To cancel policy. as if he himself at the time had thought they acted judiciously.1 The cancellation of the policy being an act that destroys the relation not only of assured and insurer, but of insurance broker as agent for the assured, cannot for that reason be justified by any supposed authority implied from the existence of that relation or from the fact of the policy being left in the broker's hands, and consequently depends for sanction on the express authority of the principal.2 The agents of the insurer. Their authority. There may be agents to effect sea policies for the assured, and agents to subscribe them for the underwriters. In this latter case they are generally authorized by power of attorney; but it is not requisite that such power should be produced at the trial, if other satisfactory evidence can be given of their authority. As to what shall be satisfactory evidence in the absence of the written authority, is a point on which there has been a little fluctuation of opinion. Thus, where a broker proved that one Hutchins had subscribed the defendant's name under the policy, that he was in the constant habit of doing so on policies, and had done several for the witness and for others to his knowledge, Lord Kenyon ruled, that this was sufficient evidence to charge the defendant, without the production of the written authority under which he acted; but Lord Ellenborough, in a later case, held precisely similar evidence insufficient, unless it was also proved that the defendant had ratified such subscription, as e. g., by paying losses upon policies so subscribed.5 1 Comber v. Anderson, 1 Camp. 2 Xenos v. Wickham (in error), 14 4 Courteen v. Touse, 1 Camp. 43, note; and rightly, see 2 Duer, 341, note a. 88. 5 Haughton v. Ewbank, 4 Camp. A memorandum indorsed on a policy for change of voyage was signed by the agent of an insurance company. It was proved that the agent had signed similar memorandums on many other policies, and that his habit was to do so, and advise the company of it. This was held by Lord Tenterden to be sufficient proof of the agent's authority to sign such memorandums; and that the other policies on which the memorandums had been signed need not be produced.1 Where a power was given to fifteen persons, "jointly or separately, to sign policies on such ships as they or any of them should think proper," after four of the original fifteen had died, a policy was executed, in the name of the principal, by four of the survivors, and the execution was held to be in pursuance of the authority.2 Where the power of attorney was to execute policies on which the risk should commence from the day that the ship was accepted by the association, the Court held that the agent had sufficiently complied with this power by executing a retrospective policy (with the clause "lost or not lost"), to commence on the day the ship had been accepted, although, at the time of so executing it, the agent and the assured were both aware that two average losses had, in the meantime, happened on the ship.3 In virtue of a power "to underwrite any policy of insurance not exceeding 1007., and to subscribe the same in his (the underwriter's) name, and to settle and adjust losses," the broker signed a slip for a policy within the terms of the power, and the Court were of opinion that the signature of the broker's clerk to the policy, made in pursuance of the slip, was a good execution of this power, this being a mere ministerial act. There was, however, in the same case, a ratification of this signature by the underwriter.* 1 Brockelbank v. Sugrue, 5 Car. & P. 21; S. C. 1 Moo. & Rob. 102; 1 B. & Ad. 81. 2 Guthrie v. Armstrong, 1 Dowl. & Ryl. 248. 3 Mead v. Davidson, 3 A. & E. 303. This case is given pro quanto valeat. 4 Mason v. Joseph, 1 Smith, 406. Limited authority. Authority to adjust policies; and to submit to arbitration. Authority of Lloyd's agents. The effect of holding out one as an agent to underwrite policies may be countervailed by the usage of the place. A broker who had a written authority to underwrite for not more than 1007. by any one slip, underwrote a policy for 1507. on the same adventure; the principal did not confirm the policy, and the Court held that he was not bound by the subscription, inasmuch as in the place where it was made by the broker, viz., Liverpool, it was common knowledge that such agents had only a limited authority.1 An agent with authority to subscribe a policy, has an implied authority to sign the adjustment of a loss.2 And one that had been in the habit of subscribing policies and settling losses, was held, by Chief Justice Gibbs, to have