policy. In such case "the usual practice," says Mr. Phillips, is, " to enter the agreement on the books of the insurance company, subscribed by some officer authorised to bind the company. Such a memorandum is binding on the company to make out a policy if the premium is paid in due time.”1 Many questions have arisen, and very elaborate decisions taken place in the United States, as to what will amount to the consummation of an agreement to insure between parties in different places, communicating by letter or message. Corrections and Alterations in the Policy. At Common tion. The policy is the only legal evidence of the terms of the contract of Marine Insurance, and, as such, will be avoided, according to one of the best known rules of the common law, by any material alteration introduced into it, without Law. the consent of all parties, after it has once been underwritten. Until that time, as it is merely in fieri, and neither a Before subscripcontract nor evidence of one, any alteration whatever may be made with the cognizance only of the parties immediately concerned. A policy as originally drawn was upon plaintiff's share of goods valued at 500l., but some days after it had been underwritten by the defendant, and before the whole sum was underwritten it was found that plaintiff's share was larger than was supposed, and therefore the following words "on his share of the goods say one-fifth, valued at 1000l." were added in the margin, with defendant's consent and initials; Lord Ellenborough was of opinion that the alteration, though material, did not vitiate the policy, as it was all in fieri, and constituted but one agreement.* If it clearly appear that there has been a mistake committed to the prejudice of the defendant in drawing up the policy, and that the terms employed in it do not express the 11 Phillips, no. 13. Ibid. no. 13, et seq. Mr. Phillips details at length the cases on this subject; see also 1 Duer, 66, 109, et seq. 3 Master v. Miller, 4 T. Rep. 320; 2 H. Bl. 230; 1 Smith's L. C. 776. 4 Robinson v. Tobin, 1 Stark, 336. After subscription. To correct a mistake, at Law; in Equity. true intention and understanding both of the assured and underwriters at the time they entered into the contract, this is a good plea on equitable grounds, perhaps a good plea at law, in case the judgment of a Court of Law can do complete and final justice between the parties; but if not, then a Court of Equity will reform the instrument, taking care that neither party suffer by this exercise of its jurisdiction.' If the mistake committed be to the prejudice of the plaintiff, it is a question with which a Court of Equity only can deal. In a policy on the ship Eyles, effected with the London Assurance Company, the voyage was described in the early part of it as a voyage at and from Fort St. George, but in that part of the policy which defines the duration of the risk, the words were "beginning the adventure from and immediately following the ship's departure from Fort St. George." The policy was proved to have been filled up from a label, signed by the agent of the assured, and two of the directors of the company, in which the risk was described to be "at and from" Fort St. George. It was not disputed by the underwriters to have been the intention of both parties that the policy should be "at and from," and it was admitted that the label was of so much importance, that the policy is not made out in many instances, unless in case of loss. Under all these circumstances, Lord Hardwicke held, that the policy, agreeably to the unmistakeable intention of all the parties, should be considered to be a policy at and from.' But where a policy described the risk, as "at and from London to Ostend, from thence to Rotterdam, and thence to 1 See Wake v. Harrop, 30 L. J. (Ex.) 273; 6 H. &. N. 768; (in error) 31 L. J. (Ex.) 451. But in the words of Story, J., a court of equity will "be extremely cautious in the exercise of such an authority, and will withhold its aid where the mistake is not made out by the clearest evidence, according to the understanding of both parties, and upon testimony entirely exact and satisfactory." Andrews v. Essex, Fire and Mar. Ins. Comp., 3 Mason's Rep. 6. 3 Motteux v. London Ass. Co., 1 Atkyns, 545. Quare whether the label would now be admissible in evidence in such a case since the 35 Geo. 3, c. 63, ss. 11, 14. See Marsden v. Reid, 3 East, 572; ante, p. 253 and note. the Canaries, warranted an Ostend ship," and the assured applied to have his policy rectified, on the ground that the parties intended the risk to commence, not from London, but from Ostend, but the evidence as to this point appeared to be contradictory. Lord Hardwicke refused to entertain the application. His Lordship admitted that the Court of Chancery had jurisdiction to relieve in respect of a plain mistake in contracts, if reduced into writing contrary to the intention of the parties, but would only exert such power upon being satisfied by the strongest possible evidence, that a mistake had really been made.' The contract of the underwriters is complete when they have signed the policy. A declaration of interest to be afterwards made stands on a different footing; it is the mere exercise of a power conferred on the insured, and need not be in writing. If, therefore, a broker has committed a blunder in making this declaration, as where he has declared goods by the wrong ship, this blunder may be rectified