Sect. 164. broker, if he chose to part with his lien, might have handed over the policy to the assured, as soon as it was effected, and his responsibility would then have been at an end; but as he retained it he was bound to use all reasonable diligence to bring the underwriters to a settlement of the loss according to the usage of trade in this respect ” (s). Duty to give 165. The insurance agent is no doubt bound, as to giving notice of abandonment. notice of abandonment, by any express instructions received from his principal, and to carry them out with such reasonable skill as may fairly be expected of him. Where, however, he is left to his own discretion in the matter, the question whether he is liable in an action for not having given due or timely notice of abandonment, must depend upon the circumstances of the case. In the case of principals living at toogreat a distance to be consulted on the matter, the agent having the policy in his hands would no doubt be held bound to act in their behalf by giving due notice of abandonment, where the circumstances are such as to require it. In such cases, if the agent have done all that his principal, as a prudent, careful and skilful man of business, if on the spot, could reasonably be expected to do, he will be free from liability; but if he have failed in this, he will be liable for the consequences of his negligence. In the case of principals living sufficiently near to be consulted, the agent, in a point of such difficult discretion as a question of abandonment frequently is, would always do wisely to refer to his employers for instructions. The only case in which the agent's liability for neglect to give due notice of abandonment has come in question in our Courts is the following:-Action by assured against insurance brokers for negligence in not giving due notice of abandonment to the underwriters, so as to have enabled the plaintiff to recover for a total loss. The plaintiff, a merchant of Liverpool, had insured through the defendants, Comber v. (8) Bousfield v. Cresswell (1810), 2 Camp. 545. The usage of trade referred to by his lordship is, that losses ought to be collected from the underwriters a month after the adjustment, and paid over forthwith to the assured. insurance brokers in London, a cargo of wheat from Water- Sect. 165. ford to Liverpool. On going down the Waterford river on the 28th January, 1807, the ship struck and filled. The greater part of plaintiff's wheat was got out, but damaged 95 per cent. on its value. On the 2nd February the plaintiff wrote to the defendants a letter, which they received on the 4th, directing them, if any steps could be taken for his interest with the underwriters, "to do the needful,” adding, "I should wish to abandon, if it be admitted of." The defendants, by return of post, wrote back to say "that it would be imprudent to say anything to the underwriters without learning further particulars." The plaintiff did not write again till the 9th, when he neither complained of the abandonment not being made, nor directed the defendants to abandon. On the 18th of the same month they sent in a notice of abandonment, which was held to be too late (f). It was contended for the plaintiff, that the defendants, after receiving the letter of the 2nd of February, ought to have given immediate notice of abandonment. Lord Ellenborough, however, held, that no negligence could be imputed to the defendants for not abandoning before the 18th. The letter of the 2nd left it to the defendants' discretion to act as they should think most expedient; and, if he was dissatisfied with their conduct, he ought at once to have said so. Instead of that he lay by till the 9th, and did not even then complain or give them any fresh orders. Had he positively required them to abandon, they would have been answerable for not complying with his request as soon as possible; but he had referred them to their own judgment, and it seemed as if he himself at the time had thought that they acted judiciously (u). The above case has been cited at greater length than usual, as it appears to afford a good illustration of the principles that in this matter regulate the insurance agent's liability he will not, in cases of difficulty, as questions of abandonment (t) In Anderson v. Royal Exchange Ass. Co. (1805), 7 East, 38. (u) Comber v. Anderson (1808), 1 Camp. 525. Sect. 165. generally are, be held liable for not having exerted the best possible judgment that could, under the circumstances, have been found; it is enough if he acted with reasonable skill and discretion, and as his principal would probably have done had he himself taken the management of the business. Broker has no Agents of the insurer. Evidence of authority. A broker has, in the absence of the express authority of his principal, no authority to cancel a policy, whether it be left in his hands or not (x). 