
    Bargett et al., Plaintiffs and Respondents, v. The Orient Mutual Insurance Co., Appellants.
    1. When by the written, terms of a cargo policy, the subject insured is declared to be “ free from average," and by the printed memorandum clause “ it is agreed ” that such property “ is warranted by the assured free from average, unless general," the insurers are not liable to indemnify the assured against a general.average loss, which, as owner of the property so insured, he has been compelled to contribute-to pay.
    2. The policy must be so construed, if practicable, that effect may be given to the written words in it, according to their meaning in such contracts as settled by judicial decisions; when, giving to them that meaning, they conflict with some customary provision found in the printed part of the policy, the latter must be rejected, and the written words allowed to-prevail.
    3. It is not competent to show by parol that words written in a policy, and which have received a judicial interpretation, have acquired by the usage of trade a peculiar commercial meaning, variant from or in conflict with that which the Courts have adjudged to be their true meaning.
    (Before Bosworth and Hoffman, J. J.)
    Heard, June 11;
    decided, July 3, 1858.
    This is an appeal by the plaintiffs; (William Bargett and John Picard) from a judgment in favor of the defendants, (The Orient 'Mutual Insurance Company) dismissing their complaint.
    
      The action was tried before Mr. Justice Slosson and a jury, in February, 1858. It was brought to recover $665.58, which the plaintiffs had been compelled to pay by way of a general average contribution, as owners of a cargo of corn, shipped on the barque Helen Mar, on a voyage from Hew York to Belfast, and insured by a policy issued by the defendants, about December 11, 1855, to J. Wallace & Co.,- which corn had been sold and which policy had been assigned to the plaintiffs, before the loss occurred. The corn insured was valued in the policy at $5,000. The perils insured against are described by the language usual in marine policies. The material parts of the policy are as follows:
    “By the Orient Mutual Insurance Company.
    (“ Cargo)
    
    “J". Wallace & Co., on account of whom it may concern, in case of loss, to be paid to their order, do make insurance and cause to be insured, lost or not lost, at and from New York to Belfast, Ireland, on 4,650 bushels corn in bags, free from average, upon all kinds of lawful goods and merchandise, laden or to be laden on board the good barque Helen Mar, whereof-, is master for the present voyage.” . .
    
    (The foregoing words, which are printed in italics, are written, in the policy.) By a printed portion of the policy, it is provided, that “ no partial loss or particular average shall in any ease be paid, unless amounting to five per cent.”
    The printed memorandum clause forming part of the policy declares, inter alia, that “ it is also- agreed that . . grain of all kinds, . . are warranted by the assured free from average, (unless general).” . .
    On the trial it was admitted by the defendants (by a written stipulation produced and read) “that while upon the voyage referred to in the complaint and policy, on which the complaint in this action is founded, the barque Helen Mar was in great danger of becoming a total loss; and that for the safety of the barque and the freight it became necessary to cut away the mainmast; that owing to this and to other injuries to the said barque, sustained by the perils, of the seas, the master of said barque was compelled to abandon temporarily his voyage, and returned to the port of New York. That the expenses which occurred in refitting the vessel, were necessary to enable her to proceed upon her said voyage.
    “ That the expenses of refitting the said vessel to enable her to proceed upon her said voyage were $
    “ That the plaintiffs’ proportion of such expenses, made up on the principle of general average, was $665.58......
    “ That the plaintiffs were the owners of the corn referred to in the policy when the said policy was executed; and that it was executed for their account; and that they were at the commencement of this action, and now are, the owners thereof.”
    The only other evidence offered or given, or proceedings had at the trial, are as follows, viz.:
    “ Charles H. Castle, a witness, produced and sworn on the part and behalf of the plaintiffs, testified as follows:
    “ The counsel for the plaintiffs asked the witness, ‘ In December, 1855, how was the Helen Mar rated ?’
    “To this question the counsellor the defendants objected. In explanation, the counsel for the plaintiffs stated, that he proposed to prove that the Helen Mar was an A, 1, vessel; and then to show by competent testimony that the rate of insurance charged by the policy in question was as great as that fixed by the tariff of the board of underwriters at the date of the policy, for insuring corn on board the same class of vessels, in policies in which the words ‘ free of average ’ were not used, and in which general average losses were included in the risks taken by the insurers.
    “And the counsel for the plaintiffs further offered to prove by competent testimony, as follows:
    “That the words ‘free from average,’ have a peculiar commercial meaning, wholly distinct from their ordinary and popular meaning, which meaning they have acquired by a known usage of trade.
    “ That the words 1 free from average,’ by a known usage among merchants, and officers of marine insurance companies, and adjusters of losses in marine insurance cases, do not mean free from general average contribution, but only free from partial loss.
    
