(1) Alsop v. Coit, 12 Mass. Rep. 40. (2) Smith v. Cologan, 2 T. R. 188. n. (3) Sanches v. Davenport, 6 Mass. Rep. Wallace v. (4) Moore v. Mourgue, Cowp. 579. The insurance must be ac trade. if he had effected a policy, with a warranty that the vessel would sail with the frigates, as he was authorized to do, nothing could have been recovered against the underwriters, under the policy.(1) It has been made a question, whether an agent is bound, under a general order, to effect insurance, to do any thing extraordinary, and more than is usual, for the purpose of effecting a policy. A London house having orders to get insurance on a vessel, applied at Lloyd's for the purpose, where the risk was refused, because the vessel was not registered there; upon which Mr. Justice Buller said, if the agents had gone no further, it might have been a doubt whether they would have been liable, for if a person do what is usual to get insurance made, that is sufficient. He is not obliged to get insurance at all events.'(2) But it would obviously not be safe in an agent to limit himself very strictly within this doctrine. But where the agent could not procure insurance in the place of his residence, or any neighbouring place, at the premium to which he was limited by his principal, he was held not to be liable in consequence of not effecting a policy.(3) It has been held to be sufficient, if the agent has no particular instructions, if he effects insurance in any usual form. A merchant of Alicant requested his correspondent in London, without giving him any particular instructions, to effect insurance on a cargo of fruit, which the agent caused to be insured, by the London Assurance Company, free from particular average. The fruit was mostly lost, but the loss came within the exception, and so was not covered by the policy. There were said to be two offices in London, where fruit was insured without this exception. The loss was claimed against the agent. Lord Mansfield said, that to make him liable, he must be guilty either of a breach of orders, gross negligence, or fraud. The plaintiff, if he pleased, might have given orders not to insure at the London Assurance-Office, but at some other, where this exception would not have been insisted on. But he gives no such directions at all. Therefore he left it to the discretion of his correspondent, who, if he meant no fraud, was at liberty to elect between the underwriters."(4) The broker must effect the policy according to the custom in the particular voyage. Brokers were ordered to effect insurance cording to theat and from Teneriffe to London.' Many brokers testified, that custom of the under such an order, and without any particular instructions for the purpose, it was the invariable practice to insert, 'liberty to touch and stay at all, or any, of the Canary Islands.' Lord Ellenborough held, that the brokers were liable for damage arising from the omission of this liberty in the policy.(5) (5) Mallough r. Barber, 4 Camp. 150. The policy must be made strictly conformable to instructions. A broker in London, was directed by his correspondent at Malaga to insure goods from Gibraltar to Dublin, the correspondent saying, 'I take the risk on myself from this to Gibraltar Bay, where I shall send my letters on shore.' The broker effected a policy on goods at and from Gibraltar to Dublin.' Gibbs, C. J. A broker is bound to have knowledge and dili 1 gence, and must execute his orders. If the instructions were (1) Park v. doubtful, I should think the principal not entitled to recover. Hammond, 1 But I think the letter not doubtful. It was understood, that the Holt, 80; S. C. 4 Camp. goods were to be shipped at Malaga, and the broker ought not 344; 2 Marsh. to have effected a policy which can only attach on goods ship- Rep. 189; ped at Gibraltar."(1) 6 Taunt. 295. A misstatement of facts by a consignor and vendor of goods, A misrepremay have the effect of making him stand as insurer. Where sentation by a the consignor and vendor made such a representation to the con- render him consignor may signee and purchaser, that an insurance upon the representation liable as insuwould have been void, it was held that the consignor thereby rer. made himself insurer, and the goods being lost by the perils (2) Arnot v. usually insured against, he was not entitled to recover the price Stewart, 5 of them.(2) Dow, 274. An agent is liable if he cause a policy to be cancelled without authority. The sum of 3000l. being insured by a valid policy, upon the life of a person absent at sea, his agent, supposing that it had been effected through mistake as to the amount, had the policy cancelled, and procured another for a smaller sum. But it appeared that the amount had been insured without any mis- (3) Gray v. take. The person, whose life was insured, died during the pe- Murray, 3 Johns. Chan. riod of the risk. The agent, by cancelling the first policy, 'Rep. 67. under these circumstances, was held to be liable as insurer; on (4) Bousfield the ground that he had no sufficient reason to suppose that there . Creswell, had been any mistake.