Pratt v. Union Mutual Insurance — 22 N.Y. Super. Ct. 97

Majority

p. 97

Charles Pratt et al., Plaintiffs and Respondents, v. The Union Mutual Insurance Company, Defendants and Appellants.

Headnote

The defendants, an insurance company, issued to D. & Co., their agents, a marine policy, to cover only property, to be indorsed by D. & Co„ losses .payable to the parties named in certificates to be granted by D. & Co., and the aggregate amount to be thus insured was limited is §250,000. Subse■-quently the defendants, by a certificate, increased the amount which the •agents might certify, as insured, by the further sum of $250,000. At a ■later date they issued to the agents a second policy, similar to the former.

Hdd, that a certificate -of insurance, issued to the plaintiffs, by the agents, under the second policy, and in terms referring to it, and entered upon it, was not invalidated by the fact that prior insurances, purporting to be made ■under the first policy and its renewal, exceeded in the aggregate the whole sum which the agents had been authorized by both policies tonnsure.

(Before Woodruff, Moncrief and Robertson, J. J.)

Submitted October 17th, 1861;

decided December 28th, 1861.

Appeal from a judgment in favor of the plaintiffs, ■.entered upon the decision of Chief Justice Bosworth, .after a trial before him, without a Jury, in October, 1859.

This action was brought by Charles Pratt and William A. McKenzie, to recover $18,571, for a loss upon a contract of insurance, alleged to have been made by the ■defendants, through their agents, J. Day & Go., at Apalachicola, Florida.

The nature of the agents’ authority, and the mode- of ■transacting the business, are fully stated in the report of the case of Hartshorne against the same defendants, 5 Bosw. 538 .) *

Among other facts, the Chief Justice found that the agents, J. Day & Co., shortly after receiving the second policy, (Eo. 993,) issued a certificate to the plaintiffs, which, ’by its terms, was stated to be “ entered this day on policy Eo. 993that the aggregate amount of risks entered upon Day & Co.’s register of risks, arising upon definite insur-ances effected prior to the date of the certificate to the plaintiffs, and of risks arising within the description of gen

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eral certificates, which were prior in date to the certificate to the plaintiffs, was $760,093; one of which prior certificates was issued by Day & Co. to themselves, for over $49,000. And he held that there was no such oneness in the authority conferred by policy No. 784 on J. Day & Co., and in that conferred on them by policy No. 993, that J. Day & Co. could claim, by virtue of the certificate issued to themselves under policy No. 784, to be insured under policy No. 993 in preference to, or to the exclusion of these plaintiffs, to whom a certificate was issued under policy No. 993 on 31st of December, 1853. So that, even if it must be held that J. Day & Co. could not bind the defendants, so as to make them liable for an aggregate of risks exceeding $750,000 these plaintiffs were insured, as to the property in question, and were entitled to judgment.

From the judgment entered accordingly, the defendants appealed to the Court at General Term.

William M. Evarts for defendants, (appellants.)

I. By the decision of this Court in Hartshorne’s case, holders of general certificates are protected in respect of risks within their description, as from the date of the certificate, and on this principal defendants are entitled to judgment in this case.

II. The whole aggregrate of insurance possible, under the authority of the defendants, was $750,000. Prior to the risks on which plaintiffs’ loss accrued, there was an aggregate of insurance of $760,093. Under the principles, then, established in Hartshorne’s case, the aggregate of insurance was exceeded, before the plaintiffs’ risks, in question, had their inception.

III. To overcome this result, the Court is required to establish certain additional principles which have received the assent of the learned Judge at Special Term.

1. Certain risks taken and entered under a “ general certificate” to J. Day & Co., prior in date to the “ general certificate” to the plaintiffs, it is said, should be excluded from the computation.

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2. That the plaintiffs are entitled to apply their certificate to the last policy of $250,000, to the exclusion of all risks arising under certificates of an earlier date than such last policy, as well as of all definite risks arising subsequently to the date of the plaintiffs’ certificate.

