XENOS

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WICKHAM.

to him for payment, and having no claim against his employer. Inasmuch, then, as the broker had to exercise a judgment upon the sufficiency of the policy, it was necessarily within the scope of his authority to reject that prepared as not being one or the one ordered. When he does so properly his employer gets the benefit; when he does so improperly his employer has his remedy by action against the broker. But the office which dealt with the broker only, and stipulated for his taking to and being debited for such a policy, must, upon his rejecting it and refusing to be debited in account with the premium thereupon, have an equal right to consider the negotiation at an end, and to cancel the proposed policy, as if cash had been stipulated for and refused.

The transaction cannot properly be split up into parts. It stands upon the same footing as if, upon one and the same occasion, the broker had ordered the policy at the office, and whilst he waited for it the seals had been affixed to a form of policy in another room, and before he received or assented to the policy he had said: "Stay! I made a mistake. I decline to take up the policy, and you must not charge me in account with the premium." Whereupon the form was cancelled.

No subsequent protest by the principal that his agent ought to have acted otherwise can avail him. His payment of the premium was not made to the office, but to his own ill-conducted broker, and his remedy must be against him. The office has not received and has refused the premium; and it was in no default, because it acted upon the refusal of the broker, to whom the whole business of effecting the policy was left.

The fallacy of the argument for the plaintiffs consists in separating the preparation of the policy from the rejection of it by the broker, and thus splitting up into several contracts, one of which is alleged to be authorized and the other not, what in reality, though distinct events in point of time, constituted together but one negotiation, which by reason of the misconduct of the plaintiff's agent was abortive. The question is thus answered in the negative.

THE LORD CHANCELLOR :

The difference of opinion which has prevailed amongst the learned Judges in this case must necessarily diminish the confidence which I feel in the judgment I have formed upon it, more especially as that judgment is not in accordance with the views of the majority of the Judges. The question is one more of fact than of law, and, therefore, in considering it, it will be necessary to refer to the facts contained in the special case.

The action was brought on a time-policy of insurance, which the plaintiffs alleged had been effected with the Victoria Fire and

Marine Insurance Company (represented on the record by the defendant, the chairman of the Company), for 1,000l., for twelve months, on the ship Leonidas, valued at 13,000l.

In April, 1861, the plaintiffs employed an insurance broker of the name of Lascaridi to effect insurances upon the Leonidas for six months, to the amount of 5,000l. Lascaridi accordingly prepared a slip in the usual form, which was initialed in the customary manner by various underwriters, and by a clerk of the defendants' Company, in their behalf. In the case of private underwriters at Lloyd's, it is customary to have only one slip, which is signed by the different underwriters for the amounts for which they are willing to undertake the insurance. In the caseof Insurance Companies, a separate slip is always prepared for each Company by the brokers 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. Before any policy was made out on the slip left at the office of the defendant's Company, Lascaridi received a direction from the plaintiffs, dated the 29th of April, 1861, to "cancel Leonidas' insurance, and insure the same for all the year and for all seas, 4,000l., valued 13,000l."

Lascaridi, after receipt of this order, called at the office of [the] Company, and told them he wished the insurance to be off, as he was going to re-insure the vessel for twelve months and for all seas. Accordingly, the slip left at the office was destroyed, and another slip was prepared by Lascaridi, which was signed by different underwriters, and initialed by the same clerk of the Company who placed his initials to the cancelled slip. A separate slip was prepared by Lascaridi, and left with the Company, in order that, in the usual course, the policy might be made out from it. Lascaridi, on the signature of the new slip, was debited in the books of the defendant's Company, under date of the 1st of May, 1861, with 105., the amount of the premium, and 21., the amount of stamp duty.

The usage with respect to premiums upon insurances effected by brokers is clearly explained by Lord ELLENBOROUGH, in Jenkins v. Power (1), and by BAYLEY, J., in Power v. Butcher (2). The latter learned Judge says: "According to the ordinary course of trade between the assured, the broker and the underwriter, the assured do 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. (1) 18 R. R. 375 (6 M. & S. 282). (2) 34 R. R. 432 (10 B. & C. 329).

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The latter pay the premiums to the broker only, and he is a middleman between the assured and the underwriter." On the 1st of May Lascaridi sent to the plaintiffs an account debiting them with the amount of premium and stamp duty payable on the insurance of the Leonidas, and drew upon the plaintiffs a bill for four months, which was accepted and paid at maturity. A policy in the form usually adopted by the defendant's Company was filled up from the slip, and dated the 1st of May, 1861; a facsimile of it forms part of the special case and it appears to be in entire accordance with the slip.

About the 8th of June, 1861, a debit note for the premium was sent to Lascaridi's office, with a request for payment. On presenting this note at the office, a clerk there said that no premium was due; and upon a second application, the clerk said that the policy ought not to have gone forward. The same day a clerk of Lascaridi called at the office of the defendant's Company, and said that the policy had been put forward in error, and requested that it should be cancelled. A memorandum of cancellation was accordingly indorsed upon the policy, and signed by two of the directors of the Company and by the secretary, and the policy so cancelled was handed to Lascaridi, in order to enable him to obtain a return of the stamp duty. The Leonidas was lost on the 1st of September, 1861. On the following day a clerk of Lascaridi's called at the office of the defendant's Company, and said the policy was cancelled by mistake, and wished it to be reinstated. The Company, however, having heard of the loss of the vessel, declined to comply with the request, and the present action was therefore commenced. It was admitted by the defendants that the plaintiffs never, at any time in fact, authorized the cancellation of the policy, or were aware of it, nor did they ever receive back from Lascaridi any part of the premium, nor any credit for the same.

