
    Stanton, Buckner & Co. v. Natchez Insurance Co.
    It seems it is the mercantile custom at New Orleans to appraise damaged cotton, covered by a policy of insurance, to ascertain whether the damage exceeds ten per cent, and then to sell the damaged article at public auction, which sale is considered as furnishing the proper arid legal criterion for ascertaining the damage and the value of the damaged article.
    It was competent to prove the appraisement, the sale at auction of the damaged article, the value of the sound article, and the custom of merchants, in relation to the sale of damaged cotton.
    IN ERROR from the circuit court of the county of Adams.
    Action of covenant in the usual form, on the defendant’s policy of insurance for damages to cotton shipped on board the steamboat Fort Adams, for New Orleans. The policy was a valued one.
    A trial was had at the July special term of said circuit court, in 1838, and a verdict for ten thousand two hundred and twenty-six dollars. There was a motion for a new trial, which being overruled, a writ of error was taken to this court, the judgment of the circuit court reversed, and a venire de novo awarded.
    At the May term of the circuit court, 1840, a trial was had in pursuance of the judgment of this court, and a verdict rendered, from which this writ of error is prosecuted. The question was the measure of the damages and the means of ascertaining it.
    The bill of exceptions set out the policy of insurance, and the accompanying vouchers. Then the receipt for the payment of the premiums.
    There was then introduced the bills of lading for the shipment of the cotton on the steamer Fort Adams, embraced in the policy, and proved to be shipped by the plaintiffs in said steamer under the policy, according to the agreement of George Winchester; counsel for the defendants, which agreement waived all objections to the protest not having been presented to the insurance office sixty days before suit brought, according to the stipulations of the policy. By the same agreement, rwas admitted the bill of lading; also, the paper, being the appraisement of the', per cent-um damage done the cotton. It was further admitted, that a paper marked (A.) was presented to the defendants by plaintiffs as their account for losses against the company, sixty days before suit, as stipulated by the policy. Other papers were admitted, containing account of sales of damaged cotton. Defendants admitted due diligence on the part of the plaintiffs, and that they had the necessary interest in the cotton.
    The plaintiffs then read the, letter of the secretary of the company admitting loss, and setting forth in a resolution of the board, the terms upon which they would adjust the 1'oss of the plaintiffs under the policy.
    The plaintiffs then introduced as a witness, J. C. Ferriday, who had appraised, the damaged cotton when it arrived at New Orleans, stating that he was then a cotton broker in New Orleans, and that it was usual for such a survey of damaged cotton to be made before sale; and that the survey was made not to ascertain the real damage, so much as to ascertain whether the damage exceeded ten per cent.. That when such damage exceeded 25 per cent, it could not be ascertained with any accuracy. That it was always the custom to sell such damaged cotton at New Orleans, at public auction; and that such sale established its market value. That a speedy sale was proper, as .such cotton was damaged more and more by delay.
    Whereupon, and before any other proof of the appraisement had been.'introduced, the witness was asked by plaintiff’s counsel, “What was the value of this cotton in its damaged state, in dollars and cents ? What proportion of its real value in a sound state, would this cotton have brought.? Whether from what had subsequently come to witness’s knowledge, he did not know that the damage, to this cotton was greater than estimated on the survey ? Whether it was or was not the custom of merchants in New Orleans sanctioned by the insurance offices, to sell damaged cotton at public auction to ascertain the actual loss ?” To each of which questions severally propounded by the plaintiff’s counsel, the defendants by their counsel severally objected, and the court refused to permit the witness to answer either of said questions, to which the plaintiffs excepted.
    The plaintiffs then offered to read in evidence the depositions of Cenas and George H. Poor, taken upon interrogatories, cross interrogatories, and commission, touching the sale of said damaged cotton in New Orleans, and the amount it sold for, by them as auctioneers. But the defendant’s counsel objected to the reading of the depositions for any purpose, because the facts therein stated were inadmissible in this case; which objection was sustained to the depositions, and they were ruled out, to which plaintiffs by their counsel excepted. - And it is upon these two exceptions that the plaintiffs in error now rely for a reversal of the judgment of the court below.
    The foregoing statement of facts embraces all that is pertinent to the decision, as the case now comes before the court. For a more detailed statement, reference may be had to the report of the case between the same parties, in the 4th volume, page 63.
    
