or place require proof before they will be recognised as binding. "Particular usage," said Lord Holt, "not being of the general custom of merchants, forms no part of the mercantile law, and yet may be an accepted term between two persons who fix what is undetermined by their contract with regard to the particular trade wherein the usage prevails" (k). To entitle a particular trade custom to judicial sanction, it must be shown to be reasonable, general, and notorious in the branch of trade to which it appertains, and one which is not at variance with the plain words of the contract. If the custom conforms to these conditions, judicial cognizance will be taken of it (7); but, if it does not conform to each and all of them, it will be disapproved, unless made a term of the contract by agrecment between the parties (m). Upon satisfactory evidence of assent by the parties, whether express or implied, to a particular usage of trade, the Courts will construe the contract in accordance with such usage, though it be at variance with legal principle; but in the absence of proof of assent to the usage, the contract will be interpreted in strict accordance with the law (n). In a previous part of this work (0), it has been shown how, before judicial cognizance was taken of the contract of marine insurance, a body of rules had been formed by those engaged in the business for their mutual guidance, which eventually became known as the "Custom of Lloyd's." By this expression was denoted the established usage adopted by the underwriters at Lloyd's and elsewhere in conducting their affairs; as, for example, the custom of deducting one-third "new for old" from the cost of repairs to damaged vessels. At a time when the rudiments of the law of marine insurance had scarcely been developed, the usage of Lloyd's Coffee House was in full force, and constituted an unwritten law by which the parties (k) In Methulier's Case, see Maclachlan on the Law of Merchant Shipping, p. 359, n. (1) Stephens v. The Australasian Marine Insurance Co., L. T. Rep. v. 27, p. 585. (m) Stewart v. The West Indii & Pacific Steamship Co., L. T. Rep. v. 27, p. 823. (n) Bartlett v. Pentland, 10 B. & Cr. 760. (0) The Introduction. to the contract held themselves bound. The underwriters expressly signified their assent to the rules and customs previously observed in relation to the contract of insurance by the following words, which appear in the common form of policy: "And it is agreed by us the Insurers, that this Writing or Policy of Assurance shall be of as much Force and Effect as the surest Writing or Policy of Assurance heretofore made in Lombard Street, or in the Royal Exchange, or elsewhere in London." The Usage of Lloyd's has been held to be that of "a particular place, or of a particular class of persons" (p), and is accordingly governed by the rules applicable to particular usage. When the subject of marine insurance was first brought within the jurisdiction of the Common Law, the Courts had of necessity to turn for guidance to the rules and customs prevalent among merchants. Accordingly, we find that, in the time of Lord Mansfield, when the foundations of the system of the law of marine insurance were laid, great deference was paid by the judges to the usage of Lloyd's, and the law was to a large extent formed out of the materials which were found ready to hand in that usage. When, however, the structure of the law began to assume definite and harmonious proportions, usage was subjected to a keener scrutiny before it was pronounced admissible; and from time to time many alleged customs have been repudiated, on the ground that, either they were unreasonable, at variance with the express terms of the policy, or their universality not sufficiently attested. The Customs of Lloyd's have thus to be tried by the same tests which are applicable to other particular mercantile usages in order to determine whether they are of binding authority as between the parties to the contract of insurance. It is to be observed, in conclusion, that the Courts, in adjudi (p) Bartlett v. Pentland, 10 B. & Cr. 760. cating upon questions of general average, have drawn a marked distinction between mercantile usage and the practice of average adjusters, intended to give effect to the law, and altering from time to time to conform to legal decisions, which practice does not possess the characteristics of a usage of trade, though merchants, shipowners, and underwriters may have conformed to it on the supposition that it was agreeable to law (q). At the same time, if the practice of British average staters is made an express term of the contract, all parties will of necessity be bound by it (~). If the meaning of an exception from the terms of the policy be ambiguous, it will be construed against the underwriter, on the ground that it devolves upon the latter to express in plain and unmistakeable language any provision inserted for his protection (s). Clauses extending the provisions of the policy in favour of the assured are cumulative and not