Case ID: barb_64/html/0077-01.html
Source: Caselaw Access Project
Author: {"author": "\n      By the Court, Gilbert, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Fabbri and others vs. The Mercantile Mutual Insurance Company.
    The plaintiffs applied to the defendant for insurance upon the cargo of a specified ship, about to arrive, in a sum “not exceeding $10,000 in gold.” The defendant signified its acceptance oi the application by writing upon it “ binding.” About the same time, applications were made to other companies, for insurances upon the same property, which applications were accepted in a similar way. The aggregate amount of insurance sought by the plaintiffs was $162,000. In neither case was the amount of risk which either company took definitely fixed. There had existed, and was then existing, between the plaintiffs and the several companies, including the defendant, a practice and course of dealing, in effecting marine insurances upon property belonging to the plaintiffs, where the precise value thereof was not known, at the time of the application, by which the plaintiffs were accustomed to make written applications, like those in the present instance, being in different sums, and amounting, in the aggregate to the supposed value of the property which would be at risk; and such applications were accepted and made binding for such indefinite sums, with the understanding that when the value of the property should be ascertained, the amount so insured should be declared and apportioned, so that the amount insured by each company should bear the same proportion to the property actually at risk as it bore to the aggregate of all the indefinite insurances thereon; and that after the amount had been so ascertained and fixed, a policy, in the form then in use, was issued by the respective underwriters, for the precise sum so ascertained and adjusted. The value of the property intended to be insured in this instance was not known to the plaintiffs at the time their application to the defendant was made.
    
      Held 1. That the contract created by the defendant’s acceptance of the plaintiffs’ application, as explained by evidence of the practice mentioned, would render the defendant liable for a proportionate amount of the loss, in this case, notwithstanding the clause of prior insurance, contained in the policies used by it.
    2. That evidence to prove the existence of such a practice between the parties, was admissible, although it did not prove any general usage, nor was it given for that purpose.
    3. That for the purpose of showing what was the actual contract between the parties to the action, such evidence was not only' competent, but absolutely essential.
    The admission of illegal testimony by a referee, will not warrant a reversal of the referee’s decision, where there is sufficient evidence, without such testimony, to sustain the judgment; the error of the referee, if any, in admiting the illegal testimony, in such a case, not being injurious to the unsuccessful party.
    
      APPEAL, by the defendant, from a judgment entered upon the report of a referee.
    The action was brought to compel the defendant to issue a policy of insurance to the plaintiffs, and then pay a loss, thereunder, on the cargo of the ship Flora McDonald, which was destroyed by fire at Valparaiso, in February, 1867.
    The following allegations of the complaint were admitted by the answer, namely: 1. The partnership of of the plaintiffs, and the corporate character, as alleged, of the defendant. 2. The signing and delivery by the defendant of the application in the form annexed to the complaint. 3. That the form of policy attached to the complaint was that used by the defendant on the 5th of March, 1867,
    The cause was referred to E. H. Owen, Ésq., as referee, to hear and determine all the issues ; who found and decided the following facts:
    
      First. That before and at the several times mentioned in the pleadings, the plaintiffs were copartners in trade, carrying on such business in the city of Yew York, under the firm name of Fabbri & Chauncey, and that the defendant was, and still is, a corporation created by and existing under the laws of the State of Yew York, and carrying on the business of marine insurance in the said city of Yew York.
    
      Second. That previous to, and on the 16th of February, 1867, the ship Flora McDonald, then owned by the plaintiffs, was and had been for some time previous lying at the port of Valparaiso, on the west coast of South America, taking in a cargo belonging to the plaintiffs, and destined for the port of Yew York, where it was to be delivered to the plaintiffs; but the quantity and value thereof shipped, and expected to be shipped, was not known to the plaintiffs until the time in that behalf hereafter stated.
    
