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Miller v. Insurance Co. of North America

1 Abb. N. Cas. 470 Court N. Y. Supreme Court, Second Department; General Term, English

Delivered by Gilbert, J.

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p. 470
MILLER v. INSURANCE COMPANY OF NORTH AMERICA.
N. Y. Supreme Court, Second Department; General Term,
June, 1876.

Headnote

Testimony of Parties.—Usage to vary Contract.
The testimony of the plaintiff alone, though contradicted by two disinterested witnesses, is sufficient to sustain a finding of fact in his favor.[1]
In an action on a promise to pay commissions to an insurance agent, evidence of a usage or custom of the trade to pay commissions only on premiums actually collected is admissible.[2]
p. 471
Under a general denial in an action on a contract, evidence of a cus-
p. 472
■ tom or usage known to both parties is competent, by way of showing that the contract made was not that alleged.[3]
p. 473
Appeal by plaintiffs from the report of a referee, and a judgment dismissing the complaint.
The action was brought by Robert Miller and William Scott, to recover $39.81 gold, which the plaintiffs claimed to b.e due from defendant, as commissions on the amount of premiums charged on five policies of marine insurance, issued by defendant. Gatlin & Satherwait were defendant’s agents in New York city.
The answer was a general denial of all except specified allegations. The case was referred, and the referee found as matters of fact that the defendant had agreed to allow the plaintiffs a commission of five per cent, in gold, on all premiums of insurance effected through their agency ; that there is a custom by which marine insurance brokers are not entitled to their commissions until the premiums, upon which they are chargeable, are paid to the insurer; and that the plaintiffs effected the insurances upon the premiums, of which they claimed commissions, but that the pre
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miums had not been paid to the defendant. Wherefore he found, as conclusions of law, that the plaintiffs, by reason of said custom, were not entitled to the commissions.
At plaintiffs’ request, he also found as a fact, that it was not their duty to collect the premiums or deliver the policies, but that the premiums were due and payable by the plaintiffs to the defendant directly, and that the policies were delivered to the plaintiffs.
He refused to find that they were delivered to them directly by the defendant, after the negotiation of the same by the defendant.
The report was confirmed, and judgment entered in accordance therewith.
The plaintiff appealed therefrom.
Other facts are sufficiently stated in the opinion.
Adolphus D. Pape (T. M. Morgan, attorney), for the appellant.
I. Evidence of the custom, being new matter, should have been specially pleaded (Code, § 149 ; Smith v. Holmes, 19 N. Y. 271 ; McKyring v. Bull, 16 Id. 297 ; Travis v. Barger, 24 Barb. 614 ; Beaty v. Swarthout, 32 Id. 293 ; 1 Broom's Com. 67, 68; Taylor n. Richards, 9 Bosw. 679 ; Carter v. Koezley, 14 Abb. Pr. 147 ).
II. It was incompetent (Stebbins v. Brown, 65 Barb. 274 ; Beals v. Terry, 2 Band/. 127; Main v. Eagle, 1 E. D. Smith, 619 ; Stillman v. Mitchell, 2 Robt. 523 ; Lyon v. Mitchell, 36 N. Y. 235 ; Van Lien v. Burns, 1 Hilt. 133 ; Holly v. Gosling, 3 E. D. Smith, 262 ; Glentworth v. Luther, 21 Barb. 145 ; Barnard v. Mon-not, 33 How. Pr. 440 ; Smith v. Smith, 1 Sween. 552; Doty v. Miller, 43 Barb. 529 ; Knapp v. Wallace, 41 N. Y. 477 ; Corning v. Calvert, 2 Hill. 56 ).
III. The evidence of one witness, and he an interested party, is insufficient to establish the fact of a general usage (Higgins v. Moore, 34 N. Y. 417 ; Bissel v. Campbell, 54 Id. 353 ; Minnesota Centr. R. R. v.
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Morgan, 52 Barb. 217 ; affi’d, 6 Albany L. J. 173 ; Wood v. Hickok, 2 Wend. 501 ).
IY. Evidence of general usage insufficient to charge a party, if unknown to him (Southwestern Freight Co. v. Stanurd, 44 Mb. 71; Walsh v. Mississippi Co., 52 Id. 434 ; Sipperly v. Stewart, 50 Barb. 62 ; Duguid v. Edwards, Id. 288 ; Boardman v. Gaillard, 1 Hun, 217 ; Smith v. Tyler, 2 Sup’m. Ct. (T. & C.) 669).
N. A. Prentiss, for respondent.
I. Plaintiffs’ exception to admission or exclusion of testimony was not well' taken (Fountain v. Pettee, 38 N. Y. 186 ; Leffler v. Field, 33 How. Pr. 391 ).
II. The broker, in negotiating policies, is the agent and broker of the assured, and not of the insurer (2 Pars. Marit. L. 465-6 ; Mellen v. Hamilton Fire Ins. Co., 17 N. Y. 609 -10, 616, 617).

The finding of the referee, that there was an agreement to pay the commissions, rests upon the testimony of the plaintiff Miller. He stated that the conversation out of which the agreement arose, was had with one or the other of the defendant’s agents, who were Mr. Gatlin and Mr. Satterwaith. These agents were called as witnesses for the defense. Satterwaith denied having made the agreement with Miller, and Catlin denied any agreement to pay commissions before the premiums were paid. Upon this evidence, the referee was justified in finding that the agreement as stated by Miller was made, namely, to pay a commission on all policies effected through the agency of the plaintiffs.

That agreement designated no time for the payment of the commissions. Parol evidence for the purpose of supplying this omission was therefore admissible. The defendants proved by Satterwaith, a custom among marine insurance brokers, that the commission is not due until the premium is paid, and by the plaintiff Scott, that the custom was to collect commissions

p. 476
after the premiums were paid. Evidence of a custom of that kind is admissible. It is not repugnant to, or inconsistent with, the contract, nor does it add any new terms thereto, but is merely explanatory thereof. Where there is an established custom relating to the subject-matter of a contract, which is known to both the -parties to it, it may well be presumed that they made the contract with reference to such custom, and we think the evidence in this case warranted that presumption (1 Greenl. Ev. § 294).

The contract itself was informal. One of the plaintiffs asked what commissions the defendant allowed. The answer was five per cent. No other particulars were mentioned. The inquiry relates to a course of business, and the answer ought to be taken with all the qualifications attending the same.

We think, also, that evidence of the custom was admissible under the general denial contained in the answer. When proved, it became one of the constituents of the contract, and the statement thereof in the complaint, therefore, varied from the one actually made. The provision of the Code (§ 149), which requires new matter to be specially pleaded, applies only to matters of defense arising after the contract was made (Boomer v. Koon, 6 Hun, 645 -649).

The judgment should be affirmed.

Judgment affirmed..

Barnard, J., and Dykman, J., present.

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