    Quitman, for plaintiffs in error.
    . The case now before the court should be carefully distinguished from that decided by this court heretofore between the same parties. The question in that case was as to the' rule by which a partial loss was to be estimated. We admit that the rule, as to the amount of loss, laid down by this court in that case, is the correct rule.
    The record now exhibits a different state of facts from that presented in the former trial, in the following particulars:
    1. That it now appears that when the plaintiffs exhibited to the Insurance office the survey, as a portion of their preliminary proof, they also exhibited at the same time as such preliminary proof, the account of sales of the damaged cotton, and their account, claiming more than the rate of damage allowed by the survey of the brokers, consequently, they can not be considered as estopped, by their exhibition of the survey, from claiming for a greater damage or loss.
    3. That on the last trial the survey of the brokers was hot offered by the plaintiffs as evidence in chief, but merely offered to show they had exhibited it as preliminary proof to authorize them to sue; whereas, in the other case, it appears they had introduced the survey as evidence in chief.
    3. The letter of the secretary of defendants, which does-not appear t'o .have been in evidence in the former case, shows important admissions of the defendants.
    4. That additional important facts appeared in evidence in this trial, not appearing in the former case, in the testimony of Ferri-day, showing that the survey was not full, and that by the custom of the port of destination, these surveys were not made for the purpose of ascertaining the actual damage, but only as some means of adjustment. That the sale in this case was necessary, &c.
    In all these important features the case is essentially variant from that decided by the court, and admitting the opinion of the court be correct in that case, it can not apply to this. This case is in fact a'new and different case.
    We, therefore, present to the consideration of the court, the following points:
    1. Preliminary proofs consist of all the documents submitted as evidence of loss;'they consisted in this case of the survey, accounts of sales of the damaged cotton at auction, and the claims of the plaintiffs. This proof is merely designed to furnish the underwriters information, by which they can form some estimate of their right, before they are bound to pay. 2 Phil, on Insurance, 510-11-13. 'Baker v. Phcenix Insurance Company, 8 John. Rep. 307, 317. Such proof is not conclusive upon either party. The assured is not bound by the exhibition of such proof. 2, Phil, on Insurance, 756. American Insurance Company v. Griswold, 14 Wend. 399; a case in point, and full. 2 Wash. C. C. Rep. 153,480.
    2. The great question, is, what was the damage or loss? This •can only be ascertained by finding the value of the damaged article and the value of the sound article. Proof of these two facts are therefore indispensible to recovery.
    
      The best mode of ascertaining the value.of a damaged article, is by a sale at public auction. 3 Phil. Ins. 315. 3 Phil. 330.
    Even the costs of a sale, when necessary, as in this case, will be allowed. The evidence rejected in this case, all went directly to prove the' actual damage sustained.
    The court will not limit a party to particular modes of proof of a material fact.
    The survey and appraisement in this case, was not even under /oath, and Ferriday had never sworn to it. His evidence was to explain, not to contradict it.
    McM.ur.ran, on the same side.
    Winchester, for defendants.
   Mr. Chief Justice Shahkev

delivered the opinion of thé court.

This case is a second time before us on exceptions taken to the ruling out of part of the evidence, and it is said that the features of the case as now presented are essentially different from those which it exhibited on the first trial. On the former trial, the rule by which the damages should be estimated constituted the prominent question. It was then satisfactorily settled, and is now acquiesced in by the counsel. But the criterion or basis by which the damage is to be ascertained under that rale is now the main question to be determined.

When the cotton arrived in New Orleans from the wreck of the steamboat, two cotton brokers were called in to ascertain the extent of damage, which they did by fixing the depreciation at a per centum damage on the value of the cotton, thus ascertaining the loss on each particular lot at a given per cent. For example, the lot marked M. N. Brandon had been damaged thirty per cent., and so of the other lots.. After this survey or valuation of the brokers, the cotton was sold at auction for cash, and the question is, which shall be taken as the criterion of damage, the valuation of the brokers, or the auction sales.

