
    John M. Erick versus Benjamin Johnson, Principal, and Caleb Loring and Others, Trustees.
    Where an insurance broker had adjusted a loss with the agent of a party in whose name the insurance was effected, and had charged the several underwriters with their respective proportions of the loss, and credited the party in whose name the insurance was effected, with the amount of the loss, by setting it off against his premium notes, pursuant to an agreement in the policy, the underwriters were held to be discharged from the demand of the real party in interest, although the policy was effected in the name of “ N. £., and whoevei else it might concern.”
    The only question which came before the Court in this action was, whether the persons summoned therein as trustees should be adjudged such. Loring only was examined upon interrogatories, the others summoned as trustees having submitted themselves upon the case, as it appears from his answers ; and by the consent of the plaintiff, the * decision upon those answers [*194] was to extend to all the supposed trustees.
    By the answer of Loring, it appears that he, in March, 1805, underwrote for himself and partner T. Curtis the sum of 500 dollars upon a policy of insurance, in which N. Bixby, and whoever else it might concern, were insured 1900 dollars on the schooner Harmony and cargo. This policy was effected at the office of Abraham Touro, an insurance broker, by the request of S. if N. Appleton, claiming to act for N. Bixby, and upon his letter communicated at the office ; in which nothing was said of the ownership or property, except an intimation that Captain B. Johnson limited the premium at. 16 per cent.
    Afterwards, the policy, with a protest, stating the property of the vessel to be in one A. Nelson, and of the cargo to be jointly in him and B. Johnson, the principal defendant in this action, was sent on by N. Bixby to S. Sf N. Appleton, with directions to demand a loss upon the facts set forth in the protest, and if any dispute should arise, to submit the case to an arbitration. The loss, and the amount of it, were afterwards determined by the award of J. C. Jones, Esq., made September 11th, 1805, upon an agreement signed by S. N. Appleton for N. Bixby, and by A. Touro, the broker, for the underwriters. On the same day, the loss, for which 700 dollars were awarded, was fully paid by discounting, with the consent of S. if N. Appleton, certain of N. Bixby1 s notes due at the said Touro’s office for premiums of insurance, and by crediting the balance of 294 dollars 70 cents to said Bixby upon other premium notes, for which he stood indebted to the said Touro. In consequence of this adjustment, the policy was delivered up to the underwriters, and their proportions of the loss paid were debited to them, in their respective accounts with the said Touro, their broker; and the amount, so charged against the said Loring and Curtis, was allowed in an adjustment made between them and the said Touro, in the year 1800.
    * The policy in question contains an agreement on [*195] the part of the assured, that all premium notes due from the assured to the office-keeper shall be paid and deducted out of any loss arising on the policy; and it is also stated in the answer of the supposed trustee, that neither Nelson nor Johnson have expressed any disagreement to the adjustment made by Touro, or made any other demand upon the underwriters.
    At the adjournment of the last March term held here in July, Dutton, for the plaintiff, contended that the balance of 294 dollars left in Touro’s hands, and by him credited to Bixby, was still liable upon this attachment against the underwriters. The policy was originally effected for Bixby and all concerned. The same evidence, on which the underwriters assented to adjust the loss, showed them that Johnson was a part owner. The broker had then no right or authority to offset a debt owing to Johnson and Nelson, in his account with Bixby. And as his having merely credited the sum to him is no payment,  the money is still liable to the suit of Johnson, and consequently to the demand of his creditor, in this process.
    
      Charming, for the defendant,
    was stopped by the Court, whose opinion was delivered at this term by
    
      
      
        Buller vs. Harrison, Cowp. 565.
    
   Sewall, J.

The interest of B. Johnson in the insurance effected by N. Bixby is to be considered as proved by the protest, or as admitted on the part of the underwriters, by the proceedings of their agent upon the receipt of it; and then the general question, whether the underwriters are chargeable, as his trustees, to the amount .of his share in the loss proved by the protest, and awarded by Mr. Jones, depends upon the effect of the adjustment, made by their broker, Mr. Touro, with Messrs. Appleton, acting for N. Bixby, and intrusted by him with the policy effected in his name.

If the discount of his premium notes, due to the office-keeper, was an effectual payment of the loss, the underwriters [ * 196 ] are discharged; or if the cancelling of the policy, * in consequence of that payment, and the charges allowed by the several underwriters in the subsequent adjustment of their accounts with their broker, are to operate as an adjustment and payment of the loss, then the underwriters were not liable to any demand of B. Johnson at the time this action was commenced.

It may admit of some question, perhaps, whether, after the notice given by the protest of the parties concerned in interest in the policy, upon which a loss was demanded, the insurance broker had any right, which he could insist upon, to a set-off or discount of his demands against the party in whose name the assurance was effected, he not being a party in interest to the policy. But even in this view of the case, the consent of the agent of N. Bixby renders him liable to his employers ; and their long, acquiescence is strong presumptive evidence of their after-consent to the adjustment made in behalf of their agent, and may be considered as operating a confirmation of it, if that was necessary for the discharge of the insurance broker. But as it respects the underwriters upon the policy, the other circumstances stated seem to render this payment completely effectual. The particular mode of payment was adopted with the consent of the agent intrusted to effect the insurance, and to obtain payment of the loss demanded upon the policy; and the instrument itself was cancelled in consequence of the adjustment If there was no collusion or intended fraud in the case, the trans action, in this view of it, is equivalent to a payment to a factor, with whom the contract has been made. Besides, in mercantile negotiations, the possession of the contract, by the confidence of the party interested, is a sufficient token of authority in the party intrusted with it; and his cancelling of the contract, upon a fair equivalent, is a discharge to the party liable upon it.

In the other view, however, of the case at bar, suggested by the answers of Mr. Boring, the discharge of the underwriters is conclusively established. By. the negotiation * be- [*197] tween the agents of the assured and Mr. Touro, the office-keeper, and the delivery of the policy to him, he became authorized to collect the loss demanded from the several underwriters ; and he collected it, and received payment of their several proportions in their accounts with him, adjusted, as it is stated, before this action was commenced. They, therefore, were no longer answerable, whether the office-keeper had, or had not, made a proper disposition of the money paid to him by the underwriters; for between them and the broker, his charges and adjustments must be construed as adequate payments.

Trustees discharged. 
      
       5 Esp Rep. 510, Matthews vs. Haydon.
      
     