be insured by the lender, it has been required to be insured eo nomine, and not under the general description of goods. But this rule was originally adopted on the ground of mercantile usage; and where the usage was

shown to be different, such an interest was al*260 lowed to be covered by a policy on goods.

If

any of the terms used in a policy, or representation made to the insurer, have, by the known usage of trade, and the practice, as between the insurers and the insured, acquired an appropriate or commercial sense, they are to be construed according to that sense. All mercantile contracts, if dubious or made with reference to usage, may be explained by parol evidence of the usage. But the rule is checked by this limitation, that the usage, to be admissible, must be consistent with the principles of law, and not go to defeat the essential provisions of the contract.d If part of the policy should be

• Glover v. Black, 3 Burr. 1394. Robertson v. Union Ins. Company, 2 Johns. Cas. 250. Kenny v. Clarkson, 1 Johns. Rep. 385.

Gregory v. Christie, 1 Condy's Marshal! on Insurance, 118.

• Coit v. Com. Ins. Company, 7 Johns. Rep. 385. Allegre v. Maryland Ins. Company, 6 Harr. & Johns. 408. Robertson v. Clarke, 1 Bing. 445. Renner v. Bank of Columbia, 9 Wheat. 591. Columbia Ins. Company v. Catlett, 12 ibid. 383. Hancock v. Fishing Ins. Company, 3 Sumner, 132.

d Palmer v. Blackburne, 3 Bing. 61. Bryant v. Com. Ins. Company, 6 Pick. 131. Rankin v. American Ins. Company, 1 Hall's N. Y. Rep. 619. No particular usage or custom can be admitted to alter or impair a clear and express written contract of the parties. The evidence of usage can only be admitted when the intention of the parties is indeterminate, and the language of the contract may admit of various senses. Schooner Reeside, 2 Sumner's Rep. 567. Mr. Justice Story, in that case, and in Donnell v. Columb. Ins. Company, 2 Sumner, 377, thought that usages among merchants ought to be very sparingly adopted as rules of law, as they are often founded in mere mistake, and in a want of comprehensive views of the full bearing of princi. ples. So, Lord Denman observed, in Trueman v. Loder, 11 Adolph. & Ellis, 589, that the cases on the custom of trade go no further than to permit the explanation of words used in a sense different from their ordinary meaning, or the addition of known terms not inconsistent with the written contract, and the court in that case leaned strongly against the appeal to custom to

written and part printed, and there should arise a reasonable doubt upon the meaning of the contract, the

explain or vary written contracts. The general rule on this subject of the admission of parol evidence to explain, by custom and usage, the meaning of the parties, is, that if the words used in the contract be technical, or local, or generic, or indefinite, or equivocal, on the face of the instrument, or made so by proof of extrinsic circumstances, parol evidence is admissible to explain by usage their meaning in the given case. If there be no such ingredient of uncertainty, then the evidence is not admissible. This seems to be the

result of the decisions on the subject. Yeates v. Pyrr, 6 Taunton's R. 445. Blacket v. The Royal Exchange Ins. Co., Cromp. & Jervis' R. 244. Fowler v. The Ætna Ins. Co., 7 Wend. 270. Dow v. Whetten, 8 Wend. 160. Astor v. The Union Ins. Co., 7 Cowen, 202. Coit v. The Comm. Ins. Co., 7 Johnson's R. 385. A particular word, say the Court of Exchequer, in Mallan v. May, 13 Meeson & Welsby, 511, may be shown by parol evidence, to have a different meaning in some particular place, trade or business, from its proper and ordinary acceptation. Mr. Duer contends, from a critical examination of the cases, that usage may control or supersede construction or rule of law if the usage be general, uniform, notorious, reasonable and consistent with the terms of the policy, and to a certain extent with the rules of law. A valid usage is part of the contract. Duer on Insurance, vol. i. 255-282, and the Proofs and Illustrations, pp. 283-311. The doctrine for which Mr. Duer contends, is illustrated and enforced with admirable analysis of the authorities, and with surpassing ability and force. Mr. Justice Story even states it as a general rule, that a contract is understood to contain the customary clauses, although they are not expressed, according to the known maxim-In contractibus tacite veniunt ea, quæ sunt moris et consuetiudinis. Story on Bills, 161. In Wallace v. Bradshaw, 6 Dana's Ken. Rep. 385, it was held, that a commission merchant, receiving goods on general consignment from a distant owner, and making advances therefor, might, for his own interest and safety, be authorized, by the usage of the place, in certain circumstances, at his discretion, and for the benefit of himself and the consignor, to ship the goods to a more advantageous market, or one deemed so, especially if a sale at the place would not indemnify him for his advances; and that if such was the known custom of the place, (New-Orleans,) it would be reasonable to sustain the authority. Mr. Duer, in his Treatise on Insurance, vol. i. lectures 2d and 3d, pp. 158-312, gives a lucid and full collection and illustration of the rules of interpretation of policies of insurance under the admission and control of parol evidence and mercantile usage; and to which I refer, as well as to the very able and complete title on the admissibility of parol evidence to affect written contracts, in Professor Greenleaf's Treatise on the Law of Evidence, vol. i. 329-374. In Finner v. Bedford Comm. Ins. Co., 5 Metcalf, 348, it is held, that the rule excluding parol

greater effect is to be attributed to the written words, for they are the immediate language selected by the parties, and the printed words contain the formula adapted to that and all other cases upon similar subjects."

