to pay a high premium of L.354, 12s., on which alone it was to be accepted. This letter was never answered, or the premium proposed assented to by the individual, and it was held that there was no completed contract.

Yet it will be kept in view, that this preparatory agreement for an insurance cannot be adduced to contradict the written policy.—(Per Lord Eldon, in Mills v. the Albion Insurance Company, 3 Wil. and Sh. 218; Marsden v. Reid, 3 East. 572.) Nor can a verbal agreement avail against the terms of the policy. (Fowler v. the Scottish Equitable Insurance Company, 7 W. R. 5.) And though a stamped policy be in all cases necessary to sustain action in a court of law, yet in practice, and in a court of equity, such preliminary agreements for an insurance have been sustained, if a stamp is got impressed on them. Thus it is common, both here and in England, to conclude the transaction of insurance by a slip or memorandum of agreement, signed by the underwriter, or by correspondence adduced, showing a concluded agreement to insure, and this agreement will be sufficient to sustain action. It will not constitute a legal contract of insurance, but it will give action to enforce delivery of the policy of insurance, or damages for non-performance.-(Mills and others v. Albion Insurance Company, 5 S. and D. 930, as finally decided in the House of Lords, 3 Wil. and Sh. 218, 1 Dow and Clark 232.) Although, therefore, an initialed slip or memorandum will not be equivalent to a regular stamped policy, yet it will be sufficient to establish the agreement to deliver a re

gular subscribed policy. In disposing of the above case, the Lord-Chancellor Eldon laid it down: "It appears to me, in looking at the exceptions, that there is only one material point to which it is necessary to call your Lordships' attention. It was said, and justly said, that where there is a written agreement to insure-a preparatory agreement-and afterwards a policy of insurance is effected in pursuance of that agreement, it is the policy which is the contract between the parties. The ordinary course of proceeding in the city of London is, that a slip is in the first instance signed, and after that slip is signed a policy is effected; and it is the policy which is the contract, and the slip cannot be adverted to for the purpose of explaining the meaning of the parties. It was argued that no contract had been entered into at Glasgow, that it was an agreement for a policy, that the policy had been afterwards executed, and that that must be considered having been sent down to Scotland to be the agreement between the parties. But, my Lords, there was this fallacy in that argument: the pursuers brought their action on the agreement as entered into by Hamilton-as signed by Hamilton. What was that agreement? There was an agreement for a general insurance. It was an agreement that a policy should be executed; that policy to be executed was to be conform to the agreement. The policy had, it is true, been sent down; and if the parties had agreed to it, that would have bound them. But that policy did not conform to the original agreement: it was never communicated to the parties that there was an alteration; and if the

agent agreed to a general insurance-that being within his duty as agent-it was imperatively his duty, under those circumstances, to communicate to the assured, that the policy having come down, the parties in London did not conceive themselves authorized in executing a general policy, but only a policy with an exception to which I have referred. No such communication was made by Hamilton, and therefore the owners of the vessel never adopted that, for they never knew it.'

Although the payment of the premium is of the very essence of the contract, yet it does not appear in all cases to be considered as an absolute preceding condition, sine quo non. It is enough that the premium be fixed and determined.

In marine insurance, the premium in many cases is left unpaid, although the risk attaches.-(Smith v. Fleming, 20 Nov. 1849, S. and D. 138; and Ferrier v. Sandieman, 29 June 1809, 15 Fac. Coll. 373.) But, as between the underwriter and insured, the premium is always presumed to be paid at the time of signing the policy.

In fire insurance, sometimes there is a practice of paying the premium down, and afterwards, when the necessities of business permit, the policy is issued. In such cases, the meaning of parties is, that if a loss occur before the policy is issued, the underwriters will be liable; but it must be kept in view, that an insurance by parole cannot be validly established, and therefore the insured, in such a case, ought to see that there is no undue delay in issuing the policy.

Where the insurance has been effected through the medium of a broker, it is frequently the practice of underwriters to run an account with these brokers, in reference to the insurances they effect with them, by giving them credit for payment of the premiums. In such cases, therefore, it is not uncommon for the underwriters to hand over the policy of insurance to these brokers without payment of the premium. It is presumed that the Insurance Company take the brokers as their debtors for payment;' but the delivery of the policy to them will not, as in a question with them, bar the Insurance Company from insisting in an action for payment of the premium; while, as between the underwriters and the insured, the delivery of the policy will bar them from insisting in such action, the policy bearing a receipt therefor, and it being always presumed that the premium has been paid at the time of signing the policy, in so far as the insured is concerned.-(Dalzell v. Mair, 1 Camp. 532, and note; Arnould, p. 124.)

The Insurance Company ought, therefore, to take care how they deliver over the policy without payment of the premium.

On the other hand, if the premium be fixed, and paid for a series of years, without delivery of the policy, it seems that a claim for loss, or for damages in room of loss, will be sustained.-(Mills and others v. the Albion Insurance Company, 11 July 1827,

1 In Scotland, it has been decided, that both are liable to the underwriter; and the fact that the insurance has been effected by a broker does not prevent the underwriters from also coming against the insured. —(Kirk and Grieve v. Bennet, 1 Dec. 1812, Fac. Coll., p. 32.)

B

5 S. and D. 930; House of Lords, Ante p. 14.) So also, where the policy was not executed until after the loss had occurred, but the proposal for the insurance had been accepted by the underwriters, and the premium paid.-(Mead v. Davidson, 12 May 1835, 3 Ad. and El. 303.) In such cases, where the insured has paid the premium, and this is accepted of by the underwriters, this will amount to an obligation to pay any loss which may happen before the policy is executed and delivered to the insured.

In some offices, where the insurance is effected with the agents of the underwriters, a signed note or memorandum is drawn out, stating the insurance transaction, and bearing a deposit of part payment of the premium, and setting forth that, on payment of this deposit, the party shall be held as insured for fourteen days, until the approval and acceptance of the risk at the head office is known. In one case, a loss happened after the expiry of these days; but before any policy was written out, or the risk approved of by the main office, a verdict was obtained in favour of the pursuer against the underwriters after the memorandum was stamped.-(Wylie and Lochhead v. the Times Fire Insurance Company, 20 July 1860, S. and D., p. 1498, et S. and D. (1861), p. 728, and Jury Sittings, April 1861.)

2. POLICY.

Referring to what has already been said on the requisites of the policy,' and what it must contain, it 1 Pp. 10, 11, 12.