between the twelfth and fourteenth centuries, and to have been introduced into England in the sixteenth century. The law of insurance was a branch of the law merchant and very greatly out of harmony with the principles of the common law. Early insurance cases were generally either submitted to the arbitration of a merchant court or tried before a special court created for that purpose in the first year of the seventeenth century. Only about fifty cases had come before the common law courts up to the middle of the eighteenth century. The business of marine insurance was in its early stages mainly conducted at Lloyd's Coffee House in London, and it was here that much of the law and custom governing marine insurance was developed. It "It is known that Lloyd's Coffee House, an inn kept by one Edward Lloyd on Tower Street in London, was, as early as 1688, a popular resort for seafaring men and merchants engaged in foreign trade. became the custom among those who gathered at Lloyd's to make their gathering an occasion for arranging their mutual contracts of insurance against the sea. In making such contracts it was the custom for the person desiring the insurance to pass around among the company assembled a slip upon which was written a description of the vessel and its cargo, with the name of the master and the character of his crew, and the voyage contemplated. Those desiring to become insurers of the ventures so described would write beneath the description on this slip their names or initials, and opposite thereto the amount which each was willing to be liable for as an insurer. When the total amount of insurance desired by the owner of the vessel was thus underwritten, the contract was com plete. From this practice, among those congregating at Lloyd's, is derived the term 'underwriters,' as now applied to insurers. The business of insurance carried on in this informal way at Lloyd's seems to have increased rapidly, and the commercial importance of the house required that it should be removed to a more commodious and convenient site, which was found on Lombard Street, whither Lloyd removed his house in 1692. Both the importance of this coffee house in commercial circles, and the enterprise of its proprietor, were shown by the establishment in 1696 of a newspaper, giving information of commercial transactions and of the movement of shipping throughout the world. While this newspaper was shortly afterwards suppressed by reason of some indiscretion on the part of its publisher, it was yet the progenitor of 'Lloyd's Lists,' the publication of which was begun in 1726, and which continues up to this day as the most important publication in the shipping and commercial world. After various removals, Lloyd's finally found permanent quarters in the Royal Exchange, where it is now located, and remains, probably the greatest and most important single commercial factor in the mercantile world." • SECTION 5. HISTORY OF INSURANCE-FIRE INSURANCE. Small local associations for mutual aid in case of loss by fire appear to have existed in England at a very early time. The first regular office for this purpose of insuring against loss by fire was established in 1681, fifteen years after the great London fire. Fire insurance did not meet as favorable reception as marine insurance, on account of the temptation which it was supposed to furnish for the commission of • Vance on Insurance, p. 10. arson, and great development of this form of insurance has only come in the last sixty years. The first fire insurance company was established in the United States in 1752. SECTION 6. HISTORY OF INSURANCE-LIFE INSURANCE. The first attempt to establish life insurance was in 1706 in England and in 1769 in America. Life insurance has only assumed large proportions in this country since the Civil War. SECTION 7. THE CONTRACT OF INSURANCE. Not only does the contract of insurance present many contrasts to contracts of other kinds, but the contract of fire insurance and marine insurance differ from each other in many respects. In the next chapter, the general insurance contract will be considered and in the three succeeding chapters the peculiarities of the three principal forms will be taken up. CHAPTER II. CONTRACT OF INSURANCE. SECTION 8. PARTIES. A contract of insurance, like other contracts, can only be entered into by people sui juris. Either an individual or a corporation may be an insurer. In most states at the present time there are statutory requirements which must be complied with before insurance companies can write insurance policies. A contract of insurance is not a contract for necessaries, and therefore one made by an infant may be disaffirmed. Until such disaffirmance, however, it is a binding contract. A contract of insurance made with an insane person is void, if he has been adjudged insane, otherwise only voidable. A contract of insurance with an alien enemy is void. In addition to the qualifications required to make a person a competent party in the contract of insurance, the insured in an insurance company must have an insurable interest in the subject of insurance. What will constitute an insurable interest in this class of insurance contracts will be considered in the next three chapters. SECTION 9. MAKING A CONTRACT. The forms of requisites for making a contract do not differ greatly from those in the case of other contracts. A contract of insurance does not come within the provisions of the Statute of Frauds. Such a contract is not included within the provisions of the statute governing agreements, "not to be per formed within one year from the making thereof," because the loss may occur in less than a year.1 An oral contract of insurance is good. "Upon an oral contract of insurance, where nothing is said about conditions, if a policy is to be issued, the parties are presumed to intend that it shall contain the conditions usually inserted in policies of insurance in like cases, or as have been before used by the parties. That a particular condition is usual must be shown by the party who insists upon it, who has the affirmative." 2 Contracts of insurance, however, are almost invariably reduced to writing. Such a written contract is called an insurance policy. Such a contract merges prior or contemporaneous parol agreements relative to the transaction. SECTION 10. THE CONSIDERATION. In a contract of insurance, as in all other contracts, there must be a consideration from both parties to contract. In the case of Phoenix Life Insurance Co. vs. Roddin,' the Supreme Court of the United States discussed the subject of consideration in insurance contracts as follows: "But the 'consideration,' in the legal sense of the word, of a contract, is the quid pro quo, that which the party to whom a promise is made does, or agrees to do, in exchange for the promise. In a contract of insurance, the promise of the insurer is to pay a certain amount of money upon certain conditions; and the consideration on the part of the insured is his payment of the whole premium at the inception of the 1 Wiebeler vs. Milwaukee Mechan ics Mutual Ins. Co., 30 Minn., 464. • Woodruff, Cases on Insurance, p. 79. |