      “ That in cases of settlement and adjustment of losses, these words, when inserted in the policy in writing, have been always construed by adjusters, not to exclude contribution in cases of general average losses, but that in such cases the underwriters were liable for general average contribution.
    “ That the established rate of premium on the 11th of December, 1855, on cargoes of corn shipped in bags, in vessels of the same class as the Helen Mar, from and to the same ports, 1 free from particular average only,’ was the same rate as is charged in the policy on which this action is founded.
    “That the established rate of premium, and which was acquiesced in by defendants, in cases where insurance companies were not liable for general average contribution, was less than the rate charged in this policy.
    “To all the foregoing testimony the counsel for the defendants objected, and the Court thereupon sustained said objection, and refused to admit said testimony, or any part thereof; to which ruling and decision the counsel for the plaintiffs then and there duly excepted.
    “The counsel for the plaintiffs then rested their case, and the counsel for the defendants moved that the plaintiffs’ complaint be dismissed. The court thereupon granted said motion and dismissed said complaint.
    “ And to said ruling and decision the counsel for the plaintiffs then and there duly excepted.”
    Judgment was thereupon entered in favor of the defendants, and from that judgment the present appeal is taken.
    
      Wm. ¡Stanley, for the plaintiffs and appellants.
    I. The evidence offered by the plaintiffs, and rejected, was admissible.
    1. It was competent for the plaintiffs to prove that the Helen Mar was an A, 1, vessel; and that the premium charged upon the policy in question, was the established rate for insuring corn on board the same class of vessels, in policies in which the words “ free of average ” were riot used, and in which general average losses were included in the risks taken by the insurers.
    The class to which the vessel belonged, and the rate of premimnpaid, were “surrounding facts and circumstances, evidence of which is always received to aid in the interpretation of a contract. (1 Greenl. Ev., §§ 287 to 289; 1 Phillips on Ins., 3d ed., § 126, n 3; 1 Duer on Ins., p. 171, chap. 2, part 1, §§ 17 and 18; Preston, ex’r, &c., v. Greenwood, 4 Doug., 27.)
    2. It was competent for the plaintiffs to show that the words “ free from average,” by a known usage among merchants and underwriters and adjusters of losses, do not mean free from general average contributions, but only free from partial loss. (2 Parsons on Contracts, 67, 68; Dana v. Fiedler, 2 Kern., Johnson, J., p. 46; 2 Parsons on Contracts, 4, 5, m, b, c; Phillips on Ins., 3d ed., §§ 132, 145 ; Per Campbell, J., in Garrison v. Memphis Ins. Co., 19 How., 316; 1 Duer on Ins., p, 179, chap. 2, part 1, § 31.)
    In deciding upon the words “free from average," Lord Mansfield referred to the usage which had prevailed in adjusting losses, as a ground of construction. (1 Phillips on Ins., 95.)
    H. The learned Judge erred in directing that the complaint be dismissed.
    I. Construing “average” to mean “partial loss,” occasions no inconsistency nor repugnancy between the written and the printed language. On the other hand, if it is construed to include general average, the words “unless general,” in the printed part, must be stricken out.
    2. The word “average,” in the phrase “free from average,” always means particular average, or partial loss.
    This is its popular sense among underwriters, adjusters of marine losses, and merchants.
    The same usage exists among writers on insurance. (2 Arnould on Ins., 854, et seq., at 955, 1129,1130,1131,1132; Montoya and others v. The London Assurance Co., 4 Eng. L. and Eq. R., 500.).
    3. The reason for excepting average losses has no application whatever to general average losses, (2 Arnould on Ins., p. 851;: Dyson v. Rowcroft, 3 Bos. & Pul., 476, decision by Lord Advanley.)
    4. In all doubtful cases, policies of insurance are to be liberally-construed in favor of the assured, and an exception to the usual risks is to be strictly construed against the underwriters. (1 Duer on Ins., pp. 161 and 179, chap. 2, § 31.)
    
