*7 
 
 OPINION 
 
 OF THE 
 
 SUPREME JUDICIAL COURT 
 
 OF MASSACHUSETTS, 
 
 IN THE CASE OF 
 
 WILLIAM EAGER vs. THE ATLAS INS. CO. 
 
 WITH 
 
 REMARKS THEREON, 
 
 BY AN UNDERWRITER. 
 
 BOSTON: 
 
 JOHN. H. EASTBURN, PRINTER 
 
 1833 . 
 
* 
 
 
 E It It A T A . 
 
 jth pajrc, 
 
 Tth line from top, for a effect,” read affect. 
 
 2 2d 
 
 CC 
 
 6th line from bottom, for “ insured,” read insurer. 
 
 31st 
 
 CC 
 
 6th 
 
 u 
 
 cc 
 
 top, for “defendant’s” read defendants 
 
 u 
 
 cc 
 
 14th 
 
 cc 
 
 cc 
 
 “ dele “ as”. 
 
 32d 
 
 cc 
 
 14th 
 
 u 
 
 cc 
 
 “ for “ insured,” read insurer. 
 
 35 th 
 
 cc 
 
 4th 
 
 cc 
 
 cc 
 
 “ for “ costs,” read cost. 
 
 u 
 
 cc 
 
 9th 
 
 cc 
 
 cc 
 
 « for “ insurer,” read insured. 
 
 u 
 
 u 
 
 3 th 
 
 cc 
 
 cc 
 
 bottom, for “ 466,67,” read 600. 
 
 45th 
 
 u 
 
 6 th 
 
 cc 
 
 cc 
 
 “ for “ loss,” read lost. 
 
 90 t ifof 
 
SUFFOLK, S S . 
 
 SUPREME JUDICIAL COURT, MARCH TERM, 1833. 
 
 WILLIAM EAGER v. THE ATLAS INS. CO. 
 
 WILDE J. DELIVERED THE OPINION OF THE COURT. 
 
 This case is submitted to our consideration, upon 
 an agreed statement of facts, for the purpose of ob¬ 
 taining a revision of one of the points decided in the 
 case of Brooks vs. The Oriental Insurance Company ; 
 and as that decision was made without a very full dis¬ 
 cussion, though certainly not without consideration, 
 wehave very willingly re-examined the subject. But 
 after fully considering the arguments and opinions to 
 which we have been referred, in which the ques¬ 
 tion is discussed with great ability, and after due de¬ 
 liberation, we have been unable to perceive any suf¬ 
 ficient reason for overruling our former decision — 
 On the contrary, a more close and thorough examin¬ 
 ation of the principles and the reasons of that de¬ 
 cision has rather tended to strengthen and confirm 
 our confidence in its correctness. 
 
 The question to be re-considered is, whether in 
 adjusting a partial loss on a vessel after repairs made, 
 the deduction of one third from the whole expenses 
 
4 
 
 of the repairs is to be made, for the substitution of 
 new materials and work for old ; or whether the 
 proceeds of the old materials not used in the repairs 
 should be first deducted, and the one third be taken 
 from the residue. 
 
 Another question arises from the facts agreed, 
 which was not considered in the case of Brooks v. 
 The Oriental Ins. Co. and which depends on the 
 usage of the insurance offices of Boston, and “ the 
 rules and customs of assurance” referred to in the 
 policy. This question, if determined in favor of the 
 defendants will be decisive, and we have therefore 
 attentively examined the grounds upon which it ap¬ 
 pears to us to depend. The result of the examina¬ 
 tion I will now briefly state. 
 
 It is agreed by the parties, that at the time of the 
 underwriting the policy, and at the time of the loss, 
 it was the usage of the insurance offices then ex¬ 
 isting in Boston, in adjusting a partial loss, to deduct 
 one third new for old from the gross amount of the 
 expenses of repair. And it appears by the policy, 
 that, in the clause enumerating the perils insured 
 against, after specifying the seas, fire, enemies, &c. 
 there is added, “ and all other losses and misfortunes, 
 w hich have or shall come to the damage of the said 
 ship, to which insurers are liable by the rules and 
 customs of insurance in Boston.” The defendant’s 
 counsel contend that this clause in the policy, coup¬ 
 led wdth the usage before stated, must so control 
 the construction of the contract, as to settle the pre¬ 
 sent question in their favor, whatever may be the 
 general rule of law as to the adjustment of similar 
 losses in other cases. 
 
 That a local usage, as well as general usages of 
 trade, may materially affect the construction of *. 
 
b 
 
 contract, cannot be denied ; but to have this effect 
 such usage must appear to be so well settled, and of so 
 long a continuance as to raise a fair presumption that 
 it was known to both contracting parties, and that 
 the contract was made in reference to it. Such a 
 presumption is the only basis, on which any local or 
 particular usage can be sustained so as to effect the 
 construction of a contract. The usages or customs 
 of particular places are not binding unless the par¬ 
 ties contract in reference to them, and if their agree¬ 
 ment be reduced to writing, the reference ought to 
 appear by the terms of the contract. To allow par¬ 
 ticular usages to control or vary the construction and 
 legal effect of a written contract would be repug¬ 
 nant to the rules of evidence and might be followed 
 by perilous and mischievous consequences. Courts 
 take no notice of these local and particular usages ; 
 they are to be proved like other facts and necessari¬ 
 ly by parol evidence. Gordon v. Little, 8 Serg. and 
 R. 557 : 3 Rawle, 103; 1 Caines, 44. 
 
 But if parol evidence were admissible and partic¬ 
 ular usages might control or vary the construction oi 
 a written contract, an insuperable objection to the 
 defence, so far as it depends on the question of usage, 
 would remain. For whatever may have been the 
 usage and however well known, it can have no effect 
 on the contract, unless it was adopted by the parties, 
 and the contract was made in reference to it; of this 
 there is no proof, nor ground o presumption ; on the 
 contrary the terms of the contract strongly rebut any 
 such presumption. It has been already remarked, 
 that the rules and customs of nsurance in Boston 
 are expressly referred to in the po 'ey, but for a pur¬ 
 pose foreign to the present question. That reference 
 was introduced for the purpose of designating the 
 
6 
 
 perils insured against, and of supplying any omission 
 in the list of those which are enumerated ; but it has 
 no relation to the mode of adjusting a partial loss. 
 There are stipulations in the policy touching par¬ 
 tial losses, but none in respect to the question now 
 to be considered. This question had been settled in 
 New York years before this policy was underwrit¬ 
 ten, and for some time before had been pending in 
 this Court for decision. From these and other cir¬ 
 cumstances, the presumption is strong, that the par¬ 
 ties did not treat as to the mode of adjustment, on 
 the basis of usage, but on that of existing law, how¬ 
 ever it misfit be decided. When the contract refers 
 to “ the customs and rules of insurance in Boston” 
 and specifies how far they shall constitute a part of 
 the contract, it must be inferred that the parties did 
 not intend that it should be affected thereby beyond 
 the extent specified ; especially as the form of the 
 policy was no doubt settled and adopted with great 
 care and deliberation. 
 
 These considerations appear to us quite sufficient to 
 settle the question of usage, but other considerations 
 might be added if necessary. The usage relied upon 
 by the defendants is opposed to the essence of the 
 contract of insurance which is a contract of indem¬ 
 nity. That the usage, if applied to the contract, 
 would deprive the assured of a full indemnity and 
 give to the underwriters an unreasonable advantage, 
 I shall endeavour to show in discussing the principal 
 question. The usage is also opposed to the rule of 
 law, as we understand it, by which partial losses 
 when vessels have been repaired, are to be adjusted. 
 The rule of deducting one third new for old proba¬ 
 bly originated in usage, but it has been long known 
 and settled in the commercial world and has been 
 
7 
 
 adopted by courts, so that it is now a well set¬ 
 tled principle of law. Now it seems to me very 
 clear, that no particular usage opposed to the estab¬ 
 lished principles of law can be sustained. And so 
 it was decided in the case of Homer v. Dorr, 10 
 Mass. R. 26. The insurance was on property laden 
 on freight from Boston to Archangel and back to 
 Boston taking the risk on shore as well as on board. 
 In an action on the premium note, it was held that 
 the whole note W'as recoverable, although no proper¬ 
 ty was returned in the ship ; and it was proved to 
 be the universal usage in Boston, where the insurance 
 was effected, to return a portion of the premium in 
 such cases. Again if local usages are to be admit¬ 
 ted to control the rule in question, the object and 
 intention of the rule will be defeated. It was adop¬ 
 ted for the sake of convenience, and to avoid the 
 difficulty of ascertaining the relative value of the new 
 and old materials ; but there would be less difficulty 
 in ascertaining this, than there would be to settle the 
 various usages, that might spring up in different ports, 
 if every local usage were allowed to control the prin¬ 
 ciples of law. In Boston the one third new for old 
 might be deducted from the gross expenses of repair ; 
 in Salem the proceeds of the old materials might be 
 first deducted ; and in some other port some other 
 modification might be introduced, either by increas¬ 
 ing or diminishing the rate of deduction, so that we 
 might have as many different usages and laws as 
 there are ports in the Commonwealth. Instead, 
 therefore of having a simple certain and convenient 
 rule for our guide, we should have to consult and 
 ascertain these local usages ; and to conform to the 
 various changes and fluctuations in them which cir¬ 
 cumstances might from time to time introduce.— 
 These local usages may be useful, and are admitted, 
 
8 
 
 to explain the intention of parties, where there is 
 reason to presume that the contract was made in re¬ 
 ference to them, but to suffer them to prevail so as 
 to sap the foundation of a well established rule ofl aw 
 would be going too far. In the present case how 
 ever, it is not necessary to determine how far par¬ 
 ticular usages may be binding, or explanatory of con¬ 
 tracts, or of the rules of damages; it is sufficient to 
 decide, that they can can have no effect upon any 
 contract, unless by the consent of the contracting 
 parties, either express or implied. No such contract 
 appears in this case, and it cannot be presumed, for 
 the reasons already stated ; and this seems to be 
 decisive as to the question of usage. 
 
 The remaining question is more important and 
 more involved in doubt and difficulty. The argu¬ 
 ments and opinions opposed to the decisions in Byrnes 
 v. National Ins. Co. 1. Cowen, 265 and Brooks 
 v. Oriental Ins. Co. 7 Pick. 259, which have been 
 recently published, are undoubtedly entitled to great 
 consideration ; still however we continue to think 
 that those decisions are sustained by the most weighty 
 and convincing reasons. 
 
