Page images
PDF
EPUB

The Economic several years since adopted the principle of paying to persons not acting as regularly-appointed agents, but who introduced bus., simply a brokerage commission of 15 p.c. on first prem. No renewal commission.

1872-The Scottish Widows adopted the same principle as the Economic as to bus. casually introduced. COMMISSION DEL CREDERE.-Where an agent of a seller undertakes to guarantee to his principal the payment of the debt due by the buyer. The phrase del credere is borrowed from the Italian language, in which its signification is equivalent to our word guaranty or warranty.-Story's Agency. COMMISSION, GOODS HELD ON, IN RELATION TO FIRE INS.-See GOODS HELD IN TRUST OR ON COMMISSION.

COMMISSION, INS. OF. In the case of King v. Glover, 1806, it was held that an ins. on the "Commission, Privileges," etc., of the captain of a ship in the African trade, is legal. But in the case of Knox v. Wood, heard before Lord Ellenborough in 1808, it was held, that where the ship had been captured on her voyage to the port from whence she was to ship the cargo out of which a commission was to be earned, there was at the time of capture no insurable interest. [PROFITS, INS. OF.] COMMITTEE OF INVESTIGATION.-It frequently happens in young ins. asso., as with other joint-stock enterprises, that in the event of anything going wrong, a "Committee of Investigation" is proposed. The remedy is often found worse than the disease. COMMITTEES.-A good deal of the practical work of ins. asso. is performed by and under the direction of Committees. Committees have no special powers beyond those specifically delegated by the board, unless these additional powers be provided for by the orig. constitution of the asso.

COMMON ASSURANCES. -The legal evidences of the translation or transfer of property, whereby every person's estate is assured to him, and all controversies, doubts, and difficulties are either prevented or removed. Touchstone's Common Assurances is a wellknown legal work. Novices sometimes suppose that it treats of insurance. COMMON CARRIERS, INS. RESPONSIBILITIES OF.-See CARRIERS; also PARCELS INSURANCE.

COMMON LAW.-The Common Law includes those principles, usages, and rules of action applicable to the government and security of person and property, which do not rest for their authority upon any express or positive declaration of the will of the legislature. The Common Law may be said to underlie all the daily business transactions of life. They must all be governed by it, in the absence of special statutory enactment. COMMON LAW PROCEDURE ACTS.-1852, 15 & 16 Vict. c. 76; 1854, 17 & 18 Vict. c. 125-amended by 19 & 20 Vict. c. 102; 1860, 23 & 24 Vict. c. 126. The provisions of these Acts are frequently incorporated in agreements for reference, etc. COMMON LODGING-HOUSE ACTS.-1851, 14 & 15 Vict. c. 28; 1853, 16 & 17 Vict. c. 41. COMMON SEAL.-A seal used by a corporation, co., or legally constituted asso., as a symbol of its incorporation. It is, as it were, the concentrated voice and act of all the members, when affixed in accordance with the regulations of the co. It is a rule of the Common Law, that (subject to one or two exceptions which we shall note) a body corporate is not bound by any contract which is not under its corporate seal; and this rule has always been rigidly adhered to both at Law and in Equity. Even a resolution of the members of the body corporate is not equivalent to an instrument under its seal. But strict as is the rule in question, it is and always has been subject to qualification. There are some matters of so trivial a nature that they can be done so as to bind a corporation in the absence of any instrument under its seal; these are matters arising of necessity in the course of its business.

The exceptions to the general rule to which we chiefly refer are those created by statute. Some of these arise under the Banking Acts, to which we need not more particularly refer here. The Cos. Act, 1856, contained some such exceptions. The Cos. Act, 1862, did not. The Cos. Act of 1867 contains some exceptions, which we shall speak of under the head of CONTRACTS.

In 1864 was enacted the 27 Vict. c. 19-An Act to enable Joint-Stock Cos. carrying on bus. in Foreign Countries to have Official Seals to be used in such Countries. The provisions of this measure will be given in detail under SEALS ACT.

