and July 5,1873

Fis h e ra n d othersv. The Liverpool Ma r in s Insurance Company ( Lim it e d).

Marine insurance—Policy—Slip—Neglect to exe­

cute policy— Whether action will lie for neglect.—

Admissibility in evidence of slip—30 & 31 Viet, c. 23, ss. 7, 9.

E. and Co. were agents of the defendants (a Liver­

pool Insurance Company) in London, to accept risks and receive premiums. Plaintiffs instructed P. and Co., insurance brokers in London, to insure some steel rails on board a ship for them ; and on the 16th Nov. 1871, P. and Co. prepared a slip, which was initialled by one of the firm <f E. and Co. for 10001. A copy slip was sent to E. and Co., and by them forwarded the same night to the defendants in Liverpoot, but the defendants did not send up a stamped policy.

The amount of the premium and 2s. 6d. for policy duty were paid by P. and Co. to E. and Go. The vessel, with the stee.l rails on board, having been Inst, the plaintiffs brought an action against the defendants to recover damages for the loss : Held (per Quain and Archibald, JJ., dissentienle

Blackburn, J.), that the plaintiffs could not in any form of action recover against the defendants, as 30 & 31 Viet. c. 23, ss. 7 and 9, prevented the plaintiffs from making available a contract for marine insurance not expressed in a stamped policy.

Per Blachburn, J., dissentiente, that the sending to the defendants of the copy slip was a reguest to them to obtain a stamp and complete the policy, and on their accepta,nee of that request they entered into a new contract apart from the initialling of the slip, and that the plaintiffs could recover against the defendants for not using due skill and diligence in framing a stamped policy in conformity with the reguest slip, and bring­

ing the transaction to a conclusion voithin a reasonable time, either by executing or repudiat­

ing that policy; and that the slip was admissible in evidence, nut for the purpose of enforcing it as a contract of insurance, but for the collateral pur­

pose of showing that the defendants had not used diligence in bringing the matter to a conclusion within a reasonable time.

De c lar atio n, for that the defendants, by warrant­

ing to the plaintiffs that one Eames was duly authorised as their agent and on their behalf to accept certain risks and receive on their behalf certain premiums for insurance upon risk repre­

sented by the said Eames to have been accepted by the defendant, and in respect of policies of insurance drawn up and executed by the defen­

dants, to cover such risks, induced and caused the plaintiffs to pay certain premiums for the said insurance, and certain other moneys for the costs and expenses of the said policy of insurance by the said Eames, for and in respect of a risk ac­

cepted by him for and in the name of the defen­

dants, upon a ship of the plaintiffs called the Lizzie, and for the said policy of insurance repre­

sented by the said Eames to have been prepared and granted by the defendants to the plaintiffs, and restrained as usual in the hands of the defen­

dants, and also thereby induced and caused the

M A R IT IM E LA W CASES. _________ 4!

Q.

[Q-

plaintiffs not to cover the said ship by other in­

surances, and to rely upon the said policy said to have been granted by the defendants ; and the plaintiffs say that all conditions precedent were fulfilled, and all times elapsed, and all matters and things were done and happened necessary to entitle the plaintiffs to have the said warranty fulfilled and performed, and to sue the defendants for the breach of the said warranty hereinafter complained o f; yet the plaintiffs say that the defendants were g uilty of a breach of the said warranty in this respect, that the said Eames had not authority, as their agent, to accept the said risks and receive the said premiums for insurances as warranted as aforesaid, whereby the plaintiffs sustained great loss and damage, as in the second count hereinafter set forth ; and the plaintiffs also sue the defendants for that the defendants, by falsely and fraudulently misrepresenting to the plaintiffs that one Eames was then duly authorised to act as their agent in accepting premiums for insurance, and also that the defendants had granted and accepted a policy of assurance in favour of the plaintiffs, covering a certain ship of the plaintiffs called the Lizzie, induced the plaintiffs to pay to the said Eames a large sum of money for and as a premium for such assurance, and for the price of a stamp for the said policy, and also to abstain from effecting insurances with other underwriters, whereas, in tru th and in fact, ho such policy was granted or executed by the defendants, nor was the said Eames authorised to receive premiums for the defendants, all which nremises the defendants well knew at the time of the making the said false representations, whereby the plaintiffs sustained loss and damage by paying the said sum of money to the said Eames without having the benefit of the insurance, and by abstain­

