CHAPTER IV. SPECIAL REMEDY OF CREDITOR. § 105. Creditor's right to surety's securities: From principal. The creditor has a right to enforce and have the benefit of all bonds and collateral securities which are given by the principal to the surety to indemnify him for his suretyship obligation (1). This is on the theory of subrogation, which right is allowed to the creditor as to securities held by the surety, as well as to the surety as to securities held by the creditor or by a co-surety. In equity, these securities given by the principal are securities for the payment of the debt, and all other parties who are liable for the debt of such principal may have the benefit of such securities. When the surety so holds a security of the principal and the latter is insolvent, the creditor is entitled to enforce such security as against other creditors of the principal, and thus perhaps recover his claim in full; though, had he enforced it directly, he would have had to share with the others of the principal. § 106. Same: From co-sureties. However, where cosureties exchange securities with each other, for the purpose of securing the prompt carrying out of their respective suretyship contracts the creditor is not entitled to be subrogated to these securities, since they are not given (1) Chamberlain v. St. Paul Co., 92 United States, 299. by the principal. Thus, in a certain case, two parties who became sureties for a certain debt agreed with each other what amount each should be liable to pay, and interchanged mortgages to secure this agreement. The principal and sureties became insolvent, and the creditor claimed the benefit of these mortgages and that he had a right to enforce them against other creditors of the sureties. The court held, however, there were two reasons why the creditor could not enforce these mortgages. In the first place, they were not securities which ever belonged to the principal or were given by him to secure the debt, and hence, they did not come within the rule as contended by the creditors. In the second place, the right of subrogation was a mere right to be substituted in the place of the holder of the security. This would entitle the creditor to enforce the mortgages according to their terms, and the conditions of these mortgages had not been broken (2). (2) Hampton v. Phipps, 108 United States, 260, INSURANCE BY HARRY AUGUSTUS BIGELOW, A. B. (Harvard University) Professor of Law, University of Chicago. CHAPTER I. GENERAL CONCEPTIONS. SECTION 1. ORIGIN, NATURE, AND DEFINITION. § 1. Origin of insurance. The beginning of the law of insurance is more or less doubtful. There are certain indications of it among the earlier Latin races, but the first definite mention of it is in the laws of Rhodes. The law of marine insurance appears in fairly definite form in Venice in the twelfth century. From there it worked north into the German states and from there into England. The first English case which involves the law of insurance at all is a case of marine insurance (1). From England it spread to this country in the eighteenth cen(1) Crane v. Bell, 4 Coke's Inst. 139. tury, and it has since steadily grown, both here and in England, until it is today one of the three most important branches of insurance law. Fire insurance first made its appearance in England after the great fire of London in 1666. The first important fire insurance company was the Sun Fire Office, which was established in England in 1710, and is still engaged in the insurance business. The first fire insurance company in this country was established in Philadelphia in 1752. The third great division of insurance law is life insurance. While there are some early traces of it, life insurance, in the form in which we know it, first made its appearance in England about the middle of the eighteenth century, the Equitable Assurance Company being established in England in 1762. In the United States, comparatively little was done in life insurance until about the middle of the nineteenth century. After the Civil war it grew with great rapidity, and is now one of the most important branches of in surance. There are many other kinds of insurance, but their principles are the same as in the three main divisions already mentioned. Others are accident insurance, working men's insurance against accidents in their business, guaranty insurance of the fidelity of employees, plate glass insurance, burglar insurance, cyclone and hail insurance, and many other common kinds. § 2. Nature of insurance. Insurance is essentially a contract or agreement, whereby one party, in consideration of a price paid by another party, guarantees to that other that he shall not suffer loss or damage by the hap |