power of causing the property to be insured, either as agent or as principal, as the case may be.1

An agent is not only limited by the terms of his authority, or by the necessity from which it springs, but also by the general principles of trust. Thus, an agent, who has any charge of, or in respect to insured property, if he be an agent to sell, cannot buy; and if he be an agent to buy, he cannot be interested in the sale.2

An authority carries with it, in general, power to do all lawful acts necessary to the execution of the authority. Thus, an agent of an insurance company who is intrusted with printed forms of policies, which are signed by the officers of the company, and are to be filled out, countersigned, and issued by him, has authority to add to the policy before it is delivered a memorandum that the property insured is in course of construction. And in one case, in the absence of any proof of any limitation of the power of the agent, it was held after an open policy of insurance declared to be " on property on board vessel or vessels, as per indorsement to be made thereon," had been signed, that the agent might agree that the policy should cover a number of bales of cotton on shore at New Orleans from date of storage until shipped.* The power to effect insurance for a principal, carries with it the power to sign a premium note for the principal; and generally, the principal may be held liable for such a premium. But he cannot be sued on the note itself, if that be signed by the agent in his own name only, and without words indicating that he signs as agent.5

So, it is held, that the authority to effect insurance for the insurers, carries with it the authority to adjust, or agree to an adjustment of, a loss. And that the authority to make a con

1 See ante, ch. 2, § 3, p. 74.

2 See ante, p. 414, n. 4.

8 Gloucester Manuf. Co. v. Howard F. Ins. Co., Gray, 497. * Kennebec Co. v. Augusta Ins. & Banking Co., 6 Gray, 204.

5 See ante, ch. 5, § 1, p. 182-184.

6 Richardson v. Anderson, 1 Camp. 43, n. In Goodson v. Brooke, 4 Camp. 163, the agent who subscribed the policy on the happening of a loss, agreed to refer the matter to arbitrators. There was no direct proof of his authority to agree to the reference; but it appeared that he was in the habit of settling losses for the defendant, which the latter afterwards paid. It was held that this was sufficient evidence of agency to render the award binding on the insurer. But an insurance broker has no

tract of insurance in behalf of the insured, gives the agent power to make an abandonment.1

It has been held that if an agent is authorized to make a contract of insurance, to take effect from the time when the premium shall be paid and shall be received at the office of the insurance company, provided the office shall recognize the rate of premium, and be otherwise satisfied with the risk, then if the usual premium is paid to the agent, and he takes the risk, that the company are liable, although the premium is not received by them before the loss; and that they cannot arbitrarily be dissatisfied with the risk or with the premium.2 But generally the authority of an agent does not empower him to issue a policy when the property has been destroyed while the application for the insurance was on its way to the agent from the owner of the property.3 The authority of an agent to issue a policy is to be determined by the rules of agency applicable to all other contracts. As a general rule, the instrument under which the agent acts, need not be produced, and his agency may be inferred from the fact that the underwriter has paid losses without objection on other policies issued by him.1

If the insured delivers up the policy to an insurance broker

implied authority to pay a loss due from the underwriter who employs him, to the assured. Bell v. Auldjo, 4 Doug. 48.

1 Cassedy v. Louisiana State Ins. Co., 18 Mart. La. 421; Parker v. Towers, 2 Browne, App. 80. This point was also expressly decided in Chesapeake Ins. Co. v. Stark, 6 Cranch, 268, where the jury found a special verdict that the insurance was effected by the agent of the insured, and that the same agent abandoned "for the plaintiff." Marshall, C. J., said: "The agent who made the insurance might certainly be credited, and in transactions of this kind, always is credited, when he declares that, by order of his principal, he abandons to the underwriters. In this case, the jury find that the abandonment was made for the plaintiff; and this finding establishes that fact." In a case where a part-owner, insured in his own name for the benefit of whom it concerned, on a loss having taken place, abandoned the property by a letter signed with his own name only, and not stating what interest was abandoned, it was held that he was duly authorized, primâ facie to make the abandonment for himself and those for whom the insurance was made in his name, and that as there was no evidence of dissent on their part, the abandonment was sufficient. Reynolds v. Ocean Ins. Co., 22 Pick. 191. See also, Hunt v. Royal Exch. Ass. Co., 5 M. & S. 47.

2 Perkins v. Washington Ins. Co., 4 Cow. 645. 3 Bentley v. Columbia Ins. Co., 17 N. Y. 421.

4 Haughton v. Ewbank, 4 Camp. 88.

for the purpose of obtaining the amount due on it from the underwriter, and the latter pays the sum over to the broker, the broker thereupon becomes the debtor of the insured, and the underwriter is discharged.1 But the question has arisen, whether the fact of the account being settled between the broker and the underwriter by the broker debiting the underwriter with the amount of the loss, and crediting the insured with the same, and the underwriter crediting the broker with the amount, is a sufficient payment to the broker. It has been held that if the underwriter's name is not struck off the policy, he is still liable, notwithstanding this transfer on the books of the parties.2 And it makes no difference if the name is struck off, if this is done without the assent of the insured. These cases proceeded principally upon the ground that the authority to the agent to receive the amount of the loss, gave him only a power to receive it in cash, and that the underwriter was not discharged by merely crediting the broker with the amount; and that no knowledge of any usage to the contrary was brought home to the insured. But there seems to be no good reason why the payment should be required to be made in cash; and in a case where the party was proved to have known the usage, it was held that he was bound by it.5

1 Scott v. Irving, 1 B. & Ad. 605. See also, Erick v. Johnson, 6 Mass. 193.

2 Russell v. Bangley, 4 B. & Ald. 395; Todd v. Reid, 4 B. & Ald. 210; Jell v. Pratt, 2 Stark. 67. In Stewart v. Aberdein, 4 M. & W. 211, 224, the case of Todd v. Reid being cited, Parke, B., said: "With regard to that case, it certainly is incorrectly reported. I was counsel in the cause, and there was no proof at all of any settlement in account between the broker and the underwriter."

