Fulton Ins. v. Milner, Tinsley & Co.

LIGON, J. The first assignment of error was not insisted upon, either in the argument or brief of the counsel for the appellants. It must, therefore, be considere as waived.—Van [427] Eppes v. Smith, 21 A. R. 317; Cunningham v. Carpenter, 10 A. R. 109. The second arises upon the second charge given by the court below, in relation to the rule by which partial losses on valued policies of insurance are adjusted by the custom in the city of Mobile. The evidence fully justified the court in submitting the question of the existence or non-existence of this custom to the jury in the manner in which it is presented by the charge, and in saying to them that, if they found the custom to exist, it must govern their action in assessing the damages. The general law regulating the assessment of damages under such policies, even if it differed from this custom, must give way to it, if it is shown or may fairly be presumed that the parties contracted in reference to the custom, and not to the general law. It is conceded that this policy was made in the city of Mobile, and that both the appellant and appellee do business in that city ; and the proof, as shown by the bill of exceptions, is, “ that by the custom of insurers and insured in Mobile, partial losses on closed policies are adjusted by paying the difference between the sales price of the injured article, and the price stipulated in the policy.” The only legitimate inference from this proof (if indeed the language is not too plain to require an inference to be drawm) is, that this rule was known to and governed the action of all insurers and insured persons in the assessment of damages in cases of partial loss on valued policies, when the contract of insurance was made, and the owner of the goods resided -in the city of Mobile. In the absence of fraud in the valuation in the policy, or in the sales of the damaged article, the parties to this contract are bound by this usage; and it is shown in this case that both the valuation and sales were fair. Under such circumstances, the insurer will not be allowed to repudiate a custom in reference to which he is presumed to have contracted, and under which the insured had a right to expect that his loss, if any occurred against which he was protected by the terms of the policy, would be adjusted and settled. To give validity to a usage of this kind, it is not necessary that it should extend to the whole State; if it is generally [428] known and acted upon in the port, city or town in which the policy is given, it will be sufficient. In his work on Insurance, Judge Duer uses, in reference to such usages, this language ’. “ The proposition that a usage must be general, in order to bind the parties, refers exclusively to the cases in which the knowledge of the parties and their intention to adopt the usage are inferred merely from the fact of its existence; but when their knowledge, or intentions, are established by other direct or circumstantial proof, their contract will ho governed by the usage, however local or partial, in reference to which it is proved or presumed to have been made. Thus, the use and practice, as between themselves and the assured, even of a single insurance company, will be binding, not only in all cases upon the company, but upon all such persons as have been in the habit of effecting policies in their office. So, by parity of reasoning, a local usage of trade may be binding upon insurers who have frequently made insurances to which the usage would apply; and however local or partial may be the usage, the insurers will bo hound, in all cases, when the intention to follow it was expressly communicated, and the policy was founded upon that representasion.” — 1 Duer on Ins. 208 §57- Again; the same author, in speaking of general usages as applicable to the persons who recognize and adopt them, and to the ports in which they prevail, concludes hi3 remarks with this expression: “ It is not meant, for example, to deny that the insurers are bound in all cases by a usage generally followed and notorious, of the port in which they reside, however widely it may differ from the general usage of other ports engaged in the same trade. Their residence, -where the usage, although local, is otherwise valid, would doubtless be deemed sufficient evidence of their knowledge.” — -1 Duer on Ins. 261 § 55, and authorities there cited. If the usage is purely local, still, if notice of its existence is brought home to the parties, they will be bound by it, and unless otherwise provided in the policy itself, it will form a part of the contract of insurance, and be looked to by the courts in settling rights arising under it. — 1 Arnould on Ins. 71 § 43, and authorities cited. In this case, the usage referred to in the charge of the court is shown to be not only general, but universal, both with insu [429] rers and insured in the city of Mobile; for the language of the bill of exceptions, setting out the evidence, is subject to no other legitimate construction ; and as the parties do business in that city, and this policy was effected there, they must be presumed to have known of its existence, and to have contracted in reference to it. This view of the case is decisive of it, and renders it unnecessary for us to examine it in all the aspects in which it has been presented in the briefs and arguments of counsel. It is insisted, however, that the custom is repugnant to the terms of the policy, because the policy contains a stipulation that unless the damage to the tobacco exceeds 15 per cent., then the insurers are to pay nothing; and that under the calculation required by the custom, no per centum of loss can be ascertained. This by no means follows; for, when the damaged sales are subtracted from the value in the policy, the rate per cent, which the sum so obtained bears to the sum in the policy may be ascertained by a mere arithmetical calculation, and if it exceed the rate of 15 per cent., then the insurers must pay the whole loss ; if it be less than that rate per cent., they pay nothing, inasmuch as the owners were their own insurers if the damage was not greater than that sum. There is no error in the record, and the judgment must be affirmed.