Evans v. the Commercial Mutual Insurance Company

6 R.I. 47

• Court: Supreme Court of Rhode Island
• Decided: March 6, 1859
• Status: Published

Opinion

Ames, C. J.

The first cause for new trial set down in the motion is, that the judge who presided at the trial refused to instruct the jury, that the plaintiff, notwithstanding his goods were damaged by a peril insured against, could recover nothing under his policy, if the goods insured brought more, though damaged, in the port of arrival, than they cost when found in the port of shipment; that is, as we understand the request, enough more to make the adventure a profitable one. It is clear that the judge would have fallen into a gross error had he given such instruction. The insurer of goods against damage by the perils of the sea has no right to the mercantile profit of the insured by way .of set-off to the sea-damage, any more than he is subject to the mercantile loss of the adventure by way of increase or aggravation of the sea-damage. The instruction asked for would make an indemnity against perils of the seas dependent upon the state of the market at the port of arrival, which is the risk of the merchant, and in no way connected with the perils against which he has obtained the indemnity. The great excellence of the rule for the adjustmént of a partial loss, laid down by Lord Mansfield in Lewis v. Rucker, 2 Burr. 1167, and established by Mr. Justice Lawrence in Johnson v. Sheddon, 2 East, 581, which has prevailed ever since and was applied in this case is, that it yields the same result whether the goods are imported at a profit or a loss. It is, by deducting the gross produce of sales of the damaged goods at the port of arrival from the gross produce of the sales of such goods if they had arrived sound, to ascertain the proportion or percentage of loss in consequence of the damage; as one half, one third, one quarter, or the like; and to take that aliquot part of, or percentage upon, the cost of the goods insured or- their value in the policy, as the amount which the insurer is to pay. This rule in application to any state of things, can never be liable -to the objection made to it at the argument, that it may subject the insurer to more than the cost of the article, or to its value as agreed in the policy; since it can never be but a proportion of that cost or value, and the precise proportion due to the damage from the perils insured against.

The next ground for new trial alleged is, that the court erred in refusing to instruct the jury as matter of law, that “bar- iron,” in the clause of the policy enumerating for what subjects of insurance the company should not be liable for a partial loss, included as the same, or at least within the same reason, “bundles of rods.” We know no rule of law by which this identity, either in fact or within the spirit of the clause in question, is ascertained. “ Bar-iron ” is a term of trade, including, it may be, what those out of the trade would not deem to be “bars of iron,” and excluding, it may be, what -they would. At all events, this is a question ■ of fact; and as such could not properly be decided lay the court. If as terms of trade, “ bar-iron ” and “ bundles of rods ” meant, in general, different forms of iron, it was certainly not for the court to say that in the clause in question, the one nevertheless included the other, because it was within the same reason. The court, as a matter of law, cannot know that they are within the same reason; and if the judge did, as a matter of fact, he must nevertheless leave it to the jury. But further, if “ bar-iron” does not, in the trade, include “ bundles of rods,” and yet, like “ pease ” and “ corn ” in the old cases concerning the common memorandum, they should be deemed the same in this clause, because within the same reason, this, as those cases show, is a good basis for a custom amongst merchants and insurers in the adjustment of losses, to consider and treat them as the same, but no reason, without such custom, why the court should construe them to be the same. The whole matter as to the meaning of these terms, as terms of trade, and in the clause in question, was very properly, as we think, left to the jury.

And this brings us to the question of the admissibility of the testimony of others engaged in- the iron trade, than merchants and insurers procuring insurance and insuring in it, to prove the meaning of these terms. We take it that he who insures in a trade, and uses in his policy phrases or terms which have a distinctive trade meaning, is presumed to know, and is bound by that meaning; and we see no reason why any person connected with the trade, whether as a manufacturer, importer, or dealer in any form, so that as something within his line of business, he may reasonably be presumed to know the meaning of the trade terms, is not qualified, as an expert, to swear with more or less authority, to their meaning. This is the rule constantly acted upon in the trial of revenue causes in the courts of the United States, where the duty which a particular article shall pay turns upon the distinctive meaning of the articles enumerated in the tariff acts. All who deal in the articles, whether as manufacturers, importing merchants, retailers, or artisans, are admitted to testify to the names used in trade to distinguish them. Two Hundred Chests of Tea, Smith, Claimant, 9 Wheat. 439, 440; Barlow v. The United States, 7 Peters, 409, 410; United States v. One Hundred and Twelve Casks of Sugar, 8 Ib. 277.