ing from covering the said ship by other insur­

ances, and by the said ship being lost by perils of sea, against which the plaintiffs then supposed they were insured, and the plaintiffs were other­

wise greatly damnified; and the plaintiffs also sue the defendants for money payable by the defendants to the plaintiffs for money had and received by the defendants to the plaintiffs’ use.

Pleas (1) to the first count, that the defendants did not warrant as therein alleged; (2) that they are not guilty of such breach of warranty as therein alleged : (3) that they did not induce or cause the plaintiffs to act as therein alleged; (4) to the second count, not g u ilty ; (5) as to the residue of Ihe declaration, never indebted.

On these pleas issue was joined.

The case came on to be tried before Brett, J., at the Liverpool Summer Assizes 1S72, when the learned judges held that there was no evidence to go to the ju ry of breach of warranty or ol misre­

presentation, but gave leave to amend the declara­

tion so as to cover the facts, and thereupon a verdict was found for the plaintiff for 1000/,., leave being given to the defendant to move to enter a verdict for them i f there was no evidence upon an amended declaration which should have been left t° the ju ry, or if the learned judge ought not to have amended. A ll the material facts of the case are stated in the judgment of Blackburn, J. (post.)

The case had been argued once before Black­

burn and Quain, J J „ when those learned judges differed in opinion, and the rule was ordered to argued a second time, when there should be a third judge present.

Benjamin, Q.O. and Macafee showed cause against the rule.—The question is, whether an action in any form w ill lie against the defendants under the circumstances of the case, and i t is submitted that an action w ill lie. The plaintiffs being interested in a certain vessel, desired to insure it, and employed the defendants as their agents to effect the insurance. By accepting that office the defendants undertook, on receipt of the premium, to issue a p olicy; and this they were bound to do by law; and if by their neglect to do so they have occasioned loss to the plaintiffs, they are liable for it. The plaintiffs sue not in con­

tract but in to rt for a breach of duty. [ Bl a c k­ b u r n, J.— Surely you are in effect suing upon a contract. Qu a in, J.—I t was a contract with the defendants that they, on receipt of the premium, should issue a policy.] There is a clear distinc­

tion between the two classes of cases, an action in to rt often lying where an action in contract would not lie : See Langridge v. Levy (2 M. & W.

519), where an action was held to lie for falsely and fraudulently warranting a gun to have been made by a particular maker, and to be a good, safe, and secure gun, and selling it as such to the plaintiff’s father, for the use of himself and his sons, one of whom (the plaintiff), confiding in the warranty, used the gun, which burst and injured him. The defendants rely on the provisions of 30 & 31 Viet. c. 23. Sect.' 7 of that A ct provides that “ no contract or agreement for sea insurance (other than such insurance as is referred to in the 55th section of the Merchant Shipping A ct Amend­

ment A c t 1862) shall be valid unless the same is expressed in a p olicy; and every policy shall specify the particular risk or adventure, the names of the subscribers or underwriters, and the sums insured; and in case any of the above-mentioned particulars shall be omitted in any policy, such policy shall be null and void to all intents and purposes.” Sect. 8 contains similar nullifying words as to policies for periods exceeding twelve months. I t provides that “ no policy shall be made for any time not exceeding twelve months, and every policy which shall be made for any time exceeding twelve months shall be null and void to all intents and purposes.” B ut no such strong words are used when the statute comes to deal with the question of stamping. Sect. 9 provides that “ no policy shall be pleaded or given in evi­

dence in any court, or admitted in any court to be good or available in law or in equity, unless duly stamped.” [ Bl a c k b u r n, J.—The question really is, whether you can recover on a slip to the same extent as you can on a stamped policy ?] The policy must be stamped in order to be given in evidence;