      Third. That for some time previous to the last men-timed date, and previous to and at the time of effecting the insurances upon the aforesaid cargo, as hereafter stated, there had existed, and was then existing, a practice and course of dealings between the plaintiffs, the Great Western Insurance Company, the Sun Mutual Insurance Company, the Orient Insurance Company, the Mercantile Mutual Insurance Company, (the defendant,) and several of the other insurance companies hereinafter named, in effecting and making marine insurance upon property belonging to the plaintiffs, when the precise value thereof was not known at the time the application for insurance thereon was made, by which practice and course of dealing the plaintiffs were accustomed to make a written application to the said companies for insurance, in different sums, amounting in the aggregate to what they supposed might be the value of the property which would be at risk; and it was stated in the applications that insurance was wanted upon the said property for “about,” or “not exceeding,” or “not to exceed,” the sum stated therein, and such applications were accepted and made binding for such indefinite sums, with the understanding that when the value of the property at risk should be ascertained, the amount so insured should be declared and apportioned, so that the amount insured by each should bear the same proportion to the property actually at risk as it bore to the aggregate of all the indefinite insurances thereon; and that after the amount had been so ascertained and fixed, a policy, in the form then in use, was issued by the respective underwriters for the precise sum so ascertained and adjusted, as aforesaid.
    
      Fourth. That, having heard that their aforesaid vessel was, at the date above mentioned, at Valparaiso, engaged in taking in a cargo of wool for them, (without knowing what the value thereof would be, but suppos ing and assuming that it might amount to about $156,000 gold,) the plaintiffs, under and in pursuance of the aforesaid practice and course of dealing, on the 5th of March, 1867, made a written application for insurance upon the said property to the Great Western Insurance Company for “about $40,000 goldto the Sun Mutual Insurance Company, for “not to exceed $10,000 gold;” to the Orient Insurance Company, for “not to exceed $20,000 gold ;” to the Mercantile Mutual Insurance Company, (the defendant herein,) for ‘‘ not exceeding $10,000gold,” in the order of time above stated, and that each of the said companies accepted such applications and made the insurance binding. A copy of the application so made to and accepted by the defendant, was annexed to the complaint in this action, and was to be taken as part of the report.
    
      Fifth. That on the 6th of March, 1867, being still ignorant of the probable value of such cargo, the plaintiffs in like manner, under the practice aforesaid, made written applications for insurance thereon to the International Insurance Company, for “ not exceeding $5,000 gold;” to the Phoenix Insurance Company, for “not to exceed $10,000 gold;” to the United States Lloyds, for “not exceeding $5,000 gold;” to the Manhattan Insurance Company, for “not exceeding $5,000 gold;” each of which applications was accepted and made binding by the said last mentioned companies.
    
      Sixth. That, the plaintiffs being still ignorant of the shipment, afterwards applied for insurance thereon to the Insurance Company of North America, for “not to exceed $10,000 gold;’ ’ to the Delaware Mutual Insurance Company, for “about, not to exceed $10,000 gold;” to the Phoenix Insurance Company of Philadelphia, for “about $2,500 gold;” to the Insurance Company of the State of Pennsylvania, for “notto exceed $5,000 gold;” to the Pacific Insurance Company of San Francisco, for “not exceeding $20,000 gold,” each of which last mentioned applications was accepted and made binding.
    
      
      Seventh. That the insurances so effected and made binding as above stated, amounted in the aggregate to $152,500 gold.
    
      Eighth. That on the aforesaid 16th day of February, 1867, before either of the above mentioned insurances had been effected, the aforesaid vessel, then lying at Valparaiso, as above stated, was destroyed by fire, at which time she had only received a portion of the cargo intended to be shipped, that is to say, she then and there had received on board only 692 bales of white wool and 40 bales of black wool, all of which was destroyed by the said fire and totally lost, and that at the time of such loss the same amounted, in value, to the sum of $56,253 gold of the coinage of the United States.
    
      Ninth. That the plaintiffs were entirely ignorant of such loss at the time they effected the several insurances above mentioned, and did not hear of the same until afterwards, and somewhere about the 3d of April, 1867, at which time they also ascertained the value of the cargo at risk, and covered by the aforesaid insurances, to be the sum in that behalf above stated.
    