 All agree that the contract of insurance is one of 
 indemnity, and that this is in truth the essence of the 
 contract. The assured are entitled to a full indem¬ 
 nity from the underwriters and nothing more. That 
 rule therefore is the best, which will in the settle¬ 
 ment of a loss most fully and exactly fulfil this prin¬ 
 cipal intention of the contract. It is also admitted, 
 that the rule of deducting one third new for old, 
 however construed, will not always secure an exact 
 indemnity. The assured will recover more or less 
 than an indemnity according to the age and state of 
 the vessel before the loss, but this imperfection of 
 
9 
 
 the rule is supposed to be more than compensated by 
 its certainty, simplicity and practical convenience. 
 Before the introduction of the rule, the relative value 
 of the new and old materials was ascertained by ap¬ 
 praisement in each case ; and the difference between 
 the cost of the new materials and work, and the value 
 of the old materials at the time of the loss, was de¬ 
 ducted, leaving the balance for which the insurer 
 was liable. This being found inconvenient, and it 
 being difficult to ascertain the value of the old 
 materials with accuracy, the rule of deducting one 
 third new for old was long since substituted for the 
 ancient mode of adjustment, and its continuance for 
 such a length of time proves its practical utility.—■ 
 Since the introduction of the rule, neither party can 
 question the relative value of the new and old mate¬ 
 rials, whether the rule in a particular case should 
 afford an exact indemnity or not. Thus far the par¬ 
 ties are bound by the rule, but no further. This, 
 like all other general rules, when applied to a multi¬ 
 plicity of cases, will not always do exact justice, but 
 it should be so applied as to do as little injustice as 
 possible. It will not do to say, that because a rule 
 of necessity produces some unjust results in particu¬ 
 lar cases, it should be so applied as to produce other 
 similar results without necessity ; and that such must 
 be the effect of the rale contended for by the de¬ 
 fendant’s counsel, cannot, we think, well be doubted. 
 
 Let us suppose, for example, that the vessel parts 
 her cable in a storm, but that a part is saved which 
 is sold for $200, and that a new cable is purchased 
 which costs $300. If one third is deducted from 
 the full price of the new cable, this balances the ac¬ 
 count, and the assured is entitled to no indemnity. 
 If the part of the old cable saved should sell fcr $250 
 
 2 
 
10 
 
 the assured in stating an account would become in¬ 
 debted to the underwriter $50. And so whenever 
 the old materials sell for more than two-thirds ol the 
 amount of the expenses of repairs, a balance will be 
 found in favor of the underwriter. Whether he can 
 claim it or not, is not the question ; nor is it any good 
 answer to the objection resulting from the unjust 
 operation of the rule, to say that such cases w ill but 
 rarely occur ; for a result so unjust, and so manifestly 
 opposed to the spirit of the contract of insurance, 
 ought never to occur. But without supposing ex¬ 
 treme cases, it seems to me that generally the as¬ 
 sured will not receive full indemnity, if a third new 
 for old is to be deducted from the whole expenses of 
 repairs, without first deducting the salvage. The 
 salvage is no part of the loss, and belongs to the as¬ 
 sured ; the amount of that, therefore, ought to be 
 withdrawn from the operation of the rule, or the 
 assured will fail to recover a full indemnity. It 
 is said that the assured, by such a rule, would 
 recover more than an indemnity, and that injus¬ 
 tice would be done to the underwriter. For in¬ 
 stance if the expenses of repairs amount to $600, 
 and the old materials sell for $200, then it is 
 said, the assured would be fully indemnified by the 
 recovery of $200, the increased value by the new 
 materials being $200, as assumed by the rule; 
 whereas by first deducting the proceeds of the old 
 materials, and then deducting one-third from the res¬ 
 idue, the assured would recover $266 67, being 
 $66 67 more than a full indemnity. But there is a 
 fallacy, we think in this objection and statement. 
 
 It is true that the vessel is made better by the re¬ 
 pairs ; but it by no means follotvs, that the whole 
 amount of the increased value is to be credited to 
 
11 
 
 the underwriter. So far as he contributes to the ex¬ 
 penses of repairs he should be credited for the in¬ 
 creased value, but, no further. Now the underwri¬ 
 ter has no concern with the expenses of repairs which 
 are defrayed by the old materials. So far as these 
 go, the subject repairs itself, and thus far there is no 
 claim for indemnity. The further disbursements re¬ 
 quired to repair the loss, are to be made at the ex¬ 
 pense of the underwriter, and on these expenses he 
 is entitled to a deduction of one-third ; but there 
 seems to be no good reason for extending the rule 
 beyond these limits. 
 
 In the case last supposed the adjustment would be 
 thus stated. 
 
 Whole expenses of repairs - $600 00 
 
 Deduct expenses paid by the proceeds 
 of the old materials those being the 
 property of the assured - 200 00 
 
 400 00 
 
 The remaining disbursements being 
 made at the expense of the under¬ 
 writer, he is entitled to a deduction 
 of one-third new for old, - 133 33 
 
 266 67 
 
 And he is chargeable with the sum of $266 67 ; 
 which gives generally to the assured a full indemnity 
 and no more. There may be some exceptions ; but 
 in adopting a general rule of decision we are to look 
 at general results. 
 
 But it is denied that the old materials are the 
 property of the assured ; it is however difficult to 
 conceive how and when, before the adjustment of 
 the loss, the property in the assured becomes devested 
 

 12 
 
 and vested in the underwriter. It is said that if the 
 underwriter pays the full amount of the loss, the old 
 materials become his property ; that if a cable is lost, 
 and afterwards the loss is adjusted and the under¬ 
 writer pays, the old cable if recovered would become 
 the property of the underwriter. And so if part of 
 the cargo is lost, and the loss is paid by the assurer, 
 the lost articles if recovered would belong to him.— 
 This may well be admitted, without affecting the 
 question under consideration, for until an adjustment 
 is made, the old materials continue to belong to the 
 assured, and if they are disposed of, and the proceeds 
 are applied to the purchase of new materials, the 
 underwriter, as to that part of the expenses of the 
 repairs, can have no claim to an allowance for the 
 increased value. The repairs made by means of the 
 salvage constitute no part of the loss, and cannot be 
 charged against the insurer ; the old materials there¬ 
 fore clearly belong to the assured. 
 
 But a weightier objection to our former decision 
 remains to be considered. It is said to be immate¬ 
 rial, to whom the old materials belong, or who pays 
 the disbursements for repairs, because at all events 
 the ship is made one-third better by the repairs, and 
 therefore that one-third of the gross expenses should 
 be deducted or the assured will receive more than an 
 indemnity. And this would be true, if the fact were 
 that such would be in all cases the increased value, 
 or if the presumption is to be carried to the extent 
 the objection supposes. But presumptions against 
 facts, established for convenience, are to be strictly 
 guarded, and a rule founded upon such presumptions 
 is to be confined to the purposes for which it is adop¬ 
 ted. Now it has been already remarked that the 
 rule in question was adopted to avoid the difficulty 
 
13 
 
 and uncertainty of ascertaining the loss, and 
 the amount of indemnity therefor, by apprais- 
 ment in each particular case. This rule was founded 
 on the supposition or presumption, that generally the 
 new materials are one-third better than the old.—■ 
 The question then is how far this presumption is to 
 be carried out, and to ivhat portion of the repairs 
 the rule is to be applied. We understand the rule 
 to be, that one-third is to be deducted from the ex¬ 
 penses of repairing the loss, and that the loss is the 
 injury done to the vessel which remains after the 
 proceeds of the old materials have been applied.— 
 This is the loss against which the underwriter stipu¬ 
 lates to indemnify the assured, and so it was con¬ 
 sidered before the introduction of the existing rule. 
 1 Magens, 193. The rule, therefore, and the pre¬ 
 sumption as to the relative value of the materials, 
 are to be confined to the portion of the repairs re¬ 
 maining after crediting the old materials. These go 
 to reduce the cost of repairs, the underwriter being 
 only chargeable with the difference between the 
 proceeds of the old materials and the cost of the 
 new, and the amount of the difference is the amount 
 paid to repair the loss, on which the deduction of 
 one-third new for old is to be made. 
 
 This on the whole as we think, is much the most 
 equitable rule of adjustment, and best adapted to 
 secure, as nearly as any general rule can, exact in¬ 
 demnity ; and that commonly it will not be found 
 too favorable to the assured. Whereas the rule con¬ 
 tended for by the defendants might lead to injus¬ 
 tice and even absurdity ; or to a train of exceptions 
 which might be very embarrassing. 
 
 Judgment for the plaintiff. 
 
 BOSTON, July 20th 1833. 
 
% I I 
 
 ** *ln - . v p H :?< «i 
 
 ^ J 
 
 4 - ji " 
 
 
 
 »ji*%■■>«+t:~* vc 
 
 »*V- 
 
 
 
 
 
 
 
As the decision of the case of Brooks vs. the Orien¬ 
 tal Insurance Company, prescribed a new rule for the 
 adjustment of partial losses on ships with salvage ; as 
 existing—executory contracts to a vast amount, would 
 be materially affected by this rule ; as the former 
 rule had long been established, and was, till recently, 
 in New York, in universal practice,—and known and 
 acknowledged by the parties to those contracts at 
 the time they were made ; as the old rule was be¬ 
 lieved to be right, and the new rule to be wrong,— 
 these several considerations produced an impression, 
 that the decision was not the result of full discussion, 
 and mature deliberation. The importance of the 
 question rendered a re-consideration of that decis¬ 
 ion a very desirable object to the several insurance 
 companies in Boston, as it was generally maintained 
 by them, that the decision w T as not only w r rong in 
 itself; but, if otherwise, it did not affect the con¬ 
 tracts, made under their form of policies, because 
 these contained a provision, which that , on which 
 the decision was made, did not; and which, they 
 conceived, exempted them from the operation of the 
 rule. That provision follows an enumeration of the 
 several perils assumed by the insurer, and is in these 
 words, “ and all other losses and misfortunes which 
 have, or shall come to the damage of the said ship, 
 or any part thereof, to which insurers are liable by 
 the rules and customs of insurance in Boston.” 
 