COMMONWEALTH Life, LoaN, AND SICKNESS PROV. Asso., founded in 1853, under the Friendly Sos. Acts. The prosp. said:

The Commonwealth Prov. Asso. is estab. for the purpose of extending more widely the benefits of
L. assu., and bringing within its influence those of the humblest means. It is the desire of the man.
of this Asso. to induce the clerk, the artizan, and the mechanic, by a small appropriation of his
weekly income, to make provision for himself in sickness, and for his widow and children at his
decease. It presents also an easy method of securing to a child, on attaining a given age, a sum of
money
from £10 to £100, without the risk of loss to themselves; as should the parent or guardian
effecting such assu. require pecuniary assistance, it can at once be obtained by depositing the pol.
with the Asso.

It may be here stated that the man. of the Asso. is confided to gentlemen, being members, of bus. habits and integrity.

Loan classes are being formed in connexion with this Asso. in Lond. and various parts of the country, by which advances of money may be obtained upon equitable and easy terms.

The Man. Director was Mr. Geo. Reynolds; the Act., Mr. Tobiah Pepper; the Sec., Mr. J. H. Evens.

We believe the So. never got into full operation, and it passed altogether out of existence in the following year. COMMONWEALTH PROVIDENT LIFE.-This Co. was projected in 1854, by Mr. Geo. Reynolds, gentleman. It was prob. simply a regis. of the preceding Asso., for the purpose of bringing it within the operations of the Joint-Stock Cos. Acts.

COMMORIENTES.-Persons who die by the same accident, or upon the same occasion. COMMUNICATE.-It is generally a specific condition in F. ins. pol. that if any alteration be made in the premises insured, or in the use to which they may be applied, the fact shall be forthwith "communicated" to the office.

It is, further, a principle attaching to all branches of ins. that the person seeking ins. is to "communicate to the person to whom application for ins. is made, all material facts relating to the proposed ins. This we shall discuss fully under its converse aspect of CONCEALMENT.

COMMUTATION.-Conversion; exchange; labour saving.

COMMUTATION TABLES.-We have treated of these fully under COLUMNAR Method. COMPANIES ACT, 1862-25 & 26 Vict. c. 89-An Act for the Incorp., Regulation, and Winding-up of Trading Cos. and other Asso. It came into operation Nov. 2nd, 1862. The provisions of this Act, and of its Amendment Act, 1867, so far as they relate to ins. asso., are mentioned under their proper heads throughout this work. [LEGISLATION FOR AND AFFECTING INS. ASSO.]

COMPANIES ACT, 1867-30 & 31 Vict. c. 131-An Act to Amend the Cos. Act, 1862. This Act came into force Sept. 1st, 1867.

COMPANIES CLAUSES CONSOLIDATION ACT, 1845-8 & 9 Vict. c. 16-An Act for Consolidating in one Act certain provisions usually inserted in Acts with respect to the Constitution of Cos. Incorp. for carrying on Undertakings of a Public Nature; amended by 31 & 32 Vict. c. 119. 1863-26 & 27 Vict. c. 118; amended by 30 & 31 Vict. c. 127. 1869-32 & 33 Vict. c. 48.

COMPANIES, INS.-SEE INSURANCE COMPANIES.

COMPANIES, JOINT-STOCK.-See JOINT-STOCK COMPANIES; Joint-Stock Cos. Arrangement Act, 1870-33 & 34 Vict. 3. 104.

COMPANIES, LIFE.-Life Assu. Cos. Act, 1870-33 & 34 Vict. c. 61; amended in 1871, by 34 & 35 Vict. c. 58; and in 1872 by 35 & 36 Vict. c. 41.

COMPANIES SEALS ACT, 1864-27 Vict. c. 19-An Act to enable Joint-Stock Cos. carrying on bus. in Foreign Countries to have Official Seals to be used in such Countries. [SEALS ACT.]

COMPANION TO THE [BRITISH] ALMANAC.-In this work, commenced in 1828, under the superintendence of the So. for the Diffusion of Useful Knowledge, there are several papers on ins. and kindred topics-some of them by well-known writers :

1831-Life Assurance.

1834--Savings Bank Annuities. Tables of Mort. of E. and W.-Mr. Rickman.
1835-Bills of Mort.

1840-On the Calculation of Single Life Contingencies-Prof. De Morgan.