The ancient laws of insurance required the insured to bear the risk himself, of one tenth of his interest in the voyage. This was to stimulate him by a sense of his own interest, to watch more vigilantly for the preservation of the cargo. The Dutch ordinances of Antwerp, Middleburg and Amsterdam, and the Le Guidon, had such provisions. But these provisions have been omitted in all the modern codes, as being odious and useless, and the merchant can have his interest insured to the entire extent of it.

Policies are generally effected through the agency of brokers; and the insurance broker keeps running accounts with both parties, and becomes the mutual agent of both the underwriter and the insured. His receipt of the premium places him in the relation of debtor to the one party, and creditor to the other. The general rule is, that the broker is the debtor of the underwriter for the premiums, and the underwriter the debtor of the assured for the loss. The receipt of the premium in the policy is conclusive evidence of payment, and binds the insurer, unless there be fraud on the part of the insured. If the agent effects an insurance for his principal without his knowledge or authority, and the principal afterwards adopts the act, the insurer is

evidence to contradict or vary a written agreement, applies as well to policies of insurance as to other agreements.

Lord Ellenborough, 4 East, 136. Coster v. Phoenix Ins. Company, C. C. Penn. April, 1807.

2 Magens, 26. 68. Le Guidon, c. 2. art. 11.

• Dalzell v. Mair, 1 Cambp. Rep. 532. Foy v. Bell, 3 Taunt. Rep. 493.

bound, and cannot object to the want of authority.a But if A. insures the property of B. without authority, (and the master of a vessel, merely as master or a part owner, as such, has no such authority,) and without any adoption of the act by B., the contract is not binding. A merchant who has effects of his foreign correspondent in hand, or who is in the habit of insuring for him, is bound to comply with an order to insure, and the order may be implied in some cases from the previous course of dealing between the parties. If the agent neglects or imperfectly executes the order, he is answerable as if he himself was the insurer, and is entitled to the premium.c

If the subject matter of the policy be assigned before loss, the policy may also be assigned, so as to give a right of action to a trustee for the assignee. But if there be no statute provision, (as there is in Pennsylvania,) the assignee in a case of assignment in trust, must sue in the name of the assignor, who will not be permitted to defeat or prejudice the right of action of the assignee. The declaration, in such a suit, may contain the averment that the plaintiff sues as mere trustee, and that the whole interest is in others.e

Bridge v. Niagara Insurance Company of New-York, 1 Hall's N. Y Rep. 247.

b Bell v. Humphreys, 2 Starkie, 345. French v. Backhouse, 5 Burr. 2727. Foster v. United States Ins. Company, 11 Pick. 85.

• Buller, J., in Wallace v. Tellfair, 2 Term Rep. 188, note, and in Smith v. Lascallas, 2 Term Rep. 188. De Taslett v. Crousillat, 2 Wash. Cir. Rep. 132. Morris v. Summerl, ibid. 203. A commission merchant is not bound to insure, for the benefit of his principal, goods consigned to him for sale, without some express or implied directions to that effect; though he has such an interest in the goods, that he may insure them to their full value in his own name. Brisban v. Boyd, 4 Paige, 17.

a 1 Binney's Rep. 429.

* 2 Condy's Marshall on Insurance, 800. 803.805. 1 Phillips on Insurance, 11. Carter v. Union Ins. Company, 1 Johns. Ch. Rep. 463. Wakefield v. Martin, 3 Mass. Rep. 558. Bell v. Smith, 5 Barnw. & Cress. Rep. 188. Ashhurst, J., in Delancy v. Stoddart, 1 Term Rep. 26. Craig v. The United

*(3.) Of insurable interests.

The assured must have a lawful interest subsisting at the time of the loss in the subject insured, to entitle him to recover upon his policy. That interest may be absolute or contingent, legal or equitable. It may exist in him not only as absolute owner, but also in the character of mortgagor or mortgagee, borrower or lender, consignee, factor or agent, and may arise from profits, freight or commissions, or other lawful business. The subject will be better illustrated by considering it with its qualifications under the following heads, viz: 1. Ñlicit trade. 2. Contraband of war. 3. Seamen's wages. 4. Freight, profits and commissions. 5. Open and valued policies. 6. Wager policies. I shall treat of each of them in their order.

1. Of illicit trade.

The proper subject of insurance is lawful property engaged in a lawful trade; and if the voyage, as origi

States Ins. Company, 1 Peters' Cir. Rep. 410. A clause in a policy that it shall be void if assigned without the consent, in writing, of the insurer, is taken strictly, and means an effectual transfer or pledge of the particular policy. In Massachusetts, it has been decided, that if there be an absolute transfer of the subject insured before loss, the contract of insurance is avoided, for the assured cannot sue, as he has not suffered any loss, and the assignee cannot sue, for he is no party to the contract. But if the assignment be in the nature of a mortgage, or in trust, the insured may nevertheless sue and recover to the extent of his residuary interest. Carroll v. The Boston Ma. rine Ins. Company, 8 Mass. Rep. 515. Lazarus v. Commonwealth Ins. Company, 5 Pick. 76. In Delancy v. Stoddart, 1 Term, 22. Ashhurst, J. said that a policy might be assigned in equity; and that in the K. B. an action would be permitted to be brought by trustees. So, also, in Powles v. Innes, 11 Meeson & Welsby, 10, Parke, B. observed, that parties might sue as trustees for the purchaser. It would seem from the cases, that an assign. ment of a policy is only available when transferred in trust. Heath v. American Ins. Company, N. Y. Superior Court, May, 1841. See, also, infra, 371. 375, as to the assignment of policies against fire. The principle seems to be the same in both cases, that if the interest insured be assigned before loss without the consent of the insurer, (and then it becomes a new contract,) the policy ceases.