SECTION II.

OF THE FORM AND ESSENTIALS OF A POLICY OF INSURANCE.

The policy varies in different States, and from time to time in all our States; but the general form and phraseology of the old English policy is usually, or indeed always, retained; and it might subject all parties to much inconvenience, if forms and phrases were abandoned of which the precise meaning has been at length settled, by long and expensive litigation.1

The policy is subscribed only by the insurers; but it is a binding contract, or evidence of one, on both sides; and as soon

therefore, from the same time, that is, when it was received. Mr. Justice Duer, in an elaborate note in his Treatise on Insurance, vol. 1, p. 116, supports with great ability the doctrine that the party accepting must have notice of the retraction before the letter of acceptance is mailed. And this learned jurist founds this opinion upon his construction of Adams v. Lindsell. And he considers the case of Head v. Diggon, 3 Man. & R. 97 (if it was decided on the facts of the case), to be inconsistent with his views of the law. In this case A offered goods to B at a certain price, and gave him three days in which to make up his mind. Before the time expired A offered the goods to C. Held, that B could not declare against A as upon an absolute bargain. Although the case may have gone off on a question of pleading, still it is so similar to Boston & Maine Railroad v. Bartlett, supra, that Mr. Duer may, therefore, perhaps, be supposed as differing from that case. At all events we consider Boston & Maine Railroad v. Bartlett, as unquestionable law.

1 For observations upon the loose and inaccurate manner in which policies are drawn, see Simond v. Boydell, 1 Doug. 270, per Lord Mansfield, C. J.; Marsden v. Reid, 3 East, 572,578, per Lawrence, J.; Le Cheminant v. Pearson, 4 Taunt. 367, 380, per Mansfield, C. J.; Brough v. Whitmore, 4 T. R. 206, 210, per Buller, J. "I remember," said Lord Kenyon, C. J., in Brough v. Whitmore, "it was said, many years ago, that if Lombard street had not given a construction to policies of insurance, a declaration on a policy would have been bad on a general demurrer; but that the uniform practice of merchants and underwriters had rendered them intelligible." See also, Yeaton v. Fry, 5 Cranch, 335, 342; Maryland Ins. Co. v. Woods, 6 Cranch, 29, 45, per Marshall, C. J. Lord Eldon, in Smith v. Robertson, 2 Dow, 474, speaking of the contract of insurance, remarked: "It might, perhaps, be found when the matter came to be examined with the proper degree of impartiality that there was full as much uncertainty on this subject as in any other branch of the law." And notwithstanding the time that has elapsed since this opinion was pronounced, there seems to be quite as much uncertainty at the present day. For, although many old questions have been settled, yet new ones are constantly arising, and the courts are sometimes inclined to question the decisions of the old. In New York, distinct forms of policies are used for the different subjects of insurance, as ship, freight, and profits. 1 Duer, Ins. 63.

as there is an inception of the risk the insured is bound by the policy, as respects the premium and otherwise as much as if he signed it himself. But until there is an inception of the risks insured against, the insured has his option whether they shall begin under the policy or not.2 Therefore, until these risks are incurred, so as to make him liable for the premium, there is no obligation resting on him that can be enforced by the insurers. All the stipulations on his part are merely conditions, a compliance with which is necessary to enable him to recover against the insurers; but no action can be maintained by them against him.

The policy which usually states the reception of the premium binds the insurers, although the premium has not been paid, nor a note for it given; and this, even if the policy was not delivered from the office, if it was only delayed, and there was evidence otherwise of a completion of the contract. And if the policy provides that there shall be no insurance until the actual payment of the premium, as this provision is inserted for the benefit of the insurer, it may be waived by him or his agent. And if a policy be delivered after the day of its date, it may take effect from its date, as if it had then been delivered, if this be the manifest intention of the parties.5

1 Ins. Co. of Penn. v. Smith, 3 Whart. 520, 529, per Rogers, J.; Patapsco Ins. Co. v. Smith, 6 Harris & J. 166.

2 Tyrie v. Fletcher, Cowp. 666, per Lord Mansfield; Taylor v. Lowell, 3 Mass. 331, 343; Emerigon, ch. 3, s. 1, § 4, Meredith's ed., 52. See also, post, ch. 5.

8 Power v. Butcher, 10 B. & C. 329. In Kohne v. Ins. Co. of North America, 1 Wash. C. C. 93, which was an action of trover for a policy of insurance, the plaintiff's agents had settled the terms of insurance with the president of the insurance company, but had left the office before the policy was filled up. It was filled up a few hours afterwards, and the president gave notice of this to the agent, mentioning at the same time that information had been received that the ship had been captured and carried into Halifax. Both parties were ignorant of the loss when the policy was executed. The agent afterwards called to deliver the premium note and receive the policy, but the company refused to deliver it. Mr. Justice Washington charged the jury that the agreement of insurance was not inchoate but perfected. The plaintiff recovered. See Warren v. Ocean Ins. Co., 16 Maine, 439; Loring v. Proctor, 26 id. 18; Blanchard v. Waite, 28 id. 51; Bragdon v. Appleton Mut. F. Ins. Co., 42 Maine, 259; and cases ante, p. 19, n. 2; p. 20, n. 1.