16 
 
 Under this form of policy, the Atlas Insurance 
 Company insured one half of the ship Grecian, owned 
 by William Eager. The policy was made prior to 
 the decision of the Court in the case before mention¬ 
 ed. The ship, while thus insured, sustained dam¬ 
 age in her bottom, by which it became necessary to 
 strip off the old copper and to substitute new. The 
 loss having occurred subsequently to that decision, a 
 claim was made on the principle of the rule therein 
 prescribed. 
 
 The insurers of the ship refused to settle upon 
 that principle ; but proposed to adjust the loss in the 
 customary mode, and to give an obligation to pay 
 the owner of her, the difference between the two 
 modes of adjustment, if the Court, on a re-con¬ 
 sideration of the question, should confirm their for¬ 
 mer opinion, and decide, that the insurers, under 
 their form of policy, were not exempted from the 
 operation of the rule. 
 
 An adjustment was accordingly made agreeably to 
 the general usage. One-third was deducted from the 
 value of the new materials and labor, and the proceeds 
 of the old materials were credited to the insurers. 
 Under this form of adjustment the net amount of 
 
 loss was - - - $1418 00 
 
 Under the new form it amounted to - 1871 74 
 
 Making under the two forms, a difference of $453 74 
 
 For this difference, obligations as before stated, 
 were given by the Columbian Insurance Company 
 for one half, and by the Atlas Insurance Company 
 for the other—one half of the ship being insured by 
 each company. For this proportion an action was 
 commenced against the lasCnamed company in the 
 Supreme Judicial Court of Massachusetts. It was 
 
17 
 
 agreed by the parties, that, at the time of under¬ 
 writing the policy^, and at the time of the loss, it was 
 the usage of the insurance companies then existing 
 in Boston to adjust losses of this nature by the mode 
 contended for by the defendants. 
 
 The defendants contended, that the rule of ad¬ 
 justment established in Boston, was the rule used 
 and established in all other places in the commercial 
 world, except New York ; that the contract of insur¬ 
 ance being one of indemnity, the rule established in the 
 case of Brooks vs. the Oriental Insurance Company, 
 was contrary to the law of insurance, because the 
 insured wrnuld obtain by it, more than an indemnity; 
 that the rule being repugnant to the rules and cus¬ 
 toms of insurance in Boston, they were not liable 
 to its operation under their form of policy. 
 
 The facts in the case being admitted, it was sub¬ 
 mitted to the Court for judgment on the law. The 
 Court in giving their opinion also admitted : 
 
 1st. That a local usage , as w 7 ell as general usages 
 of trade may materially affect the construction 
 of a contract; but, to have this effect, such usage must 
 appear to be so well settled, and of so long a contin¬ 
 uance, as to raise a fair presumption, that it was 
 known to both contracting parties, and that the con¬ 
 tract was made in reference to it: 
 
 2dly. That, the contract of insurance is one of in¬ 
 demnity, which is its essence ; and, that the insured 
 are entitled to a full indemnity from the underwriters, 
 and nothing more : 
 
 3dly. That deducting one-third new for old is a 
 rule of law, long since introduced, and of practical 
 utility: And the court maintained: 
 
 That, in case of repairs to a ship the old materials, 
 for which new have been substituted, belong to the in- 
 
 3 
 
18 
 
 sured until the loss is adjusted ; that the value or 
 proceeds of those materials, must be deducted from 
 the gross amount of the repairs, and the difference 
 is the loss, to which the rule of deducting one-third 
 new for old is to be applied. 
 
 The decision of the Court was for the plaintiffs; 
 and the principles and opinions on which that decis¬ 
 ion rests, and the reasonings which led to it, we pro¬ 
 pose to examine. 
 
 In executing this intention, we shall speak of the 
 opinions of the Court with respect, but with free¬ 
 dom. Their opinions will be treated according to 
 their intrinsic worth ; not according to a value de¬ 
 rived only from official authority. We know not 
 why Judicial opinions should not be subject to ex¬ 
 amination, as well as others of public interest. The 
 Supreme Judicial Court is not an infallible tribunal. 
 Their decisions are received as law, and, when pro¬ 
 claimed, are rules of action for the community. From 
 those decisions there is no appeal. If they are wrong, 
 the effects upon the people will be mischievous. The 
 Judges are, and ought to be, independent in their 
 salaries, and their stations. Thus situated, we have 
 a right to expect, that their opinions will be the re¬ 
 sult of the most patient investigation of facts and a 
 sincere desire to ascertain the truth and to establish 
 sound rules of law for the administration of justice— 
 that prejudice, passion and an ad Iterance to former 
 opinions, merely because they have once been pro¬ 
 claimed, will have no influence in their determina¬ 
 tions. The decisions of our Courts of Law deeply 
 concern the public. They operate on life, lib¬ 
 erty and property. They are acts of public agents, 
 and, as such, are subjects on which the public have a 
 right, whenever they please, to express and publish 
 
19 
 
 their sentiments. A judicious, impartial and learn¬ 
 ed tribunal has nothing to apprehend from a public 
 examination of its acts. Sound opinions will bear 
 handling : and the discussion of those of the judiciary, 
 so long as it is conducted with temperance and pro¬ 
 priety, will be productive of good, not of evil. 
 
 The first point considered by the Court was that contended for 
 of usage. The usage contended for by the defend- g “»«•«/> 
 ants, was not whether a third new for old should be 
 deducted ; but whether it was the usage to make the 
 deduction for wear and tear from the gross amount of 
 repairs. This the Court considered and treated as a 
 local usage. Although the rules and customs of in¬ 
 surance in Boston, are expressly referred to in the 
 policy; yet, so far as those rules and customs agree 
 with the rules and customs of other commercial 
 states and nations, they are not local. Whether the 
 usage contended for by the Defendants was or was 
 not a local usage , should, if the fact were essential 
 in the case, have been ascertained , not assumed. If 
 the Court had investigated the subject, they would 
 have discovered, that it was not a local , but a gener¬ 
 al usage—an usage not peculiar to Boston, but com¬ 
 mon to the whole commercial world, except New 
 York; whose example, in this case, appears to have 
 been followed, without duly considering the results 
 to which it leads. If proofs of the fact had been re¬ 
 quired, proofs could have been adduced. If authori¬ 
 ties were wanted, the books furnish them. But that 
 the Court labored under some misapprehension as to 
 the matter in question, is apparent from the fact, that 
 the citation made by them from Magens I. p. 193. 
 is directly opposed to the doctrine they have here ad¬ 
 vanced, as well as to that, for the support of which 
 it was adduced. The question, or the quotation 
 
20 
 
 and long cs* 
 tablished. 
 
 The usage 
 was known lo 
 the parties to 
 the contract & 
 the contract 
 was made in 
 reference to 
 it. 
 
 Local usages 
 have the force 
 of law where 
 they prevail, 
 &c. 
 
 must have been misunderstood ! For, by this very au¬ 
 thority, quoted by the Court themselves, it appears, 
 that the usage contended for by the defendants, was 
 the usage nearly a century ago—that the only differ¬ 
 ence in the mode of adjustment then , and that now 
 practiced here, is, that the value of the old materials 
 lost was then ascertained by appraisement, but is 
 now established and admitted in all cases, to be two 
 thirds of the original cost: But, from the value thus 
 deduced, it was the usage then as now to deduct 
 the value, or proceeds of the old materials. Thus 
 the authority quoted establishes two points at once: 
 1st. that the usage contended for by the Defendants 
 is not a mere local usage; and 2dly. that it is a usage 
 oj long continuance. The Court, therefore, in con¬ 
 sidering and treating it as a local usage , have mista¬ 
 ken the fact. 
 
 We have shown, that the usage in question is not 
 local; and we will next show, that it was known to 
 the parties; and that the contract was made in refer¬ 
 ence to it. “ Besides the general law of merchants, 
 there are certain usages which prevail in particular 
 countries, and sometimes in particular branches of 
 commerce. These, like local customs in England, 
 have the force of law where they prevail; and where 
 they are in force, are always supposed to be in the 
 contemplation of the parties ; and the contract of in¬ 
 surance is construed as having been made with ref¬ 
 erence to them. But then they must appear to have 
 been long established ; that is, as I humbly appre¬ 
 hend, they must be immemorial, or at least coeval 
 with the branch of commerce to which they be¬ 
 long.”* 
 
 ’Marshall on Ins. Intro, p. 19. 
 
21 
 
 Here we have authority to show, that a local cus¬ 
 tom long established has the force of law where it 
 prevails; and, where it is in force, is always supposed 
 to be in the contemplation of the parties, and the 
 contract of insurance is construed as having been 
 made in reference to it. What ground, then, had the 
 Court for asserting, that there was no proof, nor 
 ground of presumption, that the usage contended for, 
 was adopted by the parties; nor that the contract was 
 made in reference to it? Is it no proof, that such a 
 rule of settlement had existed for nearly a century ? 
 Is it no proof, when the usage is general and long es¬ 
 tablished? Is it no proof, when the books lay it down 
 as the rule of adjustment? Is it no proof, when 
 such a mode of adjustment as that for which the 
 Plaintiffs contend, could not, at the time of making 
 the contract, be found on the records of any insur¬ 
 ance company in the Commonwealth ? If this be 
 no proof that the Plaintiff's knew of such an usage, 
 and that the contract was made in reference to it, is 
 it no ground of presumption that they knew it ? 
 
 How strange too does it appear, that in the page 
 next but one preceding, the Court say : “ It is agreed 
 by the parties, that at the tune of underwriting the 
 policy, and at the time of the loss, it ivas the usage of 
 the insurance offices, then existing in Boston in ad¬ 
 justing a partml loss, to deduct one third for new 
 from the gross amount of the expenses of repairs 
 Here is an admission, that the usage ivas adopted by 
 the parties, and that the contract ivas made in reference 
 to it, of which the Court say, “ there is no proof, 
 nor ground of presumption —How the decision of 
 the Court can be reconciled with the facts and the 
 doctrine, is a question, we imagine, of difficult solu¬ 
 tion. 
 
22 
 
 The policy 
 has refer ence 
 lo such usage. 
 
 The insurers 
 not liable f«>r a 
 loss created 
 only by a 
 mode of ad¬ 
 justment re¬ 
 pugnant to 
 usage. 
 
 The Court then proceed, and decide, that the 
 clause in question was introduced, “ for the purpose 
 of designating the perils insured against, and of sup¬ 
 plying any omission in the list of those, which are 
 enumerated ; but it has no relation to the mode of 
 adjusting a partial loss.” 
 
