and demand to sue in the name of the creditor. Now, if the creditor have given time to his debtor, the surety cannot sue him; but the fact to be tried is, was time of payment given without the privity of the sureties? What is forbearance and giving time? It is an engagement which ties the hands of the creditor. It is not negatively refraining; *not exacting the money at the time; but it is the act of the creditor, depriving himself of the power of suing by [*87 something obligatory, which prevents the surety from coming into a court of equity for relief; because the principal having tied his own hands the surety cannot release them. Here there is no contract to forbear; no impediment to the suit. A neglect to give notice to the surety that the debtor has made default does not discharge him. But the present issue is, was there an agreement to forbear? I am of opinion there was none.

Verdict for plaintiff, for 8,5087.

Vaughan, Serjt., and Comyn, for plaintiff.
Solicitor General, and Lens, Serjt., for defendant.

*HOUSTON et al. Executors. of HOUSTON v. ROBERTSON. [*88

A broker is not entitled to set off returns of premium, which became due after the death of an underwriter, in an action brought against him by the executors of such underwriter.

THIS was an action to recover the amount of some premiums due to the testator in his lifetime. The plaintiffs sued as executors: the facts were these: The plaintiffs' testator was an underwriter. The only question in this case was, whether, as the testator died before the return premiums became due, the defendant had a right to set them off against the executors. The defendant had paid money into court, and if he had a right to make this deduction he was

entitled to a verdict.

Vaughan, Serjt., and Taddy, for the defendant.-It is true the return premiums do not become due till Houston's death; but the testator did not claim them in his lifetime; he left the account open. It is an account, therefore, to be taken between the executors and the defendant as it now stands. If the testator had lived to commence the action he would have been subject to these deductions. The reservation of the right of a return premium, in case of a contingency, was the inducement to the defendant to enter into the original contract; it is, therefore, a part of the contract, and the executors must take the whole together.

The Solicitor General and Gaselee, contra.

*GIBBS, C. J.-Is not this stipulation for the return premium something collateral to the contract? The full amount of the premiums was [*89 due to the testator in his lifetime: he had a present right to them. He dies, and a subsequent event raises a claim to a return premium. All the arguments which apply in case of the underwriter's bankruptcy, apply still more forcibly to that of his death. Undoubtedly the defendant may sue his representatives upon that account; but I am of opinion that he cannot avail himself of it by set-off in this action. I will, however, reserve the point. Verdict for plaintiff, subject, &c.

Solicitor General and Gaselee, for plaintiff.
Vaughan, Serjt., and Taddy, for defendant.

REPORTER'S NOTE.

In the ensuing term Vaughan, Serjt., moved for the defendant upon the point reserved; but the court refused a rule to show cause.

The Chief Justice observed: that it was impossible to distinguish this case from Minett v. Forrester, and the cases which had been subsequently decided upon the same principle: that as the broker could not, in any sense, be said to be an agent for the underwriter after his bankruptcy, neither could he be so after his death: that as the right to the premium was communicated to the assignees by the underwriter's bankruptcy, in the same manner the right was transferred to the executors by his death; and that the authority ceased in either case.

A good deal of complexity has been introduced in cases of this description, by not adverting to the ordinary course of the broker's dealing, and the character in which he stands re⚫90] lated to the underwriter on one hand, and to the assured on the other. It is the well known, indeed the invariable custom, for the underwriters when they subscribe a policy of insurance, to write against their respective subscriptions an acknowledgment of the premium having been then received. It is never in fact paid at the time, but is entered by the broker (minus his commission of 5 per cent. thereon) to the credit of the underwriter, in an account between them; and, in like manner, it is entered by the underwriter in his books to the debit of the broker, who alone is afterwards considered as liable to the underwriter for the premium. When the broker has effected the policy (if not under a del credere commission,) the assured may at any time demand it from him, paying him what he owes him at the time of taking it; and may place it, if he chooses, in the hands of another broker to be adjusted. In that case it is unnecessary to add, that the first broker will have nothing to do with the return of premium. Care must be taken, in considering this question, not to confound the double capacity of the broker, who acts in two distinct characters, as two agents. He is agent for the underwriters, and also for the assured; first in effecting the policy, and in every thing that is to be done in consequence of it, and which, from the nature of the contract, is incidental to it. He is agent for the underwriter as to the premium, but for nothing else. He is supposed to receive the premium from the assured to the use of the underwriter. But the contract between the underwriter and the broker, whereby the former gives credit to the latter, is a clear and distinct contract and account. Exclusive of fraud and other similar circumstances, the premium, as between the insurer and the assured, is paid. For, though the premium be, in fact, only carried to the credit of the insurer in the broker's books, the underwriter may call upon him for it, and compel an immediate payment, without any reserve in the broker's hands to answer any returns of premium, or any thing else, which the insurer at a future time may be bound to pay to the assured. The returns of premium and the payment of losses, are matters between the assured and the underwriter: they constitute a debt from the "underwriter to the assured alone, *91] and not to the broker. The broker is not entitled to receive from the underwriter either the return of premium or the amount of a loss, without an especial authority from the assured. If, indeed, the broker act under a del credere commission, he becomes an agent of a different description. He is then, in substance, the owner of the policy: he is answerable to the insured for the loss: he is liable in the first instance, and he may set off losses which have become due on all policies which have been effected under his commission del credere. In Grove v. Dubois, 1 T. R. 112, and Bize v. Dickason, ibid. 285, this doctrine, as relates to the privilege of a setoff, and the right of deducting the amount of a loss, was first established. In the former case the plaintiffs were the assignees of a bankrupt underwriter, and the action was brought against the broker for premiums; for which the underwriter had debited him; but having acted under a del credere commission, it was holden that he was entitled to set off a loss upon a policy which had happened before the bankruptcy. In Bize v. Dickason the same doctrine obtained, and it was considered to make no difference, though the loss, which had occurred before the bankruptcy, was not adjusted till after the bankruptcy. See likewise Wienholt v. Roberts, 2 Camp. 586.

