Greenwich Insurance v. Oregon Improvement Co.

This action was brought to recover from the defendants a pro rata or earned portion of a policy of insurance issued by the plaintiff.

The complaint alleged that the insurance was made at the request and for the benefit and advantage of the defendants, and that the policy was continued in force until about the 12th of March, 1891,, when it was cancelled at the request of the defendants, pursuant to the terms thereof, and that the pro rata or earned premium, up to the date of the cancellation of said policy, was the sum of $1,503.76, and that the defendants promised and agreed to pay said sum.

The defendants in their answer admit the issuance of the policy, and that it was issued at the request of and for the benefit of the defendants, and that it continued in force as alleged in the complaint, when it was cancelled at the request of the defendants; they also admit the pro rata earned portion of the premium was the sum of $1,503.76, which sum defendants promised to pay; but they deny that payment had been demanded, or that they or any of them neglected or refused to pay the same or any part thereof; and deny that said sum or any part thereof was due and owing. They also deny each and every allegation contained in the complaint not expressly admitted. And they further allege that, before the commencement of this action, the defendants paid to the plaintiff the sum of $1,503.76, in full payment of said claim or demand in said complaint set forth.

Upon the trial it appeared that said plaintiff and defendants never had any transactions directly with each other, but they were all conducted through a firm of insurance brokers by the name of Satterlee, Bostwick and Martin; and that the plaintiff delivered the policies issued upon the defendants’ property to Satterlee & Co., and the defendants paid the premium upon said policies to said Satterlee & Co., who, after deducting their commission, paid over the same to the insurance company, excepting in the instance out of which this action arose. It further appeared that, shortly after the issuing of the policy in question, Satterlee & Co. made application to the defendants for the sum required to enable them to pay the premium thereon, together with the premium on another policy obtained by them for the defendants in another insurance company ; and the defendants, thereupon, on the 13th of February, 1891, furnished Satterlee & Co. with the amount required to settle said account, and took their receipt in full. Satterlee & Co. did not, however, pay the premium on the policy, and on the 20th of March, 1891, when the policy in question was cancelled, at the request of the defendants, the pro rata or earned portion of said premium due to the plaintiffs was $1,503.76, which the defendants

At this interview Satterlee promised that his firm would send a check, which was to be held for a few days. On the 5th of May the defendant’s attorneys wrote a letter to Satterlee & Co., notifying them to produce at once to the defendant, satisfactory proof of payment of such premiums to the insurance company, or forthwith to repay said moneys to the Oregon Improvement Company. On the same day Satterlee & Co. sent to the plaintiff their check on the-Chemical Bank, dated the 7th of May, to its order, for the sum of §6,410.75 ; this check covering the original premium on the policy in question before cancellation, less the broker’s commission of ten per cent., if the check was paid, to a credit in account with the plaintiff of §7,123.05. The amount thus paid was not adequate to-meet the indebtedness due the plaintiff for the earned premium on the policy mentioned in the complaint, and the full premium on the policy issued on the date of the cancellation of the policy mentioned in the complaint, but was simply the amount received by the brokers on February 13th, less their commissions. The check was receipted for on the receipt book of Satterlee & Co., by the plaintiff. Its receipt was also entered in the delivery book of the company. On the afternoon of May 5 th, the assistant secretary of the defendant called upon the'plaintiff to ascertain whether the premiums had been paid by Satterlee & Co. The president of the plaintiff showed the defendant’s agent the check, and called his. attention to the fact that it was dated the 7th, and that they should consider it payment only if it was honored by the bank. The-check was deposited in the bank on the 11th of May, and not paid. From the giving of the check until the 12th of May, Satterlee & Co. had no sufficient funds to meet the same in the bank.