 What is the language of the policy ? It is this. 
 “ And all other losses and misfortunes , which have, 
 or shall come to the damage of the said ship to which 
 insurers are liable by the rules and customs of insur¬ 
 ance in Boston.” The phraseology we will not de¬ 
 fend. The Court have considered perils and losses 
 as synonymous terms ; and so too, we presume, the 
 word misfortune must, in this connexion, be consid¬ 
 ered. The policy, therefore, enumerates certain 
 losses which the insurers are to bear ; and then adds, 
 certain other losses not enumerated, but which are 
 restricted to those, to which “ insurers are liable by 
 the rules and customs of insurance in Boston .” 
 
 The policy proceeds farther—It contains a provi¬ 
 so, that the insurers “ shall not be liable for any par¬ 
 tial loss on the ship,” “ unless it amount to five per 
 cent.” The loss, in this case, the Court considered 
 as a partial loss. Now, in many cases, a loss or 
 damage to the ship would not amount to five per 
 cent, if adjusted according to the rules and customs 
 of insurance in Boston; but would amount to five 
 per cent, if adjusted according to the rules and cus¬ 
 toms of insurance in New York. Can, then, the loss¬ 
 es that are made so for the insured by an adjustment 
 by the rules and customs of New York, be the losses 
 which are meant in the policy, as those to which in¬ 
 surers are liable by the rules and customs of Boston? 
 When the mode of adjustment determines, whether 
 a claim for damage be a loss or not a loss, within 
 
23 
 
 the meaning of the policy, the words must have been 
 evidently introduced, not “ for the purpose of desig¬ 
 nating the perils insured against,” but. for the pur¬ 
 pose of proclaiming, that they assumed no other 
 losses, than those to which insurers were liable by 
 the rules and customs of Boston. The words, there¬ 
 fore, instead of having “ no relation,” have a very 
 near relation “ to the mode of adjusting a partial 
 loss,”—the relation of cause and effect: for, if the 
 rules and customs of Boston have no relation to the 
 mode of adjusting a loss, it has been shown, that the 
 insurers would be subjected to losses, which they 
 never assumed , nor were contemplated by the parties 
 to the contract, at the time it was made. We have 
 thus shown, 
 
 1st. That the usage contended for by the Defend¬ 
 ants is not a local , but a general usage : 
 
 2dly. That the usage has been long established, 
 and was known and adopted by the parties to the 
 contract, which was made in reference to it: 
 
 3dly. That local usages, in such circumstances, 
 have the force of law, and bind the parties : 
 
 4thly. That the policy has reference to those 
 usages, as they relate to the mode of adjusting loss¬ 
 es : 
 
 Therefore, from the principles and doctrines laid 
 down by the Court themselves, the defendants were 
 not liable under their form of policy for the claim 
 made upon them. 
 
 The Court, having decided the question of usage, 
 proceed to consider the question of indemnity under 
 the rule established in the case of Brooks vs. the 
 Oriental Insurance Company. The Court maintain¬ 
 ed, that, by this rule, the insured would, in all cases, 
 of partial loss on the ship, receive an indemnity ; but 
 
 
by tliat contended for by the defendants, and which 
 had been nearly a cent. :y in operation, the insured 
 never would receive an indemnity. The Defendants 
 maintained, that, in ah such cases, the insured would 
 receive more than an indemnity on adjustments bv 
 the new rule ; but never more , nor less, under the old 
 rule. The Court admitted, 
 
 _ . 1st. That the rule of deducting; one third new for 
 
 Deducting O 
 
 ro n r e oid r a d weiilold is a well settled principle of law : 
 
 wb 2dly. That the contract of insurance is one of in- 
 
 Indemnity J 
 
 ofrliecontract demnity, which is its essence. 
 
 t, ‘ 1U1 " cr The premises are admitted—they are indisputable. 
 Taking these as our points of departure, we arrived 
 at very different conclusions from those of the Court. 
 When we are satisfied our opinions on any subject 
 are erroneous, we shall abandon them ; but while we 
 are satisfied they are correct, we will cling to them. 
 An adherance to error from pride of opinion is ob¬ 
 stinacy, not wisdom. We were ready and willing to 
 relinquish our opinions, if they could be proved to be 
 erroneous. Having a desire to know all that could 
 be said upon the question by the highest judicial au¬ 
 thority, we waited, with some impatience, for the 
 opinion of the Court. Our curiosity was excited to 
 learn, how it could be proved, that insurers, in their 
 mode of adjusting partial losses on ships, had so long 
 deluded, or imposed upon the insured by a misappli¬ 
 cation of two rules, so simple in their nature, and the 
 correct application of which is an operation of com¬ 
 mon arithmetic, and requires no further advances in 
 the science of figures, than to the Golden Rule of 
 Proportion: and, how the insured, who generally 
 understand so well how to work by that Golden 
 Rule , should, from generation to generation, have 
 been subjected to an erroneous mode of adjusting 
 
25 
 
 losses ; with too little sagacity to discover a practi¬ 
 cal error, acting injuriously upon their own interests . 
 
 Having obtained the opinion, we retraced the steps 
 by which we had come to our conclusions, and fol¬ 
 lowed those of the Court by which they came to 
 theirs ; but without discovering either our own errors 
 or their correctness. 
 
 The Court say, that “The usage” (that is deduct¬ 
 ing one third from the gross amount of the repairs) 
 
 “ relied upon by the defendants, is opposed to the 
 essence of the contract of insurance which is a con¬ 
 tract of indemnity.” 
 
 Now, if this assertion be true it is susceptible of 
 proof; and if it is not proved, we may presume it is 
 because it is not true ; and, therefore, not suscepti¬ 
 ble of proof. If it be proved, we admit it settles the 
 question, and there is an end to the whole ^matter. 
 
 What then is the proof ? 
 
 Deducting one third new for old, the Court have 
 laid down as a rule of law ; consequently, when the 
 insured, in case of loss, receives two thirds of the 
 original value of w r hat has been lost, he is, by law, 
 fully indemnified. 
 
 It is also admitted by the Court, “ that the rule of The new rule 
 
 J violates bo£h 
 
 deducting one third new for old, however construed, princi ‘ 
 will not always secure an exact indemnity. The 
 assured will recover more or less than an indemnity 
 according to the age and state of the vessel before the 
 loss” The reasons they give in favor of the rule 
 are old ; but truth is not less valuable for its age. 
 
 ; Does it require an argument to prove, that when a 
 thing is new and received as one third worn , that the 
 thing is received for less than its worth ; and when a 
 thing is seven eighths worn, and is received for two 
 thirds its original value, that the thing is received for 
 
 4 
 
26 
 
 more than it is worth ! Notwithstanding these obvi- 
 ous truths, and the labors of the Court to prove them 
 to others; yet, they themselves , have stated an exam¬ 
 ple in which, the thing lost was not one third worn, 
 to show, that the insured is not indemnified when the 
 adjustment is made by the rule for which the De¬ 
 fendants contended—thus conflicting against their 
 own principles, and controverting their own reason¬ 
 ing to prove the correctness of those principles. We 
 give below the whole case supposed. “ Let us,” 
 say the Court, “ suppose, for example, that the vessel 
 parts her cable in a storm, but that a part is saved ; 
 which is sold for $200, and that a new cable is pur¬ 
 chased which cost $300. If one third is deducted 
 from the full price of the new cable, this balances the 
 account, and the assured is entitled to no indemnity.” 
 
 It must be remembered, that the Court admitted 
 the rule of deducting one third new for old to be a 
 well settled rule of law ; therefore, if two thirds the 
 original value of the thing lost is paid the insured, 
 he is indemnified. Now, the cable when new, cost 
 $300,—when lost, it was, by the law, one third 
 worn, and the loss to the insured was therefore only 
 $200; and, of course, he could claim nothing, for he 
 had lost nothing. 
 
 The example proceeds, “ If the part of the old ca¬ 
 ble saved, should sell for $250, the assured, in stating 
 an account, would become indebted to the under¬ 
 writer $50—and so whenever the old materials sell 
 for more than two thirds of the amount of the expenses 
 of repairs a balance will be found in favor of the un¬ 
 derwriter.” This is contending against the rule it¬ 
 self. It is bringing an exception which proves, if it 
 proves anything, the unsoundness of the general rule. 
 The damaged article selling for mete than two thirds 
 
21 
 
 its original value , can it be necessary to say, was be¬ 
 cause it was not one third worn, as the rule consid¬ 
 ered it ? The Court, however, on this supposed ex¬ 
 ample, proceed in a train of reasoning on the injus¬ 
 tice and repugnancy of this mode of settlement , to the 
 spirit of the contract , apparently forgetting their own 
 language in a few preceding lines—“ that the rule,” 
 (deducting one third new for old) “ however constru¬ 
 ed. will not always secure an exact indemnity. The 
 assured will recover more or less than an indemnity 
 according to the age and state of the vessel before the 
 loss,” —and that, “ neither party can question the 
 relative value of the new and old materials , whether 
 the rule, in a particular case, should afford an exact 
 indemnity or not.” 
 
 Astonishment has indeed been excited at this rea¬ 
 soning of the Supreme Judicial Court of Massachu¬ 
 setts. The Court say, that neither party can ques¬ 
 tion the relative value of the new and old materials — 
 and they state an example in which the relative value 
 is the only point in the question —and then exclaim, 
 that “ a result so unjust and so manifestly opposed to 
 the spirit of the contract of insurance ought never to 
 occur!” And by their example too, they affirm, that 
 “ the assured in stating an account would become in¬ 
 debted to the underwriter $50—and so whenever the 
 !old materials sell for more than two thirds of the 
 amount of the expenses of repairs, a balance will be 
 found in favor of the underwriter.” 
 
 Did any one ever know, or hear of such an account 
 being stated ? The mind of the man who would make 
 it must be disordered : he would require the advice 
 af a physician, not of an attorney ; the aid of medi- 
 zine not of law. Men of business usually state ac- 
 
 ' 
 
 | 
 
28 
 
 counts” and make claims on insurers, to show they 
 have something to receive from them ; not when they 
 sustain no loss under the policy to show, that they 
 have something to pay to them ! 
 