4 Goit v. National Protection Ins. Co., 25 Barb. 189.

5 Lightbody v. North American Ins. Co., 23 Wend. 18. This was an insurance against fire. On the day of the date of the policy, a valid agreement for insurance had been entered into with the company's agent and the premium paid. The policy was delivered after the loss.

The general rule is, that if a policy insures the interest of one person only, no other person can show that it was also intended to cover his interest;1 but it is not regarded as insuring the interest of one person only, if the policy contains the general phrase for "all whom it may concern," 2 or some other expression indicating that the assured acts as agent or trustee for another, in which case such other person may prove his interest. This

1 Turner v. Burrows, 5 Wend. 541; Holmes v. United Ins. Co., 2 Johns. Cas. 329; Newson v. Douglass, 7 Harris & J. 417; Wise v. St. Louis Mar. Ins. Co., 23 Mo. 80. An insurance by one partner in his own name, without general words, covers his interest only. Graves v. Boston Marine Ins. Co., 2 Cranch, 419; Pearson v. Lord, 6 Mass. 81; Turner v. Burrows, 5 Wend. 541. See also, Bell v. Ansley, 16 East, 141; Hibbert v. Martin, 1 Camp. 538; Cohen v. Hannam, 5 Taunt. 101; Lawrence v. Sebor, 2 Caines, 203. So, also, in the case of part-owners, Robinson v. Gleadow, 2 Bing. N. C. 156; Bell v. Humphries, 2 Stark. 345; Foster v. U. S. Ins. Co., 11 Pick. 85; Dumas v. Jones, 4 Mass. 647; Finney v. Bedford Com. Ins. Co., 8 Met. 348; Murray v. Columbian Ins. Co., 11 Johns. 302; Garrell v. Hanna, 5 Harris & J. 412.

2 Blank insurances were formerly in use in England. This practice was abolished by 25 Geo. 3, c. 44, which statute directed that the name of the party interested in the insurance, or that of his agent, should appear in the policy. It was construed to require in all cases the insertion of the names of the persons interested, or of the names of the agents, as agents for the persons interested, who were in that case also required to be named in the policy. Pray v. Edie, 1 T. R. 313; Cox v. Parry, 1 T. R. 464; Wilton v. Reaston, Park on Ins. 19. This statute was repealed and superseded by 28 Geo. 3, ch. 56. which is now in force. The construction given to this statute is very liberal. Wolff v. Horncastle, 1 B. & P. 316; Bell v. Gilson, id. 345. All that is necessary to answer its requirements, is that the name of the party effecting the policy be inserted. This person in England is usually an insurance broker. It is not necessary that he should appear to sign as agent. De Vignier v. Swanson, 1 B. & P. 346, n. See also, Hibbert v. Martin, 1 Camp. 538; Hagedorn v. Oliverson, 2 M. & S. 485.

8 De Forest v. Fulton F. Ins. Co., 1 Hall, 84; Waters r. Monarch Life and Fire Ins. Co., 5 Ellis & B. 870, 34 Eng. L. & Eq. 116. In Sunderland Marine Ins. Co. v. Kearney, 16 Q. B. 925, 6 Eng. L. & Eq. 312, the policy stated that Kearney had represented to the company that he was interested in, or duly authorized as owner, agent, or otherwise, to make the assurance. It was held that an action might be brought on the policy by all the parties interested. The following citation will show the ground on which the decision proceeded: "It seems to us that they covenanted to pay to the persons who were interested in that subject-matter and for whom the policy was effected; certum est quod certum reddi potest. A designation which cannot be mistaken is, for this purpose, as good as the actual name of the individual. The company engaged to make good all losses and damages which might happen to the subject-matter of the said policy in respect of three hundred pounds assured. To whom were they to make good? necessarily to the parties interested in the subject-matter who were damnified by the loss. These parties were the assured, and accordingly the stipulations of the policy by the company are with the assured."

In Duncan v. Sun Ins. Co., 12 La. Ann. 486, the general rule was thus stated by

phrase, however, applies only to those who were contemplated at the time of the insurance; and who then had an insurable interest in the subject-matter. But it is not necessary that a specific party be intended, if the intention is to cover generally those who have insurable interests; for the intention of the insured, or of the named party, determines the application of this clause. And if A effects insurance in his own name, a payment of a loss to him will exonerate the underwriters.2

It has been contended that a mutual insurance company cannot insure parties who have no interest in the subject-matter insured, and cover the interest of the owners under the general phrase, for whom it may concern, on the ground that such insurance would not give the office the right to deduct from the amount of the loss what might be due from the owner of the property from other transactions. But this objection has been held to be of no force, as there would be no practical difficulty in making the adjustment.3

The intention of the party who effects the insurance, determines the application of this clause, where insurance has been effected by him without previous authority, and the validity of the insurance depends on a subsequent ratification. And to

the court: "If, upon a general survey of the provisions of the policy and the circumstances under which it was procured, it appears that the intention of the company was to insure for the benefit of any person in interest, although not named, the common interest of the parties shall not be defeated for the want of technical or even customary phrases. If, on the other hand, the most natural construction of the policy is that the party named as assured only sought to protect his own interest, the contract is not to be extended so as to cover the interest of a third person."