It may be, that beside the general trade meaning, certain terms may have acquired, in application to insurance in it, a customary meaning, far more inclusive than the ordinary trade meaning of them ; so that, to illustrate by the trade in question, “ bar-iron ” may include “ bundles of rods,” or “ sheet-iron” may include “ boiler-plates,” or the like, as in the cases cited on the part of the defendants from Park on Insurance, “ corn,” in the common memorandum, was construed by custom, to include “ pease ” and “ beans.” This may certainly be proved by the custom of adjusting losses under such policies as in those cases it was proved; and can only be proved by persons accustomed to insure, and procure insurance, and to adjust losses under policies upon such subjects. To prove such- a custom in the adjustment of losses, the witnesses need not be necessarily persons engaged in the iron trade; but insurers and insurance brokers would be quite as admissible as witnesses, because from their business, quite as likely to be cognizant of the custom, as iron merchants accustomed to procure such policies, and to receive losses under them. , Now, as we learn from the allowance of the judge who tried this cause, testimony from the trade, to ascertain the meaning of these disputed terms, as used in the several branches of it, and from insurers and merchants, insuring and procuring insurance on iron, to ascertain the meaning of these terms in the usual or general language of trade and business, was allowed on both sides to pass to the jui-y. We deem this, to say the least of it, sufficiently liberal to the defendants; and that they have no cause to complain of the rulings of the court in these particulars. •

Had, indeed, the defendants offered evidence of a custom amongst insurers and merchants, in the adjustment of losses-under policies on iron, to treat “ bundles of rods ” as “ bar-iron,” within the clause of the policy exempting insurers from liability for partial losses on the latter, and having thus laid a sufficient basis for the request, asked the court to instruct the jury, that if they found that notwithstanding the general distinctive meaning of these terms in the trade, they had acquired from such custom, amongst insurers and merchants procuring insurance, an identical meaning, and that in such case the particular meaning so proved, must prevail over the general trade meaning of the terms, the instruction would have been given, or if refused would have been cause for a new trial. We do not understand however, that any such evidence was submitted to the jury, or that any such request was made. The court was, in substance, asked to exclude the testimony of retailers and workers in iron, as to the meaning of “bar-iron ” and “ bundles of rods,” in the trade, and to admit exclusively the testimony of insurers, and merchants procuring insurance on iron, to their understanding of the meaning of “bar-iron” in the clause of the policy in question, as distinguished from a customary meaning attached to the term in the clause derived from the actual adjustment of losses imder it. We see no propriety in the admission of such testimony at all; and certainly none in the exclusion of testimony to the meaning of the term “bar-iron,” as used in the trade, de-' rived from persons engaged in any branch of the trade.

Two questions, one relating to the proof of the extent of the loss, and the other, what extent of loss on “ bar-iron ” is necessary to subject the defendants, within the meaning of the policy, remain to be considered.

We are asked to set aside the verdict, because the court refused to instruct the jury, that the plaintiff was concluded from claiming any greater partial loss against the defendants than the percentage at which his damage was appraised at the New York custom-house, upon the application of his agent for a remission of duties proportioned to the loss sustained; he having accepted the remission of duties in that proportion. We cannot see the ground of such an estoppel; how the defendants have been injured by the plaintiff’s acceptance of a remission of duties upon the basis referred to, or upon what principle they can claim, that it conclusively establishes the rule of ascertaining, as against them, the amount of the partial loss under the policy. The most that they can ask from it, is the privilege, which they have probably exercised, of commenting upon it before the jury as an- admission of the plaintiff, to be gathered from his conduct, as to the limited degree of the damage done to his property.

The remaining question is, however, clearly with the defendants ; and if the jury had not specially found that “ bundles of rods ” were not “ bar-iron,” the ruling of the court upon the construction of the clause excepting “ bar-iron ” from any partial loss, would have entitled the defendants to a new trial. As we construe the clause, “ bar-iron,” together with the other articles enumerated with it in the first portion of the proviso,’ is insured against no partial loss whatever; and the court erred in-qualifying this first portion of the proviso by the words “ unless the same^ amount to twenty per cent, &c.” which qualify exclusively the exception from partial loss of hemp or flax. As the jury have found, however, this error could not have injured the defendants, and cannot be allowed to disturb the verdict.

For these reasons this motion must be overruled, with costs, and judgment rendered on the verdict.