IV. As to the first claim; the whole ground is, that J. Day & Co., holders of these policies, for the purpose of' insuring risks in the cotton trade of Apalachicola, could not insure owners of cotton who made them their consignees. This proposition would not be listened to for a moment, in an action by one of these assured against the Company. If not maintainable in such an action, it is not in this action.

V. As to the second claim; the whole course of the correspondence between the Insurance Company and J. Day & Co., as well as the whole dealing of the latter in their conduct of the business, requires the treatment of policy 993, and the insurance under it, as a continuance or enlargement of the previous faculty of insurance, granted in the- original policy 784, and its specific renewal.

Charles O' Conor, for the plaintiffs, (respondents.)

I. A general insurance certificate, issued by the agents of the insurers to themselves, and intended to cover the risks of their consignors and themselves as consignees, cannot stand as a valid insurance having priority to the plaintiffs. An agent cannot make a contract between two principals, he acting for both. (N. Y. Central Ins. Co. v. Nat. Protection Ins. Co., 4 Kern., 85.)

II. Plaintiffs’’ certificate expressly relates to policy No. 993, and cannot be mixed up with insurances under policy No. 784-.

This appeal was submitted without argument. The printed case being delivered to the Court, the counsel for the appellants suggested that it was possible no questions arose in the present action except such as were discussed and passed upon in

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the' case of Hartshorne v. The Union Mutual Insurance Company, (reported in 5 Bosw., 538 ,) and in that event neither argument or points would be presented, assuming that the present General Term would adopt or not dissent from the views there expressed.

The counsel for the respective parties subsequently (in December, 1861) submitted printed points.

Two policies were issued by the defendants and delivered to their agents, J.Day & Co.; one numbered 784, on or about the day of its date, the 27th October, 1852; the other numbered 993, on or about the day of its date, October 28th, 1853.

J. Day & Co., on the 15th Kovember, 1852, issued to themselves a certificate “ to cover all cottons shipped per good steamboats, * * * consigned to them by certain named consignors.”

The case of N. Y. Central Ins. Co. v. National Protection Ins. Co., (4 Kern., 85,) is decisive to the point that an agent cannot make a contract between his principal and himself. If the decision in the case be held to wholly invalidate the certificate issued to J. Day & Co. by themselves, so that subsequent certificate holders can avail themselves of its voidable character, then the amounts entered under that certificate must be excluded from the aggregate of insurances, and this, as conceded by the counsel for the appellants, will entitle the respondents to judgment. So if, for any reason, the acts of J. Day & Co. are held binding on the defendants, (irrespective of the amounts which had been placed at risk under either policy,) in favor of parties effecting insurance in good faith and without notice that such insurances and the amounts shipped under the same exceeded the nominal amount of the said policies, then the defendants are entitled to judgment.

We, however, concur with the view taken at Special Term, that the plaintiffs here have a right to treat their certificate of insurance as binding the defendants, irrespective of the amount of insurance effected with, or certi

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ficates issued by, J. Day & Co., prior to the issuing of the policy Ho. 993, dated October 28,1853, and which is found to have reached Apalachicola Hov. 20,1853. The certificate issued to the plaintiffs, was in very terms issued under and by virtue of policy Ho. 993, and was entered upon it and made binding Dec. 31, 1853. It neither accords with justice, nor, as we think, a sound construction of the contracts made by J. Day & Co., to permit certificates issued under and indorsed upon the prior policy, Ho. 784, to effect the rights of the plaintiffs.

Whether as between the defendants and any parties holding certificates indorsed upon policy Ho. 784, the recognition of which would make the insurance under that policy, and its renewal exceed the nominal amounts thereof, the defendants are bound by those certificates or not, the plaintiffs had a right to rely upon policy Ho. 993, as a valid policy from its date, and as one which would cover risks thereafter to be taken under it and indorsed upon it. To the plaintiffs, policy Ho. 993 spoke from its date, and according to its terms, and bound the defendants accordingly.

The judgment of the Special Term must, therefore, be affirmed.

Cases cited

Hartshorne v. Union Mutual Insurance 5 Bosw. 538 N.Y. Super. Ct. 1859-12-31 p. 97