MARITIM E LAW CASES. ______________

Fis h e ra n do t he r sv. 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 . ] Fis h e r a n d o t her sv. Th e Liv e r p o o l Ma r in e In su r a n c e Oo m p a n t ( Li m i t e d).

[Q.

M A R IT IM E LA W CASES. _________ 49

ftnd completing the insurance for them. When a slip is initialled the contract is binding in honour but not in law ; and the broker’s duty requires him to take the further steps to procure it to be made binding in law. For this purpose it is necessary that the policy should be drawn up on stamped paper, and the brokers have to advance the stamp and see that the policy is properly drawn up, and then to take care that within a reasonable time the matter is concluded. The broker does not undertake that the underwriter Who has initialled the slip shall sign the policy, though that is the way in which in the great majority of cases the matter is concluded. As soon as the underwriter has signed, the premiums are as between the assured and the underwriter Paid, the underwriter taking in satisfaction of them the broker’s personal promise to pay at the end of the customary period, subject to the customary deductions. But if the underwriter refuses to sign there is no mode either at law

?r in equity to force him to do so. The matter m that case is concluded by this breach of honour

” n the part of the underw riter; and i f the broker has used due diligence to bring it to a conclu- Sl°n, either one way or the other, w ithin a rea­

sonable time, he has done his duty. I f the broker has been negligent, and in consequence of the nnal conclusion of the matter has been unrea­

sonably delayed, the broker is responsible to his Principal for the damage sustained through that delay. That damage must depend on circum- s tances. If, notwithstanding the delay, the risk Will be s till taken by other underwriters at the same premiums the damage would generally be nothing.

" the risk was s till insurable, but at an en­

hanced premium, the measure of damages would generally be the increase of the premium. B ut

“ > in consequence of the delay, news of the loss had come, or for any other reason, the risk was longer insurable, the damage would generally oe the amount which would have been recover- ahle if a stamped policy had been duly executed Within a reasonabe time. In order to prove the case against the broker i t would be necessary to Rlve in evidence the slip, not for the purpose of enforcing i t as a contract of insurance ; but for he collateral purpose of showing that the broker oad not used due diligence in bringing the mat- or to a conclusion w ithin a reasonable time, so hat the principal m ight be insured elsewhere l this underwriter did not insure him, and . think on the authority of the cases above u'ted the slip is admissible for such a purpose.

•Then it seems to me that on the usage l n Xenos v. Wickham, (14 C. B., N . S., A 1' )> and followed in this case, the effect of giving t ? a company a request slip, or copy slip, and of company accepting it, is that the company by what I consider a fresh arrangement, no part of ,, 6 contract made by in itia llin g the slip, take on dnselves that which would otherwise be the Oty of the broker, viz., to use due skill and d illi- Pe?ce about preparing the policy properly and ringing the transaction as regards the company’s scription to a conclusion in a reasonable time.

nd for this undertaking the mere fact that they ero. trusted with that duty would be a sufficient nsideration. I do not th in k that the company by 18 acceptance of the request slip promises to in V Br P°fi°v- That i t had already done by

n u llin g the slip, and the acceptance of the Vol. I L , N . S.

request slip carries that contract no further. B ut I th ink that it does by what, when the practice first began, must have been in each case an express subsequent agreement, and what I th ink s till is a subsequent agreement, though now a casual one, take upon itself a responsibility co­

extensive w ith that which the broker would other­

wise have undertaken. I f the company at once returns the request slip, and w ithout any delay informs the assured that i t w ill not execute a policy, though bound in honour so to do, I do not th ink that any action would lie against it.