1 Routh v. Thompson, 11 East, 428; Bauduy v. Union Ins. Co., 2 Wash. C. C. 391; Catlett v. Pacific Ins. Co., 1 Paine, C. C. 594; Haynes v. Rowe, 40 Maine, 181; Protection Ins. Co. v. Wilson, 6 Ohio State, 553; Seamans v. Loring, 1 Mason, 127; Lambeth v. Western F. & Mar. Ins. Co., 11 Rob. La. 82; Alliance Mar. Assurance Co. v. Louisiana State Ins. Co., 8 La. 1, 11; Frierson v. Brenham, 5 La. Ann. 540. In Newson v. Douglass, 7 Harris & J. 417, 450, Buchanan, C. J., said: "Whom it may concern' is a technical phrase, common to policies of insurance, and is understood to mean, not any and everybody who may chance to have an interest in the thing insured, but such only as are in the contemplation of the contract. Such a policy supposes an agency, and proceeding upon that ground, looks only to the principal in whose behalf, or on whose account, the agent moves in the transaction; and he, for whose benefit the insurance is procured, is the person in the contemplation of the contract, is he, whom it alone concerns."

2 Hermann v. La. State Ins. Co., 7 La. 502.

3 Cobb v. New England Mut. Mar. Ins. Co., 6 Gray, 192.

make a ratification of any avail, it is necessary that the insurance should have been made for the benefit of the party ratifying the same. If, however, there was a previous authority, the intention of the party ordering the insurance, or giving the authority, must determine whose interests are governed by the general clause.2

"On account of owners," means any one intended who is an owner of the subject-matter insured.3 And if the phrase be "on account of whom it may concern at the time of loss," they will be covered who then own the property, although many assignments have been made subsequent to the insurance. If one owns different parts in different rights, as owner, consignee, trustee, etc., all are covered by an insurance in his own name. And if he has any interest, of any kind, in the subject-matter of the insurance, which comes within the description in the policy, the insurers are liable, whatever may have been the nature of his interest or his intention.

1 Buck v. Chesapeake Ins. Co., 1 Pet. 151; Bauduy v. Union Ins. Co., 2 Wash. C. C. 391; Newson v. Douglass, 7 Harris & J. 417, 451, per Buchanan, J.; De Bollè Pennsylvania Insurance Co., 4 Whart. 68; Hagedorn v. Oliverson, 2 M. & S. 485.

2 Newson v. Douglass, supra; Holmes v. United Ins. Co., 2 Johns. Cas. 329.

3 Catlett v. Pacific Ins. Co., 1 Paine, C. C. 594, 1 Wend. 561. See also, Foster v. United States Ins. Co., 11 Pick. 85.

4 Rogers v. Traders' Ins. Co., 6 Paige, 583.

5 Carruthers v. Sheddon, 6 Taunt. 14, Marsh. 416; Hiscox v. Barrett, cited 16 East, 145; Columbian Ins. Co. v. Lawrence, 2 Pet. 25; Oliver v. Greene, 3 Mass. 133; Millaudon v. Atlantic Ins. Co., 8 La. 557; Wolff v. Horncastle, 1 B. & P. 316; Irving v. Richardson, 2 B. & Ad. 193. Also, Murray v. Columbian Ins. Co., 11 Johns. 302. In this case the plaintiff, who was the owner of two thirds of a cargo, insured the whole in his own name, and on his own account. He claimed to have a lien upon the other third. It was decided that he had not, and, on that ground, that his insurance covered only the two thirds.

6 Wolff v. Horncastle, 1 B. & P. 316. In this case A consigned a cargo to B, and drew bills upon him to the amount of it in favor of C, his general agent. A sent these bills, together with the bills of lading to C, desiring him to transmit them to B, that B might have an opportunity of insuring. He also drew a bill for £300 on C, which C accepted and paid. B refused to take the consignment, or accept the bills drawn upon him. C then effected a policy in his own name, with the general clause of the English policy, and informed A thereof, who approved of his conduct. It appeared that the intention of C in effecting the insurance was to cover, not his own interest, but that of the consignor. In an action by C upon the policy, averring in one of the counts an interest in himself, it was held that he had an insurable interest to the amount of £300, the extent of his lien. Lord Ellenborough, in the subsequent case of Conway v.