The case of Shee v. Clarkson, 12 East, 507, was the next case which occurred, and which, on the first view, seemed to extend the rights of the broker beyond what had hitherto been considered as their limits, both according to the usage of trade, and the reason and equity of the contract. In Shee v. Clarkson it was decided, that the broker, who effected a policy, being the common agent of the assured, and the underwriter, whilst the premium remained in his hands for one party, and the policy for the other, and having received notice of events which entitled the assured to a return of premium, (before an action brought by the underwriter to recover the full premium) was authorized to deduct such return, and only to pay over the difference to the underwriter. In that case, indeed, the court drew a distinction between what was due to the assured for losses, and what was due for return of premium: they considered the latter as part 921 of the premium itself, which was not to be paid over, if the event on which it was returnable ascertained the amount of the deduction before the premium was paid; and that in such case the underwriter was entitled to receive no more in the first instance, than he would be ultimately entitled to retain on the balance of the premium account. By this determination, the rule which was to govern the rights of the respective parties on the contract, became more intricate than was suitable to cases of such frequent occurrence. The rule hitherto adopted between the broker and the underwriter had been simple and intelligible; it was defined with a suitable precision, and corresponded with those decisions which had obtained in cases of an analogous character. It was considered, that, as the assured had no concern in the contract between the underwriter and the broker as respected the premium, which was their own distinct account; so the return of the premium, and the payment of losses, were matters between the assured and the underwriter, in which a broker who had not a del credere commission tould

have no right to mix or engage. The payment for losses and the return of premium were new claims, and of a distinct nature. They arose from events subsequent to the insurer's right to the full premium. The broker could not sue in his own name for the return of premium; how then could he, in an action brought by the underwriter or his assignees for premiums, set it off? It was merely an accident that the premium remained in his hand. But that, which was an incidental circumstance, could not give him a right of action or of set-off, which is correlative.

The case of Shee v. Clarkson was much shaken in the subsequent cases of Minett v. Forrester, 4 Taunt. 541, and Goldschmidt v. Lyon, ibid. 534, and in the case of Parker v. Smith, 16, East, 382, the decisions in the Common Pleas were confirmed and acted upon in the King's Bench. In Minett v. Forrester it was determined, that an insurance broker, who was indebted to the estate of a bankrupt underwriter for premiums, could not, without an especial authority, set off against the debt sums due from the underwriter, for return of premium. Whether the returns became due before the bankruptcy or after the bankruptcy? In that case Mansfield, C. J., in delivering the judgment of the court observed, in *substance, that in Shee v. Clarkson, the [*93 judgment of the King's Bench seemed to have proceeded very much on the circumstance of the plaintiff (who, in that instance, was the underwriter himself) having been constantly in the habit of settling and adjusting with the broker, and always allowing, out of the premium which he was to receive, what was due from himself to the assured for returns of premium accruing for short interest, or for any other reason. He was, therefore, in fair intendment, the common agent both of the underwriter and the assured. But where a bankruptcy had intervened and determined the agency, (which was the case of Minett v. Forrester) the authority given by the underwriter ceased, and when he became a bankrupt his right to the premium was communicated to the assignees, who had never constituted the broker their agent, either with reference to an adjustment or otherwise; they had a right, therefore, to compel him to pay the premium for the benefit of the bankrupt's estate; and how could he make himself the agent of the assignees for the purpose of detaining money to be paid by the bankrupt to the insured? In Goldschmidt v. Lyon, the decision went upon the same principle as in the former case, viz. that a broker who was indebted to the assignees of a bankrupt for premiums due to them upon policies subscribed by the bankrupt before his bankruptcy, was not entitled to set off returns of premium due upon the arrival of ships which had arrived since the bankruptcy. In Parker v. Smith, which was likewise an action by the assignees of an underwriter against insurance brokers, for the balance of an adjusted account between the bankrupt and the defendants, and also for premiums on policies subscribed by the underwriter before his bankruptcy, it was determined, first, that the brokers were not entitled to deduct for returns of premium due on policies, the premiums of which policies formed a part of the adjusted account, but where the events entitling them to such returns were not known till after such adjustment. Secondly, Nor could they deduct for returns of premium on some of the policies for the premiums of which the action was brought, the events entitling them to which returns had happened before the bankruptcy, but the returns on which had not been adjusted. Thirdly, nor could they deduct *for returns on other policies, for the premium of which the action was brought, the events entitling them to which returns had happened since the bankruptcy, but before [*94 the commencement of the action: the brokers not having a del credere commission, nor being personally interested in any of the insurances.

