Ezra Finney & others vs. The Fairhaven Insurance Company, 5 Met. 192

Hubbard, J. On the ruling of the presiding judge, two questions arise : The first, whether Bates, in his capacity of part owner, had, by force thereof, an authority to effect insurance for the other owners ; the second, if no previous authority existed, whether a ratification by the other owners, after a knowiedge of the loss, will enable them to maintain the present action. A a to the first point, it was long since determined that one part owner had no authority to insure for the rest of the owners, although such part owner wras also the ship’s husband. French v. Backhouse, 5 Bur. 2727.

Subsequent cases have confirmed thie decision. Ogle v. Wrangham, Abbott on Ship. (4th Amer. ed.) 76. Bell v. Humphries, 2 Stark. R. 345. The same decision has taken place in our own court, in the case of Fester v. U. S. Ins. Co. 11 Pick. 85. The plaintiffs therefore cannot sustain this suit on the ground that the insurance was effected by a part owner. The second point is, whether a ratification by the other owners^ after a knowledge of the loss, will enable the plaintiffs to maintain this action.

That the ratification of a contract, made by an unauthorized agent, is equivalent to" a preceding authority to make it, is a principle of the common law ; and the only inquiry is, if this case is embraced by the principle. This general rule is not denied; but the defendants contend that the case at bar is not governed by it, because the parties do not stand on the like ground, nor enjoy equal rights.

It is argued, that the part owners, on hearing of the safe arrival of the vessel, may refuse to ratify the act of their cotenant, and that in consequence of their refusal the underwriters will have no claim against them for. their premium ; while in case of loss, the owners can enforce the contract against the underwriters ; and thus there is no mutuality in the case.

This reasoning has been urged in previous cases, and though it is not without its force, yet the answer to it is, that the agent or part owner who effects the insurance is himself liable for the whole premium; because the whole property is at the risk oí the underwriters, as the owners may at any time adopt the act, the policy being made for their benefit.

And it may be also said that in making the contract, the insurers, having been will ing to look to the part owner for their premium, without calling for his authority, cannot justly complain, if, from any cause, the other owners, by disavowing the act, do not render themselves personally liable for the payment of the premium. That the contract of the agent or part owner may be adopted after a knowledge of the loss, was determined in the case of Routh v. Thompson, 13 East, 274, where the point came before the court. But the question was afterwards fully considered and distinctly decided in Hagedorn v.

Oliverson, 2 M. & S. 485. In that case, insurance was effected by an agent, and his act was not ratified by the principal, till after a knowledge of the loss. Bay ley, J. in giving his opinion says, “ a loss has happened, upon which the defendant undertook to pay, and if the premium could not have been recovered back from the defendant, there is not any circumstance here which should exonerate him from liability.

I think the plaintiff never could have recovered back the premium from the underwriter, because of the uncertainty whether Schroeder ” (the principal) “ would adopt the insurance, in respect of which the underwriter would have incurred the risk. While the contract was in fieri, there was not any ’disposition, on the plaintiff’s part, to have the "olicy vacated, and if there had been, it would have been an answer to him, that Schroeder might have adopted it.” And he closes by saying, “ the case of Routh v.

Thompson shows that if a policy be effected with reference to the benefit of a person interested, an adoption of it by such person after the loss will be sufficient.” See also 1 Phil. Ins. (1st ed.) 61. And in Story on Agency, §§ 246, 248, the same doctrine is maintained and enforced. It was argued that the present case was the same with that of Foster v. United States Ins. Co. 11 Pick. 85.

But though the cases have strong features of resemblance, there is, among other distinctions, this difference between the two ; viz. that in that case the action was brought in the names of the agents, who effected the insurance, without other proof of ratification ; while in the present case, the parties adopt the act by commencing the suit themselves. Nonsuit taken off '