      Tenth. That on the said 3d day of April, having ascertained the value of the property at risk at the time of the loss aforesaid, the plaintiffs thereupon declared and made known to the defendant and to the other insurers thereof, according to their course of dealing, the value of the property at risk at the time of such loss, and apportioned the same among the defendant and the other insurers according to the practice aforesaid; and that the sum so apportioned to and for which the defendant became insurer, was $3,688.72.
    
      El&venth. That the blank policy of insurance annexed to the complaint, was the form of policies then in use by the defendant upon similar applications, and the plaintiffs then and there demanded from the defendant a policy, according to the application in all respects, except as to the sum insured, which was to be $3,688.73 instead of $10,000 as originally stated in the application, which the defendant refused to give.
    
      Twelfth. That the plaintiffs then made to the defendant due proof of loss and of their interest in the property insured, and performed the conditions of insurance on their part to be performed, except the prepayment of the premium, which the defendant had waived on mating the application for insurance.
    
      Thirteenth. That the aggregate of the several insurances upon the said cargo, made prior to that of the defendant, as adjusted and fixed under the practice and course of dealing aforesaid, did not cover the plaintiffs’ loss, but left a balance due therefor exceeding'the sum of $3,688.73, the amount covered by the defendant’s policy, so adjusted and fixed as aforesaid, which, by the terms of the policy so in use as aforesaid, became due and payable on the 3d of May, 1867.
    
      Fourteenth. That the premium due and payable by the plaintiffs to the defendant, upon and for the said insurance, amounted to the sum of $115.03 gold, for which the defendant was entitled to credit, and which being deducted from the loss above mentioned leaves a balance of $3,573.69 gold, which with interest thereon from the 3d of May, 1867, to the date of the report, amounted to the sum of $4,584.75.
    And the referee decided, as matter of law, that the plaintiffs were entitled to have a policy from the defendant duly executed in the form of that annexed to the complaint, filled up, according to the application of the plaintiffs, for the amount so adjusted as above mentioned ; and to a judgment against the said defendant for the last above mentioned sum of $4,584.75 in gold.
    The defendant took exception to the admission of evidence tending to show the practice of the companies, in adjusting the approximate sums named in their application, upon ascertainment of the exact amount at risk.
    And it also took exception to certain findings of the referee.
    
      Townsend Scudder, for the appellant.
    I. The real issue to be tried was, whether the defendant was liable to the plaintiffs by reason of the so-called prior insurance clause in the defendant’s usual policy. That clause is to be found in ah American marine policies, 
    