On the trial, the plaintiffs introduced the valuation of the brokers, and it- is said, that it was introduced as preliminary proof merely, or rather to show that preliminary proof had been furnished to the underwriters, according to the stipulation in the policy. They also offered to introduce the account of sales at auction, and this was objected to under the former decision of this court, and it is contended that the, plaintiffs were estopped from ■doing so by the first evidence introduced, the valuation of the brokers; whilst on the other hand, the plaintiffs’ counsel insist, that they should have been permitted to show greater damage than'*had been assessed by the brokers, and that they were not precluded from doing so by the first proof offered by them. It follows as a necessary consequence, that, whichever mode is the legal one of ascertaining the damage, must of course exclude the other from being conclusive.

In our former decision, we adopted the appraisement or valuation of the brokers as furnishing the best criterion of damage. It was recommended to us by its supposed fairness, its simplicity and certainty, and we were not then informed of its true object. It now appears that this course is always pursued' with a view to ascertain whether the damage exceeds ten per cent., as a mere preliminary measure, and that it is never .taken with a view of giving a criterion by which to ascertain the damage. It further appears that it is the general custom, after such appraisement to sell at auction, and that the .sale so made is "considered in the mercantile community as furnishing the proper and legal criterion for ascertaining the damage, and of the value of the damaged article. If we recollect aright, these facts were not shown on the former trial, and they constitute the material difference between the present and the former case; and although with no additional lights before us we might be inclined to adhere to our former opinion, yet we feel constrained under present circumstances to yield, and adopt that mode which is proved to be the customary one for fixing the criterion of damages. This question is so peculiarly mercantile in its character, that it cannot be better decided than by. submitting it to the custom of merchants. It is a question similar to that which Lord M.ansfield in the case of Lewis v. Rucker, considered a proper one to be decided by merchants, ■ because they were acquainted with the custom. Whatever may be our aversion in general to adopting customs, yet in this instance, the custom is proved to be general in New Orleans, and it is to be presumed that the parties contracted with a view to it. Indeed for aught that appears, it may be a universal custom, and if so, we should certainly do wrong to reject it. We of course are not bound to adopt all the new fashioned customs of merchants, more than the customs of other classes. But where a contract in all its bearings, in its execution and fulfilment, is strictly a mercantile contract, an implied assent to customs which govern in similar cases may be presumed. This is a question which falls peculiarly within the influence of custom. The law requires a fact to be ascertained, but has not, that I am aware of, provided, any particular mode of doing it. That mode of ascertainment may be left to custom to establish. The appraisement does not preclude the plaintiff from the benefit of the proof of the sale at auction, because it was offered to the defendants as preliminary proof of loss sixty days before suit brought. It is true, it was so offered, but it now appears that the account of sales at auction was also offered at the same time for the same purpose. In this respect, therefore, they both stand upon the same footing.

Under this view of the subject, we think -the testimony should have been permitted to go to the jury, with liberty, if they found the custom fully established, to be governed by it. And it follows that all the testimony which went ,to establish the sale and the manner of making it, should have been received. And as a further consequence, the testimony in regard to undamaged cotton at the port of delivery at the time this arrived, was also proper ; because the price' of the undamaged article must be ascertained in order to apply the rule given in our first opinion for ascertaining the damage. The value of the damaged cotton is known, but the proportion to be paid cannot be known unless the price of the undamaged article be also given.

Under our present view of the case, the questions propounded to Ferriday and ruled out, may become material. It was competent by him to establish the fairness of the sale, or to explain the manner and object of taking the appraisement. It was competent also for him to state whether, from the facts which had subsequently transpired, the damage was greater than at first supposed. It was also proper to ask him as to the custom of merchants in relation to selling damaged property, and the object of such sales; this he had in substance previously stated. But it was surely not proper to discredit by the witness, the appraisement, which they had previously introduced as evidence.

The judgment must be reversed and a venire de novo awarded.  