out of time, and the insurance was declined on that ground by the insurers at Boston, to whom the agents had applied on the very day they received the letter. They subsequently tried in vain to effect the insurance at Salem, Newburyport, Portsmouth, and Providence, the principal commercial places within sixty miles. They then wrote to New York for the same purpose, fixing a limit (but a very high one) to the rate of premium; part of the amount was eventually insured there at high premiums (the highest being 33 per cent.), and the rest could not be done at the limit. An action having been subsequently brought against them for not having insured the whole amount, a verdict was found for the defendants under the direction of the presiding Judge, on the ground that in their prompt endeavours to procure insurance at Boston and the other neighbouring ports, they had extended their efforts, at least, so far as their duty required, and that having done so, they were not liable for having failed in procuring a full insurance at New York, though such failure might possibly have been ascribed to their having set a limit on the premium.1 and average skill. In none of these cases does the law require an extraordi- A reasonable nary degree of skill on the part of the agent. In inquiries, degree of therefore, as to his liability in cases of loss, the question is, whether the act or omission complained of is inconsistent with that reasonable and proper degree of care, skill, and judgment which persons of common prudence or ordinary ability might be expected to show in the situation and profession of the defendant.2 Every policy broker of average capacity, must know that all communications respecting the time of the ship's sailing are material to be submitted to the underwriter. 1 Sanches v. Davenport, 6 Mass. Rep. 258, cited 2 Duer, 242-244; 2 Phillips, no. 1890. 2 Per Tindal, C. J., in Chapman v. Walton, 10 Bing. 63. Communica the time of sailing. tions as to As to delivery of a stamped policy. Statutory penalties. All ordinary and usual clauses. Hence an insurance broker, for omitting to forward information of this kind to a second broker, who at the wish of the principal was employed to effect the policy, was held liable to the principal for the consequent failure of the insurance; for, although he was to receive no remuneration, he had yet undertaken to employ the other.1 Every insurance broker is bound to know all the ordinary formal details necessary to make a sea policy a legally valid instrument. Hence, a policy broker employed to effect a policy on a ship, having negotiated an insurance with the Newcastle Commercial Insurance Company on the terms directed, was held liable for not procuring a stamped policy, in consequence of which neglect the shipowner was unable to recover against the company for a loss that subsequently took place.2 Unless the policy is in writing on vellum, parchment, or paper, duly stamped, he is by statute deprived of his legal right to any sum for brokerage or agency, or for his pains or labour in negotiating, transacting or making such insurance, or writing the same, or to recover moneys paid by way of premium or in the nature of premium, and all sums actually paid him by his principal in negotiating, or transacting, or making any insurance contrary to the statute, may be recovered back from him as moneys received for his principal's use.3 Every policy broker, or other insurance agent, is bound, without express directions, to insert in the policy all the ordinary risks and customary clauses which are usual and proper in respect of the contemplated voyage. Thus, as it 1 Seller v. Work, 1 Marshall, Ins. 305. See the remarks of Judge Duer on this case, vol. ii. pp. 202, 203; see also Maydew v. Forrester, 5 Taunt. 615, as to the point that, whenever the information concealed is unquestionably material the broker will be liable; see also as to what constitutes negligence, Wake v. Atty, 4 Taunt. 493. 2 Turpin v. Bilton, 5 M. & G. 455. 330 & 31 Vict. c. 23, s. 16. was shown to be the invariable practice in all voyages from Teneriffe to London, to insert a clause "giving liberty to touch and stay at all or any of the Canary Islands," it was held that a London policy broker was guilty of actionable negligence in omitting this clause.1 ment of risk It has been repeatedly and notoriously decided, that a Commencepolicy on goods, "beginning the adventure from the loading on goods. thereof on board," without any addition, only attaches on goods loaded at the port which is the terminus a quo of the voyage insured." So completely is this settled law, that all insurance brokers are bound to know and act on it. Hence, a London insurance broker, being directed to effect a policy for a voyage "from Gibraltar to Dublin," upon goods which, upon his instructions, clearly appeared to have been loaded on board at Malaga, was held liable for negligence in having effected the policy on such goods "at and from Gibraltar to Dublin, beginning the adventure upon the said goods and merchandise from the loading thereof aboard the said ship.” The rule which we have been discussing regards what is ordinary, usual, and settled; when we leave this common beaten track, it ceases to be applicable. As Judge Duer well expresses it, "The mistake of the agent, where the practice is unsettled, and the law uncertain, affords no evidence of that want of reasonable skill and ordinary diligence for which alone he his responsible."4 clear and Directions that are clear, precise, and intelligible, make Directions the failure of the insurance agent to comply therewith precise, make actionable, in so far as they may lawfully be followed. default inex 1 Mallough v. Barber, 4 Camp. 150. 