    II. The plaintiffs effected insurances on this cargo to the amount of $152,500, while the property actually destroyed was of the value of $56,253.
    ill. The plaintiffs effected these insurances in the following order:
    1st. The Great Western, about $40,000; 2d. Sun, not to exceed $10,000; 3d. Orient, $20,000; 4th. Mercantile Mutual, $10,000.
    IV. If the companies insuring before the defendant are to be held for the full amount of their subscriptions, then there is more than enough to pay the loss before reaching the defendant. This litigation is really between the insurance companies to settle the law on this point.
    Y. The plaintiffs rely on the existence of a custom, whereby they claim the privilege of insuring, and then afterwards apportioning the amount at risk among the different companies. The defendant denies the existence of such a custom. 1. To prove this custom the plaintiffs called Mr. Lethbridge, whose testimony was ob- ]" ected to and exception taken. The question was vicious for several reasons, (a.) The action was upon a written contract between the plaintiffs and the defendant. (b.) It was not competent to vary the terms of such a contract by showing what witness did with some of those companies mentioned in Ms former testimony, (c.) He had not shown sufficient acquaintance with the business to prove a custom, having' been engaged only tMee years previously, (d.) What he did in other cases is not competent to vary what was done in tMs; for there is no ambigmty in the contract which requires any explanation. (N. Y. Ins. Co. v. Thomas, 3 John. Cas. 1. Mumford v. Hallett, 1 John. 433. Wadsworth v. Allcott, 6 N. Y. 72. Schooner Reside, 2 Sumner, 569, per Story, J.) 2. They further called Mr. Hazen, whose testimony is fatally defective, in that it nowhere appears that what he told ¡Robinson & Cox was ever commurncated to the defendant. The testimony of tMs witness ought not to have been admitted, for the same reasons urged against the admission of Lethbridge’s testimony, and especially is Ms statement concerning custom, vicious. The statements of the particular ships on wMch insurances were made, and afterwards varied by consent of the insurance compames interested, number ten. Of tMs number the plaintiffs insured with the defendant but three; one in November, 1866; one in October, 1866, and one in February, 1867. 3. The testimony of Mr. Walter defines the custom among underwriters precisely as the law defines it.
    VI. The referee erred in admitting this testimony (concerning the insurances) of Lethbridge and Hazen, and the applications, and the exceptions to his report are well taken. His second finding of fact, wherein he states that the quantity and value of goods expected to be shipped was not known to the plaintiffs, is without any evidence to support it.
    VII. The second exception to the report of the referee is well taken, because of the admission of testimony concerning the course and practice of dealing between the plaintiffs and insurance companies other than the defendant, without its being proved that the defendant was informed of such course and dealing, and for the reason that there was no evidence going to show that there was any privity between the defendant and any other insurance company, or between the plaintiffs and the defendant, or any other person or company in the contract upon which this action was brought.
    VIII. The fourth exception to the referee’s report is well taken, because, as matter of fact, the insurances on this cargo were taken in the order of time as stated in point 3. The policy of the defendant having the prior insurance clause in, was, as matter of law, exonerated from any risk on the cargo of the ship. (Brown v. Hartford Ins. Co., 3 Day, 58. Potter v. Marine Ins. Co., 2 Mason, 475. American Ins. Co. v. Griswold, 14 Wend. 399. Wiggin v. Suffolk Ins. Co., 18 Pick. 152.) The fifth exception to the referee’s report is well taken. The thirteenth finding of fact is in reality a conclusion of law, and not a finding of fact, because he decides that the insurances prior in date to that of the defendant did not cover the plaintiffs’ loss.
    IX. The sixth exception to the report of the referee is well taken. The plaintiffs were not, in law, entitled to any policy from the defendant, nor were they entitled to any recovery thereon.
    