* Bartlett v. Pentland, 10 B. & C. 760. See also, Scott v. Irving, 1 B. & Ad. 605.

* In Stewart v. Aberdein, 4 M. & W. 211, 218, at the trial at nisi prius, Lord Abinger, C. B., expressed his opinion "that if one man has to pay another money on account of his principal, and there is money due to him from such other person, it makes no difference to the principal whether there is an interchange of bank-notes, or a mere transfer of accounts from one side to the other, and that it is equally a payment, if it is done without fraud."

5 Stewart v. Aberdein, 4 M. & W. 211. Lord Abinger, C. B., in this case, said: "It must not be considered, that by this decision the court means to overrule any case deciding that wherever a principal employs an agent to receive money, and pay it over to him, the agent does not thereby acquire any authority to pay a demand of his own upon the debtor, by a set-off in account with him. But the court is of opinion, that where an insurance broker, or other mercantile agent has been employed to receive money for another, in the general course of his business, and where the known general

As soon as the insurance broker has received credit in account with the underwriter, for the amount of the loss, it has been held that he is liable to the assured in an action for money had and received.1 And he certainly is liable if he receives the acceptance of the underwriter payable at a date later than that at which the loss would be payable. When a loss is payable at a certain time after the preliminary proofs are presented, it would seem that the underwriter may pay the same to the agent of the assured who is authorized to receive the amount, within the time, and that a revocation of the authority of the agent, subsequent to payment, but before the expiration of the time designated in the policy for the payment, would not render the underwriters liable.3

The same person may be the agent of both parties; or, being the general agent of one, he may be made the special agent of the other; and this special agency may be inferred from circumstances. And if a party who desires to be insured, employs a person who is agent of the insurers, and so employs him as to make him his agent, he is as responsible for the acts or omissions of such agent in his behalf, as he would have been if that person had not been the agent of the other party. But generally

course of business is for the agent to keep a running account with the principal, and to credit him with sums which he may have received by credits in account with the debtors, with whom he also keeps running accounts, and not merely with moneys actually received, the rule laid down in those cases cannot properly be applied, but it must be understood, that where an account is bonâ fide settled according to that known usage, the original debtor is discharged, and the agent becomes the debtor, according to the meaning and intention, and with the authority of the principal." See also, Erick v. Johnson, 6 Mass. 193.

1 Andrew v. Robinson, 3 Camp. 199. See also, Ovington v. Bell, 3 Camp.

237.

2 Wilkinson v. Clay, 6 Taunt. 110, 4 Camp. 171. The broker in this case debited the underwriter with the amount of the loss, and took his acceptance for the balance of the account between them payable at a time subsequent to that when the loss would be payable. It was held that he was liable for money had and received.

It was so decided in Scott v. Irving, 1 B. & Ad. 605, but the court were of a different opinion in Bethune v. Neilson, 2 Caines, 139, where it was held that an agent, although in possession of the policy, had no right to receive payment till the time mentioned in the policy had expired.

4 Smith v. Empire Ins. Co., 25 Barb. 497. The parties desiring insurance in this case, handed an application to a person who was the agent of the defendants, for the purpose of receiving and forwarding applications, with the request that he would fill

in any contract requiring the exercise of judgment and discretion, a person cannot act as the agent of the two parties in interest. Thus, if a person is a director of one company and the agent of another, he cannot as such agent insure with the second, any interest belonging to the first company. A single partner has all the powers which his firm, who are agents of an insurance company, have to make a contract of insurance.2

SECTION III.

OF THE DUTIES OF AGENTS.

Any person undertaking any work for,compensation, impliedly warrants that he has sufficient knowledge, and will take sufficient care, to do it as it should be done. But this obligation on the part of the agent is affected by circumstances, because it must always be qualified by the rule, that the party employing him cannot demand of him more skill or more care than he had a right to expect. If therefore one desiring insurance goes to a professed insurance broker, he has a right to insist upon proper professional skill and reasonable care. But if he chooses to em

it out subsequently, there being no conveniences for writing there, and forward it. Nothing was said about incumbrances in the application, or by the parties, but the agent made a statement in the application that there was no incumbrance except one mentioned. It was held that the agent acted as the agent of the insured in filling out the application, and that they were liable for the consequences of his act.

1 New York Central Ins. Co. v. National Protection Ins. Co., 14 N. Y. 85; Utica Ins. Co. v. Toledo Ins. Co., 17 Barb. 132.

2 Kennebec Co. v. Augusta Ins. & Banking Co., 6 Gray, 204.

8 Thus in Chapman v. Walton, 10 Bing. 57, where it was contended that the defendant had not correctly obeyed the orders of the plaintiff, Tindal, C. J., said: "The point therefore to be determined is not whether the defendant arrived at a correct conclusion upon reading the letter, but whether upon the occasion in question, he did or did not exercise a reasonable and proper care, skill, and judgment. This is a question of fact, the decision of which appears to us to rest upon this further inquiry, namely, whether other persons exercising the same profession or calling, and being men of experience and skill therein, would or would not have come to the same conclusion as the defendant. For the defendant did not contract that he would bring to the performance of his duty on this occasion, an extraordinary degree of skill, but only a 39

VOL. II.