The assured would then be at liberty to insure elsewhere. But if the company is guilty of un­

reasonable delay, the damages to which it would be liable would, I think, be just the same as the broker would have been liable to i f he had been guilty of the same delay. A nd I see nothing in­

consistent w ith the objects of the revenue laws in enforcing a contract to pay the government for the stamp. Nor do I see any reason why we phould strive to tu rn the second independent con­

tract into a part of the first, in order to bring the same within the letter of the statute, i f i t is not within its spirit. In the present case I th ink the evidence and the answer of the ju ry to the first question put by my brother Brett, would prove a count framed on tbe undertaking of the defen­

dants to use due s k ill and diligence in framing a stamped policy in conformity w ith the request slip, and bringing the transaction to a conclusion within a reasonable time, either by executing or repudiating that policy. And I th in k that the evidence and the answers of the ju ry to the two and three questions show a breach of that duty and damage sustained by the plaintiffs justifying the verdict for 1000L And I th ink that by giving effect to that verdict, that we should not transgress the 30 Viet. c. 23, as we should neither treat, the contract for assurance contained on the slip as valid, nor make i t available at law as a policy, but merely receive it in evidence for the collateral purpose of showing the duty which the defendants took upon themselves and neglected.

I th in k therefore that the rule should be dis­

charged, but as the m ajority of the court are of a different opinion, i t must be made absolute.

The judgment of Quain and Archibald, JJ. was delivered by

Ar c h ib a l d, J .—The question in this case is, whether upon the facts, and assuming the neces­

sary amendment made, the plaintiff is under any form of declaration entitled to recover, notwith­

standing the provisions of the 30 Vic. c. 23.

The facts as proved are fu lly set forth in the judgment of our brother Blackburn, and it is un­

necessary therefore to repeat them in detail. Those which are the most material relate to the d if­

ference in regard to the preparation of the stamped policy, between the usage in the case of private underwriters and that which prevails in the case of insurance companies.

In the former case, after the slip has been initialled, the usage is for the broker of the assured to advance the stamp, draw up the policy on stamped paper, and present it to the different underwriters for execution. B u tin the case of an insurance company, after the slip has been initialled by an agent of the company, it is retained by the broker of the assured, and a copy of it is then sent to the company by the

Q. B.] Fis h e e a n d o t h e e sv. Th e Liv e r p o o l Ma e in e In s u r a n c e Co m pan y ( Li m i t e d). [Q. B.

50 M AR IT IM E LAW CASES.___________________ _

broker, in order to enable the company to prepare the policy. The policy is then drawn up on stamped paper by the company, who themselves advance the stamp and execute the policy ready to be delivered to the assured or his broker. The duty of the broker of the assured in ordinary cases, and the measure of damages for any breach of it, aro well established and understood, and if the evidence in this case satisfied us that a pre­

cisely analogous duty unconnected with and sepa­

rate from a promise to execute the policy, was undertaken by the defendants’ company, we should have no doubt that the consequences of a breach of duty by the company would be similar to those of a breach by the broker.

I t appears to us also that inasmuch as the slip, though invalid as a contract, would be admissible in evidence for the collateral pur­

poses of establishing the existence and the breach of such a duty— see Ionides v. The Pacific Marine Insurance Company (ante, vol. 1, pp. 141, 330; L. Rep. 7 Q. B. 525); Cory v. Patton (ante, vol. 1, p. 225; L. Rep. 7 Q. B. 304)—

the plaintiff would, i f the declaration could be made to assume such a shape, be entitled to re­

cover. Indeed, this seems to us to be the only conceivable form of declaration upon which, i f at all, the defendants can be rendered liable ; for the 30 Viet. c. 23, expressly renders invalid any con­

tract or agreement, for sea insurance, unless i t be expressed in a policy (in which also certain pre­

scribed particulars must be'specified) and prohibits its being pleaded or given in evidence, or ad­

m itted into any court to be good or available in law or in equity, unless duly stamped, i.e., stamped before being signed or underwritten. So that no action can be directly maintained upon the slip itself, which in the opinion of all of us amounts to an agreement for sea insurance within the meaning of the Act. (Per Willes, J., in Xenos v. Wickham, L. Rep. 2 H . of L. Cas. 296.)