      Geo. W. Soren, for the respondents.
    I. The plaintiffs’ right of recovery is rested upon the defendant’s acceptance of their application, first explained, and then made definite by resort to evidence of a special practice existing between the parties. By the execution of the application the defendant insured the plaintiffs “for not to exceed $10,000, on wool valued at eighteen cents, gold, per pound, until otherwise agreed, and ores valued at invoice cost and fifteen per cent additional.” In the particulars here named the instrument was indeterminate. The principal part of the plaintiffs’ evidence was directed to the illustration and proof of a practice between them and the defendant, for the purpose of showing, 0 (1.) What was meant by the language of the contract, thus indeterminate and uncertain on its face, and also what was meant by putting the contract into the form of an application, instead of a policy. (2.) By reducing to certainty the ambiguous and uncertain terms of the contract to show for what precise amount the insurance was actually made, and for which a policy was to be issued. (3.) Not only for the purpose' of showing that, but also because, as in this case, there might be apparent prior insurance relieving a company in any instance, it was necessary to show by complete instances of the practice relied on, that by its operation, the contracts of the companies prior to the defendant in this instance were really for amounts that did not exhaust the risk, but left enough of it uncovered to take on the defendant’s insurance, and for the very amount demanded by this action.
    II. The rights of the parties, it was insisted by the plaintiffs, were fixed by the execution of the application. The particulars of the contract were indeed in certain respects to be subsequently ascertained, but the essential terms of the contract were already agreed upon, and such points of it as were for the moment uncertain and indeterminate, were provided for, and would be rendered specific and certain by the operation of an established course of dealing between the parties, in precisely similar cases. 1. So far as evidence is concerned, it will be observed that the defendant has practically rested its defence to the action, on objections to the plaintiffs’ evidence of the practice. No ground of objection appears in the case, but the only ground which was actually suggested on the trial, was the general one of ineompetency. 2. But in the view just suggested, and looking at the form and tenor of the contract, the evidence was clearly competent, (a.) Even if the language of the contract could be claimed by the defendant to be entirely explicit and certain, evidence of a usage or practice would even then be competent, and in such a case if the usage be clearly made out, it may not only have a controlling effect to vary the plain import, or control the otherwise settled construction, of an instrument, but may even prevent the application of an otherwise settled rule of law. As to the point of mere competency in this view, see Phillips on Evidence, (vol. 2, pp. 729, 730, 4 Am. ed., and cases there cited;) Gibson v. Culver, (17 Wend. 305, 309 ;) Rushforth v. Hadfield, (7 East, 224;) S. C., (6 id. 525.) In Gibson v. Culver, (p. 308,) it is said, that though a pretended usage which is to supersede the general law is to be admitted to have this effect only after the severest scrutiny, yet that “all this has nothing to do with the abstract question of competency. Usage, when it goes to change the law, is always hard to be made out, but if counsel propose to prove such a usage, and think they can establish it, there is, it seems, no rule of law which forbids the attempt.” (b.) But looking at the form of the application, some evidence, by way of explanation at least, was directly invited by its very language, and especially by the clause “ not to exceed $10,000.” “When the language of the instrument .is such as the court does not understand, it is competent to receive evidence of the proper meaning of such language. It is competent also to receive such explanatory evidence where peculiar terms are used or indeed any expressions which, at the time the instrument was written, had acquired an appropriate meaning, either generally or by local usage, or amongst particular classes.” (2 Phil. EV. 708, 4 Am. ed., and cases cited.) (c.) Further, though the contract must be complete in all its elements, before it can found a cause of action, yet if any of its terms are uncertain on their face, evidence of the certain measure of these terms, existing in the minds of the parties when they made the contract, may be resorted to, to show the actual intention Of the parties and the substance of their contract on those points. Id cerium est quod cerium reddi potest. “Thus if a man makes a "lease to another for so many years as J. S. shall name, this is a good lease; for though it is uncertain at present, yet when J. S. hath named the years, it is reduced to a certainty. So the word certain, must, in a variety of cases, as when a contract is entered into for the sale of goods, refer to an indefinite quantity at the time of the contract made, and must mean a quantity which is to be ascertained according to the above rule.” (Broom's Leg. Max. 601.) (d.) But apart from the particular form of the application, the evidence objected to, especially as' it did not seek to contradict or vary the terms of the contract, was competent, as showing certain existing circumstance in the nature of a usage, with reference to which the contract was made. “It is upon the principle that all writings tacitly refer to the existing circumstances under which they were made, that courts of law admit evidence of particular usages and customs in aid of the interpretation, of written instruments, whenever from the nature of the case a knowledge of such usage or custom is essential to a right understanding of the instrument. The