      5. The construction contended for by the respondent, renders the provision, “free from average,” absurd. And the “Court, in selecting among the different meanings of which the phraseology is susceptible, will avoid such as are absurd, or lead to unreasonable or inconvenient consequences.” (1 Phillips on Ins., 3d ed., § 123; 1 Duer on Ins., p. 163, chap. 2, § 8.)
    If the circumstances of the case had been such as to call for the sacrifice of the whole of the plaintiff’s corn, instead of a sacrifice of the vessel, the defendant would clearly have been liable as for a total loss. The question of general average would have had nothing to do with the case, as between the owners of the com and the underwriters. It would have been simply a total loss by jettison, one of the perils insured against, and the plaintiffs would have a right to look for their indemnity directly from the respondent. (Maggrath v. Church, 1 Caines, 215, Kent, J.; Watson v. The Mar. Ins. Co., 7 Johns., 62; Greeley v. Tremont Ins. Co., 9 Cush., 419; Forbes v. Man. Ins. Co., 1 Gray, 371.)
    The result of the respondent’s construction would'be that they would be liable in case the property insured by them was sacrificed to "save the property of others, but would not be liable in case the property of others were sacrificed to save theirs.
    If the respondents should contend that they would not be liable even in the former case, the matter would not be much helped; for then the result would be that the assured would receive no indemnity from the insurer even for a total loss, and that too of the most meritorious kind that could possibly happen.
    6. A stipulation that underwriters shall not be liable to general average contribution, in any case, is in violation of the policy upon which the doctrine of general average is founded, and will not be upheld. (2 Arnould on Ins., 877; Sturges v. Cary, 2 Curtis, 382; 2 Phillip on Ins., 1275; 1. Arnould on Ins., p. 8, § 9.)
    7. The case of Coster v. The Phoenix Insurance Co., (2 Wash. C. C., 51,) is unsound.
    The learned Judge, who decided that case, erred in saying that the word average originally meant a contribution by the owner of the ship, cargo and freight, towards a loss sustained for the general benefit of all. (See 2 Arnould on Ins., 955.)
    He erred also in saying that the written and printed clauses were inconsistent with each other, and that one or the other must give away.
    There is, however, a very important difference between that case and the present. There the stipulation was to be free from average under ten per cent. In the present case it is to be free from average to any amount. There might be a reason for an underwriter wishing to exempt himself from being called on for petty losses. But a stipulation that the underwriter would not-be liable for any amount of general áverage loss would be monstrous.
    
      Aleaxmder Hamilton, Jr., for the respondents.
    I. Under the common memorandum (printed form), the underwriters were warranted free from all partial losses on grain, unless they were in the nature of “ general average.”
    Without the written words, therefore, no partial loss on “ corn in bags ” could have been claimed from them, unless arising in “ general average.”
    II. Such being their exemption under the memorandum, the words are written in, immediately after the description of the subject insured, “free from average.”
    It is confidently submitted, under well established rules of interpretation, that this refers to “ general average ” only.
    1. By the settled rule of construction, effect must be given, if possible, to each part of the instrument, so that no part shall be rendered superfluous or unmeaning; in other words, to ascertain intention the Court must look to the consequences of different interpretations of the disputed phrase; if by one interpretation it would be superfluous, and by a different construction it would be operative, it is plainly the latter sense which should be adopted. (Duer on Ins., vol. 1, 163, § 8; id., 165, § 10.)
    2. This rule applies with special force to the written words,, as expressing the more immediate intentions of the parties to the contract. (1 Duer, 165; Robertson v. French, 4 East., 136.)
    3. Under the common memorandum (the printed form), grain of all kinds was warranted free from particular average or partial loss, unless it were a partial loss in the nature of “ general average.”
    
      4. The underwriter, under the printed form, being relieved from all partial losses, but remaining liable for “general average” partial losses, the words “ free from average ” were added in writing, to take away a liability that existed, and not one already provided against.
    5. To limit these written words to the case of a particular average loss, would require the addition of the words “ unless general,” and thus repeat the phrase of the memorandum, or would render them entirely superfluous and unmeaning.
    III. There is no total loss pretended; and only a partial loss in the nature of general average. The clause “ free from average,” must refer either to a partial loss or general average loss. To construe it as intending the former would be to render them entirely unnecessary; the assured having already by the memorandum warranted the underwriters against all partial losses on corn.
    The phrase “ free of average ” in a policy like this was held to exclude general average losses as far back as 1807. (Coster v. Phoenix Ins. Co., 2 Wash. C. C. R., 51.)
    IY. The construction is apparent from the policy itself; free of average obviously means average in general, the words “ whether general or particular ” .are implied.
    Such is the construction given to them in France and Italy. (Stevens and Benecke, pp. 448, 56, 57, 58.)
    Y. The parol evidence offered by the plaintiffs was inadmissible and properly rejected.
    1. If admitted the effect would have been to contradict or materially vary the terms of the policy, and that in a case where the settled rules of construction left no reasonable doubt as to the meaning. (1 Greenl. Ev., chap. 15, §§ 275, 282 and 292; 3d Kent, p. 326, note 6; The Schooner Reeside, 2 Sumner, 568.)
    2. Parol evidence is inadmissible, except to construe new terms or exceptions not judicially settled, or to explain where the meaning is doubtful.
    The phrase “free of average” is not a new term, but on the contrary one of the oldest in the policy, and has been judicially settled. (Wadsworth v. Alcott, 2 Seld., 64; 3d Duer, 264 ; 2 Comst., 235.)
    