I t is abundantly clear that, in consequence of the provisions of the Act,the engagements entered into by initialling the slip cannot be directly enforced, either at law or in equity ; and being therefore only binding in honour, i t is open to uncon- scientious men to break it, unless it can be in ­ directly enforced in the manner and on the grounds suggested by brother Blackburn in his judgment, whether if, can or not, in the present case, depends upon the true nature and effect of the usage with respect to the preparation of the policy. In the case of private underwriters, the engagement entered into by initialling the slip must, having regard to the course of business, be understoood to be an engagement to execute a stamped policy when i t has been prepared and presented by the broker. In the case of insurance companies, i t is equally understood to be an engagement to execute a stamped policy, at some time and under some circumstances; aDd the question is whether i t does not also import that the company are, on receipt of the slip, to pro­

cure the stamp and fill up the policy. Where or how the difference of usage between the case of private underwriters and that of companies first sprung up does not appear. The monopoly of the two old companies—the Royal Exchange and the London Assurance—was done away with in 1824 by the 5 Geo. 4, c. 114; and i t may be that when other companies were first established for carrying on the business of marine insurance, the

practice as i t exists between policy brokers and private underwriters, was in the first instance adopted, and that the present practice of sending a copy of the initialled slip to the company, in order that they, and not the broker, m ight procure the stamp and prepare as well as execute the policy, afterwards came into use; or i t may be that from the first the latter course was found to be the most convenient. However this may be, it makes in our judgment little difference to the question under consideration ; for i t appears to us that when this became the fixed and settled usage, the only reasonable implication from the in itia l­

lin g of the slip on behalf of a company is that it is an engagement, not merely generally to execute a binding policy, but to execute i t in accordance with the usual and accustomed course of busi­

ness, including, therefore, and undertaking, on receipt of the copy of the slip, to procure a stamp and fill up the policy. I f then this be (as we think i t is) the true effect of the transaction, the agreement being one and entire, and including as part of it, an undertaking to execute the policy, i.e., an agreement for sea insurance, the statute applies and presents an insuperable ob­

stacle to any action founded on a supposed breach of duty in not procuring a stamp and pre­

paring a policy, or in failing to give notice within a rensonable time that the company decline to pre­

pare and execute it.

I t is contended that in the case of com­

panies there are in fact two separate trans­

actions, first, the in itia lling of the slip constituting an agreement to execute a policy; secondly, an agreement on a new and separate consideration, upon receipt and acceptance of the copy slip, to do all that i t is the duty of a broker to do in the case of private underwriters. We are wholly unable to concur in this view. I t appears to us that there is no evidence of any such second agreement, separate and distinct from the agreement which arises from initia lling the slip, namely, to execute the policy. In our opinion;!there is only- one agreement, viz., that which is to be implied in accordance with the usual course of business, from the initialling of the slip. Nor do we th ink that there is any duty cast upon the company, separate and distinct from the rest of their agreement, or which bears any true analogy to the well- known duty of a policy broker. The copy slip sent by the broker of the assured to the company, is sent merely for the purpose of enabling the company to prepare and fill up the stamped policy; and we do not th ink that i t imposes on them any fresh duty different from that which they had already undertaken, or transforms the company into brokers for the assured. The broker in his endeavour to procure the completion of the policy, has to deal with th ird persons, over whose intentions or decision in the matter, he has of course no control. If, when he has done all that his duty in the matter prescribes, the underwriter should decline to execute the policy, the broker would be discharged if, w ithin a reasonable time, he gave notice of it to his employer, in order that the latter m ight effect or direct an insurance to be effected elsewhere. But the company, i f any ana­

logous duty were supposed to be incumbent on them, would certainly not fu lfil i t by merely pre­

paring a stamped policy ready for execution in tbeir office, i f they stopped short of executing it ; and i f i t were added to their supposed duty, that

M A R IT IM E LA W CASES.

