Sect. 53.

Rescission of contract.

or to be renewable for a further period of time, unless determined by notice (h).

54. The rescission of the contract must be the act of both parties to it, the assured and the insurer. The insurance broker, acting for the former, has no implied authority, merely by virtue of his capacity as such agent, to demand or consent to the cancellation of the policy, even though it had been left in his hands (¿). But the conduct of the principals in this matter may be so ambiguous that their intention may become a question of law for the Court upon the construction of their written communications, or a question of fact for a jury upon consideration of what was said and done between them (k).

A vessel insured against fire for twelve months, ending the 29th of July, arrived at Liverpool on the 12th of April, and the assured wrote a letter to the insurance broker, proposing a cancellation of the policy and return of premium, “say from the 12th of April." The other sent for the policy "to put forward returns for cancellation," and received it. On the 21st of April the broker cancelled it on the terms of returning premium from the 30th April to the 30th July, alleging a custom of insurance brokers not to reckon broken months. The ship was burnt on the 22nd April, and that same day the assured wrote a letter, withdrawing his proposal to cancel, as he had then received no answer: and whether, under these circumstances, there had been a cancellation, and on what terms, was the question. It was held that the broker, by sending for the policy on receipt of the proposal to cancel, must be taken to have acceded to the terms proposed, and to have cancelled on those terms. The plaintiff therefore lost the insurance, and recovered the differ

(h) A policy cannot, of course, be prolonged so as to cover a period of more than one year. Stamp Act, 1891, ss. 93 (2), 96. See Charlesworth v. Faber (1900), 5 Com. Cas. 408, and post, s. 440.

(i) Xenos v. Wickham (1866), L. R. 2 H. L. 296; in the Ex. Ch. (1865), 14 C. B. N. S. 435, 449, 463; see also Russell v. Thornton (1859), 4 H. & N. 788.

(k) Ionides v. Harford (1859), 29 L. J. Ex. 36.

ence on the return of premium for the period between the Sect. 54. 12th and 30th April (7).

A policy on ship from Liverpool to Philadelphia and United Kingdom was altered by memorandum substituting Baltimore for Philadelphia, and was afterwards further altered by this memorandum: "In consideration of an additional premium, it is hereby agreed to allow the vessel to go to Antwerp." In this state of the policy, the ship arrived at Antwerp and was ordered to Leith, but was lost on her way thither. It was held that she was uninsured at the time of the loss, as the effect of the second memorandum was to terminate the risk at Antwerp (m).

(1) Baines v. Woodfall (1859), 6 C. B. N. S. 657; 28 L. J. C. P. 338.
(m) Stone v. Marine Ins. Co. Ocean, Ltd, of Gothenburg (1876), 1 Ex. D. 81.

VOL. I.

F

The principles

of construc

tion applic

able to wa policies are

the same as

those applied

to other mKEcantile con tracts.

Evidence of usage.

SECT.

.55-61

Ceage must be notorious, &c. .62-66

Explanation of Ambiguities in
Contract

.....67-72 Written and Printed Clauses..73, 74 Inexplicable Ambiguities...... 75

55. THE principles which govern the construction of seapolicies do not vary from those applicable to all other mercantile instruments.

The language of sea-policies is frequently indeterminate, ambiguous; or technical. When this is so, parol evidence, as in the case of other contracts, is admissible to explain it. The language of sea-policies is also frequently incomplete as an expression of the meaning of the parties, because it is employed, and is understood so to be, with reference to the usages of trade (a): in this latter class of cases (and they are very numerous) the meaning of the contract embodied in a Bea-policy may, nay must, be explained by parol evidence of those usages, a knowledge of which in such cases forms the only available key to the real intention of the parties (b).

In this class of cases, even where the language of the policy is on the face of it unambiguous, yet, as without reference to the usage, the mere terms employed would not be a complete expression of the mind and intention of the contracting parties, evidence of usage, if not repugnant to the express terms of the instrument, is always admitted to show what the true nature

(a) I.e., as Judge Duer very correctly expresses it, "not of trade in the largest sense of the word, but of that export and import trade which is

conducted by navigation." 1 Duer,

180.