      3. The testimony offered by the plaintiff to show that the rate of insurance charged by the policy in question was- as great as that fixed by the tariff of the board of underwriters, at the date of the policy, for insuring in the same class of vessels, in which the words “ free of average ” were not used, and in which general average losses were included in risks taken by insurers, was properly rejected.
    It amounted in effect to an attempt to strike these written words out of the policy, under the proof of the tariff of the board of underwriters.
    4. The testimony to show that the words “free of average” have a peculiar commercial meaning wholly distinct from their ordinary and popular meaning was properly rejected.
    
      a. It was not shown to be relevant in any way.
    
      h. The words have been judicially settled, and are almost-as old as the policy itself—parol evidence is only admissible to construe new or generic terms or expressions not judicially settled.
    5. The same objection applies to the offer to show by the usage among merchants and officers of marine insurance companies and adjusters of losses, that the words “ free from average” mean only free from partial loss, and not from general average contribution. The offer was bad in form, and properly rejected. It should have been an offer to show the uniform use and practice of underwriters in settlement of losses, under policies similar to this one, to admit claims for general average. (1 Duer, 186, cases there cited.)
    6. The construction given by adjusters is matter of opinion only and should be rejected. Opinions of witnesses as to the proper interpretation of those words in a policy that are neither foreign nor purely technical cannot be received as legal evidence. Usage must be proved by facts- and practice, not by opinions however numerous.
    This objection applies to all the offers made by the plaintiffs. (Syers v. Bridge, Doug., 529; Rogers v. Mech. Ins. Co., 1st Story, 607.)
    7. The offers to show the established rate of premium were properly rejected.
    The amount of premium paid is no evidence of the meaning of words used in the policy, which must be ascertained from the policy itself. The first offer was to show the established rate of premium, without averring that the defendants acquiesced in it. The proof, if admitted, would have been entirely irrelevant.
    The last offer to show that the established rate of premium acquiesced in by the defendants in cases where the insurers were not liable for general average contribution, was less than the rate charged in this policy, was of a character too indefinite, where the terms of the policy are as clear as in this case.
    VI. The decision of the Court below was correct, and the judgment must be affirmed, with costs.
   By the Court.

Hoffman, J.

—The term average was borrowed from the foreign law; and in that law it indicated every chance damage which happened to the merchandise or the ship. Average was such a loss. (Emer., 463, and the authors cited by him.) It excluded, from its very character, an absolute total loss. The ordinance of the marine of 1688 showed this in a plain form. (Art. 46.) Abandonment was applicable to cases of total loss. Average comprised all the minor disasters causing damage to the thing insured. (Emer., ut supra, and 468.)

The 397th section of the Code of Commerce follows out this •definition with marked exactness. It speaks of the term avaries thus: “ All extraordinary expenses incurred for the ship and the cargo conjointly or separately ; all damage happening to the vessel or goods from the time of their lading and departure until their arrival and discharge are reputed averages. There are two classes of averages, gross or common (general), and simple or particular averages.”

In entire conformity with this description in the foreign law, there has grown up into English mercantile language and English mercantile law a two-fold meaning of the term average. The distinction is, between a particular and a general average. The first is that loss which falls solely upon a particular subject; the second is that damage or liability which falls upon property in question, by reason of an injury to something else.

Molloy does however define the term as used in the mercantile law to be, the contribution made proportionably, by others, to those who have their goods east into the sea, for general safety. It is made he says, “ after the rate of every man’s ave-ridge, or goods carried.” (De jure Maratimo, ch. 6, 5.)

Cowell’s Interpreter, quoted by Mr. Stevens, adopts a similar meaning for the phrase. (Step. & Ben. on Average, Boston Ed., 1883, p. 56.) “ What we term general average is the only case entitled to the appellation of average. A particular loss is no average at all.” (1 Rob. Ad. Rep., 293.)