 It would appear from the manner of treating this 
 question, that it had not two sides. The Court, 
 indeed, admitted, that under the rule, the assured will 
 recover more or less than an indemnity, according to 
 the age and state of the vessel before the loss .”—But 
 the case, they state, is one of less than an indemnity , 
 because the value of the thing at the time of the loss, 
 was greater than that assumed by the rule—being 
 less than one third worn. Could not the Court have 
 stated a case on the other side, where the insured 
 would recover more than an indemnity f If their sup¬ 
 posed case against the insured shows a result so un¬ 
 just , and so manifestly opposed to the spirit of the con¬ 
 tract as ought never to occur, will not a supposed 
 case against the insurer also show a result so unjust 
 and so manifestly opposed to the spirit of the contract 
 as ought never to occur? We will suppose such a 
 case.—A vessel in a storm slips her cable, and anoth¬ 
 er is purchased which cost $300. The old cable is 
 afterwards recovered, and is worth neither more nor 
 less, than it was at the time of slipping it. The cable 
 is sold and produces but $50, being five sixths worn. 
 Now, under the rule contended for by the Defendants, 
 the following would be the mode of adjustment ; 
 
 First cost of the lost cable, ----- $300 • 
 
 Less one third new for old ----- 100 
 
 Loss by the law under the contract, - - - $200 
 
 Now by this mode of adjustment, the loss is esti¬ 
 mated at $200 ; but the article being five sixths 
 worn, the actual loss is but $50; the difference, i 
 
29 
 
 therefore, between the actual loss and the legal loss 
 is $150, which sum, being the excess beyond the ac¬ 
 tual loss, the insured is so much more than indemni¬ 
 fied. In the first case, the insured receives less than 
 he had lost, because the thing lost was worth more 
 than two thirds of its first cost; in the second case, 
 he receives more than he had lost, because the thing 
 was worth less than two thirds its first cost. But 
 there is this difference in practice,—the insurer will, 
 in such circumstances, never he paid the profit; but 
 will always pay the loss. 
 
 Such cases may be multiplied ; but they have no 
 relation to the question. They prove nothing. Their 
 bearing is upon the rule of deducting one third new 
 for old, about which there is no controversy. 
 
 But will the rule of the Court be more equal and The new 
 
 . i 1 * * • *11 • *1 rule of adjust. 
 
 equitable m its operation—will it provide a more wm 
 
 1 1 1 always give 
 
 exact indemnity than that for which it is substituted 
 We answer, no : it creates an evil, instead of remov-oid y tl,e 
 
 . T 11 . , neither more 
 
 mg one. In all cases it gives more to the insured, nor less, 
 and takes more from the insurer. It operates all on 
 one side. When the thing lost is less than two 
 thirds worn, and the rule operates for the insurer, 
 the effect of that favorable operation is diminished; 
 and when the thing is more than two thirds worn, 
 and the rule operates against the insurer, that effect 
 is increased; and as the insured in such cases re¬ 
 ceived more than an indemnity by the former mode 
 
 demnity, is still further increased under the new 
 mode. Or, in other words, the losses on one side of 
 the rule are for one party augmented; and the gains 
 on the other side diminished : While, to the insur¬ 
 ed, it is a gain on both sides. 
 
 Let us see how far the rule of the Court will oper- 
 
30 
 
 ate in producing an indemnity more nearly than the 
 old rule. We take the case stated by the Court, 
 which, they say, is so unjust in its result , that it 
 ought never to occur. The cable purchased to re¬ 
 
 place the one lost, cost ------- $300 
 
 Deduct one third new for old - - - - 100 
 
 Loss under the policy ------ $200 
 
 The old cable is sold and the proceeds are paid to 
 the underwriters and amount to $250. By which 
 the insurers receive more than they pay $50. This 
 the Court say “ it a result so unjust, and so mani¬ 
 festly opposed to the spirit of the contract of insur¬ 
 ance” that “ it ought never to occur.” 
 
 There can be no injustice in executing a contract 
 according to its conditions, and the mutual under¬ 
 standing of the parties at the time of making it. Is 
 it unjust, if a ship is fully insured, is supposed to 
 be totally lost, is abandoned, a total loss paid ;—and 
 it appears afterwards, that she was not lost, is re¬ 
 ceived by the underwriters and sold for more than 
 they paid for her ? and so if goods are insured, aban¬ 
 doned, and sold for more than the sum for which 
 they were insured ?—If there be injustice in the one 
 case, there must be injustice in the others. But 
 these are cases which very seldom occur ; and when 
 they happen, it is because the result was not antici¬ 
 pated by the insured. 
 
 But the true point of light in which to view this 
 question is not, whether the insurers have received 
 more than they paid ; but whether, what the insur¬ 
 ed has received, is equivalent to what he has lost? 
 Was the cable then worth more than $200 ? By 
 the contract it was not; if then he is paid that sum 
 he is indemnified: for he has received all the loss 
 which was covered by the premium. 
 
31 
 
 The salvage, “ say the Court,” is no part of the 
 loss, and belongs to the assured ; the amount of that, 
 therefore, ought to be withdrawn from the operation 
 of the rule, or the assured will fail to recover a full 
 indemnity.” They then cite a case stated and pre¬ 
 sented by the defendant’s showing that, by the opera¬ 
 tion of the new rule, the insured would receive viore 
 than a full indemnity. But the Court add—“ there 
 is a fallacy, we think, in the objection and state¬ 
 ment”—“It is true,” say they, “ the vessel is made 
 better by the repairs.” 
 
 The Court attempt to prove the fallacy by stating 
 the following case— 
 
 “ Whole expenses of repairs - - 600 00 
 
 Deduct expenses as paid by the proceeds 
 of the old materials, those being the 
 property of the assured - 200 00 
 
 400 00 
 
 The remaining disbursements being made 
 at the expense of the underwriter, he is 
 entitled to a deduction one third new 
 for old ----- 133 33 
 
 $266 67 
 
 and he is chargeable with the of $266 67.” 
 
 The Court had admitted that “ the vessel is made 
 better by the repairs” and they admitted, that the rule 
 of law determines, that she is, by those repairs ‘made 
 better ’ or more valuable one third of their amount; the 
 vessel is therefore bettered 0200. But the insured 
 receives $200, for which he credits only $133 33.— 
 His loss is $400 ; for this he receives $200 in old 
 materials, and $266 67 of the insurers. Does he 
 
 I 
 
 I 
 
32 
 
 not then for a loss of $400, receive the sum of 
 $466 67 ? Now, if the loss of a cable which origin¬ 
 ally cost $600, will, under one mode of adjustment, 
 give a claim for $466 67 as a true indemnity ; it is 
 evident, that, for the loss of the same thing, less 
 than $466 67 will not be an indemnity. Suppose 
 there was no salvage,—it is then universally admit¬ 
 ted, that 3400 in money will be an indemnity. Can 
 a loss be greater with salvage than without it ?— 
 So the new rule makes it appear. 
 
 It being admitted, that when a cable costing ori¬ 
 ginally $600 is lost, it is worth but $400 at the time 
 of the loss.—Suppose in case it were lost, that the 
 insured, instead of furnishing a new cable, were to 
 supply an old one of similar quality and value as the 
 one lost.—The account would then be balanced : 
 the insured had lost one cable worth $400, and re¬ 
 ceived another of similar quality and value. Sup¬ 
 pose the old cable be found, to whom would it be¬ 
 long ? Can it, or ought it to make any difference 
 in the ownership, whether the recovery be before, or 
 after the adjustment ? 
 
 But the Court deny, that the old materials are 
 
 The court J 
 
 fid 17 materials ^ ie property of the insurer ; “it is however, 1 ” say 
 which new they, “ difficult to conceive how and when, before 
 stituted, are the adjustment of the loss, the property in the as- 
 
 the property J 1 1 J 
 
 oi ihe imurer. sure( ] becomes devested, and vested in the under¬ 
 writer.” 
 
 It is more difficult to conceive, how the insurer 
 should acquire a property in the salvage after an ad¬ 
 justment under the new rule, than before it: for un¬ 
 der this rule, the salvage is considered as belonging 
 to the insured, and so treated. On an adjustment 
 then, the insurer has paid nothing for it, and has ac¬ 
 quired no additional right to the property by that act. 
 
Suppose before the adjustment they are destroyed by 
 fire, or they are sold, and the purchaser becomes bank¬ 
 rupt ; or they cannot be sold in the country where 
 the vessel was repaired, and are shipped to another 
 and lost on the passage ? In either case, on whom 
 would the loss fall ? If they are “ the property of 
 the insured,” and clearly belong to him,” the loss 
 ought to be his. But if any such event were to 
 happen, would any Court or jury so decide? 
 
 The right of property in the old materials is ob- 
 taine d upon the same principle, as a right of prop¬ 
 erty is obtained in all other similar cases. The loss 
 
 • •• -■ i -|*i • 11 The loss ini 
 
 in question is a salvage loss, winch is a total loss question was a 
 of a part of any subject insured. Here, without s a u n c d h ™ d a e j Just . 
 abandonment, a total loss of the damaged part is materials are 
 paid, and the salvage is vested in the insurer. “ Iny^ughnot 
 such cases,” (salvage losses) “ though the property abondoncd ‘ 
 be not abandoned to the underwriters, the principle 
 of abandonment, is assumed, and is in fact acted 
 upon ;—the property saved does not indeed actually 
 belong to the insurers as where a regular abandon¬ 
 ment is allowed, but it is to all intents and purposes 
 treated as if it did, and all the charges incurred are 
 born by them. The principle acted on is this ;— 
 the underwriter pays a total loss, and takes the pro¬ 
 ceeds of the goods.” (Stevens on average, p. 79.) 
 
 This applies to a part of the cargo, not to a part of 
 the ship ; and there is this difference between them— 
 in the case of the cargo, the thing lost is paid for in 
 money, not in kind—but in the case of the ship, the 
 thing is paid for by furnishing another of the same 
 quality and quantity. 
 
 “ When goods, in consequence of any of the per¬ 
 ils insured against, must be sold short of their des¬ 
 tination, and there is either a proper abandonment, 
 
- I 
 
 34 
 
 or the'loss, owing to its nature, must be treated as 
 a total one without an abandonment, as when goods 
 saved from a ship which cannot be forwarded to their 
 destination, which is a salvage loss properly speak¬ 
 ing, the underwriter must pay the difference between 
 the value in the policy, (or the cost &c.) and the 
 nett proceeds of the goods. There is no difference 
 between a salvage loss with, and one without an 
 abandonment, except that in the former the property, 
 after payment of the sum insured, is transferred to 
 the underwriters, and the nett proceeds divided 
 amongst them in proportion to their respective inter¬ 
 ests'; and in the latter the sale of the property is con¬ 
 ducted by the assured, and the underwriters (who in 
 such cases usually agree to a payment on account) pay 
 the balance of the loss after it is finally settled.” 
 (Benecke on the Prin. of Ind’y p. 442, vide, also, 
 Phillips, Hughes.) 
 
