In Ireland, the general rule in cases of fire insurance has been thus laid down in a case where a mill and machinery were injured by fire. The court directed the jury to say, "what state of repairs the machinery was in, what it would cost to replace it by new machinery, and how much better, if at all, the mill in which the machinery was placed would be with the new machinery than it was at the time of the fire; the difference to be deducted from the entire expense of placing there such new machinery.” (w) This rule has been adopted in this country, in cases where the property is injured and repaired so as to replace it substantially as it was before the accident. (x) But in cases of total destruction, much confusion appears to exist.

Mr. Greenleaf has said, (y) that the actual loss is to be ascertained by the expense of restoring the property, without any deduction for the difference of value between the old and new materials; and on the other hand, an effort was recently made in Massachusetts, in a suit on a fire-policy, to introduce the analogies of marine insurance; the defendants insisting on deducting from the estimated cost of a new building, the difference in value between the old and such new building. The property had been totally destroyed, and a different building had been erected.

on the premises. In this case both these rules were re[255] jected; the court saying as to the latter, with great justice, that it was not supported by any authority or principle. They also refused to sanction the principle laid down by Mr. Greenleaf, saying, that if it were followed, the assured in some cases would recover more than an indemnity, and much more when the building is dilapidated and out of repairs; that the underwriters are liable only to pay a fair indemnity for the loss; and that, whatever the rule might be when the building insured is partially injured by the peril assured against, it has no application to cases like the present, where the building is totally

(w) Vance v. Foster, 1 Irish Circuit Cases, 51; 3 Stephens' N. P., 2084.

(x) Brinley v. The National Insurance Co., 11 Met., 195.

(y) 2 Greenleaf on Ev., § 407.

the real owners, nor any notice given to them of such insurance; and the insurers are entitled in such a case to recover from the insurance office the full value of the goods destroyed by fire. They are, however, liable to account to the true owners for the excess of the money received beyond the amount of their own charges in respect of such goods. Waters v. The Monarch Life & Fire Insurance Co., 34 Eng. L. & E., 116.

destroyed and to be replaced by a new one; and they proceeded to say, "If the rule laid down in Vance v. Foster were applied, the jury must ascertain by the estimates and opinions of witnesses, the amount of the expenses of a new building, and they must estimate the value of the old building in order to ascertain the difference, if any there be, between the new and old. We can perceive no use in requiring this double estimate; for when the plaintiff is only entitled to recover the amount of the value of the building destroyed, the estimate of the cost of the new building is useless. We are, therefore, of opinion that there is no rule of damages applicable to the present case; and that in all cases where no rule of damages is established by law, the jury are to decide upon the question, and that to their decision there can be no legal exception." And a new trial was ordered. (2)

I see no ground on which this decision can be maintained. To say that a contract of insurance is a contract of indemnity, and at the same time that there is no rule of damages whatever, and that the jury are to dispose of the matter absolutely, seem very contradictory propositions. Nothing can be more dangerous, in cases of insurance above all others, than to leave the matter to the uncontrolled arbitrament of the jury-box. It is well known that owing to the defendants in insurance cases being in this country always corporate bodies, there exists an extreme laxity in the verdicts rendered, and a very great disposition to stretch the justice of the case, so as to save individuals from loss. What then more perilous than to leave an issue of this kind to the absolute disposition of the jury? And the decision appears the more remarkable because the case of Vance v. [256] Foster, offers a clear and simple mode of arriving at the desired result with accuracy and safety. The court say, "We perceive no use in the double estimate." The utility of it is twofold. In the first place, to secure the great object of not leaving the matter to the loose and unguarded decision of the jury; and in the second place, because, no practical man, whether mason, or builder, or juryman, has any means of arriving at the value of an old or second-hand building, save by this very double estimate. He first calculates what it would cost to put up such a building originally, and then how much it has been deteriorated. And it is only by this two-fold process that justice can be arrived at. It

(z) Brinley v. The National Ins. Co., 11 Met., 195.

is a legal solecism to call the contract of insurance a contract of indemnity, if verdicts upon policies are to be governed by the uncontrolled discretion of the jury. This reasoning would not be admitted even in a common case of trespass free from malice. If a building was destroyed by ordinary negligence, would a jury ever be told that, without being governed by any estimate of its value, they are the sole masters of the subject? Nothing is more important than to reduce this branch of our law to system; and nothing short of extraordinary difficulty in laying down a rule, difficulty vastly greater than any existing in cases like this, should warrant a court to shuffle off the matter on the jury. The tribunals of Massachusetts have long been so eminent for their learning and sagacity, that it is with unaffected deference that any writer should venture to differ from them. Still I cannot persuade myself to refrain from this criticism.