2 Robertson v. French, 4 East, 130; Spitta v. Woodman, 2 Taunt. 416; Horneyer v. Lushington, 15 East, 46; Mellish v. Allnutt, 2 M. & M. Sel. 106. 3 Park v. Hammond, Holt's N. P. N cusable. Directions in writing supersede prior verbal communications. What policy will suffice. Thus, where clear directions were given by the plaintiffs to the defendants to insure goods and also the premium, and the defendants insured the goods, but not the premium, it was held that they were liable to the plaintiffs for not complying with the order thus far to insure, notwithstanding it also directed them to insure against British capture, which could not legally be done.1 An agent who has faithfully followed express written instructions, is not liable for omitting a provision which, from the verbal communications of his principal, he might fairly have inferred to be necessary. Thus, a policy broker, who had heard in the course of conversation with the captain, that the ship was to carry simulated papers, followed the written instructions sent him, in which nothing whatever was said as to inserting a liberty to carry them, and was held not to be liable in an action for negligence in not inserting the clause, though the ship was subsequently condemned for carrying such papers.2 In case the orders of the principal are so ambiguous as to be susceptible of two distinct and perfectly consistent meanings, and the agent honestly and fairly assuming one of these to be the intention of the principal, carries out the orders accordingly; he has done his duty, and the principal is bound by his acts.3 Whether the policy effected in the particular instance answers the directions given, or meets the necessities of the case stated in the instructions, is a difficult question of fact upon the evidence that should be considered quite apart from private views on either side, and with reference to the ordinary ways of business men. 1 Glaser v. Cowie, 1 M. & Sel. 52; see also S. P. in Fomin v. Oswell, 3 Camp. 357. 2 Fomin v. Oswell, 3 Camp. 357. "The captain," Lord Ellenborough remarked, "notwithstanding his prior conversation, might have resolved not to carry any such papers; or if he still meant to carry them, might not have wished that a leave for that purpose should have been inserted in the policy." 3 Ireland v. Livingstone, L. R., 5 H. of Lds. 395. A general order to insure seems to be satisfied by an in- A policy in the general surance in the form in general use at the place to which the form. order refers, with regard to such a subject in such circum-` stances. If the principal wishes to have an insurance in a particular form, or with a particular class of insurers, he should give specific instructions to that effect. In the following case the subject of insurance, it was thought, would have indicated a different course from that which the agent pursued; but the Court held otherwise. The plaintiff, a merchant of Alicante, sued the defendant, Moore v. Mourgue. his agent in London, for not insuring the plaintiff's goods agreeably to his directions. The goods were a cargo of fruit, which the plaintiff without other more particular directions gave the defendant a general order "to insure." The defendant effected the policy with the London Assurance Office, where they only insured fruit "free from particular average," an exception at that time not to be found in the policies of Lloyd's or the Royal Exchange, although the rate of premium was the same in all three; and the conse-` quence was, that when an average loss happened the plaintiff was precluded from recovering for it on the policy. The Court held that the plaintiff was not entitled to maintain his action, unless the defendant were guilty of a breach of orders, of gross negligence, or of fraud; and as` the verdict of the jury was in favour of the defendant on all these grounds, the Court refused to disturb it. "The plaintiff," says Lord Mansfield, "if he pleased, might have given orders to the defendant not to insure at the London Assurance Office, but at some other office, where this exception would not have been insisted on. But he gives no 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."1 It may be said in favour of this decision, that it by no means follows that a policy from a particular office containing 1 Moore v. Mourgue, Cowp. 479. |