166. Agents may be appointed for the purpose not only of effecting sea-policies for the assured, but also of subscribing them for the underwriters. In this latter case they are generally authorized to act by power of attorney; but it is not requisite that such power should be produced at the trial, if satisfactory evidence can be given of the agent's authority without its production. As to what shall be satisfactory evidence in the absence of the written authority, is a point on which there has been some little fluctuation in the decisions. Thus, where a broker called by the plaintiff proved that the defendant's name had been subscribed by one Hutchins, who was in the constant habit of subscribing policies in the defendant's name, 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 (y); 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 (a). 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 (x) Xenos v. Wickham (in error) 61. (2) Courteen v. Touse (1807), 1 Camp. 43, n.; and rightly, see 2 Duer, 341, n. (a). (a) Haughton v. Ewbank (1814), 4 Camp. 88. advise the company of it. This was held by Lord Tenterden Sect. 166. 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 (b). sufficient 167. Where a power was given to fifteen persons, "jointly What is a or separately, to sign policies on such ships as they or any of execution of a them should think proper," after four of the original fifteen power to sign policies. had died, a policy was executed, in the name of the principal, by four of the survivors, and this was held to be a sufficient pursuance of the authority (c). Where the power of attorney was to execute policies on which the risk should commence from the day on which 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 (ɗ). In virtue of a power "to underwrite any policy of insurance not exceeding 100%., 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 (e). 168. The ostensible authority of an agent to underwrite Limited authority. policies may be controlled by local usage. A broker who had a written authority to underwrite for not more than 1007. by (b) Brockelbank v. Sugrue (1831), 5 C. & P. 21; S. C., 1 Moo. & Rob. 102; 1 B. & Ad. 81. (e) Guthrie v. Armstrong (1822), 1 Dowl. & Ryl. 248. (d) Mead v. Davison (1835), 3 Ad. & E. 303; S. C., 4 Nev. & Man. 701. Cf. Mason v. Joseph (1804), 1 Smith, 406. (e) Mason v. Joseph, 1 Smith, 406. Sect. 168. any one slip, underwrote a policy for 1507. The Court held The authority to sign involves that of settling claims, and of submitting to arbitration. Authority of Lloyd's agents. that the principal was not bound by the subscription, inasmuch as in the place where it was made by the broker, i. e., Liverpool, it was common knowledge that such agents had only a limited authority (ƒ). An agent, whose original authority to subscribe a policy has been proved, has an implied authority to perform any subsequent act on behalf of his principal that the relation between the latter and the assured may render necessary. Thus the authority to sign or subscribe a policy for the underwriter involves that of signing the adjustment of a loss (g). And an agent proved to have been in the habit of subscribing policies and settling losses, was held, by Gibbs, C. J., to have an implied authority to submit a dispute, concerning a loss, to arbitration (h). These were cases of implied authority, arising out of the proved relationship subsisting between the underwriter and the agent. Where, however, the agent of the underwriters derives his authority from express instructions, which profess to define and regulate the duties of his agency, he cannot, as agent, bind his principal by any act which exceeds the limits of such instructions, much less by one that violates or contravenes them, unless the principal have held him out to the public as being invested with a general authority. Thus: 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 representative of the underwriters. Where, therefore, such (f) Baines v. Ewing (1866), L. R. 1 Exch. 320. (g) Richardson v. Anderson (1807), 1 Camp. 43, n. (h) Goodson v. Brooke (1814), 4 Camp. 163. Sed quære. The report no doubt bears out the text, but it is a report ex relatione of another, and it seems contrary to Stead v. Salt (1825), 3 Bing. 101; Adams v. Bankart (1835), 1 C. M. & R. 681; confirmed by Hatton v. Royle (1858), 3 H. & N. 500; 27 L. J. Ex. 486, that even a partner has no implied authority to submit a partnership dispute to arbitration. Cf. also Thomas v. Atherton (1878), 10 Ch. D. 185. |