The cases in the two courts, therefore, seem now in unison.

See, likewise, Koster v. Eason, 2 Maule and Selw. 112.

*SITTINGS AFTER MICHAELMAS TERM, 56 GEO. III.

AT GUILDHALL.

[*95

YEATS et al. v. PIM et al.

A usage of trade cannot be set up to contravene an express contract. Therefore, where A. agreed to sell to B. a quantity of bacon, which he warranted to be of a particular quality, part of which B. weighed and examined upon delivery at the wharfinger's, and paid for the whole by a bill at two months, but before the bill became due gave notice to A. that the bacon was not agreeable to the contract. Held that A. could not give in evidence a custom in the bacon trade, that the buyer was bound to reject the contract, if dissatisfied therewith, at the time of examining the commodity; and that, having neglected to do so, in the first instance, he was excluded from future objections.

ACTION for a breach of contract upon the sale of some bacon.

On the 29th of March, 1815, the defendants sold to plaintiffs 50 bales of bacon, warranted to be (Penrose's) prime singed bacon, at 688. per cwt.; payable by a bill at two months from the landing; average for weight. The bacon

was landed a few days after the contract. On the 31st of March, one of the plaintiffs examined a bale, and upon the 3d of April three more bales were weighed and opened. No objection was taken, and no allowance claimed. A bill was drawn by defendants on plaintiffs for the price of the bacon, which was accepted and duly paid. About the latter end of May plaintiffs made a final examination of the bacon, and rejected it on account of taint.

*The counsel for the defendants offered evidence, that there was a cus*96] tom in the trade, upon the sale of baccn, to examine it a few days after the landing, if it was not imported at the time of the sale, and at the time of inspection to reject or accept it, or claim an allowance for damage or difference of quality; and that if the buyer did not at that time reject the contract, or claim an allowance, he was bound to accept the bacon without reference to the terms of the contract.

Best and Vaughan, Serjts., and Marryat, for plaintiffs, objected to this evidence of custom in a case where there was a warranty. The question was, whether, on the 29th of March, 1815, this bacon was prime singed bacon. No usage can countervail a special contract or defeat a warranty. Nothing short of an express acceptance of the commodity, amounting to a waiver of the contract, could be an answer to this action.

The Solicitor General and Scarlett, contra.-A conclusion may be made against the plaintiffs, (as evidence that the commodity complied with the warranty) who do not reject it when they may, but by their conduct induce the seller to think that they accept it. The seller may be deprived of important advantages by their delay. The shipper, against whom he has his remedy over, may fail. After two examinations, and a bill drawn and accepted, it was too late for the plaintiffs to change their minds. The custom, offered in evidence, was not unreasonable. It was not unusual to append a *custom *97] to a particular contract. The days of grace upon a bill of exchange was a familiar instance. In like manner, upon a purchase of goods, though payment be due upon the sale, the contract being debitum in præsenti, the usage of trade is constantly allowed to interpose, in order to give the buyer a certain extent of credit. Contracts, the creatures of custom, might be regulated by it; and, in the present case, the custom was not offered to contradict the contract, but as a reasonable qualification of it.

HEATH, Justice.-It would breed endless confusion in the contracts of mankind, if custom were of any avail in a case like the present. I will admit evidence to show that the buyer inspected the commodity, and made no objection to the quality; but no usage in a trade can deprive a man of the benefit of an express contract. By requiring a warranty, he is to be understood as excepting against all terms but such as are stipulated in the bargain. It is open to the defendants to prove that the plaintiffs acquiesced; and evidence may be admitted to show that they were guilty of gross negligence in not examining and rejecting the bacon in time. But the evidence of custom cannot be received to alter the contract. Although one of the plaintiff's examined three bales, which he did not object to, it does not follow, if the remaining bales were carrion, that he was bound to accept them. It is prima facie evidence which may be explained or rebutted. If the shipper failed, the loss must *987 attach on the party who gave the credit, not on the person who relied on the warranty. Verdict for plaintiffs.