lav/ is not so unreasonable as to deny to the reader of any instrument the same light which the writer enjoyed.” (Wigram' s Extr. Ev. 67, 58. Boorman v. Johnston, 12 Wend. 566.) (e.) It was no objection to the evidence offered by the plaintiff, that it did not prove a general usage. It was not adduced for that purpose. An objection of this character has been strenuously urged by the defendant’s counsel upon former arguments in these cases, but it is submitted that it cannot avail.. The proper question in the first instance in this, as in all cases, is, what is the contract; not what is the usage, but what have the parties agreed. It may not be possible to answer these questions without showing their practice or course of dealing in regard to the subject of the contract. But it is their practice after all, which determines their contract, not the practice of others. They may be bound by a general custom; but in that case only, because the law presumes their participation in it from the generality of the practice. But if the practice of the parties can be proved from their own acts, the evidence, though it faE short of proving a general custom, is no less, it may fairly be said, perhaps, is even more decisive of their intent, than proof of a general usage would be, and it wiH be sufficient to control the construction of them contract. “When the knowledge or intention of parties is established by direct or circumstantial proof, (of a practice short of general usage,) their contract must be 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, wiH be binding not only in all cases upon the company, but upon aE such persons as have been in the habit of effecting poEcies in their office.” (1 Duer on Ins. p. 263, § 57.) In Bourne v. Gatliff, (11 Clark & Fin. 45,) a bEl of lading ran, “ to be deEvered at the port of London to GL ” The plaintiff claimed that the delivery was to be made at Ms residence, and not merely at the pier, and he was allowed, on the trial, under objection by the defendant, to read bills of freight and lading, relating to other goods carried for him by the defendant, and also to give parol evidence of the mode in which the defendant had delivered other goods, and it was held, on the appeal, unammously, per Lyndhurst, J., that there was no objection to the evidence. * * “It was to explain the contract by showing what had been the meaning of the parties. It was said that the evidence is of individual contracts. Be it so; that does not make the evidence the less admissible.” These suggestions have the greater force when it is considered that the contract in tMs case was, on its face, clearly uncertain and indeterminate.
    III. With reference to the defendant’s exceptions to the referee’s 3d, 10th and 13th findings of fact. If the evidence was competent, these findings must be sustained. 1. The evidence of the practice adduced by the plaintiffs, made out a prima facie case at all events, and, until it was rebutted or shaken, it proved the allegations of the complaint on this point. 2. The defendant offered no evidence in contradiction of the case thus made by the plaintiff. 3. The oMy testimony on that side, that of Walter, the defendant’s president, was that, when the application was for a fixed amount, the party applying could not alter such amount without the consent of the company, if the application had been already approved by the company, (a.) But the application in tMs case, and-in the other cases adduced, was not in any proper sense for a fixed amount. (5.) The statement that “the assured could not alter without the consent of the company,” did not meet the plaintiffs’ evidence, wMch was to the effect that the company did—that is to say, did as a matter of regular practice, consent to amendments. (c.) That the company did not consent in this case, could not avail in the face of proof of its repeated acts to the contrary in similar cases, unless reason were shown why the practice should not be followed in this case, and no evidence to that effect was offered. 4. Upon this state of the evidence, it is submitted that the referee could not possibly have found otherwise than he did. As to the sufficiency of the undisputed evidence to support the conclusions of fact which the plaintiffs claimed to deduce from it, it is to be observed that no such criterion is to be applied as is required in the case of a general usage. In reference to particular practices between parties, every instance adduced directly affects the party against whom it is proven; and it rests in the mere judgment of the tribunal which receives the evidence to say how many instances of this sort shall be sufficient; and if the referee holds here that, eight, or five, or three instances do suffice, especially when there is no evidence the other way, who is to gainsay his conclusion % Suppose there were altogether only eight or five or three instances of similar transactions between the parties, then evidence of these must, of necessity, suffice. For aught that appears, there were no other instances of any transactions between these parties than were shown here. If there had been even any other instances, or especially if there had been any other similar instances where this practice was not observed, it was open to the defendant to show the fact, and that he has not done so may fairly be taken most strongly against Mm. ‘ When the words or clauses to be interpreted are indeterminate or ambiguous, or the rule of law to be applied doubtful and uncertain, much slighter evidence than is necessary to be required in the cases I have mentioned, may doubtless be admitted to control and fix the hesitating judgment of the court.” “A few instances in cases thus doubtful, in which a particular interpretation or rule has been followed, though wholly insufficient to constitute a general usage, may yet be sufficient to give a preponderance to the scale into which they are cast.” (1 Duer on 
      