The questions which arise out of these facts are, first, whether there was a complete contract of insurance between the parties; and, secondly, if there were, whether it was afterwards cancelled by the plaintiffs' authority.

Upon the first question we have no evidence of the fact of the execution of the policy, except that which arises upon the face of the instrument itself, and upon the fact stated in the special case, that the policy (which must be taken to mean the executed policy) is kept by the Company until sent for by the assured or his broker. The policy purports to be signed, sealed and delivered by two of the directors of the Company, in the presence of Registrar Scaife, resident secretary. This statement, *on the face of the policy, that all acts were done to render the execution complete, which is acknowledged by the directors who executed it, must, I think, be

taken to be conclusive against the Company, that it was not only signed and sealed, but also delivered. We all know the formal mode of executing a deed by the words "I deliver this as my act and deed"; a form which, no doubt, or something equivalent to it, was observed upon this occasion.

The policy, most probably, was afterwards given to the secretary, to be kept till called for. Now, although the policy was thus retained by the Company, when formal execution of it took place, they held it for the plaintiffs, whose property it became from that moment. It is a mistake to suppose, as some of the learned Judges. have done, that the policy wanted its complete binding effect till it was delivered to and accepted by Lascaridi. The usage of Insurance Companies to keep the policy until sent for by the assured or his broker is not for the purpose of completing the instrument by a delivery personally to the party or his agent, but merely as a matter of convenience. And as to Lascaridi's acquiescence and acceptance being necessary to complete the contract, I apprehend that there is no ground for such an opinion. He was the broker and agent to the plaintiffs to effect an insurance upon their vessel, upon certain terms dictated by them. He prepared the slip according to his directions. When the policy was executed in exact conformity to his instructions, his duty was so far discharged; and without the authority of the plaintiffs, he could not refuse to accept it. They had effected, through their agent, a complete binding contract, which they alone could have a right to abandon.

It is hardly necessary, after the preceding observations, to say anything upon the second question as to the supposed cancellation of the policy. All the Judges seem to have thought that if the contract was binding, Lascaridi had no authority to cancel it. The Company could not have been led, from anything in the previous transaction respecting the same vessel, to suppose that Lascaridi was authorized to act beyond the ordinary scope of the authority of a broker. It is one thing to cancel a slip, which is merely the inception of a contract, and to change the terms of the proposal for an insurance, and an entirely different one to release the underwriters from their liability upon a policy.

It is quite clear that Lascaridi had no authority from the plaintiffs to relinquish, on their behalf, the benefit of a contract to which they were entitled, and that the Company had no reason to suppose that he possessed any such authority. I think that the judgment of the Exchequer Chamber was wrong and ought to be reversed, and that judgment should be entered for the plaintiffs.

LORD CRANWORTH:

My noble and learned friend has gone so fully into the facts of

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this case, that I shall not further advert to them, but shall assume that they are present to the minds of your Lordships.

There is one part of this case which seems to me to admit of no doubt. If the policy was so executed as to have become a complete instrument, binding on the respondents, and giving a good right of action to the appellants in the event of a loss, I think it clear that they could not cancel it at the instance of Lascaridi. They had a right to consider him as having authority to do all which a broker can do in discharge of his duty in effecting a policy, and they might safely settle with him in case of a loss, if that be the ordinary mercantile usage; but there is no suggestion that it is part of the ordinary duty or power of a broker to cancel agreements once validly and completely entered into. The only semblance of plausibility in support of such an argument was the fact that he had on a previous occasion had an authority expressly delegated to him by the appellants-not to cancel a policy, but to cancel a slip. They had originally proposed, through Lascaridi, to effect a policy on the Leonidas with the respondents, on terms materially differing from that ultimately acted on, and a slip had been signed and handed to the respondents for that purpose five days before the signing of the slip, on the 30th of April; but on that latter day, and before anything had been done, Lascaridi called on the respondents at the instance of the appellants, expressing their desire to substitute the terms of insurance ultimately acted upon for those originally *proposed. To this the respondents agreed, and the slip dated the 30th of April, 1861, was accordingly prepared and left with the Company, as the groundwork of the policy to be prepared by them. It was suggested that as the appellants had thus authorized Lascaridi to make this important change in the nature of the contract to be entered into, the Company might reasonably suppose he had authority to sanction the cancellation of a policy already validly binding on the assurers. To this I cannot accede, as it is admitted that Lascaridi had not in fact any authority to cancel the policy of the 1st of May; if it was a binding instrument, his act cannot affect the appellants, unless it was done according to some ordinary course of business which would warrant it. I can see nothing whatever to warrant such an assumption. And indeed the point was not much insisted on. The point really argued was, that the circumstances are not such as to show that any absolute liability ever attached on the respondents. The policy, it is said, did not become a binding contract on the respondents until it had been taken from the office by the appellants or their broker, and been accepted by them as the terms by which they were to be bound.

There is no direct evidence as to what actually took place when