Atlantic Mut. Fire Ins. v. Goodall

29 N.H. 182 | Superior Court of New Hampshire | 1854

Gilchrist, C. J.

This is an action of assumpsit upon a promissory note, for the sum of $180, for value received in policy No. 564, dated January 22, 1849, by which the defendant promises to pay the company this sum, “ in such portions and at such time or times as the directors of said company may, agreeably to their act of incorporation and by-laws,, require,”

An assessment of $18 was made upon this note on the 4th of February, 1850, of which the defendant was notified ; but he refused to pay it, upon the ground that there was no valid and subsisting contract between him and the company.

At the trial, it appeared that the first policy issued in class No. 4 of the company (to which this policy belonged) was No. 50, and that no policy had been issued in that class bearing a lower number, and the defendant contended that the false numbering was a fraud upon him and avoided ■the contract. The defendant’s argument is that this numbering induced him to suppose that there were forty-nine ■more persons than there actually were, who would share all ■losses with him, and that if there were not that number of persons -who had become insured, it would be holding out false colors to him. This consideration, however, appears to us to be altogether too remote to be regarded as evidence of fraud. His application was numbered 564. The numbering may have been entirely arbitrary; and, for some reason best known to the company, and which we have no right to regard as indicating a fraudulent purpose, they chose to call their first policy No. 50. We do not consider this a sufficient reason for setting aside the verdict.

The important question in the case arises upon the evidence relating to the existence of two policies in different companies ; and the defendant considers the question to be settled in his favor, by reason of the sixteenth section of the charter. This provides that if there shall be an insurance in this company, and also in any other company, the insurance in this company shall .be void, unless such double insurance subsist with the consent of the directors, signified by indorsement on the back of the policy, signed by the president and secretary. Much stress is laid upon this section, and it is argued that inasmuch as such indorsement was not made, no action can be maintained on the note. It is very clear that if the only question in the case be whether an indorsement be necessary in general, our decision must be for the defendant. But it is a matter deserving serious inquiry, whether the case can be determined by the provisions of the sixteenth section alone.

There is no doubt that a policy of insurance may be made out complete, in all its forms, and upon its face taking effect from the date therein mentioned, but with an understanding that it should not become operative and binding upon either party until the happening of some certain event. For instance, a policy might be executed in proper form and delivered to the insured, together with the form of a note, to be executed by him and a surety. If, however, it should be proved that the policy was delivered with the agreement that it should not take effect until the execution and delivery of the note, the company would not be liable, if a loss should happen before that time. If we reverse the position of the parties, and suppose a case where a note is delivered to the company, with the agreement that the maker should not be holden until the policy should be delivered to him, he would not be liable for assessments upon the note until he should receive the policy. These considerations are adverted to because they have a bearing upon the case before us.

It is not necessary, in this case, to define the powers of the agent of an insurance company, and ascertain how far he may bind his principal, and we do not propose to go any further than to ascertain what was the contract between the defendant and the agent of the company. When the defendant informed the agent that he was already insured in the New Hampshire Mutual Insurance Company, and that he did not wish to be without an insurance, the agent answered “ that it was the custom of the plaintiffs for the applicant to keep his old policy until the new one was received, and the defendant might do so, and he would “fix it so that it would be all right and safe for him.” This tends to sho\v not a contract precisely, but the understanding of the parties that the new policy was not to take effect from its date, but only from the time of its reception by the defendant.

The letters which passed between the parties tend very strongly to show, not that the present policy was void on account of the double insurance, but that it was not to take effect till the other policy was surrendered. In Mr. Goodall’s letter of March 5th, he wrote the company that he told their agent that he was insured in the New Hampshire Mutual; that he wished to surrender his policies there, and take out a policy with the plaintiffs ; that the agent took the applications, and agreed to inform the plaintiffs and have it made all right. He then adds, “ and he told me I might surrender them after I got yours.” He then alludes to the sixteenth section, and desires to have an indorsement made on the back of the policy. In answer to this, Mr. Folsom, the secretary, in his letter of March 7th, says that Mr. Goodall misapprehends the import of the sixteenth section. He says, “ if you wish the insurance to remain in the New Hampshire Mutual Insurance Company, notwithstanding your insurance in our company, then it would be proper for the indorsement to be made agreeably to the charter. But if you have no insurance in the New Hampshire Insurance Company, there is not the least necessity for the indorse» ment. I presume you have surrendered your policies. If that is the case, you may rest assured that your policies, Nos. 1022, 562 and 564, are good as they are, and that no indorsement is necessary.”