For a more complete understanding of this branch of our subject, the reader is referred to the various treatises devoted to this particular branch of the law. But I cannot quit it without expressing the opinion that the principle of arbitrary remuneration has been carried, in this country, to a very dangerous extent. It certainly removes difficulties, lessens the labor of all parties concerned in the inquiry, and may perhaps be said, on the whole, to do justice; but on the other hand, it is the business of the law and her officers not to shun but to grapple with difficulties; it hardly becomes the dignity of jurisprudence to declare its inability to do right in the particular instance; a rough average of justice

is far from satisfactory to the suitor who suffers gross hard[257] ship in the individual case, and as applied to the subject

of technical or constructive total loss, the fixed rule holds out infinite temptations to fraud and litigation. (a)

It has already been stated that nice questions often present themselves, as to the amount and character of the testimony necessary to prove damage; and in no branch of the law are they more perplexing than in insurance cases. We shall have occasion

to recur to the subject when treating of evidence. I shall at

(a) It is superfluous to name the leading English and French authors on the subject of this chapter, or Mr. Phillips's work, which is equally well known; but I can, with propriety, mention the learned treatise with which Mr. Duer, of

New York, is now enriching our libraries; and I may also be allowed to state the pleasure and benefit that I have received from the very able work of M. ALAUZET,-Traité Général des Assurances.

present content myself with referring to the judicious language of Mr. Justice Story. (b)

Life Insurance. Contracts of assurance on lives form another very important division of this branch of our subject. Where the policy was taken out on the life of a third person, it was originally said that, like marine and fire policies, it was a mere contract of indemnity; that if not damnified, the plaintiff could not recover; and so, where the creditors of Mr. Pitt had effected an insurance on his life, and their debts had been subsequently paid, it was held that they could not recover. (c) But this case has been overruled; and it has been decided by the Exchequer Chamber that a contract of life assurance is a mere contract to pay a certain sum of money upon the death of a person, in consideration of the payment of certain premiums; that it is not a contract of indemnity; and that the termination of a creditor's interest before the death does not defeat the recovery. (d) (1)

(b) Rogers v. Mechanics' Ins. Co., 1 Story, 603. See also post, Chap. XXV.

(c) Godsale v. Boldero, 9 East, 72, cited, with approbation, in Tyler v. Ætna Fire Ins. Co., 16 Wend., 385.

(d) Dalby v. India & London Life Assurance Co., 15 C. B., 365; 28 Eng. L. & E., 312; 18 Jur., 1024; 3 Com. Law, 61.

(1) In a suit on a policy of insurance by which £1000 was to be paid to the representatives of the assured in case of his death by railway accident, and a proportionate part of that sum to him in case of his injury by such accident, it was held not to be a true measure of damages to assume the sum insured as the value of the life, and to estimate a proportionate sum for the injury sustained. In such a case, though the assured can recover for the personal expense and pain caused by the injury, he is not entitled to damages for the loss of time or profits occasioned by it. Theobald v. The Railway Passengers' Assurance Co., 26 Eng. L. & E., 432; 10 Exch., 45; 18 Jur., 583.

A policy upon life is in its nature an insurance upon the benefits which will or may result to the assured from the continuance of the life; and in that respect is like an insurance upon profits. Miller v. The Eagle Life & Health Insurance Co., 2 E. D. Smith's (N. Y.) C. P. R., 268.

CHAPTER X.

MEASURE OF DAMAGES UPON THE BREACH OF CONTRACTS FOR THE SALE OF PERSONAL PROPERTY.

Roman Law-General rule as against vendor is, the difference between the contract price and the value of the article on the day fixed for delivery-How far this rule is modified by payment of the price in advance-Examination of the decisions-As against vendee, the whole price may be recovered, although the article be not delivered-Rules of the modern Civil Law-Molinaeus-Pothier-Measure of damages against vendor upon breach of warranty, is the difference between the value of the article as warranted, and its value as delivered.

We now approach the consideration of a large class of cases falling under the head of the common-law action of assumpsit,that of contracts for the sale of chattels or personal property. These contracts may be broken, either completely, by the vendor's neglect to deliver the article, or by the vendee refusing to pay the price; or partially, by the article proving different from some warranty made in regard to it at the time of sale. Generally it may be said that these agreements furnish their own measure of damages; in other words, that courts of justice, without desiring to fix any arbitrary rate of remuneration, endeavor solely to carry into effect the contract of the parties; and to this rule the only exception that can be said to exist, is that in regard to agreements of an unconscionable and oppressive character, which we have already considered. (e)

The general language of the Roman law is, that in case of the breach of contract of sale by non-delivery, the measure of damages is all that the buyer loses or fails to gain in relation to the thing itself, over and above the price paid; id quod interest propter rem ipsam non habitam. And, embarrassed by no form

(e) Ante, 221, et seq.