1841-Statistics of Disease and Mort. in E. and W. in 1838.-Regis. of Births, Marriages, and Deaths.-Extension of Vaccination.

1842-Life Contingencies [Prof. De Morgan].-Ann. Movement of the Pop. of E. and W. 1843-Sanitary Condition of Labouring Pop. of Gt. Brit.

1844-On Arithmetical Computation.-Pop. Returns, 1841.

1845-Occupations of the People.-Pop. of Ireland.

1846--Life Ins.-Comparative Tables.

1848-Health of Towns.-Odd Fellows' and Friendly Sos.

1849- The Cholera.-Relative Progress of Pop. and of Industrial Wealth.

1850-On Ancient and Modern Usage in Reckoning.-Cholera.

1851-On Some Points in the Hist. of Arithmetic.

1852-Census of Gt. Brit., 1841 and 1851.

1853-Census of Gt. Brit., 1851.

1854-Census of the U.S., 1850.-Occupation of the People.

1859-Practical Results of Sanitary Legis. in England.

1861-Friendly Sos.

1863-Logarithms for the Many.-Fires and Fire Brigades at Home and Abroad.

1864-Occupation of the People as Exhibited in Pop. T., 1851.—On Fire Ins. and its

Taxation.

1865-Health of the Brit. Army in India.

1866-The Swedish Calculating Machine at the Gen. Regis. Office, Somerset House.
1870-Royal Commission on Water Supply.

These papers are all referred to under their proper heads in this work.

COMPANY, JOINT STOCK.-An asso. of persons joined in the common interest, for the purpose of carrying on some commercial or industrial undertaking. [LEGISLATION FOR AND AFFECTING INS. Asso.]

COMPANY AT JOHN'S COFFEE HOUSE FOR SHIPS.-A project thus advertised was started during the South Sea period; but what became of it we cannot discover. [MARINE INS., HIST. OF.] COMPANY, INS.-The definition of an ins. co. under the L. Assu. Cos. Act, 1870, is as follows:

The term " company means any person or persons, corporate or unincorporate, not being regis. under the Acts relating to friendly sos., who issue or are liable under pol. of assu. upon human life within the U. K., or who grant annu. upon human life within the U. K.

The Cos. Act, 1862, says (sec. 3):

For the purposes of this Act a co. that carries on the bus. of ins. in common with any other bus. or businesses shall be deemed to be an ins. co.

COMPANY OF LONDON INSURERS.-This Co. was formed in 1709, and constituted the basis of the Sun Fire. It will be more convenient to give the entire hist. of this Co. under SUN FIRE. We shall have occasion to notice it under FIRE INS., HIST. OF. COMPANY OF PARISH CLERKS, incorp. by James I., 1611. [BILLS OF MORT.] COMPASS, MARINER'S.-See MARINER'S COMPASS.

COMPENSATION FOR PERSONAL INJURIES UNDER LORD CAMPBELL'S ACT [1846], 9 & 10 Vict. c. 93-An Act for Compensating the Families of Persons Killed by Accidentscame into operation 26th Aug., 1846. [ACCIDENT, DEATHS FROM.] [COLLISIONS.] [INJURIES.] [NEGLIGENCE.] [VIOLENT DEATHS.]

COMPENSATION INS.-This title is given to a branch of accident ins., viz. to the payment of compensation for non-fatal injuries, exclusive of any sum at death. COMPENSATION, LAW OR DOCTRINE OF.-Those who have been in the habit of observing natural phenomena must have been frequently struck, not simply with the wonderful uniformity which prevails, but rather with the varying causes which more or less frequently combine to produce this uniformity. Philosophers say these minor variations are themselves but manifestations of the operation of another law-the law of compensation. Professor De Morgan, in his Essay on Prob., 1838, has dealt with this subject: The fluctuations of mort. have of themselves a tendency to create opposite fluctuations. Thus a very sickly season carries off the weak, and deprives the succeeding years of those who were most likely to have died; causing therefore a season of remarkable health. This is a very important item in the theory of the fluctuations of mort. .... It reduces ann. fluctuation itself to a species of regularity, and is perhaps a sufficient reason for the slightness of the total fluctuations.