an implied authority even to submit a dispute, concerning a loss, to arbitration.3 Some of these were cases of authority implied from the proved relationship subsisting between underwriter and agent. Where the agent derives his authority from express instructions, which profess to define and regulate his duties, he cannot bind his principal by any act which exceeds the limits of such instructions, much less by one that violates or contravenes their contents; unless the principal have in effect held him out to the public as his general agent with a general authority as such. Lloyd's agents have no other authority than what they derive from the printed instructions under which they act. By these instructions it is expressly declared that no Lloyd's agent is to make up or sign any adjustment of loss as the 1 Baines v. Ewing, L. R., 1 Exch. 320. 2 Richardson v. Anderson, 1 Camp. 44, note. 3 Goodson v. Brooke, 4 Camp. 163. Sed quære. The report referred to no doubt bears out the text, but it is a report ex relatione of another, and it seems to be contrary to Stead v. Salt, 3 Bing. 101; Adams v. Bankart, 1 C. M. & R. 678, confirmed by Hatton v. Royle, 3 H. & N. 500; 27 L. J. (Ex.) 486, that even a partner has no implied authority to bind his co-partner by a submission to arbitration. representative of the underwriters; where, therefore, such in relation to We have been considering the rights and liabilities of Considered insurance agents on the part of the assured and of the Business Usage. insurer, as governed by the general principles of the commercial law. But there are usages of trade which cannot be overlooked in a treatise such as this, especially as these very usages are recognized in the Supreme Court. The usage of the metropolis has introduced certain modes of transacting business between the brokers and underwriters of London, apparently intended to facilitate business on an extensive scale, by substituting credits for payments, but one effect of the system has been to complicate in law the relations subsisting between the assured, the broker, and the underwriter. business in The general course of the business of marine insurance, Course of as actually carried on in London and the more important London towns of this country, is briefly but comprehensively de- between scribed by Bayley, J., in these words:-" According to the broker, and ordinary course of trade between the assured, the broker, 1 Drake v. Marryatt, 1 B. & C. 473. 2 Read v. Bonham, 3 B. & B. 147. See the dicta of Burroughs, J., as M. there reported at p. 155. 3 Lord Tenterden in Drake v. Marryatt, 1 B. & C. 478. assured, underwriter. Legal relation of the parties and their broker. Rule of law Slips. Accounts. and the underwriter, the assured does not in the first instance pay the premium to the broker, nor does the latter pay it to the underwriter. But, as between the assured and the underwriter, the premiums are considered as paid. The underwriter, to whom, in most instances, the assured are unknown, looks to the broker for payment, and he to the assured. The latter pay the premiums to the broker only, who is a middleman between the assured and the underwriter. But he is not merely an agent: he is a principal to receive the money from the assured, and to pay it to the underwriters."1 Hence the general rule of law is, that the broker is the debtor of the underwriter for premiums, and the underwriter the debtor of the assured for losses. If we enter a little more minutely into the subject, the following will be found to be the actual course of practice at the present time, altered in one point from what was the practice of a remoter period. The broker on receiving orders from his principal to effect an insurance, prepares a slip embodying the terms of the proposed policy. In the case of private underwriters at Lloyd's, it is the custom to have but one slip, which is initialed by the different underwriters for the amounts for which they are willing to become insurers, and a policy is subsequently prepared by the broker of the assured and taken by him to the different underwriters in succession for execution. In the case of insurance companies a separate slip is always prepared for each company by the broker of the assured, and the policy is afterwards prepared and filled up from the slip by the officers of the company, and is kept by the company until sent for by the assured or his broker.2 The broker now keeps two accounts with underwriters, 1 In Power v. Butcher, 10 B. & C. 329, 340. 2 See Xenos r. Wickham (in error), 14 C. B., N. S. 452; 33 L. J. (C. P.) 13, and the judgment per Blackburn, J., ibid. |