      Ins. 254.) 5. And still further to the point, that a.contract may be made out either by proof of general usage, or by evidence of acts of the parties in like cases. See Bacon's Abridgment, (Trover, p. 663 ;) Green v. Farmer, (Burr. 2221, 2223;) Rushforth v. Hadfield, (6 East, 519;) S. C,, (7 id. 224.) 6. That there is no objection (with reference to the rule excluding parol testimony to explain written contracts) to the plaintiffs’ showing as against the defendant, what were their contracts with third persons, namely, the other companies, see Lee v. (Adsit, 37 N. Y. 94.)
    IV. With reference to the exception to the referee’s second finding of fact, though in the particular point complained of it is not very material, it is yet fully sustained by. the evidence. The oases appealed to, being instances of insurances made in the same way in which this insurance was made, also sustain the finding.
    
      
      
         It was as follows:
      “Provided always, and it is hereby further agreed: That if the said assured shall have made auy other assurance upon the premises aforesaid, prior in date to this policy, then the said Mercantile Mutual Insurance Company shall be answerable only for so much as the amount of such prior assurance may be deficient towards fully covering the premises hereby assured; and the said Mercantile Mutual Insurance Company shall return the premium upon so much of the sum by them assured, as they shall be by such prior assurance exonerated from. And in case of any insurance upon the said premises, subsequent in date to this policy, the said Mercantile Mutual Insurance Company shall nevertheless be answerable for the full extent of the sum by them subscribed hereto, without right-to claim contribution from such subsequent assurers, and shall accordingly be entitled to retain the premium by them received, in the same manner as if no such subsequent assurance had been made.' It is also agreed: That the property be warranted by the assured free from any charge, damage or loss, which may arise in consequence of a seizure or detention, for, or on account of .any illicit or prohibited trade, or any trade in articles contraband of war.”
    
   By the Court, Gilbert, J.

The application to the defendant for insurance was for a sum not exceeding $10,000 in gold. The defendant signified its acceptance of the application by writing upon it “ binding. ’ ’ About the same time that this application was made, applications were made to other insurance companies, for insurances upon the same property, which applications were accepted in a similar way. The aggregate amount of insurance sought by the plaintiffs was $152,000, and was to cover a cargo then in progress of shipment. In neither case was the amount of risk which either company took definitely fixed. It was proved upon the trial, and the referee has found, that there had existed, and was then existing, between the plaintiffs and the several insurance companies referred to, including the defendant, a practice and course of dealing, in effecting marine insurance upon property belonging to" the plaintiffs, where the precise value thereof was hot known, at the time the application for insurance thereon was made, by which the plaintiffs were accustomed to make written applications, like those made in the instances referred to, being in different sums, and amounting in the aggregate to what the plaintiffs supposed might be the value of the property which would be at risk; and such applications were accepted and made binding for such indefinite sums, with the understanding that when the value of the property at risk should be ascertained, the amount so insured should be declared and apportioned, so that the amount insured by each should bear the same proportion to the property actually at risk as it bore to the aggregate of all the indefinite insurances thereon; and that after the amount had been so ascertained and fixed, a policy in the form then in use, was issued by the respective underwriters, for the precise sum so ascertained and adjusted as aforesaid.

It also appears, and the referee has so found, that the value of the property intended to be insured was not known to the plaintiffs, at the time said application was made.

It is not disputed by the defendant, that the contract created by the acceptance of the application, as explained by evidence of the practice mentioned, would render the defendant liable for a proportionate amount of the loss in this case, notwithstanding the clause of prior insurance contained in the policies used by it; and such, no doubt, is the rule of law. But the defendant contends that the evidence of the practice mentioned was inadmissible. We think otherwise. It is true the evidence did not prove any general usage; nor was it given for that purpose. It was given to show what was the actual contract between the parties to the action. And we think, within settled rules, it was not only competent, but absolutely essential for that purpose. (1 Duer on Ins. p. 263, § 57. Bourne v. Gatliff, 11 Clark & Fin. 45. Bliven v. New York Screw Co., 23 How. 421. Allen v. Merchants’ Bank, 22 Wend. 215. Van Santvoord v. St. John, 6 Hill, 157.)

[First Department, General Term, at New York,

November 4, 1872.

Leonard and Gilbert, Justices.]

The defendant’s objection to the testimony of Hazen, even if well founded, would not warrant us in reversing the decision of the referee. There being sufficient evidence, without his testimony, to sustain the judgment, the error, if any, of the referee, admitting that testimony, was not injurious to the defendant. (The People v. Gonzales, 35 N. Y. 59.)

The judgment should be affirmed, with costs.