutual Fire Insurance Co. v. The Andes Insurance Co.",
  "name_abbreviation": "Illinois Mutual Fire Insurance v. Andes Insurance",
  "decision_date": "1873-01",
  "docket_number": "",
  "first_page": "362",
  "last_page": "366",
  "citations": [
    {
      "type": "official",
      "cite": "67 Ill. 362"
    }
  ],
  "court": {
    "name_abbreviation": "Ill.",
    "id": 8772,
    "name": "Illinois Supreme Court"
  },
  "jurisdiction": {
    "id": 29,
    "name_long": "Illinois",
    "name": "Ill."
  },
  "cites_to": [
    {
      "cite": "9 Ind. 443",
      "category": "reporters:state",
      "reporter": "Ind.",
      "case_ids": [
        1466949
      ],
      "opinion_index": 0,
      "case_paths": [
        "/ind/9/0443-01"
      ]
    }
  ],
  "analysis": {
    "cardinality": 396,
    "char_count": 8606,
    "ocr_confidence": 0.57,
    "pagerank": {
      "raw": 2.7295669748779745e-07,
      "percentile": 0.8310017302167038
    },
    "sha256": "17a01b6310fa96b332a988539797d52fb6bfc3e67fab600c9ba05a6ba4ec15b8",
    "simhash": "1:756fe175078f87fb",
    "word_count": 1548
  },
  "last_updated": "2023-07-14T20:18:48.240811+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [],
    "parties": [
      "The Illinois Mutual Fire Insurance Co. v. The Andes Insurance Co."
    ],
    "opinions": [
      {
        "text": "Mr. Justice Sheldon\ndelivered the opinion of the Court:\n' The only question here presented for decision is, as to the amount of the recovery.\nThe original insurer became liable to pay to the first assured the sum of $6000 in consequence of the loss of the subject matter of the first insurance ; but it actually paid only $600 in full discharge of the liability. The amount of the reinsurance was $2000. Shall the reinsured recover the full $2000, or only $600, or a pro rata part of the latter sum ?\nSo far as we are aware, the contract of insurance, or of reinsurance, against loss by fire, has uniformly been held to be a contract of indemnity not exceeding the sum insured.\nIn the case of an ordinary policy of insurance, and a loss, the sum insured is the extent of the insurer\u2019s liability, not the measure of the assured\u2019s claim. The contract being one of indemnity, he is entitled only to that, and the actual loss sustained by the assured is the measure of indemnity to which he is entitled where it is less than the sum insured. So, if the assured has parted with all his interest in the subject insured before the loss happens, he can not recover, for the reason that the contract is regarded as one for an indemnity, and he has sustained no loss or damage.\nAlthough the original insurer here did become liable to pay the sum of $6000, that did not turn out to be the amount of its actual loss. The actual loss and damage which it sustained was $600, the sum which it paid in full discharge of its liability. That sum, given to the reinsured, would make good the loss sustained by reason of the original insurance; whereas, to allow a recovery of $2000, would enable it to realize a gain of $1400 over and above the actual damage it has sustained. It is difficult to see how this can be done consistently with principle, under a contract which, we apprehend, this must be admitted to be, to indemnify the reassured against the loss it might sustain from the risk it had incurred in consequence of its prior insurance.\nIn Bainbridge v. Nelson, 10 East, 346, it was said by Bayley, J.: \u201cA policy of insurance is only a contract of indemnity, and anything which tends to show that an assured can recover beyond his indemnity, is against the very principle of the contract?\u201d\nOf like import was the language of Lord Mansfield, in Hamilton v. Mendes, 2 Burr. 1210, in reference to an action on a policy of insurance, as follows: \u201cThe plaintiff\u2019s demand is for an indemnity; his action, then, must be founded, upon the nature of the damnification as it really is at the time the action is brought. It is repugnant, upon a contract for indemnity, to recover as for a total loss, when the court has decided that the damnification, in truth, is an average, or perhaps no loss at all.\u201d \u201cWhatever undoes the damnification in the whole, or in part, must operate upon the indemnity in the same degree. It is a contradiction, in terms, to bring an action for indemnity where, upon the whole event, no damage has been sustained.\u201d\nThe precise point here involved is quite barren of the authority of adjudged cases. As the contract of reinsurance was virtually prohibited in England more than a century ago\u2014it having been there forbidden except where the insurer shall be insolvent, become bankrupt or die, by the statute (19 Geo. 2, Ch. 37, sec. 4)\u2014that may account for the absence of authority in the English reports upon the point.\nWhat little authority is to be found, it must be confessed, is in support of the view that, where the first insurer becomes insolvent, and, on a compromise with his creditors, pays only a certain percentage of the loss sustained by the insured, the reinsurer is, nevertheless, bound to pay the reinsured the full amount of the reinsurance. Such was the decision of a French court of admiralty at Marseilles, made in 1748.