COSTER v. PHOENIX INS. CO., 6 F. Cas. 611

WASHINGTON, Circuit Justice. The word “average” originally meant a contribution, by the owner of the ship, cargo, and freight, towards a loss sustained for the general benefit of all. But when understood in this sense, it is at this day always called “general,” to distinguish it from “particular” average, which means nothing more than a partial loss.

So that from the time that the term “average” was used to express a partial loss, the word “average” has, in the common understanding of commercial men, so far varied its original meaning when applied to original insurances, as to import as well a general contribution, as a particular loss; and is intended to be used in either of those ways: the adjuncts “general,” “partial,” or “particular,” are always affixed. An attention to the true meaning of this phrase, will assist us in understanding the point in controversy.

The printed clause liberates the underwriters from particular average to any amount, on articles of a perishable nature, and on other articles where the loss amounts to less than five per cent. The written clause discharges the underwriter from all responsibility for average losses, whether general or particular, under ten per cent. These clauses are inconsistent with each other, and one or the other must give way.

If the written clause varies from the printed, it is evidence of a special contract made in that particular case, different from the usual contract of insurances; and it must necessarily be considered as the real agreement of the parties. If the written and the printed clauses can be reconciled by any fair construction, it ought to be done; if they cannot, the former must prevail. Whether, in this case, the not qualifying the general expressions, proceeded from mistake or was designed, is quite uncertain.

The insured may possibly have expected that the usual words, “unless general,” would be added, and the underwriter may have taken a smaller premium in consideration of being exempted from general average losses, trader ten per cent. There is no certain ground to go upon, but the construction fairly deducible from the expressions which the parties have used. The opinion of the court therefore is, that the defendants are not liable for the average loss, and that judgment should be rendered for them.