are shown to have known it, and to have entered into the contract with that knowledge.1

No usage is permitted to contradict the plain and positive provisions of the policy. In some cases it seems to be held,

1 In Rogers v. Mechanics' Ins. Co., 1 Story, 603, insurance was effected in New Bedford on a ship from Bristol, Rhode Island, on a whaling voyage. It was held that evidence of the usage of the whaling trade at New Bedford, was not admissible. Mr. Justice Story said: "The usage or custom of a particular port, in a particular trade, is not such a custom as the law contemplates to limit or control, or qualify the language of contracts of insurance. It must be some known general usage or custom in the trade, applicable and applied to all the ports of the State, where it exists; and from its character and extent so notorious, that all such contracts of insurance in that trade must be presumed to be entered into by the parties, with reference to it, as a part of the policy. If the usage or custom be not so notorious; if it be partial, or local in its existence or adoption; if it be a mere matter of private and personal opinion of a few persons engaged therein; it would be most dangerous to allow it to control the solemn contracts of parties, who are not or cannot be, presumed to know it, or adopt it, as a rule to govern their own rights or interests." In Natchez Ins. Co. v. Stanton, 2 Smedes & M. 340, it was held, that the usages of insurance offices at New Orleans, could not affect insurance offices at Natchez. And in Child v. Sun Mutual Ins. Co., 3 Sandf. 26, where a Rhode Island ship was insured in New York, evidence of the usage in New Bedford was held to be inadmissible. And in Mason v. Franklin Fire Ins. Co., 12 Gill & J. 468, where the question arose as to the construction of a policy on a vessel building in Baltimore, it was held that the usage in New York under similar circumstances could not be admitted in evidence. But see Noble v. Kennoway, 2 Doug. 510, where usage of the Newfoundland trade was admitted as aiding in proving a usage of the Labrador trade. In Macy v. Whaling Ins. Co., 9 Met. 354, the vessel was owned in Nantucket and was insured in Boston and New Bedford. The question arose respecting a certain usage which was well established in New Bedford, and the court said: "The inquiry will be whether the usage is general to all who are concerned in the trade, or whether it is a local usage, and confined to the ports of the Commonwealth; and if local, whether the merchants and underwriters in Nantucket and Boston are conversant with it, and practice upon it. . . . . But if the custom is limited to the port of New Bedford, or is not well known or established in Nantucket and Boston, then it cannot be admitted to affect the construction of the defendants' policy, or to lessen the amount of their contributory share of the loss." In Cobb v. New England Mutual M. Ins. Co., 6 Gray, 192, 200, insurance was effected in Boston on a vessel in Maine, at and from Perry, to stop at Eastport and at and thence to a southern port. The court said: "The contract is presumed to be made with reference to the usages of the place to which the contract has reference; in this case that it was usual to take vessels built at Perry to Eastport to be rigged and equipped for sea."

The question has arisen how far the usages of insurance companies or associations are binding upon persons doing business with them. The general rule of law must be, that if the person is in the habit of transacting business there, so that he may be presumed to have knowledge of the usage and to contract in reference to it, he is bound by it, but otherwise, not. Gabay v. Lloyd, 3 B. & C. 793; Bartlett v. Pentland, 10 B. & C. 760; Scott v. Ewing, 1 B. & Ad. 605.

2 Thus in M'Gregor v. Ins. Co. of Penn., 1 Wash. C. C. 39, a usage to strike off

that not only must a usage be shown, but the further fact must be proved that the underwriters have assented to the usage by paying claims arising under it.1

one third of the gross freight for charges, and to pay two thirds to the assured in a policy on freight, was held to be invalid. See also, Hone v. Mutual Safety Ins. Co., 1 Sandf. 137, 2 Comst. 235, cited ante, p. 56, n. 5. So a usage not to pay for a particular part of the vessel's apparel or furniture, as a boat when it is in a certain place on the vessel, is invalid if the place is that where it is usually carried. Blackett v. Royal Exch. Ass. Co., 2 Cromp. & J. 244, 2 Tyrw. 266. Lord Lyndhurst, C. B., in this case said: "Usage may be admissible to explain what is doubtful; it is never admissible to contradict what is plain." In Mercantile Mut. Ins. Co. v. State Mut. F. & M. Ins. Co. of Penn., 25 Barb. 319, the question arose as to the construction of the following order for reinsurance: "Reinsurance is wanted by the Mercantile Mut. Ins. Co. for $- on cargo on board of the ship Great Republic at and from New York to Liverpool on the excess of risks the applicants may have over $50,000, not to exceed $15,000." At the time of the loss the plaintiffs had insured less than $50,000 on the cargo of the ship, but they had risks on the freight and on the ship, which, when added to the amount on the cargo, amounted to over $65,000. It was held, that the defendants only engaged to insure the excess of risks on the cargo, and that evidence of a custom of the parties and of the port of New York in adjusting contracts of reinsurance, upon such applications, to regard the word "excess in the application, as applicable to the whole amount of insurance at risk in or upon the vessel, and that the premiums upon open policies had previously been adjusted and paid between the present parties upon that principle, was properly excluded, there being no ambiguity on the face of the instrument. In Rankin v. Am. Ins. Co. of N. Y., 1 Hall, 619, the defendants offered to prove "that by the established usage of trade in the port of New York and in other ports, the master of the vessel is in all cases responsible for any damage sustained by the goods delivered by him to the owner or consignee, unless there has been an actual survey made on board the vessel by the wardens of the port or other officers, and on such survey the surveyors shall have found that the goods were properly stowed, and were damaged on the voyage by the perils of the seas. That by a similar usage as between the assurers and the assured, the survey so made by the wardens, is a document indispensable to be produced in order to charge the underwriters, and that the preliminary proof is deemed insufficient unless such document be exhibited as a part of it." Oakley, C. J., said: "By the terms of the policy in the present case the defendants bound themselves to pay all damage to the property insured, arising from the perils of the sea; and the attempt now made is to introduce into the policy a condition that they shall not be responsible unless such damage is ascertained in a particular mode, and that too by the aid of third persons, over whom the assured has no control. Such a condition would, in my judgment, vary the legal obligations of the defendants as ascertained by the plain language of the policy." See also, Bentaloe v. Pratt, Wallace, 58, 64. In Illinois Mut. Fire Ins. Co. v. O'Neile, 13 Ill. 89, it was held that if the charter of an insurance company declared the contract to be void in case of additional insurance on a house unless it was made with the consent of the company, evidence of usage that this applied to goods was not admissible.