But at page 39 he says, “ By the continental law all losses not total are said to be average losses, and so the Courts in this country use the term.”

Particular average and general average, are terms pervading the whole mercantile law, and decisions of England and this country. Particular average is the damage or loss, short of total, falling directly upon a particular property. General average is the liability or claim falling upon that property, from the loss of or damage to something else.

Average then, in its generic sense, and used simpliciter, is a loss, injury or deduction, not amounting to a total loss, and then when the parties to a policy agree that goods insured shall be free from average, they agree that the liability of the insurers shall only arise when a total loss shall occur.

This is the plain import and legal effect of the clause in writing in the first part of the policy in question. The insurance is made “ on 4,650 bushels of corn in bags, free from average.”

But then we find the clause, that in no case shall the insurers be liable for a partial loss, unless it exceed five per cent. So they would be liable under this clause for any such loss exceeding such rate. Yet the first clause exempts them from it.

Again, in the memorandum clause we have the provision 11 that grain of all kinds shall be free from average unless general.”

I think it clear that this clause supersedes entirely the clause as to a partial loss over five per cent. It is a qualification as to particular articles of the general provision, and com is one of such articles.

And then it follows, that the case is to be determined by a comparison of this clause in the memorandum, with the first written clause in the policy. In substance the contract reads thus; We agree to insure this particular parcel of corn shipped on board the Helen Mar, from any loss which shall be total in its nature, but not from any partial loss or other damage which it may be subjected to; and then we agree to insure any grain laden by you on board the Helen Mar, from a. total loss, and also from any damage you may sustain by reason of a loss creating a case for contribution or general average.

I am not able to reconcile these provisions. The question is, which must give way ?

That question is fully settled. The written words control the printed formula of a policy wherever there is a discrepancy. Mr. Duer states the rule to be that the inconsistent printed clause must be so limited or modified as to render it consistent with the written; or, if by no construction they can be reconciled must be wholly rejected.” (Duer on Ins., vol. 1,166, citing Emer., and Lord Ellerbororgh in Robertson v. French, 4 East., 136.)

The parol evidence offered in this case was we think correctly rejected. The phrase has no uncertain or ambiguous mean- - ing. The question simply is, does the written clause remain unaffected by the printed formula.

The judgment should be affirmed, with costs of the appeal.

Bosworth, J.

—An insurance upon articles declared by the policy to be “free from average,” or which, by the terms of the policy, “ are warranted by the assured free from average,” is, in effect, an insurance against their total loss only; according to the meaning of the words, “total loss,” as used in the law of insurance, applicable to memorandum articles. (Maggrath v. Church, 1 Caines’ Rep., 196; Neilson v. Columbian Ins. Co., 3 id., 108; Saltus v. Ocean Ins. Co., 14 J. R., 138; Marcardier v. Chesapeake Ins. Co., 8 Crunch, 39; Coster v. The Phoenix Ins. Co., 2 Wash. C. C. R., 51; Morean v. United States Ins. Co., 1 Wheat., 219.)

By the terms of the printed part of the policy, the defendants would not have been liable for any partial loss, whether in the nature of a general average loss or otherwise, were it not for the qualifying words, “ unless general.”

These have the effect to make the insurance company liable for all general average losses chargeable upon the cargo insured.

The words “free from average,” inserted in the policy, in writing, should be so construed, if practicable, that effect maybe given to them, according to their meaning in such contracts, as settled by judicial exposition. When, giving them that meaning, they conflict with some customary provision in the printed part of the policy, the latter must be rejected and the written provision be allowed to prevail.

The insertion in writing of the words, “free from average,” is equivalent to a declaration of the parties, embodied in and made part of their contract, to this effect: We agree, with respect to the com in question, that no claim shall be made upon the insurance company for, any loss or damage which is partial only, whether it be in the nature of a general .average loss, or a partial injury of the corn itself.

We think therefore that, the Judge at the trial proceeded upon a correct view of the law.

Independent of other objections to the evidence offered, to show the meaning of the words “ free from average,” it is sufficient to say that evidenceof such a character is not admissible, for the purpose of attaching to those words, when forming part of a written contract, a meaning in conflict with, or variant from that given to them by adjudged cases; by which their meaning, in precisely such contracts has been determined and was a point in judgment.

No usage can exist or be proved by which the liabilities of parties to a written contract will be greater or less, than the settled law of the state has adjudged them to be, on a contract in the terms of the one-sought to=be affected by such evidence.

The judgment must be affirmed.

Judgment -affirmed.  