Howard v. Great Western Insurance

109 Mass. 384

Opinion

Chapman-, C. J.

*

The plaintiff admits that the burden is on him to prove that the article loaded was known in commerce as a different article from that which was bought and sold as coal. But this leaves open the question as to what this difference must consist in. Sometimes there is a difference in the mere name; for the same article often has different names in different places. Articles may also be different as to one class of dealers, while they are the same as to other classes. If for example there had been a warranty against carrying cotton cloth, it would as to an insurer include all cloths made of cotton; while at .a retailer’s shop calico, gingham, muslin, and a variety of other goods, which consist of cotton cloth, would never be called for by the name of cotton cloth, nor would they be sold by merchants under that name. Or lead may be run into moulds resembling images, for the purpose of avoiding duties, while it remained mere lead as to an insurer. So if coal were broken by a patented machine, and thereby had a peculiar shape, it might well be called “ patent fuel,” though it should be the same to the insurer and the method of breaking it constituted its only material peculiarity. Illustrations of this character might be multiplied; and they make it apparent that further inquiries than those relating to the difference of the appellation of the article are pertinent.

It was proper to inquire into the materials of which “ patent fuel ” was originally composed, the process of manufacture, and the substance and character of the finished article, in order to ascertain whether there was any difference material to a contract of insurance. The statements of a witness acquainted with its composition and mode of preparation, and its constituent parts as a manufactured article, were properly admitted.

Under the rulings, the jury must have found that patent fuel was coal, in the sense in which that term was used in the policy; with no change in its character, except that it was put into blocks for convenience of freighting, handling and use; so that it was not different from ordinary coal, with reference to the perils of the sea and the importance of not loading ; with it beyond the registered tonnage.

The jury were instructed that the plaintiff might show that it was not coal, by showing that its character had been so changed, either by other ingredients than coal, or by the process to which it had been subjected, that the general term coal, according to the common understanding of that name, would not apply to it, or by showing that by commercial usage the article was known, regarded and dealt with as an article distinct from coal, and not included in the general term coal. But a commercial usage, in order to have that effect, must be not merely a local usage, existing and known only at Cardiff, but must be shown to have been known to the parties at the time the contract was made; or to have been at that time so generally known, that the parties may be fairly presumed to have made their contract in view of its existence. And the court declined to instruct the jury according to the plaintiff’s request, that whether “ coal,” as used in the pol icy, includes “ patent fuel,” or whether patent fuel and coal are the same or different articles, is to be determined under this policy by the usage at the port of lading, namely, Cardiff.

In contracts of a commercial nature, a reference to usage is implied. Clark v. United Insurance Co. 7 Mass. 365, 369. When the meaning of a word, used to designate an article of trade, is to be fixed by proof of mercantile usage, it may be by the usage of the trade among merchants dealing particularly in that article. Underwriters insuring by certain words are bound to know the mercantile meaning of the words, and are liable according to that meaning. Astor v. Union Insurance Co. 7 Cowen, 202. The presumption is, that they mean to deal according to the general usage, if any exists, in relation to the subject matter. It may be local, but must be in force among persons engaged in the trade. Thus it was held that the word “ outfits,” as applied to a whaling voyage, may acquire by usage a peculiar local meaning, but, if limited to Hew Bedford only, the usage is not admissible to affect the construction of a policy. Macy v. Whaling Insurance Co. 9 Met. 354, 363.

When a local usage at a particular port grows out of the peeul iar situation or circumstances of the place, such for example as a peculiar method of managing a vessel, or taking in or discharging a cargo, some of the cases go to show that the insured makes his contract with reference to what it may happen to be, though he knows nothing about it. But in this case the article called patent fuel has long been prepared by a process which enables proprietors of coal mines to use their fine coal. And its use has extended to different parts of England, and to countries beyond the sea. A usage, relating to the character of such an article as an article of commerce, in order to affect the construction of a policy of insurance, should be known beyond Cardiff, and known so generally that the parties may fairly be presumed to have made their contract in view of its existence.

Exceptions overruled.

Gray, J., did not sit in this case.