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Fisher v. Smith.

1878

H.L. (E.) more convenient method of carrying out Fisher's purpose was to employ some broker in Liverpool who would be able to make terms on the spot for a satisfactory premium. Accordingly Skinner employed the defendant as a sub-agent of Mr. Fisher, the owner of the goods, and employed him to effect the policy. Thereupon the defendant effected a policy and kept it in his hands, as I believe is the universal practice of brokers effecting insurances.

The result of that transaction, as it seems to me, would be to make Mr. Smith, the defendant, the sub-agent of Mr. Fisher. Mr. Fisher knew that he had been employed for the purpose of effecting the policy, and Mr. Smith knew that he was effecting the policy, not for Skinner but for [8 Fisher. It was, therefore, a perfectly well understood transaction; the principal at Barrow-in-Furness had employed the local agent, the local agent had employed the agent at Liverpool, that agent thoroughly understanding for whom he was acting, and the principal thoroughly understanding that the local agent was acting for him. Under these circumstances it appears to me that the ordinary rule of law, that a lien would arise in favor of the broker who held in his hands the policy, could not but be applicable to this case. It is precisely the same as if there had been no intermediate agent at all, and as if Mr. Fisher had written direct to Mr. Smith to ask him to open a policy for him. Having opened that policy, and having got possession of it, he was not liable to give it up to his principal until he had received the premium, which he had either paid or become liable to pay, in respect of it. My Lords, it appears to me that up to this point, and looked at in this way, the case does not admit of argument.

But then it is said,-and it is upon this ground that Mr. Watkin Williams has based his argument,-conceding that there would have been originally, from the nature of the transaction, a lien in Smith as against Fisher and as against everybody, yet if you look at the case you will find that a bargain was made by the defendant Smith which was inconsistent with his having any such lien. And the learned counsel refers to paragraph 12 of the case, which says: "The course of business was for the said W. H. Brand or the defendant to effect the policy with the underwriters, and procure and deliver to Skinner & Co. copies of the policies. Therefore the course of business, as there stated, was not to effect a policy and hand it over to Skinner, but to hand over to Skinner a copy of it. "And also to send to Skinner a debit note of the premiums paid, and at the commencement

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1878

Fisher v. Smith.

H.L. (E.)

of each month to make out and deliver to Skinner an account debiting them with the money due in respect of the premiums paid on the several insurances effected for them during the month then preceding, and on the 10th of each month the account of premiums paid on the preceding month was paid." That is to say, the course of business was, that when he had effected a policy he kept that policy in his own hands, he forwarded a copy of it to Skinner, and he debited Skinner 9] *for it in the general account of all the moneys that were due between them, which general account was paid at the end of the month, or at least on the 10th day of the following month. That was the mode in which the business was usually carried on. Then the case goes on: "It was not the usual practice for the defendant or Brand to part with the original stamped policies to Skinner & Co. until the premiums were received from Skinner & Co."

Now, My Lords, I confess, reading that as a statement of the way in which the defendant and Skinner carried on business, I am wholly at a loss to understand how that was inconsistent with the idea of Smith retaining the policy and retaining a lien. It is very true that it shows that the payment was, according to the common understanding between them, ordinarily postponed for a month or till the 10th day of the following month; but that postponement of the payment was not coupled with the giving up of the thing in the meantime. Undoubtedly a lien may be lost, as was suggested in the argument, in cases where the party agrees to give up the thing, making a bargain at the same time for payment on a future day. If the agreement is that the thing is to be surrendered and that the payment is to be postponed, that is inconsistent with a lien. But there is nothing inconsistent with a lien in saying, I will, for convenience' sake, take payment at the end of the month, and I will keep the policy in my hands in the meantime; if a loss should occur in the meantime and you want the policy, then you must pay the premium, but, subject to that event occurring, the premium need not be paid till the end of the month. It seems to me that that is the natural consequence and effect of the sort of agreement, as it is called, or rather the course of business which is here set up, and if the matter be viewed in that aspect, of course the ground taken by the appellant entirely fails.

As regards the remaining proposition which was argued, namely, that though there was once a lien yet that lien has been discharged, I have nothing to add to what has fallen from my noble and learned friend on the woolsack.

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H.L. (E.)

Fisher v. Smith.

1878

My Lords, I am therefore of opinion that the judgment of the court below should be affirmed.

*LORD O'HAGAN: My Lords, I am quite of the same [10 opinion, and I had some difficulty, I confess, in following the argument, ingeniously and forcibly as it was put.

There were two points argued in this case. On the first point, as to the existence of a lien, the matter stands in this way: it is found that the appellant here, Mr. Fisher, employed an intermediary to do his work, but the person who effected the insurance, the person who got the insurance made, and who paid the money for the making of it, and who got the policy into his hands, was the defendant, and that was with the full knowledge and assent of the plaintiff himself, because in the 5th paragraph of this case it is found that although Skinner & Co. were the persons directly employed, "the plaintiff generally knew the name of any insurance office with which Skinner & Co. effected policies, without the intervention of any broker, and in the present case had been informed, before receiving the covering note, that the policies which Skinner & Co. were authorized to effect, as above stated, had been effected through Brand and the defendant" at Liverpool. I do not say that that makes any great difference in the case, or that it would have been necessary for the case of the defendant that that should have been found; but it is a fact that what was done by the defendant here was done with the full knowledge, privity, and authority of Mr. Fisher, and in that way he became the authorized maker of this particular insurance.