This tends to show the understanding of the parties that, upon the surrender of the policy in the New Hampshire Mutual, the present policy would become effective.

Mr. Folsom also says, in his letter to Mr. Goodall of May 15th, “ I understood by Mr. Gale, our agent, and by your letter of the 5th of March, 1849, that your policies were to be given up in the New Hampshire Mutual, when you received policies from our office. If such is the fact, why should you wish an indorsement, permitting double insurance to subsist where none did subsist, as you would be discharged from the New Hampshire Mutual, when your insurance took effect in our company.” He also states that they had received applications for insurance, “ to b e discharged from other offices when they took effect in ours,” and says, “ you can go into any other office and hold on t o our policies until you receive policies from another office, and then request your policies in our office, to be discharged at the time when they take effect elsewhere.”

This letter also seems to proceed upon the understanding before mentioned.

In Mr. Goodall’s letter to Mr. Dearborn, the treasurer, dated on the 17th of December, he says, “ I have written you before that Gale, as your agent, came, and ,1 told him the property was insured in the New Hampshire and in the New England Mutual Insurance Companies, and was to 1«C by him to keep those on until I received your policies^"; j he would see it was all made right with you. After I got your policies I found they were void, by the sixteenth section of your charter, unless you signed your consent on the back of your policy to the former ones subsisting, &c. I then retained them to be surrendered, unless you would make them good by signing your consent. This you refused.” It is evident from his letter, that Mr. Goodall supposed that his rights were to be determined by the sixteenth section of the charter, and that the agreement between himself and Mr. Gale was of no effect. Mr. Dear-born, in his letter of December 19th, says that the sixteenth section was designed to apply to cases where insurances were to subsist in his own and also in some other company, and was not intended to apply to any case where no insurance was to be effected except by his company. He also writes as follows: •' I have examined the former correspondence between yourself and the secretary of this company, and I find that when you made application to be insured at this office, you had insurance on the same property in the Concord companies, and that it was your intention at the time to give up your policies in the Concord offices when our policies should take effect in this office. This was the understanding that Mr. Gale, the individual who made out your application, had relative to this subject; and the secretary and directors of this office supposed when they issued your policies, that the policies covering the same property which you held from the Concord companies, were to be discharged, and that only one insurance was to subsist on your property, and that in this office. This being the fact, section sixteenth of our charter did not invalidate your policies, nor was any action on the part of the officers of this company necessary for your security.”

The case finds that the defendant surrendered his policy the New Hampshire Mutual, on the 1st of February, 9, after receiving the policy now in dispute. This ac-brought to recover an assessment.of $18 upon the note made on the 4th of February, 1850. It appears, then, that not only was it stated and understood, by both parties, that upon the receipt of the present policy, the policy in the New Hampshire Mutual was to be surrendered, but that the defendant carried that agreement into effect. No question, therefore, arises under the sixteenth section of the charter. The evidence tends clearly to show that neither party ever contemplated a double insurance. The plaintiffs did not, for they so stated explicitly. The defendant did not, and he was satisfied with the matter as it was, until his attention was turned to the sixteenth section, and then he feared that that section was so imperative in its terms as to control the agreement made between himself and Mr. Gale, the agent. If an action had been brought against the company to recover for a loss happening after the defendant received the policy, it is very clear that upon this evidence they could not have set up the defence of a double insurance. It is the ordinary case of an instrument, complete in its form, but by the agreement of the parties not to take effect until a certain event happens. The parties do not differ in their understanding of the agreement between Gale and the defendant, and all the evidence goes to prove it.

The only question for the court now is, whether we should render judgment upon the verdict, upon the ground that the policy was valid, because of the agreement between the parties, or whether we shall set it aside for the purpose of enabling the parties to lay the evidence of the agreement before the jury. In the latter case, the question for the jury will be whether it was the understanding that the present policy was not to take effect until the surrender of the policy in the New Hampshire Mutual. The defendant can, if he desire, have an opportunity to apply to the judge who tried the cause for an amendment of the case; or if he has misapprehended the true question at issue, he may, upon proper evidence, move that this case be discharged. But as the matter now stands, there must be

Judgment on the verdict.