but the various steps taken by the parties in anticipation of this valid contract are perfectly legal. They may come to an understanding as to the form which the agreement is to take. I f the plaintiff's had not paid to the defendant the amount of stamp duty, it is admitted that i t would be contrary to the policy of the Stamp^Act that they should be allowed to recover in this action ; but the plaintiffs, having paid the amount of stamp duty, have done all they can to meet the require­

ments of the Stamp A c t ; and there is nothing to prevent the plaintiffs from making the defendants liable for a breach of duty in not, after receiving the amount of the stamp duty, obtaining the requisite stamp and issuing the policy. There has been no evasion or attempt at evasion of the

46

M A R IT IM E LA W CASES.

Q . B.J Fis h e r. a n d ot h eh i, v. Th e Liv e r p o o l Ma r in e In s u r a n c e Co m p a n y ( Li m i t e d). [Q . B.

Stamp A ct on the part of the plaintiffs. I t is acknowledged that there can be no valid policy unless it is stamped, but the statute does not say that the slip may not be used to prove other things. E. g., i t may be used for the purpose of convicting offenders against the statute; sect. 13 providing that “ if any person shall become an assurer upon any sea insurance, or shall subscribe or underwrite, or otherwise sign or make, or enter into any contract, agreement, or memorandum, for or of any sea insurance, or shall receive or con­

tract for any premium or consideration for any sea insurance, or shall receive, or charge, or take credit in account for any such premium or consi­

deration as aforesaid, or shall w ilfully or know­

ingly take upon himself any risk, or render himself liable to pay, or shall pay or allow, or agree to pay or allow, in account or otherwise, any sum of money, upon any loss, peril, or contingency relativeto any sea insurance, unless such insurance Bhall be written on vellum, parchment, or paper duly stamped ; or if any person shall be concerned in any fraudulent contrivance or device, or shall be guilty of any w ilfu l act, neglect, or omission, w ith intent to evade the duties payable on policies under this Act, or whereby the duties may be evaded, every person so evading shall for every such offence forfeit the sum of 100?.” This section clearly shows that there are collateral purposes for which an unstamped policy is admissible in evi­

dence. Now the plaintiffs do not use it in the present case to show that there has been a contract of insurance, but to show that through the default of the defendants the plaintiff s have been prevented from obtaining a contract of insurance. The claim is for unliquidated damages to recover the amount of the loss sustained owing to the defendants’

neglect of duty. I f the plaintiffs are held not entitled to recover, it w ill follow that the party who has provided the money for the stamp duty w ill have to suffer, and not the party who received it. In Ionides v. The Pacific Fire and Marine . Insurance Company (ante, vol. 1, p. 141; L. Bep.

6 Q. B. 674; and on appeal, ante, vol. 1, p. 330;

L. Bep. 7 Q. B. 517) i t was held that notwith­

standing sect. 7 of 30 & 31 Viet. c. 23, a slip may be given in evidence, though not valid as a contract, as evidence of the intention of the parties. Bl a c k b u r n, J., in the court below, said :

“ As the slip is clearly a contract for marine in ­ surance, and is equally clearly not a policy, i t is by virtue of these enactments not valid, that is, not enforceable at law or in e q u ity ; but i t may be given in evidence wherever it is, though not valid, m aterial; and in the present case i t is ma­

terial.” And in the Court of Exchequer Chamber.

Kelly, C.B. said: “ The second question is, whether this slip was admissible in evidence at all, and if i t were, whether i t was admissible in evidence for the purpose for which alone i t was used on the tria l of this cause. Now, i t is quite true that under the statute in question (30 Viet. c. 23, ss.