Then it is said that the lien does not exist, because there is an antagonism between the contract made by the parties and the existence of a lien. I do not think that I can say anything more on that subject than has been said so very well by my noble and learned friend beside me. It seems to me, as plain as light, that the principle of antagonism, between a contract and the existence of a lien, does not apply to this case. The principle would have applied, if, in this case, there had been a contract that, on the making of the insurance, the policy should be given up immediately and absolutely; then the lien could not have existed without interfering with the contract between the parties. But that is not the ordinary bargain, and it is not found to be the bargain which existed between these parties; indeed, on the *contrary, the bargain was that the policy should re- [11 main with the person who had made it and paid for it, and that he should hold it until his debt should be discharged.

1878

Fisher v. Smith.

H.L. (E.)

Therefore, I think upon the first branch of the argument there is nothing farther to be considered.

As to the second branch, I shall only say one word. If there was a lien in the case, the question is, how was that lien discharged? If Mr. Smith, having done this work, was entitled to be paid for it, how has he been paid? He has not been paid at all; ex concessis he never was paid.

But, my Lords, it was attempted to show that the payment which Mr. Fisher undoubtedly made to Skinner & Co. was a payment to Mr. Smith, the defendant. But how is that made out in any manner of way? It is said that according to the course of business he recognized a payment to Skinner as a payment to himself. He recognized nothing of the kind in the course of business. The course of business found to have existed on the face of this case was a course of business which led to the payment to Skinner by a monthly bill, and then a payment by Skinner to his under agent, this Mr. Smith, and why Mr. Smith should be bound to stop in the middle of that course of business so far as it helped him, I cannot at all understand. I put the question more than once myself to the learned counsel, whether or no there was anything in the case that would entitle him to contend that the intermediary had been constituted an agent to receive payment for the sub-agent, and the answer was that there was nothing of the kind. There is not a particle of evidence in the case, or any finding upon the case, that any such acceptance was ever authorized by Smith to the intermediary; and if not, I cannot at all comprehend how the payment to the intermediary can be held to have been a payment to the sub-agent. If that was no payment to him, and if he had a lien, the lien is there still undischarged in justice and in law.

I observe that in the court below, not a case of authority exactly, but a statement of the law was referred to, which I think I may very fairly and properly submit to your Lordships as covering, as the learned judge says who cites it, the whole of this case. It is from the 2d volume of Phillips on 12] Insurance, sect. 1909. *Your Lordships will observe how very fully it touches all parts of this case: "The agent who effects a policy for his principal, and advances the premium, or becomes responsible for it" (which is this case) "and retains the policy in his hands, has a lien upon it for his commission and the premium until the same are paid to him, or he is supplied with funds for the payment, whether his immediate employer is the assured himself or an intermediate agent, and in the latter case whether the intermediate. agency was known or not known to the sub-agent claiming

H.L. (E.)

Fisher v. Smith.

1878

the lien." Here there was an intermediate agent, here there was a sub-agent, and here the knowledge of the whole transaction was in the minds of all the parties. It appears to me quite impossible to contend, that, under those circumstances, this lien does not exist as fully now as it ever existed at any period of the transaction.

On the whole, my Lords, I have no doubt that the judgment of the court below was right, and that the appeal should be dismissed.

LORD SELBORNE: My Lords, I have but a few words to add to what has been already said. As to the cases of Crawshay v. Homfray('), and Kirchner v. Venus (3), I understand their principle to be this: that a lien cannot be claimed, so as to intercept the performance of the actual contract between the parties, whether that contract is express, or is to be inferred from a certain course of dealing. If the contract is to deliver goods at a certain time, or to deliver them whenever demanded, it would be inconsistent with that contract to refuse to deliver them (the proper time having arrived) upon the ground of any lien for a price, which by agreement was not then payable. Here, no such contract has been found by the special case; for, if, on the one hand, there was a course of dealing, according to which payment of the premiums was usually made to the broker by monthly settlements with his principal, it is also found (on the other hand), that it was not the course of dealing between these parties (for which purpose I identify Fisher with Skinner), that the policies should ever be delivered to the principal, until the premiums were actually paid *to the [13 broker. The true result is, in my opinion, that payment of the premiums was postponed till the monthly settlement, only when possession of the policies was not, in the meantime, demanded; but that, if the policies were sooner demanded, they were then to be delivered up to the principal, upon payment of the premiums, and not otherwise.

Judgment of the court below affirmed; and appeal dismissed, with costs.

Lords' Journals, 14th November, 1878.

Solicitors for appellant: Chester, Urquhart & Co. Solicitors for respondent: Sharpe, Parkers, Pritchard & Sharpe.

(1) 4 B. & A., 50.

(2) 12 Moo. P. C., 361.

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