The Reg.-Gen., in his 5th Rep., pub. 1843, says:

One of the most remarkable points of the previous comparisons of the expectations of life at different times, in different nations, and various climates, will without doubt appear their remarkable uniformity. This uniformity does not imply that the external circumstances in which men live have no influence on the duration of life; it only tends to prove that life being regulated by constant laws, the circumstances adverse or favourable to existence produce, by compensations of various kinds, the same results.

It has been cited as an instance in support of these views, that the risk which females encounter at the child-bearing age is compensated for in males by the violent deaths they are subjected to during the same period on rivers, on the sea-coast, in mines, in the streets, in travelling, and in their dangerous occupations; by the accumulation of work. men in ill-ventilated shops, or the hard, exhausting work of the agricultural labourer, independently of war, and service in unhealthy climates. To these may be added mental agitations and anxieties, terminating unhappily sometimes in suicide-altogether making the chance of living from 25 to 45 rather in favour of English women. The operation of this law of compensation is everywhere traceable throughout mort. obs. indeed it pervades all nature. The astronomer recognizes its influence in the remotest regions of space. The philosopher finds it ever present with his inquiries; reconciling and har monizing the results. The moralist trusts to it when other hopes fail him. The phrenologist knows its influence in the nicely-balanced operations of the human will, and the subjugation of the passions. While the divine derives aid and consolation from it, and traces it to the sacred origin from which it first sprang.-Ins. Guide and Handbook, 1857. COMPETITION.-Competition has many advantages-it tends to efficiency. But it is not to be regarded as an unmixed good. In L. ins. its operations are seen, when seen at all, in two forms--increased expenditure; increased mort. Happily, it has never yet seriously shown itself in relation to reduction of prem. When such an event shall happen, it will be an evil day for L. ins. But in nearly every other branch of ins., especially in Marine, Fire, and Plate Glass ins., this is just where it has shown itself in the most damaging form. On the subject of competition in F. ins., we commend to our readers the following judicious remarks from the Monetary Times of Canada, towards close of 1872:

While competition is the universal safeguard against undue exactions by public companies and private traders; while it is the dreaded foe of all monopolies, it is itself liable to generate abuses and grievances only less intolerable than those which it redresses.... The same is true of F. ins. in Canada; this fact we have demonstrated more than once. Ten or twenty years' operations in these provinces by some of the largest Brit. offices show an excess, we believe, of aggregate losses over prems., without reckoning expenses at all. This is not right; it is a result in open defiance of all sound commercial principles. Not that the insuring public are to blame, the fault does not lie wholly at their door; the companies themselves have to bear the burden of the fault. A sort of internecine war, in which each preys on the other's vitals, is kept up; competition, reckless, uncurbed, has run riot with rates and terms of pol. and adjustments until the bus., as a bus., is of no advantage whatever

to those who have locked up their money in it. There is not in Canada any field in which an equal amount of money has been invested, and as much bus. talent and painstaking care employed, which shows so poor results. This is surely a sufficient reason why the bus. ought to be remodelled, and placed on a sound and profitable basis. The interests of all classes demand this. No bus. will be persisted in which does not pay. Besides in F. ins. such vast operations are conducted on a relatively small capital that the latter serves but as a margin against extraordinary contingencies. The real safety to the public is in the prem. being sufficient to meet the liability or risk assumed; if it is not sufficient, the capital will not long suffice to make good the deficiency. The demand therefore for higher rates for F. ins. can only be pronounced just, equitable and necessary, in order to nullify in a measure the effects of an abnormal and unhealthy competition.

COMPIGNE, DAVID, was Sec. of Hants, Sussex, and Dorset, for many years prior to its amalgamation in 1864.

COMPLEMENT OF LIFE.-The term "complement," as applied to the duration of life, is derived from De Moivre's Annuities on Lives, 1725: “I call that the Complement of Life, which is the time comprehended between an age given and the extremity of old age. Thus if the age be 50, and the extremity of old age be 86, the Complement of Life is 36." By his hypothesis, the Expectation of Life was always half the Complement. Dr. Price used De Moivre's hypothesis in the early eds. of his Obs. on Rev. Payments, etc.; and wherever he speaks of the Complement of Life, he always meant double the Expectation of Life, "whatever that may be, according to any tables of obs." The term is not now generally used.

