that its insurance, $10,000, bears to the total insurance of $32,000. Company "C's" liability will be limited to 14/32. Company "A," therefore, will pay $2,500 of the loss, Company "B" $3,125, and Company "C" $4,375.

Significance of the Words "Whether Valid or Not and Whether Collectible or Not."-Special mention should be made of that section of the contribution clause, which provides for pro rata apportionment among all the policies, "whether valid or not and whether collectible or not." Such wording avoids many troublesome questions as to the validity of policies and the solvency of companies that would frequently arise where a number of policies cover the same property and which would have to be settled before the loss could be apportioned. But by expressly declaring that invalid policies, or policies issued by insolvent companies, must contribute just like the valid and solvent ones, it is possible to avoid the expense and delay usually connected with any inquiry into the validity of policies or the solvency of companies. This part of the contribution clause is also of the greatest importance to the property owner who may rely upon the chance that he will suffer only a partial loss, and may, therefore, feel that he can afford, in part at least, to take cheap insurance in an unreliable company. If the policies of insolvent companies were not considered as contributing with those of the solvent companies, it would follow inevitably that property owners, who are constantly on the lookout for cheap insurance, would take part of their insurance in reliable companies charging adequate rates, with a view to covering their partial losses, and then, as a protection against unusual losses which they hardly expect, would take other insurance in doubtful companies charging inadequate rates. The contribution clause as it stands, however, gives fair warning to property owners that such a practice can prove

of no benefit because, whether the loss be partial or total, all policies in companies unable to pay will be considered as contributing on a pro rata basis with those issued by solvent insurers. If in the foregoing illustration Company "C" should have been able to pay only 50 cents on the dollar, it would, nevertheless, be considered as having contributed 14/32 of the $10,000 loss. Companies A and B, despite the insolvency, would pay only their respective proportions of 1/4 and 5/16 of the loss, and the property owner would be the loser of one-half of Company C's liability, or $2,187.50.

Contribution when the Policies Are Non-current.-As contrasted with the foregoing, much greater difficulties present themselves in the apportionment of a loss when two or more policies are issued on the same interest and are "non-current," i.e., do not agree in their terms. As sometimes happens, a number of policies may be written on the same interest, and may differ as to the description of the property, one policy insuring the building, another covering the building and furniture, and still another insuring the furniture and general merchandise. Or it may happen that certain policies are "specific," and cover only one item of property, whereas other policies. are "general" (sometimes called "blanket" policies or "compound" policies), and cover all the items under one sum. Again, it may happen that the policies on a given interest do not agree as regards important endorsements, one policy, for example, containing a three-quarters' loss clause and another containing no such limitation. Policies may also be non-concurrent in that they differ (1) as to the location of the various items covered, or (2) because the interests insured are not the same. Non-concurrent policies are usually the result of carelessness on the part of the agent, and in case of loss always result in much dissatisfaction. Companies instruct their agents, in order

to avoid the issuing of such contracts, to refuse a policy where the insured declines to make known the wording of policies already covering the property. And where the nature of the other policies is revealed and they are found to vary in their wording, it is deemed best to have their terms so changed that they will be concurrent with the new insurance. Agents are also warned to make the written portions of all policies alike. Through their underwriters' associations, the companies also aim to use uniform printed endorsements. Through the same associations they also operate so-called "stamping departments" to which agents must refer all policies for examination and approval. Here the policies are carefully checked with reference to their endorsements and descriptive matter, with the result that much of the difficulty formerly connected with non-concurrent insurance is now avoided.

Unless effective methods of this kind are adopted, hopeless confusion will arise which no system of apportionment can solve accurately. In most instances the companies have sought to adjust cases of non-concurrency outside of the courts through the application of some arbitrary rule. Where the courts have undertaken to prescribe a method of settlement, the attempt usually has been far from satisfactory. A study of the court decisions shows that, as a rule, when a case of apportioning a loss among non-concurrent policies was brought up for consideration, only two plans were considered by the court, namely, "the two rules of apportionment contended for by the parties to the suit." The court would attempt to place the different policies as much as possible upon a footing of equality, and would approve that rule of apportionment which would pay the insured the full amount of the loss. As stated by Daniels, "the courts have repeatedly decided that if the insured has as much

or more insurance than the amount of loss, his loss must be paid in full, and no rule of apportionment which fails to pay the loss in full will be recognized by the courts."

Illustration of Apportioning Compound Insurance.To arrive at the amount payable under each of several non-concurrent policies, it is necessary to observe two distinct steps, namely, (1) the apportionment of the insurance, and (2) the determination of each policy's contribution to the loss. In other words, it is first ascertained what portion of the face value of each policy applies to the risk on which the loss has occurred, and secondly, what proportion of the total indemnity is due under the terms of each.

Of the many rules devised, one may be used for illustrative purposes. The so-called "Reading Rule," for example, stipulates that the compound policy (the policy covering more than one item) shall apply to each item on which there is a specific policy (a policy covering the one item only) in the proportion that the value of the specific item bears to the value of all items covered by the compound policy. This rule may be illustrated by the case of Page vs. Sun Insurance Office (74 Fed. Rep., 194). Here the court was called upon to apportion the loss among policies which were non-concurrent as regards the location of the property. Reducing the figures to

even thousands the facts were as follows:

Value of the property

Insurance

Loss

West yard..$10,000 Four specific ( $2,500 West yard. . $30,000

The question involved was: How should the loss of $30,000 be apportioned between these five policies, one a general policy on all the property, and four specific policies covering the property in the West yard only? According to the contention of the underwriters issuing the specific policies, the total insurance on the West yard consisted of the $40,000 general policy and the $10,000 of specific insurance, or $50,000 in all. If this reasoning was to be followed, the general policy would pay the $30,000 loss in the proportion that its insurance ($40,000) bore to the entire insurance ($50,000), or four-fifths ($24,000), and each of the specific policies would pay only $1,500 or $6,000 in all. On the other hand, however, the underwriter issuing the general policy contended that his policy of $40,000 applied to the property in the West yard only to the extent that the value of property in the West yard, $40,000, bore to the total value of all the property in both yards ($60,000), i.e., only to the extent of four-sixths of $40,000, or $26,666.66. This latter plan was the one adopted by the court as the most equitable. It is clear that under this line of reasoning the liability of the specific policies was considerably increased beyond what would have been the case had the general policy been obliged to contribute for its full amount on the value of the property in the West yard.

Numerous Rules in Use for the Apportionment of Loss Among Compound and Specific Policies. The difficulties which present themselves in the apportionment of losses, when some of the policies are "specific" and others are "compound," are well illustrated by the case submitted for solution to Mr. W. H. Daniels. According to the case, the Continental Insurance Company insured $2,500 on

'Another excellent summary of the various rules in use is furnished by Mr. Willis O. Robb and published in George Richards' ́ ́Treatise on the Law of Insurance.''