Universo Insurance Company of Milan v Merchants Marine Insurance Company
| Jurisdiction | England & Wales |
| Date | 1897 |
| Court | Queen's Bench Division |
Insurance, Marine - Policy - Liability of Broker for Premiums.
The general rule of law, founded on mercantile custom, whereby the broker, and not the assured, is liable to the underwriters for the premiums on a policy of marine insurance, is not limited to the ordinary form of Lloyd's policy, but extends also to policies cautioning a promise on the part of the assured to pay the premiums.
ACTION tried before Collins J. in the Commercial Court.
The writ was indorsed with a claim for 1361l. 17s. 6d. for premiums of insurance upon policies effected by the defendants with the plaintiffs, and the defence, as indicated in a letter from the defendants' solicitors, was that the premiums were payable, not to the plaintiffs, but to the trustees of a deed executed for the benefit of their creditors by the brokers who had effected the insurances, against whom the defendants had an admitted set-off and counter-claim for 633l. 18s. 1d. The facts were shortly as follows:—
The policies in question were policies of reinsurance effected during November, 1895, by the defendants with the plaintiffs through Messrs. Tweedie, a firm of insurance brokers. A draft agreement between the plaintiffs and defendants as to reinsurances had been prepared, but was never executed; but the business between them was in fact transacted upon the terms of this intended agreement, by which the plaintiffs were to take by way of reinsurance and the defendants were to cede to them one-half of the aggregate of all lines underwritten by the defendants in London upon hull and/or machinery and/or materials of any steamer or steamers for any time risk in 1895, the amounts to be taken by the plaintiffs not to exceed 500l., and the defendants to retain at least as large an amount. The premium paid to the plaintiffs was in every case to be at the same net rate as that received by the defendants less 7½ per cent., and the premiums less 7½ per cent. retained by the defendants as commission were to be paid monthly by the defendants to Tweedie Brothers, and by them to the plaintiffs' representative in London. Tweedie Brothers had a commission of 2½ per cent. The course of procedure was as follows. The plaintiffs handed to the defendants a quantity of their slips in blank. When a risk had been accepted by the defendants they filled up the slip with the particulars, filling in the blank under the heading “Policy in name of” with the word “Merchants”; the slip was forwarded to Tweedie Brothers, who in some cases stamped their own name in the blank under the heading “On account of”; in other cases the blank was not filled in. Tweedie Brothers then forwarded the slip to Sedgwick, the plaintiffs' London agent, in whose office the...
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