 If this be not the character of the loss, it 
 must be a partial loss, and ought to be settled as 
 such. What would be the result of the last case 
 stated, if settled upon this principle ? The value of a 
 thing insured in an open policy, is the market value 
 of it. A cable therefore which cost originally $600 
 the market value would be - - - - - 400 00 
 II not a sal - This cable is damaged, and sold for - - 200 00 
 
 vage toss it is a ° 
 
 partial loss _ 
 
 and ought to 
 
 that principle. The difference between the sound and unsound is 
 50 per cent., which is the loss to be applied to the 
 if teuied sum insured, and this is $400, being 2-3 of $600. 
 The claim therefore would be $200. And such 
 
 the«, nic ns if would be the uniform result in cases where it could 
 
 adjusted un 
 
 deMbfU p e applied. The coincidence in the results of this 
 mode of adjustment, and that contended for by the 
 defendants, show the incorrectness of the rule es¬ 
 tablished by the Court. 
 

 35 
 
 Every part of a ship, separately considered, is val- aS hi h f . e a r a e val¬ 
 ued in the policy at 2-3 the expense, that would, 111 icy at two 
 
 4 J % 1 thirds their 
 
 case or loss, be required to substitute new. Thus ori s' lnal?alue * 
 a cable which costs $600, is valued in the policy at 
 $400. If totally lost the insurers are liable for this 
 sum, and no more. Nor are they directly or indi¬ 
 rectly interested in any sum exceeding this amount— 
 the excess on the expense of it belongs exclusive^ 
 to the insurer as a distinct interest—as much so, as 
 if he had lost an anchor of 600 lbs., and had procured 
 another of 900. Now, as the salvage is derived only 
 from what was insured, its value should be deducted 
 from the amount only of what had been substituted 
 to supply the loss. But by the new rule it is tak¬ 
 en from a larger sum, thereby increasing the sum re¬ 
 
 ceived beyond an indemnity. 
 
 Thus a cable is lost costing - - $600 00 
 
 The old cable sells for - 200 00 
 
 400 00 
 
 Less one third new for old - - 133 33 
 
 Then the cost of the new cable is - 600 00 
 
 Less new for old as before, - - 133 33 
 
 $466 67 
 
 Thus it appears, that the salvage which was derived 
 from a loss of 400 is applied to a loss of 466,67. By 
 this rule too the insurer sustains all the loss on the 
 
 I old materials arising from their damage, and wear and 
 tear ; and the proceeds are applied to the purchasing 
 of new materials, on which, for the amount of the 
 old, the insured makes no deduction. 
 
 Let another case be supposed—a ship which cost 
 the owner $15,000 is insured when new at that sum. 
 
36 
 
 As she lessens in value by age and service, so he 
 diminishes the sum at which she is insured, until her 
 value is $10,000, when she is one third deteriorated. 
 Now, suppose in this state she were to get on shore, 
 and it would cost more than 50 per cent, of her value 
 to repair her damages, but worth as she was $4,000. 
 Suppose, too, that the insurer had a new ship of the 
 same cost as the other when new, and in all other 
 respects precisely similar. This vessel he tenders to 
 the owner upon the same terms,he would furnish new 
 work and materials to repair any loss or damage to 
 the old ship. The offer is accepted. How will the 
 account be adjusted? Under the new rule of the 
 Court it would be thus; 
 
 Cost of the new ship, - $15,000 00 
 
 Value of the old ship, - 4,000 00 
 
 11,000 00 
 
 Less new for old, - 3,666 66 
 
 Insurance of old ship, - 10,000 00 
 
 $13,666 66 
 
 Thus, the insured would receive a ship, worth 
 $15,000 for which he would pay but $13,666 66; and 
 the difference between the two sums is the excess 
 over an indemnity. “ But,” say the Court, “a weight¬ 
 ier objection to our former decision remains to be con¬ 
 sidered. It is said to be immaterial to whom the old 
 materials belong, or who pays the disbursements for 
 repairs, because at all events the ship is made one 
 third better by the repairs, and therefore, that one 
 third of the gross expenses should be deducted or the 
 assured will receive more than an indemnity—and 
 this would be true, if the fact were, that such would 
 
37 
 
 be in all cases the increased value, or if the presump¬ 
 tion is to be carried to the extent the objection sup¬ 
 poses.” This seems to be conceding the whole 
 ground—for the Court have admitted it to be a rule 
 of law well settled, to deduct one third new for old. 
 Can it be denied, then, that a vessel is made better one 
 third the amount expended in repairs ?—This would be 
 contending against the rule itself, by which that fact 
 is, in all cases, established. The Court add, “ But 
 presumptions against facts, established for conven¬ 
 ience are to be strictly guarded, and a rule founded 
 upon such presumptions is to be confined to the pur¬ 
 poses for which it is adopted.” And is not the ship 
 equally bettered before as well as after the adjust¬ 
 ment, by the repairs or new articles furnished ? 
 
 What connexion has the rule of one third new for 
 old with the question ? The point is whether that 
 one third shall be applied to the whole amount of re¬ 
 pairs, or to the difference between this sum, and the 
 value of the salvage. Now it does not affect the 
 question whether one third, one sixth, or any other 
 proportional part be taken as the difference between 
 new and old ; nor, whether the value of the articles 
 lost or damaged be ascertained by estimation or es¬ 
 tablished by law. 
 
 The Court say, “ We understand the rule to be 
 that one third is to be deducted from the expenses 
 of repairing the loss, and that the loss is the injury 
 done to the vessel which remains after the proceeds 
 of the old materials have been applied. This is the 
 loss against which the underwriter stipulates to in¬ 
 demnify the assured and so it was considered before 
 the introduction of the existing rule. 1 Magens, 
 193.” Unfortunately for the Court, the authority 
 here cited is directly against them on this question. 
 
 The court 
 adduce Ma¬ 
 gens as author¬ 
 ity in the sup¬ 
 port of their 
 doctrine, 
 whereas this 
 authority is 
 against them. 
 
38 
 
 Case cited 
 by the court. 
 
 The part of the ease referred to runs thus ;* “ The 
 translation of the instrument which contains the re¬ 
 port of five persons appointed at the request of the 
 captain by the Court of Justice at Copenhagen, 
 shews, how they valued the damage, that happened 
 to the ship and its materials by running aground, and 
 by the breaking and cutting of the cables. Whereof, 
 only the following, being the cutting of the cables is 
 brought here as valued by them, viz.” 
 
 “ The same weighed 26 ship pounds and were 
 worth 15 R’lrs per ship pound, making Rix 
 Dollars _____ 390 00 
 
 “ Deduct the neat proceeds of that part there¬ 
 of which was saved and sold, being 35:4 
 
 “ Remain Rix D’rs - - 354:2” 
 
 rk< By this statement, it will be perceived, that the 
 value of the damaged materials before the disaster, 
 was estimated by competent persons, appointed for 
 that purpose. The rule of deducting one third, was 
 not then in use. Instead, therefore, of fixing the 
 value by this deduction, as at the present time, it 
 was then ascertained in that manner by estimation. 
 Thus the cables before they were damaged were 
 valued 390. The cables, when new we suppose to 
 have cost 585. By the present rule, one third would 
 be deducted for wear, making their value before the 
 disaster 390. Whether the cables were more or less 
 worn, affects not the question; and it is quite as 
 probable, that they were more, as that they were 
 
 * This is the case of the Swedish ship Victoria bound from 
 Cronstadt, to Leghorn. On her passage she got aground and 
 was repaired at Copenhagen. | The charges [referred to are 
 General Average. The cables and anchors were recovered. 
 The quotation is from a statement dated in Amsterdam, 1748. 
 
39 
 
 less. The point of inquiry is, whether taking the 
 value of the old materials from the whole of the first 
 cost, or from the value of the thing at the time of the 
 loss, was then the rule f We say, the authority 
 quoted sustains the latter ; and is, therefore, against 
 the new rule of the Court, and in accordance with 
 the rule previously in use. They had one mode of 
 ascertaining that value, ive another ; they by valua¬ 
 tion, ive by deducting one third. Now, it is of no 
 importance, whether or not these two modes would 
 give the same, or a different result. If from this 
 result, however obtained, the value of the old ma¬ 
 terials is deducted, it establishes the point, that it 
 was then the rule to deduct the allowance of new for 
 old from the gross sum, and not from the difference 
 between the value of the old materials and cost of 
 the new. This, we think, is manifest—We claim, 
 therefore, this authority for us, which was adduced 
 as being against us; and the Court, no doubt, will 
 respect it, as they themselves made use of it, though 
 under an erroneous impression, that it sustained the 
 doctrine for which they contended. 
 
 The Court say: “ the salvage is no part of the loss.” TI,e >° ss of 
 
 The language of the policy is “ losses ,” “ which 
 have or shall come to the damage of the said ship thing is ren- 
 
 0 x dered useless 
 
 A thing appertaining to a ship is lost to the ship, ®" e d ! " e P ara - 
 when, by the perils insured against, it is irreparably 
 damaged, or rendered useless for the purposes for 
 which it was intended ; and it becomes necessary to 
 substitute another. Thus, when a cable has been 
 cut, and the remainder of it is too short for the gen¬ 
 eral purposes of a cable, it is a loss of a cable to the 
 ship, and the insurer must furnish another. If a boat 
 be stove, or a mast sprung, or shivered by lightning, 
 so as to be useless and irreparable, it is as much a 
 
40 
 
 loss of a boat or a mast to a ship, as the paralysis 
 of a limb, is the loss of a limb to the human body ; 
 or the withering of a branch, is the loss of the branch 
 to the tree. The ship would not be seaworthy, un¬ 
 less the articles, which constituted a part of her, and 
 have been rendered useless, were removed, and 
 others, that would supply the deficiency, substituted. 
 That, which is a daily occurrence, hardly admits of 
 a question. 
 
 n old ma. Although the Court decide that the salvage is no 
 0 "™“ f„e„ part of the loss ; yet, they say, that a loss is the dif- 
 not he claimed ference between the value of the old materials saved, 
 and the new substituted. If it be true, that the old 
 materials saved form no part of the loss, it follows, 
 that new materials can never be claimed while the 
 old materials remain, because there is no loss of 
 these materials. Thus if thirty fathoms of a cable 
 of ninety be lost by cutting, the remaining sixty 
 fathoms are not lost, consequently, the insured can 
 have no right to procure, at the expense of the insur¬ 
 er, more than thirty fathoms ; and if he procures a 
 new cable of ninety fathoms, he has substituted sixty 
 fathoms of it for a like quantity, which was not lost; 
 and the insurer is chargeable with no part of this. 
 