COMPLEMENT OF A SHIP.-The estab. number of officers and seamen of the several grades by whom she is intended to be manned.

COMPLETE.-A life annuity is said to be complete when the payment is to be continued up to day of the death, as distinguished from an annuity curtate.

COMPLETE LIFE POLICIES.-This title has been given in England to life policies, first issued in the U.S., on the plan of ten or any other number of fixed payments-each payment securing a proportionate part of the sum orig. insured-the forfeiture of policies being by such means avoided. The system is a most excellent one, and has been adopted in Gt. Brit. by several offices.

There have been, and are, one or two other phases of ins. which deserve to be enumerated under this title.

In 1709 the Berkshire and Counties Ins. Asso., a scheme of mut. contribution, the completed value of which was to be £600, had the following provision: "When you have paid £400, though the life be not dead, then you shall have the £600."

The Briton L. office applies the profits of certain of its parti. policy-holders to the extinguishment of the future prems., which in process of time will in effect render the policy complete.

Most of the L. offices in the U.S. provide that when the insured reaches the age of 100, the ins. shall be deemed complete, prems. cease, and the sum ins. become payable. In Germany, also, this plan is generally followed, but the pol. are usually made payable at younger ages. [AUSTRIA.] The Positive L. has adopted a modification of this plan. COMPLETE REGISTRATION.-This was the final stage in the formation of joint-stock cos., under the Joint-Stock Cos. Regis. Act, 1844-7 & 8 Vict. c. 110. It implies a previous state of "provisional regis.' The whole subject will be discussed under LEGISLATION FOR AND AFFECTING INS. Asso. The Act has been superseded by the Companies Act, 1862, etc.

[ocr errors]

COMPLEX INS. Asso.-By "Complex Ins. Asso." we mean those having several branches of ins. bus. combined, as fire and life; fire, life, and marine; fire and marine; life and accident ins. ; life and fidelity guarantee; and similar combinations.

How it originally came to pass that businesses so essentially different as life ins., fire ins., and marine ins. were united, is as difficult to comprehend as why the essentially different businesses of grocery and drapery are combined in the Eastern portion of England; drapery and ironmongery in the Southern portion; grocery and pork-butchery in the Midland Counties; and grocery and spirit-selling in Ireland. Regarding the different branches of ins. bus., it may be replied that they all depend upon "averages"; but in the same way all business depends upon "profit and loss." The averages will only come in favour of the office by the employment of skilled managers, who know what to accept, and what to reject; and profit, instead of loss, can result only to the trader who thoroughly understands the bus. he is engaged in,

It may seem at first sight invidious to dilate much upon this subject, seeing that in the case of existing offices of a complex character they are "accomplished facts"; but on the other hand the importance of the question demands some notice; and in the case of new asso. it is of the utmost importance to consider well beforehand the course to be pursued. We have indeed remarked during the past few years a very general departure from the method of "complex" ins. offices.

In the U.S., where the subject of ins. has been made a study by legislators, as well as by many astute business men, certain combinations of ins. bus. are absolutely prohibited. For instance, no life co. can also carry on the bus. of fire or marine ins. Fire and marine may be worked upon one capital. Life and accident ins. is also permitted. The Hon. Wm. Barnes, in his N. Y. Ins. Rep. for 1861, said, "The sacred funds provided for the necessities of old age, and for the wants of the widowy and orphan, should never be

subjected to the hazards of F. ins., extended over the four quarters of the globe." That is the enlightened view of an experienced man. That is the principle which has guided the legislators of several of the leading States of the American Union.

The subject has to a certain extent already engaged the attention of our legislature. The Parl. Committee which sat upon joint-stock cos. in 1844, having Mr. Chas. Ansell under examination, interrogated him on this point. Here are the questions and answers:

1920-Is there any advantage in having the same office for both a fire and life bus.? Mr. Ansell: I do not know that there is, except that there is some expense saved; there is, for instance, one house and one board of directors.

1921-Does one branch of business bring in business in the other line?-I do not observe that there is much advantage of that kind; I do not think the junction is very valuable in that respect.

1922-Is there any danger of the profits of the one being mixed up with the profits of the other? -There may be; but in the Atlas inst. the funds are kept totally distinct, and the investments are kept distinct.