1 See Taunton Copper Co. v. Merchants' Ins. Co., 22 Pick, 108. In Hermann v. Western M. & F. Ins. Co., 13 La. 516, it was held that although it might be usual for steamboats to tow vessels up and down the river, yet that this could have no effect upon

Foreign, unusual, and technical words, are especially those which are often interpreted by usage, and by that only. For common words are to be understood in a common way; and words of single and plain meaning interpret themselves, and usage is seldom permitted to cast a doubt upon their meaning. There are, however, cases in which words that have a plain meaning of their own, and have this meaning fortified by settled adjudication, are yet entirely changed in their force and effect by evidence of usage, where this leaves no doubt of the meaning and intention of the parties.2

With the precautions above stated, we know not why evidence of usage should not be freely admitted, and regarded as very useful. But eminent judges have even doubted whether any

The

the insurers, there being no evidence of a usage for them to pay in such a case. case of Taunton Copper Co. v. Merchants' Ins. Co., supra, related to the liability of insurers when goods were carried on deck according to the usage of the trade. This question we shall consider hereafter.

1 In Hone v. Mutual Safety Ins. Co., 1 Sandf. 137, 2 Comst. 235, Sandford, J., said: "There is a great variety of cases, in which the courts have permitted evidence to be given to show the meaning of terms in commerce and the arts, or of words and phrases peculiar to mercantile pursuits. This is generally spoken of as proof of usage; although in many cases it is rather the definition of technical language."

2 In Sleght v. Rhinelander, 1 Johns. 192, it was held that the term "sea letter" could not be explained by parol to mean merely a certificate of ownership, as the nature of the instrument was settled by public treaties and acts of congress. But this decision was reversed on appeal, 2 Johns. 531. In Child v. Sun Mutual Ins. Co., 3 Sandf. 26, it was held that usage was admissible to prove that a whaling voyage included the taking of sea elephants on the beaches and islands of coasts, as well as wherever whales were to be found. It was also held to be a question for the jury to decide whether the mating of two whaling vessels was a deviation. Evidence of usage as to the meaning of the word "roots" has been admitted. Coit v. Commercial Ins. Co., 7 Johns. 385. So, in regard to "corn." Scott v. Bourdillion, 5 B. & P. 213. And "furs." Astor v. Union Ins. Co., 7 Cow. 202. Cotton in bales has been held to mean "pressed " bales. Taylor v. Briggs, 2 Car. & P. 525. "Outfits" on a whaling voyage, to include one quarter of the catchings. Macy v. Whaling Ins. Co., 9 Met. 354. "Furniture," to comprehend provisions. Brough v. Whitmore, 4 T. R. 206. "Proceeds" of a cargo, the cargo itself if brought back. Dow v. Whetten, 8 Wend. 160. Commercial rather than geographical divisions of countries are regarded. Thus Mauritius, which is geographically an African island, is considered commercially as an Indian

one.

Robertson v. Clark, 1 Bing. 445. See also, Uhde v. Walters, 3 Camp. 16. So usage may determine the commercial limits of an island or port to be different from its geographical limits. See Moxon v. Atkins, 3 Camp. 200; Constable v. Noble, 2 Taunt. 403; De Longuemere v. N. Y. Fire Ins. Co., 10 Johns. 120; Cockey v. Atkinson, 2 B. & Ald. 460. See also, post, chapter on Deviation and a Usage to Deviate, and chapter on the Termination of the Risk as governed by Usage.

usage, not expressly referred to by the parties, should be regarded by the court. No tribunal would go so far as this now. And even Mr. Justice Story's rule, that such testimony should be received "with cautious reluctance, and watched with scrupulous jealousy," 2 would, in our judgment, be better expressed if he had only said it should be admitted and applied cautiously.

VOL. II.

1 Rogers v. Mechanics' Ins. Co., 1 Story, 603.

6

CHAPTER II.

OF THE INTEREST OF THE INSURED.

SECTION I.

OF THE NECESSITY OF SOME INTEREST.

THE insured must have an interest in the subject of insurance, and this interest must be at risk. And as insurance is essentially a contract of indemnity — which principle is of great importance and wide application- the insurers can be called upon only to make good a loss sustained. This loss, whether total or partial, must be measured by the value of the property insured; and this value may either be determined by proper evidence after the loss has occurred and the claim been made, or it may be agreed upon by the parties at the time the policy is made, and be expressed therein.

SECTION II.

OF OPEN POLICIES AND VALUED POLICIES.

If a policy does not state the agreed value of the property insured, but leaves that for proof, it is called an OPEN POLICY;1 but if the policy states what the parties have agreed upon as the

1 That is also called an open policy where the property insured is to be inserted by subsequent indorsements. See supra, p. 34, n. 3.