Sect. 140. has, as such, a prior implied authority to direct an insurance to be effected by English correspondents of his master on a consignment made by them on account, and to the orders, of his employer, may be doubtful; but subsequent adoption by the foreign principal of the insurance so effected will amply warrant a jury in finding that such insurance was made with his authority (").

Ratification of insurance may be implied from conduct.

Evidence of ratification.

141. With regard to the nature of the evidence required to establish the fact of ratification, positive proof of an express ratification is not needful. The adoption of the policy may be inferred from the conduct of him for whose benefit it was originally intended. If he means to reject it, he should express his dissent as soon as he is informed of the fact; if he fail in so doing, his adoption of the contract will, generally speaking, be inferred from his silence (~). At all events, this will be so in cases where those who have effected the insurance, instead of being mere strangers or volunteers, stand in such relations of business or correspondence as would give them, not indeed an implied authority to insure, but a reasonable ground for anticipating that the policy, when made, would be adopted by him for whom it was designed (y).

Thus, in the case of part owners: where no proof could be adduced of an express authority to insure, but evidence was given that the part owner insuring had "told all his copartners that he had insured, and that they did not object to it" (z); or where it appeared that the part owner insuring

(u) Barlow v. Leckie (1819), 4 J. B. Moore, 8.

(x) So Phillips (vol. i. s. 390). And in view of the now-established doctrine in this country, that a principal may ratify even after knowledge of a loss (see post, s. 142), this would probably be held to be law here; otherwise a party interested would be able to lie by for an indefinite time, and eventually elect to take the benefit of the insurance in case of a loss, or to repudiate liability for premiums in case of safe

arrival.

(y) This distinction is suggested by Judge Duer, vol. ii. pp. 151154. See also note (v) to sect. x. pp. 178-182, in which he discusses the question "whether the mere omission of the principal to reply to a letter of advice from a self-constituted agent is to be regarded as evidence of an adoption of the agent's act." The learned jurist takes the negative view.

(z) French v. Backhouse (1771), Burr. 2727. The action here was by

had entered the premium in his books, which were open to Sect. 141. the inspection of the other owners, and that they had actually inspected an extract made out from these books relating to the insurance transaction without objecting to it; juries were held to be justified in finding that the part owner insuring had done so with the authority of his co-owners (a).

ratification.

142. A ratification, conditional in its terms, has been held Conditional in the United States to be equivalent to a prior authority as soon as the contingency on which it was to depend has happened. The general agent, at New York, of a merchant resident at Carthagena, having effected an insurance for him without instructions, gave him notice of what he had done. The Carthagena merchant wrote in answer, that, if other insurances which he had ordered should not have been made, and if the ship should not have arrived safe, he wished the policy to stand, otherwise to be cancelled. When this answer was received in New York the other insurance referred to had not been made, and the ship (which was then out of time) had not arrived; in fact, was totally lost. An action having been brought in the Superior Court of New York on the policy, Oakley, J., before whom the case was tried, held the ratification sufficient, and a judgment was recovered for the loss (b).

With regard to the time at which the adoption must be When the made, it is clear that it need not be during the pendency of be made. adoption must the risk. In many of the cases on the subject there was no ratification till after the loss had taken place, and was known to the principal (c); and in one case the only evidence of

the ship's husband against his copart-owners to recover back premiums on a policy effected by him on the owners' behalf.

(a) Robinson v. Gleadow (1835), 2 Bing. N. C. 156. The action was by the assignees of the broker against all the part owners for premiums.

(b) Bridge v. Niagara Ins. Co. (1828), 1 Hall, 247, cited 2 Phillips VOL. I.

on Ins. s. 1868. In point of fact, a
conditional order ceases to be so,
and becomes positive, when, before
receipt by the party who is to exe-
cute it, its conditions have been ful-
filled.

(c) Lucena v. Craufurd; Routh v.
Thompson; Barlow v. Leckie, ubi

supra.

N

Sect. 142. adoption was a letter written by the principal two years after the making of the insurance, and nearly as long after he had become aware of the loss, expressing a hope that the party who had effected the policy had procured a final settlement from the underwriters (d). Accordingly, the Court of Appeal, when asked to review these cases in order to restrain the time for valid ratification within narrower limits, recognized the exception as one that had been long established, and no doubt found convenient in the case of marine insurance, and therefore refused to disturb it (e).

Ratification of an insur

agent.

That, however, which is relied upon as a ratification must be done, said, or written by the principal after he is cognizant of the insurance. A general order to insure, given by the principal before knowledge of the particular insurance, though not received by the party insuring till after the policy was effected, cannot, it seems, be construed into an adoption of such policy (ƒ).

