Phillips v. Insurance Co. of Pennsylvania , 19 F. Cas. 514 ( 1821 )

TILGHMAN, Chief Judge.

Insurance is. as has been frequently declared, a contract of indemnity. The insurer undertakes that if the goods insured are lost by any of the risks insured against he will pay the insured the value of those goods at the time and place of shipment; and this value is generally to be ascertained by the invoice. In this case the invoice is in rupees. To ascertain, therefore, the value of the cargo, the value of the rupee must be ascertained. This is the point in dispute. The plaintiff contends that the rupee should be valued at 55^> cents. He endeavors to support his position, 1st By the act of congress. 2d. By the custom of merchants; or at least a general usage and understanding among them. 3d. The actual cost of the rupee to him, which he contends was also its current value at Bengal at the time of the purchase of the cargo.

1. It is the opinion of the court, that the act of congress does not affect the present question between these parties. That act was intended to fix the value of foreign coins, only for the purpose of ascertaining the amount of duties.

2. No custom, strictly speaking, is proved, or much relied on. But the testimony of several merchants is adduced to show under what opinion as to the value of the rupee they effected insurances and paid premiums. They founded this opinion, not on what they imagined was the true value of the rupee, but under an idea that it was regulated by the act of congress, and this they say they believe to have been the general understanding. But it is not brought home to the defendants that they ever acted upon this principle. On the contrary, in August. 1800, but four months before this policy was underwritten, they actually returned premium for short property, calculating the rupee only at 47% cents. In order to make this understanding obligatory on the defendants in this, case, knowledge of it ought to be brought home to them. It is not enough that the plaintiff understood it so; the defendants must have acted upon the same principles, thereby impliedly, though not expressly, incorporating it into, and making it a part of, the contract. When men enter into a contract, it is presumed that they proceed upon the general principles of law. It is noi competent for one of the parties to vary the operation of law in relation to the particular contract by alleging that he was governed by other principles, or acted in reference to a certain usage or understanding prevailing among a certain class of men. The other party must have acted upon the same grounds, otherwise the general principles and intendment of law will prevail. The party, therefore, setting up an usage or understanding varying the effect of a contract from what it would be by the general operation of law, must show that both parties acted in reference to it, or, if not actually proved, it must appear to have been so general and notorious as to warrant the conclusion that both contracted on that ground, with the knowledge and adoption of it. This has not been done in the present-ease, and of course this ground does not avail the plaintiff.

3.The actual cost of the rupee to this particular party cannot certainly be obligatory upon the defendants, or otherwise affect the case than as evidence of its current value at the time.

The real question then is what is the value of a rupee in Bengal, or rather what was it when the goods in question were purchased. This is a matter of fact, and peculiarly a mercantile question. The jury must decide it from the evidence. Testimony has been given of the value of the rupee upon an assay at the mint, of its value in India in comparison with dollars, and of its value there in comparison with sterling money, in purchase of bills of exchange. The comparative value between rupees and dollars, so far as fineness and weight of coin is considered, is eternally the same, and is accurately ascertained by the mint assay; and that would be the proper guide if its value here were the question. But as the question is the commercial value of the rupee in Bengal, where it seems to be an article of commerce and subject to some fluctuation, the mint assay is not conclusive in this case. The comparative commercial value in India between dollars and rupees is probably not very different from the real intrinsic value, judging either from the testimony or the nature of the subject; and there appears to be no objection to taking this comparison as the guide. The comparison with bills seems to be more fluctuating, and dependent in a degree upon circumstances by which the insurer cannot be affected. It affords, therefore, in general, not so safe a guide. Though in this particular case, if the jury give full credit to the supercargo, there was no difference in the price of rupees when purchased with dollars and with bills. The law and the evidence being before, the jury, they will estimate the value accordingly.

It is the opinion of the court, however, that the expense of carrying the dolía rs from this country to Bengal is not to be taken at all into the calculation; otherwise the subject would be involved in endless questions. Neither was the receipt of the premium such an affirmance of the plaintiff’s estimate of the value of the rupee, as to preclude the defendants from now controverting it. The defendants had given notice to the plaintiff that they objected to pay the whole amount of the policy, on the ground of short property. The point in dispute was fully understood. Bur-ing the controversy the note falls due. ' Being in hank, it is paid in the ordinary course of business, without being intended by either party to affect the matter in dispute, and in point of law it does not affect it.

The jury found for the plaintiff his whole demand, grounding themselves, as was understood, on the testimony of the supercargo, or more probably because it was an insurance case.