and liabilities of the assured, the broker, and writer. Neither will the under the fact that the assured has till after the broker's failure, when the former had already Relative rights settled their general accounts with him; that by thus acting the plaintiffs had precluded themselves from proceeding against the company: but the Court held that, however the case might be, if the company could be shown to have been placed in a more disadvantageous position by the plaintiffs neglecting to apply to them for payment, yet that in this case no such inference could arise, for the facts showed that the company had throughout the whole time, from the first adjustment of the loss down to the final settlement of account, been indebted to the broker; and, therefore, as the company had not been damnified by the laches of the plaintiffs, they could not be discharged by it. (r) The given credit to the broker, preclude his claim against the unless the latter derwriter, un can thereby be shown to have been damnified. Scott v. Irving, 1 B. & Ad. 605. tiff, upon the evidence, apof the custom pears ignorant Where plain losses, he will not be pregeneral settlement of ac as to settling cluded by a count between the broker and underwriter, from proceeding against the In the next case of the same kind that came before the Court, the plaintiff, who was a merchant residing and trading in Glasgow, had employed a London broker to procure an insurance to be effected for him at Lloyd's: a total loss having occurred on the policy, the broker wrote to the plaintiff, informing him of the fact, and also of his having procured an adjustment from all the underwriters: the plaintiff, in reply to this, enclosed a bill drawn on the broker, payable ten days after sight, stating, at the same time, that he did not know at what date it was proper to draw the balance, this being the first total loss he had ever had in London. Court held, upon these facts, that plaintiff could not be held cognizant of the usage of Lloyd's so as to preclude him from suing the underwriter even two years after the broker's insolvency, for so much of the sum due in respect of his loss as was passed in account between the underwriter and broker: as, however, it appeared, that on the settlement of account between the broker and underwriter, a specific payment had been made in cash by the underwriter in respect of the balance due from him, on account of this specific loss (which was the only one entered to his debit in the broker's account), the Court held that, to the extent of the sum so paid, the underwriter was discharged from all claim on the part of the action, to the (r) Per Lord Tenterden C. J., 10 B. & Cr. 770. latter, even two years after the such settlement, a specific payin cash by the underwriter in balance due ment is made respect of the from him to the broker on ac count of the specific loss claimed in the extent of the and liabilities Relative rights assured, although such payment was made before the expiration of the month allowed by the custom to the underwriter. (s) of the assured, the broker, and the underwriter. sum so paid, the underwriter is discharged as against the assured. Stewart v. In the next and last case decided on this point, the facts clearly showed the existence of such a general course of dealing between the assured and the brokers as to raise an almost irresistible presumption that the assured was cognizant of the usage of Lloyd's, and he was therefore held to be precluded from recovering against the underwriter for losses settled in account according to that usage. The plaintiffs, in the case now referred to, were merchants at Liverpool, who, for a long course of years, had employed one and the same firm of London brokers, to effect their insurance business in London, which was of a very extensive character: the London brokers kept both a general, and also an insurance account with the plaintiffs, in the latter of which they debited them with all premiums, and credited them with all losses, allowed to them, the brokers, in account by the different underwriters, with whom they effected insurances for the plaintiffs: the balance, after deducting the premiums, they then carried into the general account with the plaintiffs. Ample evidence was given of the usage at Lloyd's of settling accounts by taking credits as payments; and some evidence was also given that that usage was well known in Liverpool, as well as in London. A loss having occurred on a policy effected for the plaintiffs by the London brokers with the defendant, who was an underwriter at Lloyd's, was settled and passed in account as between the brokers and the defendant in the usual way, and the defendant's name was struck off the policy. The London brokers having obtained from the various underwriters with whom they had effected policies for the plaintiffs, an adjustment of this and other losses, advised the plaintiffs (to whom they were then considerably indebted on the general account) of the fact; and the plaintiffs then drew upon them for the amount. Shortly after this the London brokers, who were (s) Scott v. Irving, 1 B. & Ad. 605. and liabilities the under Ground on which the Court decided this still greatly indebted to the plaintiffs, failed, and the plaintiffs Relative rights thereupon immediately claimed from the defendant the loss of the assured, which he had settled with the brokers, as already mentioned, the broker, and by passing it in account with them. But the Court held writer. that, under the circumstances, the plaintiffs' claim could not be supported, on the ground, as stated by Lord Abinger, "that there was sufficient evidence in the case, of a custom case. between brokers and underwriters, to make settlements in account, by taking credits as payments, and also of the knowledge of the plaintiffs of such custom, and of their authorising the brokers to settle with the