Q. B.] ^Me r c h a n t Sh ip p in g Co m p a n y ( Li m i t e d) v. Ar m it a g e. [Q. B.

they were, w ithin a reasonable time after they decided not to execute, to give a notice of such 1 retention, this would im ply a duty to make up their minds within a reasonable time, whether to keep or break their agreement, a duty altogether unlike anything undertaken by a broker. We are Unable upon the facts to find that ther9 is any sn°h duty undertaken upon a new consideration,

°r any duty whatever severable from the contract to insure in the usual and customary manner; and upon the whole, therefore, we are of opinion that there is no possible form of action, under ohe C|rcumstances of the case, which could be main­

tained without contravening tho 30 Viet. c. 23.

Tor these reasons we are of opinion, that the rule to enter the verdict for the defendants must be tuade absolute.

Rule absolute.

Attorney for plaintiffs, MeDiarmid.

Attorneys for defendants, Venn and Son.

Friday, June 6,1873.

■Merchants Sh ip p in g Co m pany ( Lim it e d) v. Ar m it a g e.

Charter-party—Lump sum freight—Entire dis­

charge and right delivery—Loss of 'part of cargo p hy fire.

V a charter-party made at Colombo it was agreed that, the plaintiffs1 ship which was there should load there, or sail and proceed to Cochin, and Ihere load from the defendants, the charterers or their agents, a full and complete lading. The ship being so loaded was to proceed to London and discharge; a lump sum freight of £5000 to Paid after the entire discharge and right de­

livery of the cargo in cash two months ajter the date of the ship’s report inwards at the custom house, or under discount at 5 per ant., at option

° f charterers’ agents.

"f plaintiffs’ ship proceeded to Cochin, and was there put up by the defendants as a general ship and loaded with a fu ll and complete cargo, the Property of various merchants, and. shipped under severed bills of lading. On her voyage from Oochin to London the cargo was found to be on Are, and the s]dp had to be scuttled. Afterwards the water was pumped out, the damaged cargo leas sold and accounted for by plaintiffs to the owners; the remainder of the cargo was re-laden

°n board and brought to London in the ship. The defendants had paid freight in proportion to the ccffgo and distance, but refused to pay the balance

°f the lump sum freight, about 11501., w Inch was 'claimed in this action.

e d, that the plaintiffs were entitled to this sum, and also to interest from the time agreed for pay- m ,new{ in cash.

l ^ ls was an action for the recovery of 11521.

g ® Id. and interest, as hereinafter mentioned, foil • consent of the parties and by order, the CQ ° ^ lng case was stated for the opinion of the

Th ^ t'k°u t any pleadings :

Ups » Plaintiffs are a company carrying on busi­

ng 8 8,8 shipowners in the C ity of London, and t 6 and are the owners of the ship Clyde, herein- Car r Mentioned, and the defendants are merchants

( 7 lng on business at Colombo and London, the h ^ ^Mh Jan. 1872, the ship was lying in Cha . aru°ur at Colombo, and upon that day the ter'Party, hereinafter set out, was made and

entered into by Edward Shrewsbury, the master of the said ship, on behalf of the plaintiffs and the defendants. The charter-party was as follows:

Colombo, 25th Jan. 1872.

1. I t is this day mutually agreed between Edward Shrewsbury, of the good ship or vessel called the CLyde, classed A 1 in Lloyd’s, of the registered tonnage of 1151 tons or thereabouts, now lying in the harbour of Colombo whereof he is master, of the one part, and Messrs. Armit- age Brothers, of Colombo, merchants, on the other part.

That tho said ship being tight, staunch, and strong, and every way fittedfor the voyage, shall, w ith all convenient speed, load here or sail and proceed to Cochin (orders to be given on or before the 29th inst.), and, it ordered to

That tho said ship being tight, staunch, and strong, and every way fittedfor the voyage, shall, w ith all convenient speed, load here or sail and proceed to Cochin (orders to be given on or before the 29th inst.), and, it ordered to