stamp acts. that the plaintiff could not recover on the policy as altered; Alterations in the policy, as and the plaintiff thereupon brought an action upon the policy affected by the in its original form, the court held he could not recover on that either. (m) Lord Ellenborough said, "That the altered policy, though ineffectual as an instrument to sue on, was effectual to do away with the former agreement, which was thereby abandoned” (n); and Mr. J. Le Blanc asks "how the court can enforce an agreement, after the parties themselves, upon the very face of the same instrument, have declared that it is not their agreement, and have actually written another and a different agreement in the place of it." (o) It makes no difference whether the altered agreement is written on the back or the face of the original policy. (p) (m) French v. Patton, 9 East, 351. (*) Ibid. 3.55. (0) Ibid. 357. (p) Reed v. Deere, 7 B. & C. 261. 64 The prin CHAP. III. OF THE CONSTRUCTION OF THE POLICY. § 41. The principles which govern the construction of struction appli- policies do not vary from those which are applicable to all ciples of con cable to policies, mercantile con- Though the extreme am other mercantile instruments. Where the terms of the policy are dubious, or employed with reference to the usages of trade, the meaning of the contract may, nay, must be explained by parol evidence of those usages, which in such case form the only available key to the real intention of the parties. Where, however, the terms employed are clear and precise in themselves, no evidence of any usage or custom can be admitted to explain, to alter, or impair them. A notion appears at one time to have prevailed that policies of insurance formed an exception to the rules of construction generally applicable to all mercantile contracts, and were to be construed solely with the view of carrying out the intention of the parties, irrespective of the terms in which they more frequent had expressed their intentions on the face of their contract. (a) biguity of the language in which policies are expressed, leads to the necessity of a reference to extrinsic evidence in their case than in that of other instruments. This notion most probably arose from the extreme ambiguity of the terms employed in the common forms of policy, which required a constant reference to usage in order to explain them: where so many clauses were doubtful, it seems to have been considered that none could be clear; and a rule of construction only applicable to those portions of the policy which would be unintelligible, without reference to usage, was extended to those, the meaning of which was too clear to admit of a doubt. It was also hardly sufficiently borne in (a) Thus in Newman v. Cazalet, in Long v. Allen, he even goes so far as to say, that usage not only explains but controls the policy. Park, p. 797. 8th ed. policy. mind, that the rules of construction which might be fairly of the conapplied to the common printed clauses of the policy, which struction of the were not the immediate terms selected by the parties themselves for the expression of their meaning, were less appropriate for the interpretation of those written clauses and stipulations, in which the parties may reasonably be considered to have employed the language best adapted for the explanation of the objects they had in view. The notion thus alluded to, is now discarded as erroneous; and the true rule of construction is, that if the clauses of the policy are in themselves clear and unambiguous, the courts cannot admit parol evidence to contradict, to vary, or explain them. If, on the contrary, they are obscure and ambiguous, the courts may resort to any means of explaining them which may be supplied either by the rules of the common law, the general usages of trade, or the particular circumstances of the case. (b) "The same rule of construction," said Lord Ellenborough, "which applies to other instruments, applies equally to this, viz. that it is to be construed according to the sense and meaning, as collected in the first place from the terms used in it, which terms are to be understood in their plain, ordinary, and popular sense, unless they have generally, in respect to the subject matter, as by the known usage of trade or the like, acquired a peculiar sense, distinct from the popular sense of the same words, or unless the context evidently points out that they must in the particular instance, and in order to effectuate the immediate intention of the parties, be understood in some other special and peculiar sense." (c) The true principle of construction as applied to policies. Rule as laid down by Lord Ellenborough, in Robertson v. French. § 42. In the development of these principles the following Rules of rules of construction have been acted upon by our courts: construction derived from this principle. Of the con policy. I. Every wellsettled or generally known usage of trade considered to form part of the policy. RULE I. Every usage of a particular trade which is so well struction of the settled, or so generally known, that all persons engaged in that trade may fairly be considered as contracting with reference to it, is considered to form part of every policy, designed to protect risks in such trade, unless the express terms of the policy is primâ facie decisively repel the inference: nor need any evidence be given in such cases, that the usage has been communicated to the underwriter; for, as Lord Mansfield says, "every underwriter is presumed to be acquainted with the usage of the particular trade he insures; and if he does not know it, he ought to inform himself." (d) The description of the voyage in the policy, is an express reference to the usual manner of making it, as much as if every circumstance were mentioned" on the face of the instrument. (e) Thus, where it had been the universal custom for many years in the China trade, for all European ships, while at Canton, to store all their rigging and furniture in storehouses, built for that purpose on sand banks in the Canton river, and called BankSauls, it was held that every underwriter insuring a risk in the Canton trade, must be considered to have done so with reference to this usage; that the storing of the rigging in the bank-saul must be deemed to have been quite as much part of the course of the voyage insured, as though it had been expressed so to be in the policy; and that the underwriter was, therefore, as much liable for a loss by fire happening to the rigging so stored, as for any similar loss occurring in any other part of the voyage. (ƒ) Usage of the Pelly v. Royal Exch. Ass. 341. Rigging, &c. burnt in a bank-saul, on the Canton river. Usage of the v. Hopkins, It was the uniform and well known practice of the East trade, Salvador India Company, to reserve in their charter-parties the liberty of employing the vessel in what is called the country trade, that is, on intermediate voyages from one port to another in India. All parties engaged in this trade were taken to be 3 Burr. 1707. (d) Lord Mansfield, in Noble v. Kennoway, 2 Dougl. 513, per Lord Ellenborough in Da Costa v. Edmunds, 4 Campb. 143. v. Royal Exch. Ass. Comp., 1 Burr. 341. (f) Pelly v. Royal Exch. Ass. Comp., 1 Burr. 341. Brough v. (e) Per Lord Mansfield, in Pelly Whitmore, 4 T. Rep. 206. fully cognisant of this usage: accordingly, under policies on ships employed by the Company, though nothing was said of an intermediate voyage in the policy, yet, because the voyage insured was known by the underwriter to be an East India voyage, the courts held that he must be presumed to have contracted with reference to all the known usages of the East Indian trade; and, therefore, that the construction of the policy should be the same as if liberty had been expressly reserved on the face of it, to make such intermediate Voyage. (g) In the Newfoundland trade, where the main object of the voyage is to take fish, it is a well known and universal usage that the cargoes insured on such voyages, being chiefly salt and provisions, are taken out as they are wanted, and not landed, like other cargoes, on arrival; on such voyages, therefore, it has been held that the underwriter, who must be taken to have insured with full cognisance of this usage, cannot exempt himself from liability for a loss upon the goods, which has not taken place until long after the time when, but for such custom of the trade, his liability under the mere terms of the policy would have been at an end. (h) Another usage foundland trade, Vallance of the New v. Dewar, It is also a well understood and familiar usage of the Newfoundland trade, that the ships engaged in it, after their arrival at Newfoundland, make intermediate voyages from one American port to another, before beginning to load a cargo on the homeward voyage. It has been frequently held that underwriters, who had insured homeward cargoes on Intermediate ships engaged in this trade, were bound to know this usage; and not entitled to contend that such intermediate voyages vitiated the policy, by varying the risks they had intended to insure. (i) The risk on ship and goods, generally speaking, only commences at the very port or place named in the policy, as voyages. Usage governs ment and the commence termination of the risk. |