1923-Are there separate books?—Yes, there are separate books, not separate ledgers; there is a general ledger which we can use for the two. [Mr. Griffith Davies, then Act. of Guardian, being present, said: In our office they are entirely distinct; separate books altogether, and separate funds.] 1924-Separate capitals ?-Mr. Davies: No; the same cap. is available to the one as to the other, if there is a necessity to resort to the cap. ; either the fire or the life has that privilege, but the funds of the fire and life arising from prems. are separate funds.

1925-The capitals are separate, with a mut. liability to aid each other if necessary?-Mr. Davies: The prem. funds are separate, with a common guarantee of the shareholders' cap.-Mr. Ansell: It is not so in our office; however disastrous the fire bus. might be, it would in no respect alter the bonus or profit upon the L. assu. bus.; the proprietors themselves would have to make good the deficiency arising from the losses on the F. pol., leaving the L. assu. fund untouched.-Mr. Davies: Supposing that our cap. were entirely taken away by fire, if that cap. were not sufficient at the calling in of the shares, the L. fund would not be required to be called upon to aid in making up the deficiency in the fire, and vice versa.

Nearly all the considerations involved are here opened up in a very clear and candid manner. Each of these witnesses stated what he honestly believed. The lawyers, who did not create the difficulty of these compound offices, have done their best to remedy their more glaring dangers. The L. funds are made the subject of special trusts. These trusts might hold good in the event of any emergency. That would depend upon the equity in which they had been conceived, and care with which they had been conducted. If the L. department had traded with any part of the cap., so as to realize profits from it, questions would arise; if any part of the cap. had been employed to make good deficiencies in the life fund, and had not been entirely repaid, more serious questions must occur. The complications which at all times threaten these separate funds may be judged of by a careful perusal of the "Limited Liability" clause in the pol. of the Commercial Union, which we have set out in our hist. of that Co. The clause is shaped in view of preserving the integrity of the separate funds, in the event of any cap. being required in special support of either branch of its bus. Whether it would or would not do so, it is not our present purpose to decide. It is a question which has engaged the serious consideration of many able lawyers. It must continue to do this until finally solved. It is certain that, in the event of any co. having a F. or marine ins. branch, or both, and either of these branches sustaining such a loss as to imperil the cap. of the co., and drive it into a winding-up, no one branch of the bus. could be suddenly severed, whatever the amount of its separate funds; but that all must fall under the tender mercies of the Court of Chancery together. If the L. fund survived such a catastrophe, unquestionably the L. risks would be re-insured by its means with some other asso. ; but the co. itself would be wound up and extinguished.

We have, on the other side, to look at the advantages claimed for combination. These are held to be-1. and chiefly, Economy of management. A life bus. may be worked in this form at a less per-centage of cost than as a distinct organization. It may, indeed, by throwing a portion of its expenses upon the other branches of bus., claim an apparent advantage over rival offices not so circumstanced. But here a point of danger arises. In the event of a liquidation, the expenses account might have to be adjusted. 2. By means of the large figures obtained at an early date, the asso. assumes a degree of importance which tends to secure to it public confidence. Legislation is seeking to unravel all complication of accounts arising from this cause. 3. Collateral strength is gained by reason of the connexions surrounding the other branches of bus.-whereas with a L. office not having a F. bus. associated, the agents, who desire to represent a F. co., only give a divided allegiance. This view of the case brings us to the point we have in mind. Two, three, or any greater number of insurance businesses may be worked together, in one office, by one staff, not more extensive or diversified than at present. For even now each branch of bus. must be superintended by persons who understand it. A separate cap. for each; and a common constitution, regis. in duplicate, with only such modifications as are necessary for the government of each bus.—all of which have now to be mixed up in one deed-would answer every purpose. One sec., one board of directors, one set of auditors, and one solicitor. In a word, the practical difficulties of which we hear so much are only "difficulties in imagination.' So with regard to existing offices. There is no insuperable barrier to separating the branches, and forming them into distinct asso. Apportion the cap. as may be thought desirable; divide each present share into as many shares as there are branches of bus; give each shareholder one of each of these new shares, for each present

« PreviousContinue »