DEPARTMENT OF FISA_\'CE--I)\.SURA SCE BRANCH.

under the terms of his agreement with the defendants of the 2nd August, 189222, entitled to, as his commission for obtaining the risks. The applications were forwarded in due course by the general agent to the head office of the defendants at Montreal, and were considered and accepted on the 4th of December, 1894, and on the following day interim acceptance receipts, on the defendants' usual form were forwarded to White, accompanied by a letter of the same date (Exhibit 9) in which he was in-formed that his account had been debited with the amount of them and of another receipt relating to another insurance which was sent to him at the same time. By the terms of the agreement between the defendants (Exhibit 6) and White, he was not " under any circumstance " to collect or receive payment of any premium without giving the head office receipt or policy therefor," and it was provided, that all premiums should be paid in cash or notes approved by the defendants, and that the agent should not receive payment for premiums or renewals thereof in any other manner. White was furnished by the defendants with forms of receipts, which from their terms would appear to have been intended to be given to applicants for insurance who desired to pay their first premium by note, or partly by note and partly in cash.

The following is one of these forms put in at the trial (Exhibit 17) :

No. 4420. (In duplicate.) Note payable    

London and Lancashire Life Assurance Company. Agents interim receipt.

Received from    Es,1., of    his promissory

note for    dollars (on which the sum of    dollars

has been credited) being for the    premium for an assurance of    on the

life of    provided the application be accepted by the company,
and if accepted, I agree to deliver the official acceptance receipt from the head office of the company

in _Montreal; or should the said application be declined, I undertake to return to    
Esq., or to ins order, the said promissory note. It is hereby understood and agreed that if the note be not paid at maturity, the policy or official receipt shall be null and void, but nevertheless the note shall he paid in full.

Agent. Date    

Place, Toronto.

White had given to Fleming two receipts, dated 19th November, 1894, for promissory notes for the amounts of the premiums payable by the latter ; the receipts were upon the form I have just referred to, except that all the words in it commencing with the words : It is hereby understood " down to the end of the receipt were stricken out, and the words " within fifteen days " interlined. One of these promissory notes made by Fleming, the insured, was dated the 19th November, 1894, and was payable to the order of White six months after date, and the other made by Robert Fleming, a brother of the insured, was dated the 10th December, 1894, and was payable in like manner, three months after date. White did not communicate to the defendants the fact that he had taken these promissory notes, or inform them how he had arranged with Fleming for payment of the premiums, but on the 31st December, 1894, he telegraphed the defendants as follows : "Mailedl my note one thirty-five 16 for premiums Fleming, McGlade, Thomson," and on the same day he wrote the defendants as follows : " I omitted to inclose settlement of new premiums, hence 1 wired you to-day as follows : ' Mailed my note 8135.16 for premiums Fleming, McGlade, Thomson' which I inclose herein." The amount mentioned in the telegram and letter was made up of the premiums on the two insurances in question and those of McGlade and Thomson after deducting the agent's commission of 55 per cent. On the 3rd January, 1895, the manager at the head office wrote to White, acknowledging the receipt of his letter of the 31st December in these terms : " I an- in receipt of your letter of 31st ult., enclosing note at three months for 8135.16, which we will hold as requested." According to the evidence of the manager, the policies in question were included in the defendants' return to the insurance department, and it rust therefore have represented the promissory cote of White as an asset of the defendants. and the policies as " outstanding policies in force." At this time, according also to the evidence of the manager, he assumed that White had received the premiums in cash. It did not appear in evidence when the interim acceptance receipts were handed by White to Fleming, but they were produced by the plaintiff, and are countersigned by White--his countersigning being, according to a note at the foot of the receipts, necessary to their validity. White, after receiving the promissory notes, but at what time was not disclosed in evidence, discounted them with Burke & Graham, a firm of private bankers in Toronto, receiving the amounts of them, less the discount. and endorsing them to Burke & Graham. It is important at this point to note that at the date when White forwarded Ins own promissory note to the defendants, he had possessed himself, by means of the discount, of Fleming's promisory notes, and had in hand far more money than would have been sufficient to pay to the defendants that part of the premiums to which they were entitled. On the 32nd January, 1895, White wrote the defendants asking them to forward, among others, the policies in question. and they were accordingly forwarded to him on the following day, with a letter which informed him that he had been debited with the premiums in respect of them. .The promissory note of the 10th December, 1894. was renewed in full on the 31st March, 1895, by a new promissory note at two months, and on the 5th June, 1895, the other promissory note of the 19th November was re-