 Although by the decision of the Court the old 
 materials are not lost, but belong to the insured ; 
 yet, under that decision, new materials of like quan- , 
 tity, quality and value as the old, when new, may 
 be obtained in lieu of them ; and the difference in 
 value charged to the insurers, and to the amount of 
 the old materials in value, the insured receives new 
 for old, without deduction. 
 
 the insurer is If the old materials belong to the insurer, they be- I 
 d"!n/^ r d« .. 011 S t0 " im absolutely and in kind. He cannot sell < 
 ^ioned by .he t h em for underwriters account, and charge them with I 
 
41 
 
 all the losses of converting them into money; and, 
 with the proceeds, buy new articles for their account. 
 
 The Court told us, that indemnity is the essence of 
 the Contract of insurance ; and so is it the essence of 
 the Contract, that no new thing shall be obtained for 
 another, that is not lost. Suppose a cable is damaged, 
 but none of it lost; that it remains the same in weight 
 and length as before the damage ; but a new one is ne¬ 
 cessary, and obtained. The old cable by the doctrine 
 of the Court is no part of the loss, and belongs to the 
 insured, of the property in which he is not devested. 
 
 What more then ought they, the insurers, in any view 
 of the case, to pay, than the amount of injury by the 
 damage? But it is plain, that if the cable be sold, 
 that the value being diminished, not only by this in¬ 
 jury, but by wear and tear, it will produce as much 
 less as the diminution in value from both those causes 
 combined ; and it is equally obvious, that the insurer 
 not only suffers the loss from those two causes ; but 
 the proceeds, being deducted from the new cable, 
 and the third new for old deducted from the balance, 
 he sustains a further loss, by furnishing that propor¬ 
 tion of the value of the new cable, without receiving 
 the benefit of one third new for old. 
 
 Let us examine the operation of the new rule bv . E«n>ma- 
 one other case not of value but of quantity. of'qu’imuy 356 
 
 No question can exist that, if a cable be rendered nolofTJlue * 
 useless or irreparable by the perils insured against, 
 the owner has a right to demand another of the 
 insurer. Suppose of a cable ninety fathoms long 
 sixty had been lost by cutting, and thirty saved ; that 
 a new cable of similar length is furnished by the in- 
 
4 2 
 
 surer. How, under the rule of the Court, would the 
 loss be adjusted ?—It would be thus : 
 
 The old cable lost w ? as in length - 90 fathoms 
 
 Deduct the old materials, these being 
 
 the property of the assured, - - 30 “ 
 
 60 “ , 
 
 The remaining quantity being furnished, 
 at the expense of the underwriter he 
 is entitled to a deduction of one third 
 new for old, ------- 20 “ 
 
 40 “ ,T 
 
 and he is chargeable with forty fathoms. In this 
 statement we have adopted the formula of the 
 Court—And wdiat is the result P It shows, that the 
 insurers are to furnish forty fathoms ; that the in¬ 
 sured has 30 fathoms, being the remainder of the old 
 cable, which the Court say were not lost and be¬ 
 long to him ;—These together make seventy fathoms, 
 ten more than an indemnity under the rule of law 
 admitted by the Court. 
 
 Now, this mode w r ould be right and equitable, if 
 the thirty fathoms remaining of the old were used in 
 the repair by adding to them sixty fathoms of new. 
 But this is not the practical operation of the rule, if 
 it were, no complaint would be heard against it: nor 
 is the operation and effect such as they appear to be 
 by the statement of the Court, as this shows a result 
 after the materials had been converted to money. 
 The thirty fathoms saved would not be received as 
 thirty fathoms of cable. They would be first sold, and 
 as many fathoms, not of old, but of new cable as the 
 nett proceeds would purchase, would be considered 
 as the quantity to be deducted. Thus, if the thirty 
 
fathoms of old would purchase but twenty fathoms 
 of new, the twenty fathoms only are deducted ; the 
 insured thereby receiving for the old material new 
 without deduction. And the thirty fathoms of old 
 cable, which the Court say are not lost but belong 
 to the insured, are sold for the account of the insur¬ 
 er and produce but twenty, by which, in effect, he 
 is charged with thirty, and receives credit only for 
 twenty. Should sixty fathoms only of new cable be 
 
 purchased, and the thirty fathoms of old be added 
 to it, in this case, “so far as these go, the subject 
 repairs itself,” and “ go to reduce the cost of re¬ 
 pairs and not, as in the case stated by the Court, 
 where they are sold and not used again, and conse¬ 
 quently their place is supplied by new. 
 
 It seems to be evident, that the Court on this The new rule 
 
 is established 
 
 point of indemnity have “begged the question.” u P on an ex - 
 
 X J DO x treme case 
 
 They maintain, that under the rule contended for ^wL d ant‘e d 
 by the defendants, the insured wmuld not receive law prescrib- 
 
 J ing one third 
 
 an indemnity, which is the essence of the contract “ s nc l e he be f;« r * 
 of insurance : and to prove it, they cite a case in IT. and old 1 
 which the article damaged, was not one third worn, 
 which is an extreme case in favor of their position, 
 under the admitted rule of law allowing in all cases 
 a deduction of one third : then they assert this is 
 not indemnity : thus using as a medium of proof 
 what, if considered abstractly, they themselves 
 would not admit to be sound, and indeed have in 
 effect denied. If a thing be totally lost without 
 salvage, although at the time of the loss, it was 
 entirely new, they admit, that the insured is indem¬ 
 nified by the payment of two thirds the first cost of 
 it : for, they have laid down as a rule of law, that 
 one third shall, on all partial losses on a ship, ex- 
 
44 
 
 Tl»e Court 
 hive establish¬ 
 ed a general 
 rule upon an 
 extreme case 
 assumed in fa 
 vorofone par¬ 
 ty, and which 
 will always 
 operate 
 against the 
 other. 
 
 cept on anchors, be deducted from the expences of 
 labor and materials. 
 
 Indemnity is a payment of the loss according to 
 the contract. The indemnity meant by the law and 
 the contract, is the only indemnity contemplated by 
 the parties to the contract; and that can, either 
 lawfully or equitably, be claimed. The lawful in¬ 
 demnity, is an equitable equivalent. It is, indeed, 
 not only a reasonable supposition, but a fact suscep¬ 
 tible of proof, and which has been proved, that in the 
 aggregate, the loss by wear and tear exceeds one 
 third of the original value ; consequently, that the 
 proportion allowed on new for old is insufficient 
 and it has been shown, that, in all cases, where the 
 thing is more than one third worn, the insured re-* 
 covers more than he has lost. 
 
 But upon that fallacy the Court have reasoned, 
 and decided the question. On an extreme case in 
 favor of one party, grounded upon that fallacy, they 
 have, illogically deduced a general principle to the* 
 injury of the other. Assuming as fact, that the rule 
 of law operates always against the insured, they 
 have prescribed a new rule, which will operate al¬ 
 ways in his favor. 
 
 But the assumed fact, differs widely from the ac¬ 
 tual fact: experience shows, that under the rule 
 of deducting one third new for old, the insurer , and 
 not the insured, is the suffering party. For proof! 
 of this, actual, not assumed facts will be adduced. 
 
 The small difference in the value of old and new 
 copper, renders the operation of that rule, on a loss I 
 of this article, apparently less favorable to the insur¬ 
 ed, than on a loss of others where this difference is 
 greater. Hence, the advocates of the new rule, 1 
 have usually selected this article to show what they 
 
deem to be the error of the common mode of adjust¬ 
 ing a loss. But even on that their calculations are 
 uniformly made on the assumed fact, that the cop¬ 
 per was less than one third worn: and without as¬ 
 suming this ground, they would, in every instance, 
 utterly fail of making even the appearance of a case 
 of non-indemnity, under the former mode of applying 
 the rule of law. What then are the actual facts re¬ 
 garding the loss of copper ? We have examined 
 every case of new coppering ships, which an Insur¬ 
 ance Company of this city has had, since they com¬ 
 menced business, embracing a term of eight years. 
 The whole number of cases was seventeen ; but 
 the particulars of only sixteen could be obtained. 
 By these it appears, that the aggregate weight of 
 the new copper furnished, exceeded that of the old 
 copper saved, forty-two and three fourths per cent,* 
 which was the loss by wear and tear; consequently, 
 the insurer has received credit for thirty-three and one 
 third per cent, and been charged with forty-two and 
 three quarters per cent.—by which he has paid nine 
 and five-twelfths per cent, more than was loss, and 
 so much exceeding an actual indemnity,—the differ¬ 
 ence being not one third as established by law, but 
 forty-two and three quarters per cent, as established 
 by fact. Such then is the real result evinced by 
 experience. 
 
 * 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 o 
 
 Weight of old copper 
 
 50 
 
 CO 
 
 i-h 05 CO 
 
 CO 
 
 o 
 
 —4 
 
 to 
 
 o 
 
 SO 
 
 CO 
 
 
 co 
 
 CD 
 
 05 
 
 
 G* 
 
 1—4 
 
 CO 
 
 SO Gt Gt 
 
 o 
 
 CO 
 
 05 
 
 05 
 
 CO 
 
 GO 
 
 CO 
 
 co 
 
 ^ CO 
 
 GO 
 
 vj 
 
 CO 
 
 saved. 
 
 r—4 
 
 o 
 
 CO 05 tO 
 
 
 co 
 
 05 
 
 05 
 
 t- 
 
 1—4 
 
 CO 
 
 c- 
 
 i—i 
 
 05 
 
 - 
 
 
 
 CO 
 
 co 
 
 Gt UO GO 
 
 
 iff to 
 
 Gt 
 
 GO 
 
 
 Gt 
 
 GO 
 
 iff Gt 
 
 
 
 CO 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 iff 
 
 
 Gt 
 
 CO 
 
 05 Tf to 
 
 Gt 
 
 © 
 
 G* 
 
 
 O 
 
 
 LO 
 
 05 
 
 iff 
 
 
 05 
 
 
 CO 
 
 r Weight of new copper 
 
 
 t-o 
 
 OO O ^ 
 
 
 i—I 
 
 CO 
 
 co 
 
 Gt 
 
 
 CO 
 
 
 t-O 
 
 Gt 
 
 GO 
 
 v* 
 
 
 furnished. 
 