7, 9), the document called a slip, although i t is binding in point of honour between parties cir­

cumstanced as these parties were, is made void as a contract, and as such inadmissible in evidence. I t is not like an agreement for a lease, upon which an action can be brought for the non-acceptance of the lease, or the refusal to grant a lease j but as a contract for a policy of assurance to be afterwards made, is a mere nullity. I t does not, however, follow that i t is not admissible in

evidence for a great variety of purposes. In this case i t is unnecessary to do more than consider whether i t is admissible in evidence for the pur­

pose of showing what the two parties intended at the time they entered into this transaction ; in otherwords, whetherthey intended i t to be a policy pursuant to a previous contract, although that contract was not binding, or whether the policy was a new, separate, and substantive contract, to be construed without reference to the previous acts of the parties . . . I f i t had been applied to a purpose forbidden by the A c t of Parliament, I should not have hesitated to say that i t ought not to be considered as admitted, or i f admitted ap­

plied to any such purpose. B ut for many pur­

poses i t may legitimately be used, as in cases where a fraud is suggested, or where there is a plea, as here, of misrepresentation, the slip may be evidence of the fraud or of the misrepresenta­

tion charged. Suppose a slip, with a view to an insurance from a port in South America, which had been under a blockade little while before the date of the policy, and the slip, at the instance of the plaintiff, described the port as an open port, and the question had arisen whether the policy had been procured by misrepresentation, or whether there was a concealment of the material fact that the port had been under blockade; no one can doubt that upon the collateral question of misrepresentation, tho slip would be admissible in evidence to prove what the plaintiff had repre­

sented. I t is quite enough, therefore, to say that here i t was not given in evidence to prove a bind­

ing contract between the parties, or to contradict or to explain, or in any way affect the construction of the policy in question ; but i t was given in evidence only to show what their intention was in preparing the policy. For that purpose I am clearly oi opinion that i t was admissible in evi­

dence.” The point fo r which the slip is sought to be used in the present case is clearly a collateral one, and the authority of the case cited shows that for such a purpose it is admissible in evidence.

Dutton v. Powles (2 B. & S. 174) was also referred to.

It. O. Williams and James P. Aspinall (Aspinall, Q.C. w ith them) in support of the rule.—A slip is a contract for sea insurance; i t is a contract to execute an instrument by which the vessel named shall be duly insured; and that is the only contract in the case. There is no such thing as a contract merely to make and deliver a policy. The contract for a sea insurance arises immediately on the initialling of the slip. Apart from the Stamp Acts, the slip would be a good contract of sea insurance : but the statute has provided that “ no policy shall be pleaded or given in evidence in any court, or admitted in any court to be good or available in law or in equity, unless duly stamped.” The cases of Cory v. Patton (ante, vol. 1, p. 225; L . Bep. 7 Q. B. 304), and Ionides v.

The Pacific Fire and Marine Insurance Company (uhi sup.), could never have arisen i f a slip could in any way be made enforceable in an action. In the last cited case, the court distinctly say that “ i t is void as a contract, and as such inadmissible in evi­

dence “ as a contract for a policy of assurance to be afterwards made, it is a mere nullity.” Now i t is only as a contract for a policy of assurance afterwards to be made that the slip can in any way be made available in the present action, and as such it is “ a mere n u llity .” A contract to execute

M A R IT IM E LA W CASES. 47

Q. B . ] Fis h e ran dothersv. Th e Liverpool Mar in e Insurance Comaany ( Lim it e d). [Q . B .

a policy of insurance is indisputably a contract for sea insurance, and therefore comes expressly within the application of the Stamp Act. What is a sea insurance and what is a policy are defied by the 4th section, which provides that “ the expression

‘ sea insurance’ means any insurance (including re­

insurance) made upon any ship or vessel, or upon the machinery, tackle, or furniture of any ship or vessel, or upon any goods, merchandise, or property of any description whatever, on board of any ship or vessel, or upon the freight of or any other interest which may be lawfully insured in or relating to any ship or vessel; and the word ‘ policy ’ means any

insurance) made upon any ship or vessel, or upon the machinery, tackle, or furniture of any ship or vessel, or upon any goods, merchandise, or property of any description whatever, on board of any ship or vessel, or upon the freight of or any other interest which may be lawfully insured in or relating to any ship or vessel; and the word ‘ policy ’ means any