by parol evidence, either with or without the assent of the underwriters. Mistake in declaring inte rest. consent The parties themselves may, by consent, introduce any Corrections by alterations into the policy, even after it is underwritten, whether by an erasure, and interlineation, or an addition in a blank space, which may be required by their mutual interests, and sanctioned by their mutual agreement (subject, however, as we shall see, to the provisions of the Stamp Acts); and such alterations, if properly signed, and not infringing the provisions of the Stamp Acts, form as valid a contract between the parties as the terms of the original policy. Policies are required by law to be in writing, and therefore must be in writing. alterations intended to make policies express the meaning of the parties must also be in writing, either in a separate Henkle v. Royal Exch. Ass. Co., 1 Ves. 317. 2 Robinson v. Touray, 3 Camp. 158; S. C. 1 M. & Sel. 215. Striking a 'pen across words, and writing others over them, so as to S General rule at What are mate. rial alterations. Destination. Subject of insur ance. Time of sailing. Another terminus ad quem. instrument, or on the face or back of the policy itself; and in either case, subscribed by, or as is most usual in practice, signed by the initials of, the underwriters, who are intended to be bound by them.' The only ground upon which a written alteration of this kind can be binding upon any of the parties to the original policy, is his assent signified thereto by his signature; in the absence of this, dissentients are not bound by the policy as altered." The general rule then is, that any material alteration of the policy, by the assured, avoids the policy, except as to those underwriters who have consented to it in writing, by signing their initials to the memorandum in which the alteration is specified, or to the interlineation, erasure, or addition by which it is effected. The question, therefore, has generally been, what constitutes a material alteration. Where a ship was insured from Virginia to Rotterdam, with leave to call at a port in England, and the assured, after the policy was underwritten, by consent of some of the underwriters (indorsed on the policy) altered her destination from Rotterdam to Hull: this was held to avoid the policy, as to all the underwriters, except those who had signed the indorsement." So the insertion of a specific subject of insurance in a policy which had been executed without any such description; the alteration of a specified day in the warranty as to time of sailing; and the alteration of a policy which had been "from Colmar to Portsmouth" into a policy "from Colmar to Portsmouth, or Weymouth;" were severally held to be policies not binding on those underwriters who had 1 Kaimes v. Knightly, Skinner, 54; Robinson v. Tobin, 1 Stark. 336. See Reed v. Deere, 7 B. & C. 261. 2 Forshaw v. Chabert, 3 Br. & B. 158; 6 Moore, 369; see also 1 Duer, 78-81, notes 142, et seq. 3 Laird v. Robertson, 4 Brown's Parl. Cases, 488; Langhorn v. Cologan, 4 Taunt. 330; Fairlie r. Christie, 7 Taunt. 416; Campbell v. Christie, not subscribed the alteration, and this too, in the latter case, notwithstanding the underwriter when first informed of it had said he would not take advantage of it.' So, where a ship was insured from "Cuba to Liverpool, Liberty to call. with liberty in that voyage to proceed to and touch and stay at and discharge and take in at any ports or places whatsoever, without prejudice," and after the subscription of the policy a leave" to call off Jamaica" was inserted in the body of it; the Court held, that, as Jamaica was out of the direct course of the voyage insured, this was a material alteration which avoided the policy as to an underwriter who had not signed it; although his not doing so seemed to be the result of accident rather than in consequence of a refusal.3 alterations. On the other hand, where the alteration is not material, it Immaterial will not vitiate the policy; but, in such case, if some of the underwriters have consented to the alteration, after the policy is executed, and others refuse, those who consent make the altered instrument their own; but those who do not, remain liable on their original contract.' are not material. Tres Hermanas, inserted after "The Three Sisters.” The following alterations have been considered not to be What alterations material. A policy was originally filled up, "on The Three Sisters, at and from Cadiz and Seville to Liverpool:" after the policy was underwritten the broker added the words Tres Hermanas (Spanish for The Three Sisters) and also the words "both or either:" Lord Ellenborough said that, as the English name, The Three Sisters, did not amount to a warranty that the ship was an English ship, the policy was not avoided by merely inserting the equivalent Spanish name of Tres Hermanas." As to the words "both or either," his Lordship said, that "as the ship, as originally insured, had the option of going both to Seville and Cadiz or not, as it might suit the exigencies of the adventure, these words did not give any additional liberty, and therefore did not affect the legal operation of the instrument." A ship was insured "from Liverpool to her port or ports of Liberty "to 1 Campbell v. Christie, 2 Stark. 64. 2 Forshaw r. Chabert, 3 Br. & B. 158. 3 Per Richardson, J., in Saunderson 7. M'Callum, 4 J. B. Moore, 5. Clapham v. Cologan, 3 Camp. 382. trade." |