
    Sanderson v. The Columbian Insurance Company.
    In ascertaining whether the loss upon a policy of marine insurance amounts to five per cent., a deduction must he made of one third of the cost of the repairs, as an allowance for the difference of value between the new and the old materials.
    A general usage among ship-owners and underwriters in relation to the settlement of average losses, if known to the parties, becomes part of the contract, and binds the parties.
    This was an action upon a policy of insurance, to recover for damage exceeding five per cent, on 6000 dollars insured on the ship Thomas. By the terms of the policy, the underwriters were not liable for any loss or damage under five per cent, upon the amount insured.
    The repairs amounted to 372 dollars, which was more than five per cent.; but if one third should be deducted for the difference of value between the new and the old materials, the loss or damage would be less than five per cent.
    The plaintiff’s counsel, Mr. Hewitt and Mr. Swann,
    
    contended that there should be no such deduction — or if any, not one third.
    
      
      Mr. Jones, for the defendants,
    cited “ The Shipmaster’s Assistant and Owner’s Manual,” pp. 130, 136.
   The Court

(¿Thruston, J., absent,)

decided that on settlement of a partial average the difference in value between the new and the old materials ought to be deducted, whether the deduction reduce the sum below the five per cent, or not.

Mr. Nichols, a witness sworn on the part of the defendants, testified, that he has been an insurance broker twenty-three years. That the universal practice, as far as he knows and believes, is to deduct one third for the difference in value between the new and the old materials, whether they were half worn, or three fourths worn, or quite new. That sometimes the insured gains, and sometimes loses, by the rule. -

The Court further instructed the jury that if they should be satisfied by the evidence, that the practice, as stated- by Mr. Nichols, was the general usage, in settlement of average losses, among ship-owners and underwriters, and that the usage was known to the plaintiff at the time of the contract, it was to be considered as part of the contract, and the plaintiff was bound by it..

Mr. Sioann, asked whether the opinion was the same, whether th.e materials, used in the repair, were new or old.

The Court, said it would be time enough to answer that question when a case should occur.  