restrictive, i.e., they cannot be construed so as to deprive the assured of any right which he would have possessed under the ordinary terms of the policy, irrespective of the additional clauses introduced for his benefit (t). III. THE NAME OF THE ASSURED. Be it known that as well in own Name as for and in the Name and Names of all and every other Person or Persons to whom the same doth, may, or shall appertain, in part or in all, (9) Attwood v. Sellar, 4 Asp. Mar. L. C. 289; Svendson v. Wallace, 4 Asp. Mar. L. C. 550. (r) Stewart v. The West India & Pacific Co., 2 Asp. Mar. L. C. 32. In this case, which was an action upon a bill of lading, it had been stipulated that average, if any, "should be adjusted according to British custom," which was understood to mean the practice of British average adjusters. (s) Duer on the "Law and Practice of Marine Insurance," p. 161. (t) Hagedorn v. Whitmore, see Arnould on Insurance, 5th ed., p. 805. doth make assurance and cause and them These are the opening words of the policy. They express the purport of the contract, and set forth the name of the assured or his agent, which is to be inserted in the blank space immediately following the words "Be it known that." There are several points of importance to be observed in filling up this part of the policy. In the first place, it is imperative that some name should be inserted, policies "in blank" being void at law. An enactment to that effect was made in the year 1787, and is still in force (u). It was provided by the same Act, that the name inserted must be either "the name or names, or the usual style and firm of dealing" of " one or more of the persons interested," or of "the consignor or consignees of the property to be insured," or of the person or persons who give or receive the order to insure. This enactment has been construed very liberally by our Courts, and is now practically reduced to a prohibition against policies"in blank” (x). All persons, whether British subjects or foreigners, possess the right to protect their property by insurance, except alien enemies, i.e., subjects of a foreign state at war with this country (y). The reason for this exception is, that it is considered impolitic, on public grounds, to permit subjects of the Crown to make good losses sustained by an enemy's commerce, and thus to give one class of citizens an interest on the side of the enemy (2). It is, therefore, an understood condition of insurances upon foreign property, that they do not cover any loss which may happen while hostilities are being carried on between the respective countries of the assured, and the underwriter. The words which immediately follow the blank for the insertion of the name of the assured serve a double purpose: (u) 28 Geo. III., cap. 56. (y) Ib.. they specify the nature of the contract, and provide for the contingency of the policy being executed in the name of an agent. With respect to the latter point, it is to be observed that the clause is so framed as to enable any person in whom an insurable interest "doth, may, or shall appertain" in the subject insured to take advantage of the insurance, though the policy may have been made in another person's name. It is not, however, to be inferred from this elasticity of the contract that it attaches to the subject insured as an incident, so that, if the property changes hands, the policy will accompany the transfer; for insurance is a contract which is always presumed to have been made for the protection of a specific interest, and while it may be applied to whatever interest it was intended to cover, it cannot be extended to embrace an interest lying without the scope of the original intention. For instance, a policy of insurance on freight was made by the charterers of a vessel on behalf of the owners; and, although the fact of this insurance having been made did not come to the knowledge of the shipowners until after a loss had taken place, it was held that they were still entitled to ratify and take the benefit of the policy (a). On the other hand, where a policy was effected on behalf of the owners of a cargo, and the latter sold the cargo without expressly assigning the contract of insurance along with it, it was held that the buyers could not take advantage of the policy to recover a loss which had subsequently happened, though some time after loss the policy had been assigned to them by the original assured (b). As already stated, it is not essential to the validity of an adoption of the policy that it should be made prior to loss. A policy in the usual form was effected in London through a broker for the benefit of a foreign merchant, who had given no instructions to insure, and who took no steps to adopt the policy for nearly two years after a loss had occurred, when he wrote (a) Williams v. The North China Insurance Co., 3 Asp. Mar. L. C. 343; see also Routh v. Thompson, 13 East, 274; and Hagedorn v. Õliverson, 2 M. & S. 485. (b) North of England Pure Oilcake Co. v. Archangel_Maritime Insurance Co., L. R. 10 Q. B. 249. |