(3) 2 Camp. 545. If the policy remains in the hands of the agent, he is bound The duty of to use reasonable diligence to obtain payment of the loss.(4) an agent in He is answerable for a mistake of his principal's orders, through payment of a procuring haste or carelessness. Where the assured instructed his agent loss. upon what terms he would adjust the loss, and the agent, by a hasty reading of the instructions, mistook them, and settled the Moore, 3 loss upon different terms, he was held to be answerable.(5) (5) Rundle v. Johns.Cas. 36. Johnson, 6 Payment to an authorized broker, is payment to his principal.(6) What is payA broker settled a loss which had become due, by taking the ment to the underwriter's bill at a credit of three months. This was held broker. to be payment to the broker, and made him immediately liable (6) Erick r. to the assured for the whole amount of the loss.(7) But where Mass. Rep. the insurers initials were struck out of the adjustment in token 193. of payment, and the broker had charged the loss to the insurer, (7) Wilkinson Lord Ellenborough said, 'The assured is never estopped from Taunt.' 110; v. Clay, 6 demanding the money, unless there is actual payment to the S. C. 4 Camp. broker, or a credit given."(a) In England, as has been already mentioned,(8) the broker is generally considered to be debtor to the underwriter, for the premium. But in the United States there is no distinction, in this respect, between an insurance broker or an agent for effecting insurance, and any other broker or agent. The broker may become a debtor to the insurer, or a creditor to the assured, for the premium, in virtue of an agreement to this effect,(b) or by holding himself out as principal, he is liable to be so consi (a) Jell v. Pratt, 2 Starkie, 67. (b) Taylor v. Lowell, 3 Mass. Rep. 352; Supr. 79. See also Bethune v. Neilson, 2 Caines, 139. 171. (8) Supr. 78. Williams, 7 T.R. 356. n.; Maanss v. (1) Rabone v. dered by the party with whom he contracts.(1) And the party with whom he contracts is entitled to all the advantages of considering him as principal. White and Lubbern, merchants in London, directed their brokers to effect insurance upon a cargo without making known that the cargo did not belong to themselves. The cargo in fact, belonged to a merchant at Rostock, to whom it was shipped. A loss happened, which the insurers paid to the brokers. Lord Ellenborough said, 'The brokers having had no notice that the policy was not for White and Lubbern, they had a lien upon it for their general balance. They must be supposed to have made advances on the credit of the policy, which was allowed to remain in their hands.' Accordingly, the brokers were held liable to pay over to the assured only the excess, after satisfying their own demands against White and Lubbern.(2) (2) Mann v. Forrester 4 Camp. 60. See also Westwood v. Bell, 1 Holt, 122. (3) Bowne v. Shaw, 1 Caines, 489. (4) Edgar v. Bumstead, 1 Camp. 411. (5) Jameson v. Swainstone, 2 Camp. 546. n. (6) Shoemaker v. Smith, 2 Binn. 239. In the United States this rule would be applicable between the broker or agent, and the underwriter.(3) If the agent discloses his principal, and does not render himself liable by any special agreement, it does not appear that cither of the parties has a right to consider him as principal, in respect to any part of the transaction. In the United States the premium note is generally made payable to the broker, where the policy is made in a private office. Where a broker paid a loss, not knowing that the insurer had previously become bankrupt, Lord Ellenborough said, 'According to the well known course of dealing between the broker, underwriters, and assured, the money could not be recovered back.'(4) A broker paid a loss, and two years afterwards claimed repayment of the money, alleging that he had not been able to recover the loss from the insurers. Sir James Mansfield said, 'After so great a lapse of time the broker must be presumed either to have received actual payment, or to have settled with the underwriters in some way or other.'(5) Where a broker paid the premium to the underwriter, after notice from the assured not to pay it, as the property had not been put at risk, it was held that he could not recover it from the assured.(6) The rights of lien and set-off are of importance to insurance brokers and agents, but the particular consideration of these subjects is omitted, as not coming within the plan by which this treatise is limited. INDEX. ABANDONMENT, defined, 382-object of, 434, 335-whether goods separately valued buying in the ship and selling her on his repairing ship without consulting insurer, ACCEPTANCE of Abandonment, 449. See ADJUSTMENT, of a claim for a loss, 500— AGENTS, acts of, may be insured against, AGENT and BROKER, usually effect insu- AGREEMENT FOR INSURANCE, described, ALIEN ENEMY, cannot insure, 19, 160- -domicil constitutes national character, 21 AMOUNT, of insurable interest, 304-re- APPORTIONMENT of Premium, 178, 506— TION. ARRIVAL, return of premium for, 510. LICY. ASSURED. See INSURED. AVERAGE, General, what constitutes, 330 1. What entitles to average contribution. |