\nIn Howe v. Mutual Safety Insurance Co., 1 Sandf. R. 137, this subject is quite elaborately considered, and the authorities bearing upon it adduced, and the doctrine laid down by the above French decision is recognized and adopted as the ' true rule of law which governs the extent of the liability of a reinsurer.\nThere are treatises on insurance where the same doctrine may be found to be laid down, but so far as they have, for its support, the authority of adjudications, th\u00e9y seem to de1 end upon the two cases above cited.\nIn Eagle Insurance Co. v. The Lafayette Insurance Co. 9 Ind. 443, the case in 1 Sandf. is, with seeming reluctance, barely recognized as authority.\nThis comprises the sum of the authority of adjudged cases to which we have been referred, or which have been brought to our notice in support of this doctrine of the reinsurer\u2019s liability for the full amount reinsured, as contended for by the appellee.\nWe can understand how the reinsured party, where the amount of his liability has been ascertained, may be admitted to recover to the full extent of the liability so long as the liability to pay continues, although he may not have made payment, or may be insolvent and unable to pay. But where the liability has become actually discharged by the payment of a sum less in amount, it is difficult to perceive, on principle, why the sum paid in discharge of the liability should not be taken as the amount of damage sustained, and as the measure of indemnity to be recovered under a contract which is confessedly one of indemnity.\nNotwithstanding, then, the adverse authority that is to be found, we are disposed to hold, on principle, as we regard it, that $600, the sum paid by the reinsured company in discharge of its liability for $6000, was the actual loss it sustained and the extent of the recovery which should be had. And in view of the following special clause in this policy of reinsurance, we are of opinion that the recovery in this case should be reduced even below that sum. The clause is this : \u201cLoss, if any, payable pro rata, at the same time and in the same manner as the reinsured, company.\u201d\nThe only construction we can well put on this clause and give it practical effect, is this: that the Andes Insurance Company, the reinsurer, was only to pay at the same rate as the Illinois Mutual Fire Insurance Company, the reinsured, should pay ; and as the latter company paid only ten cents on the dollar of its insurance, the former company is only liable to pay at the same rate\u2014that is, ten cents on the dollar of the amount of its reinsurance, which would be $200.\nAppellee\u2019s counsel suggest that the clause has reference only to cases of double insurance. There is no warrant in the language of the clause for giving it such a reference.\nThe policy of reinsurance is not before us. The case comes before us as a certified question of law, and this clause is the only portion of the policy which is put into the case, so that we have nothing, aside from the language itself, of the clause, to aid in it's construction.\nWe are of opinion the judgment should have been for $200 instead of $2000.\nThe judgment is reversed and the cause remanded.\nJudgment reversed.",
        "type": "majority",
        "author": "Mr. Justice Sheldon"
      }
    ],
    "attorneys": [
      "Mr. Charles P. Wise, for the plaintiff in error.",
      "Messrs. Stuart, Edwards & Brown, and Mr. J. H. Yager, for the defendant in error."
    ],
    "corrections": "",
    "head_matter": "The Illinois Mutual Fire Insurance Co. v. The Andes Insurance Co.\n1. Insurance\u2014extent of liability for loss. In the case of an ordinary policy of insurance, and a loss, the sum insured is the extent of the insurer\u2019s liability, but not the measure of the claim of the assured. The contract being one of indemnity, he is entitled only to that, and the actual loss sustained by the assured is the measure of indemnity to which he is entitled when it is less than the sum insured.\n2. Same\u2014liability of reinsurer to company first insuring. Where an insurance company, after having taken a risk and reinsured in another company to indemnify itself against loss on its policy, discharges its liability by the payment of a less sum than that reinsured, the sum so paid by it will be taken as the amount of damage sustained, and the measure of indemnity to be recovered of the second company.\n3. Same \u2014policy of reinsurance construed. And where the policy of reinsurance contained this clause: \u201closs, if any, payable pro rata, at the same time and in the same manner as the reinsured company,\u201d in case of a loss the reinsurer will only be bound to pay at the same rate the re-insured shall pay; so that, if the reinsured pays only ten cents on the dollar of its insurance, the reinsurer will pay at the same rate on the amount of its policy.\nWrit of Error to the City Court of Alton; the Hon. Henry S. Baker, Judge, presiding.\nMr. Charles P. Wise, for the plaintiff in error.\nMessrs. Stuart, Edwards & Brown, and Mr. J. H. Yager, for the defendant in error."
  },
  "file_name": "0362-01",
  "first_page_order": 364,
  "last_page_order": 368
}