Scott against Irving
| Jurisdiction | England & Wales |
| Judgment Date | 26 November 1830 |
| Date | 26 November 1830 |
| Court | Court of the King's Bench |
English Reports Citation: 109 E.R. 912
IN THE COURT OF KING'S BENCH.
S. C. 9 L. J. K. B. O. S. 89. Referred to, Pearson v. Scott, 1878, 9 Ch. D. 206; Elgood v. Harris, [1896] 2 Q. B. 495.
scott against irving. Friday, Nov. 26th, 1830. An assured residing at Glasgow, employed an insurance broker in London to recover a loss from the underwriter. The loss was settled in part by the underwriter setting off in account against it a debt due to him from the broker for premiums, and as to the residue, by his paying the broker in cash, and the underwriter then erased his name from the policy. The broker became bankrupt, and never paid the loss to the assured. Evidence was given of a usage, that on adjustment payment was generally in a month, and that the practice between the broker and the underwriter was to set off in account between them the amount of premiums due to the underwriter, against the loss: Held, first, that the underwriter was not entitled to treat the set-off in account between him and the broker as payment to the assured, the latter not being bound by a usage, of which he was not shewn to be cognizant. Held, secondly, that the assured was not entitled to recover the sum which the underwriter had paid in money to the broker within the month, that being a payment made to the broker pursuant to the general authority given to him by the assured. [S. C. 9 L. J. K. B. 0. S. 89. Referred to, Pearson v. Scott, 1878, 9 Ch. D. 206; Elgood v. Harris, [1896] 2 Q. B. 495.] Assumpsit on a policy of insurance at and from Gibraltar to Havannah, on a cargo of cottons by the "Union." At the trial before Lord Tenterden C.J., at the London sittings after Trinity term 1828, a verdict was found for the plaintiff, damages 1001., subject to the opinion of this Court on the following case :- On the 27th of July 1824 a cargo of cottons, the [606] property of the plaintiff, was shipped on board the " Union " at Gibraltar, to be carried thence to Havannah. On the 3d of September 1824 the plaintiff, who resided at Glasgow, wrote to James JB.&AD. 607. SCOTT V. IRVING 913 Mitchell, an insurance broker at Lloyd's, to get 7001. insured with the usual clauses; and, accordingly, the defendant, who is an underwriter at Lloyd's, subscribed the policy of insurance on which this action was brought, which was stated on the face of it to be made by James Mitchell, agent, on the cottons by the " Union " at and from Gibraltar to Havannah, for 1001., at a premium of six guineas per cent. The policy was in the usual printed form, and contained an acknowledgment that the premiums had been paid by the assured to the underwriters. An account had, for several years before, been kept between the defendant and Mitchell in the usual way in which accounts between underwriters and brokers are kept in conducting insurance business at Lloyd's, and Mitchell was debited in this account for the premiums on the said policy. The " Union " duly proceeded on her voyage, and on the 27th of September 1824 was wrecked, and the ship and cargo totally lost. When this became known to the plaintiff, he gave Mitchell directions to obtain a settlement of the loss, and Mitchell laid the policy and papers before the defendant and other underwriters on the policy at Lloyd's, in the ordinary course of business there. After some delay, the defendant signed his initials to the following adjustment on the policy:-" Settled a loss of 1001. per cent, on this policy, payable in a month. 1001. per cent., London, 8th March 1826." And the defendant at the same time struck his pen through his subscriptions to the policy, and also through [607] his initials of the settlement of the loss. On the 25th of March 1826 the defendant and Mitchell settled an account then standing between them. In that account Mitchell was debited for 461. for various premiums, including that on the "Union,"and 1001. were placed to his credit for loss per "Union." The defendant paid Mitchell 541., and took from him a receipt...
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