REPORTER'S NOTE.

In the ensuing term, the Solicitor General moved for a new trial, on the ground that the evidence of the custom of the trade was improperly rejected at the trial. The court, however, was unanimous in opinion, that the ruling of Mr. Justice Heath was perfectly correct.

All contracts made in the ordinary course of trade, without stipulation, warranty, or express provision, are presumed to incorporate the usage and custom of the trade to which they relate The trade is the ground of the contract, and the custom and usage, as members or parts of the'

trade, compose a whole thing. The contracting parties, being conusant of such customs, are presumed, and the presumption is generally consistent with the truth, to have it in their intention, that their contract shall not exclude such usages. But as it would be absurd to say tha: any one should be bound to a condition, under whatever name, against his will, and contrary to his interest; so in all cases, where there is a warranty, or any special pr vision in the contract, contrary to the custom of the trade, such custom is excladed. the parties have varied the ordinary mode of dealing; and the custom, as a mere usage of trade, having no separate legal obligation, the expressed will contradicts the construction of law, and the limitation or enlargement is of course exempted. No usage, therefore, of trade, can be set up in contravention of an express contract.

The days of grace on a bill of exchange are no exception to the rule. Bills of exchange are totally mercantile contracts; days of grace are part of the nature of the thing: they are as much a part of the contract on a bill of exchange as the act of payment itself. They are not incidental but of essence: they are not adscititious, but the thing itself. With respect to the sale [*99 of goods, if the contract be that they shall be paid for on a particular day, no custom can dispense with such a term. Nevertheless in ordinary cases, where no day of payment is expressed, the usage of the trade may introduce into the contract a particular credit, though the bargain, in form of law, raises a debitum in præsenti. But the usage operates in that case, because not being excepted by express words, the parties are presumed to contract with reference to the general course of the trade.

A variety of cases has determined, that mercantile contracts are to be construed in conformity with the usage and custom of merchants. It has been doubted, however, by judges of the highest authority, whether this practice has not been extended too far. In Anderson v. Picher, Lord Eldon, C. J., observes, that as much subtilty is raised by the application of usage to the construction of a contract, as by the introduction of additional words, and that, if the matter were res integra, it might reasonably be questioned. 2 B. and P. 168. Mercantile contracts, however, when reduced to writing, are subject to the same rules of construction as other written instruments; therefore, in an action on a policy of insurance, on the ship till moored at anchor twenty-four hours, and on the goods till discharged and safely landed," evidence having been admitted that, by the custom of the trade, the risk on the goods, as well as on the ship, expired in twenty-four hours; the Court of K. B. granted a new trial on that ground, and on the new trial the evidence was rejected. Parkinson v. Collier. Park Ins. 416. See, likewise, Robertson v. French, 4 East, 135, and Cutter v. Powell, 6 T. R. 320, in which the doctrine of admitting evidence of usage to explain and construe mercantile contracts is strongly illustrated.

*CRAVEN et al. v. RYDER.

[*100

When the master of a ship receives goods on board and gives a receipt for them, it is his duty not to deliver the bill of lading, except to the person who can give the receipt in exchange. A. sells goods to B. to be delivered free on board a particular ship: he loads them on board, and takes a receipt from C., which purports that the goods were received "for and on ac• count of A." Before the delivery, B. had sold the goods to D., who, without the knowledge and consent of A., obtains a bill of lading from C. B. becomes insolvent. Held, that A. is entitled to stop the goods in transitu, and that C. having refused to deliver them on the production of the receipt, is answerable to A. in an action of trover. A.'s right would have been the same, although the receipt had not contained the restrictive words, but had been in the general form.

TROVER to recover the value of some sugar. On the 5th of May, 1815, the plaintiffs entered into a contract with Messrs. Bogle & French, to sell them, at à credit of two months, twenty-four hogsheads of Hamburg loaf sugar, to be delivered by the plaintiffs "free on board the George, Captain Ryder." On the 11th of May, Bogle & French sold the sugars to Caldas, who paid for them; and Caldas subsequently sold them to Bene & Co., of Hamburg. The shipping order was in these terms, "To the commanding officer on board the George, Capt. Ryder; receive the undermentioned goods, for and on account of Craven & Co." When the goods were shipped, a receipt was brought back from the defendant's mate in these words, "Received, the 15th of May, on board the George, Captain Ryder, the undermentioned sugars for Hamburgh, for and on account of Craven & Co.-Robert Ramsay, mate." It was in evidence that the usual form of a lighter's note was not to add to the receipt," for and on account of the party;" but a general note only was given with the goods. The lighterman in this case had introduced, within a few months, a form which was