(b) Mason v. Skurray (1780), 1 Marsh, 226; 1 Park, 253.

of the contract, as mutually understood by the parties, really Sect. 55.

was.

In such cases, in the language of Lord Mansfield, "the question is, whether the usage has not explained the generality of the words. If it has, every man who contracts under a usage does it as if the point of usage were inserted in the contract in terms" (c).

56. From the frequency, probably, of such cases as those just referred to in this branch of the law, a notion appears at one time to have prevailed (favoured unquestionably by certain

interpreting policies. Thus, in "Preston v. Greenwood (1784), 4 "Dougl. 28, Lord Mansfield says: "Usage is always considered in 66 6 policies of insurance, even where "the words are plain;' and Buller, 66 'J., in Long v. Allen, ibid. 276: "In policies of insurance in par"ticular, a great latitude of con"struction as to usage has been "admitted;' and again (which is "the strongest expression on the "" subject to be found in the books): "Usage not only explains but con"trols the policy.' Judge Duer "considers Buller, J., strictly accu"rate in the use of the word control,

"preted are indeterminate or
"ambiguous, the usage explains
"them; but when they convey a
"definite meaning that the Court
"would be bound to adopt, or their
"construction has been settled by
"law, the usage controls them; and
"in these cases it does set aside
"what, judging only from the
"terms of the policy or the rule
"of law, was the plain intention
"of the parties; but, in controlling,
"the usage does not contradict the
"words, it merely varies, by re-
"straining or enlarging, their appli-
"'cation.' Duer, vol. i. pp. 245,
246."

This note is retained by the pre-
sent editors because of the high
authority from which it emanates.
It is, however, impossible not to feel
the force of Phillips' criticisms (in
s. 133) on Duer's explanation of the
word "control." If the word means
no more than to "interpret," or
"explain," then clearly a usage
which "controls" the policy does
not necessarily contradict it; but
understanding the word in the sense
in which Judge Duer evidently under-
stood it, it is difficult to see how a
usage which "varies, by restraining
or enlarging," the application of
words does not pro tanto contradict
them.

Sect. 56. reported expressions of the earlier judges) that sea-policies were not amenable to the rules of construction generally applicable to all other mercantile contracts, but were to be interpreted so as to carry out the assumed intentions of the parties, even though repugnant to the terms in which their intentions purported to be expressed on the face of the instrument itself.

This notion is now discarded as erroneous (d). Parol evidence, whether of usage or otherwise, can in no case be admitted to contradict or materially vary the plain and express terms of a sea-policy (e); it can only be admitted either to explain those terms where technical or ambiguous, or to modify and add to them where they are plainly employed with reference to some usage of trade, and without such reference would, accordingly, be incomplete as an expression of the mind of the parties contracting: in such cases the Courts may resort to any means of interpreting the policy so as to effectuate the real intention of the parties, which may be supplied either by the rules of the common law, the general usages of trade, or the particular circumstances of the case (ƒ).

(d) Weston v. Emes (1808), 1 Taunt. 115.

(e) The case, however, of Universo Ins. Co. of Milan v. The Merchants' Marine Ins. Co., [1897] 1 Q. B. 205; 2 Q. B. 93, is difficult to reconcile with this rule.

(f) See 1 Emerigon, c. i. s. 5, p. 17; and c. ii. pp. 55, 56; see the judgment of Lord Denman in Trueman v. Loder (1840), 11 A & E. 589; and that of Story, J., in The Schooner Reeside, 2 Sumn. 567; see also the admirable remarks of Mr. Chancellor Kent (Com. iii. p. 260, n. (ƒ)); and especially the two very able and elaborate chapters of Judge Duer (1 Duer, 158-311). "The meaning of the rule excluding parol evidence is, that such evidence shall

never be received to show the intention of the parties to have been directly opposite to that which their language expresses, or substantially different from any meaning which the words they have used upon any construction will admit or convey; but there are cases in which the language of a policy, in entire consistency with the rules of law, may be interpreted in different senses, or with a modification which, though not express, is implied in such cases parol evidence may be admitted to determine the construction that, following the intention, ought to be adopted. The admission of such evidence varies the construction of the contract, but does not contradict or vary the agreement embodied in the policy; on the con

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