underwriters, and to give them, the plaintiffs, credit on account for the loss, and to permit them to draw on the brokers for the amount." (t) Lord Abinger Upon the general question, the Court were of opinion, Opinion of "that where an insurance broker, or other mercantile agent, upon the general question. has been employed to receive money for another, in the general course of his business, and where the known general course of business is for the agent to keep a running account with the principal, and to credit him with sums which he (the agent or broker) may have received by credits in account with the debtors (the underwriters, &c.), with whom he also keeps running accounts, and not with monies actually received, it must be understood, that where an account has been bonâ fide discharged and settled according to that known usage, the original debtor (i. e. the underwriter) is discharged; and the agent (ie. the insurance broker) becomes the debtor, according to the meaning and intention, and with the authority of the principal.” (u) § 68. The following propositions seem to embrace the law Summary of 1. Unless the plaintiff, either from his residence or from his previous course of dealing, can be shown to be cognizant of this usage of settling losses in account, he will not be bound by it; but, upon the broker's insolvency, may recover (1) Stewart v. Aberdein, 4 Mees. & Wels. 211. (a) Per Lord Abinger delivering the judgment of the Court in Stewart the law on this point. and liabilities Relative rights against the underwriter the amount of the loss, although the loss has been passed in account, as between the broker and the broker, and underwriter, and the name of the latter has been struck off of the assured, the under writer. Where the action is the policy. 2. Even actual payment in cash by the underwriter to the broker of the balance of the general account is not to be considered payment as against the assured to that extent. But a specific money payment by the underwriter to the broker in respect of the specific loss claimed by the assured in the action, is, even as against the assured, payment pro tanto. 3. If, from the place of the plaintiff's residence, or the previous course of his insurance dealings, it is, on the whole, reasonable to suppose that he must have been cognizant of this usage, he will be bound by it, and cannot recover against the underwriter, whose name has been erased from the policy, losses passed in account as between the underwriter and broker. 4. If the underwriter's name have not been struck off the policy, it seems doubtful whether the assured, though cognizant of the usage, might not recover on the policy as against the underwriter, even for losses so passed in account. (v) A trustee suing as a plaintiff in a court of law, must be brought in the treated in all respects as a party to the cause, and any defence against him is a defence in that action as against the cestui que trust who uses his name. name of the broker, passing losses in ac count is evi dence of pay ment as against the plaintiff in such action. Where, therefore, a broker, in whose name a policy under seal was effected, brought an action of covenant against the underwriters, who pleaded payment, such plea was held to be supported by proof that they had allowed him credit on account for premiums to the amount claimed; for, although this might be no payment as between the defendants and the assured, yet, as it was good payment, as against the broker, who was the plaintiff on the record, it was an answer to the action. (w) (v) Andrew v. Robinson, 3 Campb. (w) Gibson v. Winter, 5 B. & Ad. 199. 96. ART. V. Actions by the Broker against the Assured for Commissions, Premiums, and Losses paid over by Mistake. § 69. The assured is liable to the broker for the commission due to him for effecting the policy, which generally amounts to five per cent. on the premium. (a) If the broker acts under a commission, del credere, the rate of remuneration is, of course, higher; and in this case he may recover from the assured instanter, under a general indebitatus count for commissions, without waiting for the event on which his liability on the guarantee depends. (y) Relative rights and liabilities of the assured, the broker, and the under writer. Liability of the assured to the broker for commission, rate of commission. Liability of assured to miums. broker for pre Premiums, if paid over, may be recovered on a count for With regard to premiums, there can be no doubt that the assured is liable for them to the broker, or, upon his bankruptcy, to his assignees, whether the premiums have been paid over by the broker to the underwriter or not (z); the only question is as to the form of the count under which they are recoverable. Lord Kenyon is said to have held that the money paid. broker, even before paying over the premiums to the underwriter, might maintain an action against the assured to recover the amount as for money paid. (a) Mr. Campbell, however, But not, as it seems, till acfailed to discover any such decision of Lord Kenyon's in tually paid print; and as, on the general principles of pleading, the count for money paid cannot be maintained, without proving actual payment, or that which is equivalent to it (b), the point must be considered as doubtful. Where, indeed, the policy, as in the common form, acknowledges the receipt of the premium by the underwriter, and the (x) He may recover this under a general count for work and labour; and was allowed so to recover it in a case where, though the declaration contained a count for work and labour, the particulars of demand contained no such claim, but only a charge for inPower v. Butcher, 10 B. & surance. Cr. 329. (y) Carruthers v. Graham, 14 East, (z) Airy v. Bland, Park, 8th ed. (a) Dalzell v. Muir, 1 Camp. 532. over. Except, perhaps, where the policy acknow ledges the re- usage of |