Glasgow Assurance Corporation Ltd v William Symondson and Company
| Jurisdiction | England & Wales |
| Judgment Date | 08 February 1911 |
| Date | 08 February 1911 |
| Court | King's Bench Division |
King's Bench Division
Scrutton, J.
Glasgow Assurance Corporation Limited v. William Symondson and Co.
Empress Assurance Corporation v. BowringUNK 11 Com. Cas. 112
Sanders v. MacleanDID=ASPMELR 5 Asp. Mar. Law Cas. 160 (1883) 49 L. T. Rep. 464 11 Q. B. Div. 343
Royal Exchange Assurance Corporation v. Vega Insurance CompanyELR 87 L. T. Rep. 356 (1902) 2 K. B. 304
Home Insurance v. SmithELR (1898) 2 Q. B. 351
Marine insurance — Broker and underwriter — Relations between
MARITIME LAW CASES. 583 K.B. DIV.] GLASGOW ASSURANCE CORPORATION V. WILLIAM SYMONDSON &CO. [K.B. DIV. Wednesday, Feb. 8,1911. (Before Scrutton, J. Glasgow Assurance Corporation Limited William 8tmondson and Co. (a) Marine insurance Broker and underwriter Relations between Disclosure of material facts. Where a contract of marine insurance is entered into between a broker and underwriter the material facte to he disclosed by the former are as to the subject matter of the insurance, that is, the skip, and the perils to which she is exposed. On these facts the underwriter must form his own judgment of the premium the judgment of other people being quits immaterial. It, is not necessary that the broker should disclose the name of the assured, unless his is requested to do so. COMMERCIAL COURT. Action tried by Scrutton, J. sitting wittout a jury The plaintiffs claimed to set aside treaty or contract dated the 10th Nov. 1906. made between themselves and the defendants and to have all policies of insurance effected by the plaintiffs with the defendants in pursuance of the said treaty or contract set aside and delivered up to be cancelled Sir Edward Carson K.C. Bailhache, KC. and Marie for the plaintiffs. Leslie Scott, K.C. and Mackinnon for the defendants. The facta and arguments are sufficiently stated in the judgment SCRUTTON, J. This action was brought by the plaintiffs, an insurance company at Gle?gow, against the defendants, four gentlemen carrying on the business of marine insurance brokers in London to avoid a document described in the claim as a contract of obligatory reinsurance and certain marine policies issued thereunder as being obtained (1) by fraudulent representations and (2) by conoealment of material facts There was also an allegation that either under the contract in question or certain collateral con. tracts to it the defendants were as the plaintiffs agents, bound to use reasonable care and skill, and that they had not used such care and skill, and had made profits as principals without making full disclosure of their position to the plaintiffs, who employed them as agents The case was beard by me without a jury on parts of six days The length of time is sufficiently explained by a thousand pages of correspondence many policies slips bordersame, audit notes and other Insurance documents, and a good deal of oral evidence. I only propose to summarise the facts before stating the contentions and my findings of facta and law thereon Before referring to the special facts it is necessary to say something about the course of business in marine insurance in London for to persons unfamiliar with it much of the business trans acted there is unintelligible and suggests many conclusions as to the legal effect. When one finds a broker paid commission by an underwriter and preparing documents for an underwriter, one is tempted to treat him as the underwriter's agent and owing a legal duty to the underwriter. But for the reasons stated in the judgment of Kennedy, J. in Empress Assurance Corporation v. Bowring (11 Com. Cas. 112) this conclusion would generally be erroneous and the broker personally under ordinary circumstances knows no duty to the underwriter in respect of erroneous but honest statements made by him. Similarly, when one finds as one frequently does at Lloyd's, A agreeing to reinsure B. against every risk insured by at a premium based on a percentage of the premiums received by H. and always therefore smaller, one is naturaly inclined to think that as B. has a temptation to accept every risk, howerer bad and pass it on to A at a smaller premium and therefore at a certain profit, such a system is absurd and cannot work. But as Bowen, L.J. said in Sanders v. Maclean (5 Asp. Mar. Law Cm. 160 (1888) 49 L. T. Rep. 464; 11 Q. B. Div. 348), anyone who attempts to follow and understand the law merchant will soon find himself lost if he begins by assuming that merchants conduct their business on the because of attempting to insure themselves against fraudulent dealing. Credit not distrust, is the basis of commercial dealings Mercantile genius con- a) Reported by LEONARD C. THOMAS Esq Barrister-at-Low, 584 MARITIME LAW CASES. K.B. DIV.] GLASGOW ASSURANCE CORPORATION V. WILLIAM SYMONDSON &CO. [K.B. DIV. sists principally in knowing whom to trust and with whom to deal." In the insurance market large quantities of risks are pressed on well-known underwriters of high standing, whether companies or Lloyd's men. They have more risk in a particular interest than they wish to take, and they desire to reinsure part of thir lines. On the other band, original lines of insurance will not be placed with new companies, or foreign companies who are not well known, and if they are to get business they most accept reinsurances of the lines of the popular underwriters. They compete eagerly for these, and are ready not only to accept leas premium than the original underwriter can get but also to make agreements with him to reinsure a part of all his riske at a lower premium, leaving the selection of risks to him. This dealing is based on confidence in him; be might abuse it but he rarely does; and this explains many open covers which at first sight seem odd and unbusinesslike. The defendants were a firm of four gentlemen of the Symondson family, W. W. H., A 0., and Ernest, carrying on business as brokers. The first three were under writing members of Lloyd's. Mr. William Symondson had originally underwritten for names at Lloyd's he now did not personally write, but engaged at a salary Mr. Herbert Symondson, not a member of the brokerage firm, who underwrote risks for seven names W. W. H., A. C. and Herbert Symondson, the late Mr. Freeland, Mr. Colvin, and Mr. Phillipps. The three Messrs. Symondson, W., W. H., and A. C. also underwrote policies as Symondson's names "; the profit or loss in this underwriting was divided between these three...
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