On the 9th of May the plaintiff wrote to the defendants, calling their attention to the fact that they had been requested to hold from day to day the check given in payment of the premiums, and notifying them that the premiums were not paid, and that they should look to defendants for their payment. On the 11th the defendants wrote to the plaintiff, in reply, to the effect that they had paid the money to the brokers on the 13th of February; and that the plaintiff, on the 4th of May, was notified of such payment; and that on the 5th of May, they were informed by the officers of the plaintiff that they had received a check of the brokers for the amount of the premiums, less their commissions, and that, under the circumstances, they were advised that the plaintiffs could not

It was claimed upon the trial that Satterlee & Co. were the agents of the plaintiff to receive the payment of the premium from the defendants, and that, even if they were not, the plaintiff accepted the check of Satterlee & Co. as payment of the premium on the part of the defendants. These propositions were repeated in different forms, but they were decided against the defendants by the court, who refused to allow defendants to go to the jury upon any such issues, and directed a verdict in favor of the plaintiff, and from the judgment thereupon entered this appeal is taken.

It is difficult to see how, under the pleadings, it can be claimed that the payment of the 13th of February, 1891, to Satterlee & Co. was a payment to them as the agents of the plaintiff, because the answer admits the surrender of the policy in question on the 20th of March, 1891, and that the pro rata or earned premium on said policy up to the date of its cancellation, was the sum of $1, ■503.79, which they promised and agreed to pay. Now, if the had already, on the 13th of February 1891, paid the full premium on this policy, as was claimed on the-trial, how could it be possible that they could owe $1,503.76 upon such policy upon its surrender before maturity for pro rata or earned premium ? The admission in the pleadings is entirely inconsistent with any such view. But, •even if that were not so, it is apparent from the tenor of a the letter ■of May 11th by the defendants to the plaintiff, when they were notified of the condition of affairs in reference to this non-payment of the check of Satterlee & Co. that they did not consider that the payment to Satterlee & Co. of the 13th of February had can-celled any indebtedness of theirs to the plaintiff, because they say; “ On May 4th you were fully notified of such payments (referring to the payment of February 13th) and on May 5th made inquiries of Messrs. Satterlee, Bostwick and Martin, and having been informed by them that they had paid the premiums on the same date, the 5th inst., but after said statement by Satterlee, Bostwick and Martin, we sent to your office and were informed by your officers that they had received a check from Messrs. Satterlee, Bostwick and Martin for the amount of the premiums less amount of their commission. Under these circumstances, we are advised that you cannot properly look to this company for the payment of the premiums referred to, you having accepted Satterlee, Bostwick and Martin’s check, and. their obligations in payment of the original of this company therefor.”

The only question which was open to discussion, in view of the-issues raised by the pleadings, was the question whether the indebtedness had been discharged by the acceptance of the check of Satterlee & Co.

There is no evidence that there was any agreement that, this check should be taken in absolute satisfaction of the debt. The messenger of the defendants first called upon the platinti£E in regard to this matter to learn whether the premium had been paid. This action was entirely inconsistent with the idea that the payment to Satterlee & Co. had satisfied their obligation. When they learned that it had not, they brought Mr. Satterlee to the plaintiff, and he promised to give his check. But there is no evidence that, upon the giving of that check, the plaintiffs agreed to take it in full satisfaction of the debt. In fact it is difficult to see how they could have made any such agreement, because they knew of the embarrassment of Satterlee & Co. The check was to be post-dated and they were to wait for its payment. The defendants were notified of these facts and it is impossible to spell out such an agreement as would discharge them from their obligations.

The rule as laid down is that, in the absence of an agreement to take the security in absolute satisfaction of the debt, the intendment of law is that it is a conditional payment only, namely, that, if the check is paid, the debt will be discharged; otherwise not. This proposition is distinctly laid down in the case of Carroll v. Sweet, 128 N. Y. 17 ; 37 St. Rep. 868 , and cases there cited. There-is no room for inferences. The agreement must be proved. If any inferences are to be drawn from silence or want of evidence, it is in favor of conditional payment. The giving of a receipt for the money as presented by this check in Satterlee & Co.’s receipt book in no way changed the aspect of the transaction. The money was not received, and such entry was only an acknowledgment of the receipt of the check. It' discharged nothing, and in no way changed-the relation of the parties It would seem, therefore, that the defendants failed to present sufficient proof to-justify a submission to the jury on the question of payment.

There was a claim made that the plaintiffs were negligent in their attempts to collect the check in not having deposited it, and that, therefore, the defendants were discharged. But the defendants.

Upon the whole case we see no error in the conclusion arrived at by the court below, and the judgment appealed from should be affirmed, with costs.

O’Brien and Parker, JJ., concur.