Sun Mutual Insurance v. Davis — 24 N.Y. Super. Ct. 602

Majority

p. 602

The Sun Mutual Insurance Company, plaintiffs and appellants, vs. Joseph D. Davis and others, defendants and respondents.

Headnote

A. and B. being jointly interested in the shipment and sale of merchandise, agreed that as part of such joint enterprise, A. should procure-insurance on such merchandise for the benefit of both, and at their joint expense. A. sub- ' sequently procured such insurance on such merchandise from the plaintiff, by a policy insuring him, loss payable to “whom it might concern,” and agreed that the parties for whom such insurance was effected should pay the premiums of insurance agreed upon therefor.

Held that in such case the policy was obtained in pursuance of the original, agreement with, and authority from, B. That A. had authority to bind B. for the payment of the premiums and did so. That the terms of the policy did not vary the liability of B., against whom jointly with A. the plaintiffs were entitled to recover the premiums due.

(Before Robertson, Ch. J., Garvin and McCunn, JJ.)

Heard-, 1864;

Decided June 7, 1864.

p. 603

This was an appeal from an order sustaining a demurrer to the plaintiff's complaint, made by Justice Baebour, on the 21st day of December, 1866.

The complaint alleged that two firms, William Grove & Oo., of New York, and Davis & Toscano, of Cuba, entered into a partnership to buy and ship sugars from Cuba to New York; that it" was agreed between all the partners, that “ Grove & Co./' the members of the firm in New York, were to insure the goods so shipped at the joint and equal expense of both firms, out of the proceeds of the shipments. That on being advised of the shipments, “ Wm. Grove & Co.” applied to the plaintiffs to insure the goods for the joint and equal account and interest of all the defendants. And that, in consideration of the premiums agreed to be paid by the new copartnership, the plaintiffs did, in an open policy, for whom it may concern, and upon which, by its terms, shipments of the said description were applicable, and which policy had been effected by and in the name of Wm. Grove & Co. some time previous, allow the risks to be entered-; that the defendants paid, on account of said premiums, $444.24, and that there remained a balance due and-owing for which they asked judgment.

J. F. Choate, for the plaintiffs, appellants.

W. H. Anthon, for the defendants Davis & Toscano, respondents.

I. The defendants, Davis & Toscano, are not liable as beneficially interested, there being no privity of contract between the insurance company and any party, except William Grove & Co. The policy being in the usual form, insuring them in consideration of premiums paid, loss payable “to whom it might concern.”

1. The terms of the policy as set forth in the complaint, are plain and unambiguous. William Grove & Co., and they alone, are the parties to whom the plaintiff is to look for the pre

p. 604

mums,'and no parol evidence can now be adduced to change the nature and effect of that contract.

2. The contract was with William Grove &'Có., and any credit for the premiums was given to them. The remedy of the insurer is confined to the party to whom the credit is given. (See 2 Duer on Insurance, 301, and English cases cited.) ' .

3. These views are particularly pertinent to an open running policy, like that mentioned in the complaint, intended, doubtless, to cover the general business of the insured, in regard to which the company must .look for their, premium expressly to the; firm with whom the contract is made.'

II. They are not liable as partners of William Grove & Co. in this particular adventure.

1. The policy does not treat the two firms as partners. It is made with “ William Grove & Co." alone. “ Where any contract is made by: one partner upon his own exclusive credit, he alone is liable, therefor, and the partnership, although the money, property, or other contract is for their own proper use and benefit, and is applied thereto, will in nó manner be liable therefor.”. (Story on Partnership, 212.)

2. Notwithstanding their copartnership, either of the copartners may contract, on his own account and make himself alone liable for merchandise, although bought for copartnership account, if the vendor chooses to accept him. ■ " (Opinion of Parker, J., Sylvester v. Smith, 9 Mass. R. 121 .) .

3. The only exception to this rule is the case of dormant partners ; because, in general, it may be claimed that a man can not be- said to agree 'to look exclusively to one person, when he is not aware that there is another interested. This reason, however, will not apply to the present case, because the form of .the policy in favor “ of whom it may concern ” is ¡ in fact a recognition and allowance of assignees, dormant partners, or any one else who can prove an interest.

•• 4. The:plain meaning, therefore, of this policy is, that the plaintiffs' look to “William Grove.& Co.” alone for the pay

p. 605

ment of the premiums, with full knowledge that others are interested, being willing that all the world should claim the -benefits of the insurance, provided they proved interest.

III. Davis and Toscano not being liable either as persons interested or as partners, the demurrer should be sustained.

In discussing the merits of this demurrer, we are not warranted in looking at the facts in any other light than as the complaint presents them, because the interposition of a demurrer admits the truth of all the allegations contained in the complaint, and the only question to be determined is, whether a judgment entered upon these facts would be good and valid in law. I am clearly of opinion they would warrant the entry of a judgment thereon, in favor of the plaintiffs.

The policy declared on' is an open policy, and is in the ordinary form, and contains the usual clause, for whom it may concern, and it had been effected by William Grove & Go., before the partnership between them and Davis & Toscano was formed, yet the company had a right to select their risks thereunder, and as they thought proper to assume these risks in consideration of the premiums agreed to be paid by the defendants, they are clearly entitled to recover.. It is true the policy was effected in the name of William Grove & Go., but no presumption of law arising on the face of the policy can presume away an express promise made afterwards, by other parties, for a full consideration. Moreover, one half of the sugars entered under the risks were the goods of Davis & Toscano, and under this form of policy they had a right to enter these shipments as risks, and consequently they had an interest in, and were entitled to, the benefits of the policy, and by virtue of mutuality of contract they became liable to the insurers. (3 Kent’s Com. 344, 9th ed. 2 Caines' Rep. 203 .) * •

And for all that appears in the complaint, the policy may have been effected by Wm. Grove & Go., in their own name, to cover these very risks ; at any rate, the complaint alleges •

p. 606

that all the parties agreed to pay, or be responsible for the premiums at the time the risks were entered, and it was for this consideration the risks were assumed by the company.

It may be remarked here, that the facts set out in the points offered to sustain this demurrer can be conveniently set up in the form of an answer. ■

The order must be reversed; the defendants to be permitted to. withdraw their demurrer- and answer within twenty days, upon payment of costs.