143. It is, however, necessary, in order to justify an adopance effected tion or ratification of such a contract, that the "voluntary by a voluntary agent"—or, in other words, the party who has without authority effected, or purported to effect, the contract-should have intended to be acting on behalf of the person claiming to adopt or ratify it. He must also have intended to look to such person for the reimbursement of his necessary expenses in the transaction (g). "It is clear," said Erle, C. J., "that no one can sue on a contract but the person who made it, or the person who ratified what purported (h) to be a contract

(d) Hagedorn v. Oliverson (1814), 2 M. & S. 485.

(e) Williams v. North China Ins. Co. (1876), 1 C. P. D. 757. In view of this decision, it is probably the law now, as stated by Phillips, vol. i. s. 390, that ratification, and consequent liability for premiums, is presumed in the absence of express repudiation within a reasonable time after notice. See sect. 141, note (x). (f) Bell v. Janson (1813), 1 M. &

S. 201.

(g) See 2 Duer, 135. The whole subject of voluntary agency and ratification is learnedly discussed in pp. 132-155.

(h) As to the meaning of this word, the Lords Justices in Durant v. Roberts, [1900] 1 Q. B. 629, took different views. The dissenting opinion of A. L. Smith, L. J., was approved by the House of Lords, Keighley & Co. v. Durant, in the Times for 21st May, 1901.

made by his agent. A very wide extension has been Sect. 143. given to this principle . . in respect of a policy of assurance, and persons who could not be named at the time, if intended to come within it, and so capable of being ascertained, have been allowed to be entitled to the benefit of the same: but they must have been such as were contemplated at the time when the policy was made" (i). "It is imperatively necessary," said Mathew, J., " that the insurance should be intended to be effected by the agent on behalf of some person capable of identification, and responsible to the broker for the premiums that the broker undertakes to pay to the underwriter" (k).

In Byas v. Miller, an insurance broker at Lloyd's was instructed by principals at Liverpool to reinsure goods for a voyage at a certain premium. He was unable to execute the order at the rate mentioned, but obtained from the defendant, an underwriter, a slip at a higher premium, and sent to the Liverpool firm a cover-note stating that he had reinsured provisionally for their account at the higher rate: this insurance, however, the Liverpool firm refused to accept. The broker shortly afterwards issued to the plaintiffs a fresh cover-note in respect of an interest which they had in the same goods, the defendant's name being inserted therein as underwriter; and within two or three weeks the goods were totally lost. A few days later a policy in the ordinary form was tendered to, and signed by, the defendant in accordance with the slip. The defendant never knew the names of the original principals of the broker, nor did he ever know, until after the loss, that the broker had appropriated the slip to clients for whom he was not acting at the time when the slip was signed. It was held, in accordance with the principles above stated, that there was no contract between the plaintiffs and the defendant (1).

(i) In Watson v. Swann (1862), 11 C. B. N. S. 756; 31 L. J. C. P. 210. See Keighley & Co. v. Durant, ubi supra.

(k) In Byas v. Miller (1897), 3

Com. Cas. 39.

(2) Byas v. Miller, ubi supra. The facts and the decision in Watson v. Swann were very similar.

Sect. 144.

When an express authority to insure may be revoked.

Duties and liabilities of

assured.

Agents paid and unpaid, skilled and unskilled.

144. With regard to the revocation of an express authority to insure given to an agent, the time within which it may be made depends, of course, upon this: whether the agent, acting in pursuance of the authority, has conclusively bound himself or third parties before receiving the revocation. If he have not, the revocation will be operative; if he have, it will be ineffectual. In this country no contract for sea insurance is valid unless it be expressed in a policy containing the particulars required by the statute (m). Hence, the authority given to an insurance agent may be revoked, notwithstanding the initialing of the slip by the underwriters, at any time before the formal policy is subscribed; and if a broker, having procured a slip to be written on terms within the scope of his original authority, afterwards receive an intimation. from his principals that they will not consent to such terms, and, notwithstanding such notice, effect a policy on those terms, and pay the premiums to the underwriters, he cannot recover against his employers for the premiums so paid, nor for his commission (»).

145. The liability of insurance agents to their employers for agents for the negligence is determined by the general principles of the law of agency (o). All such agents, whether paid or unpaid, skilled or unskilled, are bound to exercise due care in the performance of the duties which they have undertaken. A greater degree of care, however, is required from a paid than from an unpaid, from a skilled than from an unskilled, agent. In other words, conduct which amounts to actionable negligence in a paid or in a skilled agent may not amount to such in one who is unpaid or unskilled. In view of recent authorities, this seems to be a better way of stating the law than to say that the one is liable for ordinary, but the other only liable for gross negligence (p).

Application of these principles.

The great majority of persons employed in the business of
(m) The Stamp Act, 1891.
by the principals would be too late.

(n) Warwick v. Slade (1811), 3 Camp. 127. We have, however, elsewhere advanced the view that the slip may itself be a valid policy: if this view be correct, the revocation

(o) See Coggs v. Bernard; and notes in Smith's Leading Cases; Story on Agency, 149, 150.

(p) Cf. 2nd ed. of this work, Pp. 174, 175.