 05 
 
 'ff 
 
 05 05 O 
 
 co 
 
 05 
 
 
 
 05 
 
 iff 
 
 CO 
 
 GO 
 
 GO 
 
 Gl 
 
 GO 
 
 
 G* 
 
 
 CO 
 
 05 
 
 tO h f- 
 
 
 
 r- 
 
 r- 
 
 t''* 
 
 
 Iff 
 
 CO 
 
 
 t- 
 
 CO 
 
 
 1—4 
 
 1—t 
 
 
 1—4 
 
 Gt 
 
 3 
 
 4 
 
 5 
 
 CO 
 
 
 CO 
 
 © O 
 
 1—4 
 
 Gt CO 
 
 
 to 
 
 CO 
 
 
 
 
 
 
 
 
 
 
 
 1—4 
 
 ’ 1 
 
 
 r “ H 
 
 r—4 
 
 
 1—4 
 
 
 
If it be said, that a part of the old copper may 
 have been lost or stolen, it affects not the argument: 
 for, if the vessels had been coppered at their own¬ 
 er’s expense, we are bound to believe, that the same 
 losses would have been experienced, as the fidelity 
 of the agents employed, is not to be questioned: 
 Moreover, if the old materials do not, as the Court 
 maintained, belong to the insurers, that part of them 
 which was lost, not by the perils insured against, 
 ought not to be borne by them. 
 
 The fact here adduced proves more, than that the 
 deterioration by wear and tear , exceeds the propor¬ 
 tion established by law. It may be taken for grant¬ 
 ed, and the position will not probably be disputed, 
 that, when the copper upon a ships bottom is dimin¬ 
 ished by wear and tear one third of the whole 
 original weight, the vessel then requires to be 
 new coppered ; consequently, of the sixteen vessels 
 new coppered by the insurer, twelve of them, at 
 least, if no accident by the perils of the sea had 
 happened, required and would have been new cop¬ 
 pered at the expense of their owners : and, according 
 to the loss per centum on the aggregate, not only 
 twelve, but the whole number, required, at the time 
 of the loss, new coppering. 
 
 It may also be taken for granted, that the average 
 duration of the service of copper is three years, al¬ 
 though its annual loss of weight is but one-ninth of 
 the original quantity ; consequently, every coppered 
 vessel, after three years service requires to be new 
 coppered: and when this is done at the expense of 
 the insurers, if the copper had been in use more< 
 than one year, the deduction of one third is less 
 than the actual diminution of value by wear, in pro¬ 
 portion as that excess bears to the whole term. 
 
47 
 
 Nor is that excess of loss in the weight of copper, 
 the only loss sustained beyond the proportion estab¬ 
 lished by law. The same relatiye excess beyond an 
 indemnity, will exist in all the repairs attendant on 
 new coppering : Stripping off the old, and putting 
 on new copper ; recaulking, painting, &c. are char¬ 
 ges always comprised in, and form a large propor¬ 
 tion of the expense of new coppering,—these, and 
 in most cases, many others are paid by the insurer. 
 If, therefore, the difference of weight between the 
 old and new copper, be taken as the criterion of 
 wear of those parts of a ship, which must be repair¬ 
 ed, when she is new coppered ; the deduction of one 
 third is less by nine and a half per cent., than the 
 actual deterioration by wear and tear. 
 
 The severity with which the new rule will oper¬ 
 ate on the insurer, may be thus seen. For, he not 
 only pays that per centage on the sum expended for 
 repairs; but, by the new rule, this excess will be 
 augmented by one third the value of the old mate¬ 
 rials saved. 
 
 But the sum exceeding an indemnity which the 
 insurer, under the rule of the Court, is compelled to 
 pay, is not its most objectionable feature :—This, as 
 it increases the risk, may be counterbalanced by an 
 adequate increase of premium. It is being obliged 
 in adjusting an account to abandon a rule known to 
 be right, and to act by a rule demonstrably wrong ; 
 for, we hold, while it is admitted that the old mate¬ 
 rials are, at the time they are lost, one third depre¬ 
 ciated by wear, so long will it be true, that when 
 the insured obtains more than two thirds the first 
 cost of new materials, will he receive more than an 
 indemnity : and when one third of any given value 
 has been lost, what is the value of the remaining 
 
48 
 
 two thirds, is a problem of too easy solution to ad¬ 
 mit of any question in the result. Moreover, the 
 decision prescribing this rule, in effect pronounces 
 the old rule to be false ; the decision, then, is an im¬ 
 peachment of the morality or capacity of those, who 
 have so long practically applied it to the adjustment 
 of losses. 
 
 We feel compelled here to remark, and we do it 
 with regret and reluctance, that the Court, throughout 
 their argument, appear to have viewed but one side 
 of the question,—and that the side of the Plaintiffs— 
 All the cases supposed, are extreme cases on that 
 side. Why, let us ask, did they, in all cases, take 
 the thing as less than one third worn ? and why, in 
 no one instance, have they taken it as more ?—Why 
 did they not fix upon the line prescribed by the law, 
 and keep, in their arguments and stated cases, on 
 that line ? Why, after admitting, “ that the rule of 
 deducting one third new for old, however construed, 
 will not always secure an exact indemnity, that the 
 assured will recover more or less than an indemnity 
 according to the age and state of the vessel before 
 the loss, but this imperfection of the rule is supposed 
 to be more than compensated by its certainty, sim- : 
 plicity and practical convenience” ; that “ the rule of 
 deducting one third new for old was long since sub¬ 
 stituted for the ancient mode of adjustment, and its 
 continuance for such a length of time proves its prac¬ 
 tical utility. Since the introduction of the rule : 
 neither party can question the relative value of the 9 
 new and old materials, whether the rule in a particu- j 
 lar case should afford an exact indemnity or not.'’ 3 
 Why, we repeat, after all these admissions, did they,! 
 in answer to the Defendants who asserted, that : I 
 u the ship is made one third better by the repairs,! 
 
and, therefore, that one third should be deducted, or 
 the assured will receive more than an indemnity,” 
 say, “ And this would be true, if the fact were, that 
 such would be, in all cases, the increased value, or if 
 the presumption is to be carried to the extent the 
 objection supposes.”—Is not one third of the repairs, 
 the increased value given by law in all cases of repairs 
 upon a ship ? Is there any presumption in assum¬ 
 ing what the law establishes as fact? Why could 
 not the Court have tried the other side of the ques¬ 
 tion ? And have stated and considered a case or two 
 where the materials were more than one third worn ? 
 then, they would have seen, that, in such cases, which 
 ; certainly are no less rare than the others, the in¬ 
 creased value by law, was less than the increased 
 value in fact. 
 
 The old rule of adjustment gives, in all cases, an 
 «xact legal indemnity ; it operates uniformly in all 
 circumstances. The new rule gives an indemnity in 
 no case ; it operates exclusively against one party, 
 and for another ; and, when the insurer by law pays 
 more than is lost, by this rule, his loss is made still 
 : greater. The law considering the materials to be 
 one third worn at the time of the loss, no other mode 
 of adjustment than that under the old rule can furnish 
 a legal indemnity; or be a correct rule of law—for 
 that cannot be a rule of law, which counterworks the 
 law itself. 
 
 We have thus, we think, evinced : 
 
 1. That the usage contended for under the policy 
 was not a local , but a general usage : 
 
 2. That the usage is of long continuance, having 
 existed from the time of Magens nearly a century 
 ago ; that it was known to the parties to the con¬ 
 tract, which was made in reference to it: 
 
50 
 
 3. That local usages have the force of law where 
 they prevail, if they are well known and long estab¬ 
 lished, because they are then presumed to have been 
 in the contemplation of the parties : 
 
 4. That the policy has reference to such usages, ** 
 as they relate to the mode of adjusting losses : 
 
 5. That by the terms of the policy expressed, and 
 by the usage as known and established and not ex¬ 
 pressed, the insurer is not liable for a loss by any 
 other mode of adjustment, than that in use at the time 
 of making the policy : 
 
 6. That under the new rule a construction is giv-1 
 en to the policy, by which the insurer is made liable .' 
 for losses, which it was intended to exclude : 
 
 7. That the unenumerated losses, are such only as^ 
 insurers arc liable for by the rules and customs of 
 Boston: 
 
 8. That the new mode of adjustment is repugnant 
 to those usages : 
 
 9. That the new rule violates the spirit of the 
 contract, the essence of which is indemnity : 
 
 10. That it violates a settled rule of law, which 
 prescribes what is indemnity : 
 
 11. That the old mode of adjustment always gave 
 a legal indemnity, but the new 7 mode will always 
 give more than such an indemnity : 
 
 12. That the loss is a salvage loss: and the old. 
 
 & 
 
 materials saved, are virtually abandoned, and belong 
 to the insurers : 
 
 13. That, if the old materials belong to the insur¬ 
 ed, the loss is a partial loss, and ought to be settled 
 as such: 
 
 14. That, if settled on the principle of a partial - 
 loss, the result would, in all cases, be the same, as 
 
 d settled by the old mode of adjustment: 
 
15. That a loss of a particular thing appertaining 
 to a ship, is when that thing is, by the perils insured 
 against, rendered useless and irreparable, and its 
 place is supplied by others : 
 
 16. That, if the old materials do not belong to the 
 insurers, but to the insured, the old materials are 
 not lost, and others cannot be claimed of the insur¬ 
 ers : 
 
 17. That, in this case, the insurer is answerable 
 only for damage sustained by the disaster : 
 
 18. That the new rule was established upon an 
 extreme case assumed, and not warranted by the 
 rule of law prescribing one third as the difference 
 between new and old, in all cases of partial loss on 
 ships : 
 
 19. That this extreme case was on one side ; 
 and the rule established was intended, and actually 
 does operate always in favor of that side, and always 
 against the other: 
 
 20. That the new rule, therefore, is consistent, 
 neither with the policy nor usage, with law nor jus¬ 
 tice. 
 
 AN UNDERWRITER. 
 



<£> 3 ^2 ^ ye