Fish v. . Cottenet

| NY | May 6, 1871

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The point is made by the appellant, that the contract of October 24th was void for want of consideration, there being no agreement then made by the plaintiff to pay the premium. The argument goes to this length, that, if Mr. Fish had received a policy covering his interest as mortgagee, and four days thereafter, having become owner of the property, had applied for a change thereof, expressing that his interest was that of owner, and the defendant had made an indorsement to that effect, stipulating that the indemnity should continue, no recovery could be had thereon in the event of a loss. A consideration is equally necessary in a written contract and in a parol contract. The change in both cases is the same. The property insured and the premium to be received are the same. The character of the ownership only is affected. I apprehend that, in such case, no new consideration is needed. No repetition of the terms of the original agreement is required. They all remain in force, except so far as specifically changed, and furnish aliment to the new arrangement. The doctrine that the terms of a contract may be legally altered by mutual consent, and without a new consideration, is well settled. (Blanchard v. Trim, 38 N YR., 225.)

Assuming, for this purpose, that a parol insurance is valid, the appellant insists that the court will not enforce its execution, under the circumstances in this case. The defendant's agent at Buffalo had cancelled a previous policy on the same property, which, it is said, was known to the plaintiff. If such was the case, and the plaintiff had such knowledge, he also knew that it was so cancelled, not from any objection to the property, but to the parties insured. Boyle and Smith had got into a controversy about the property, and one of them attempted to fire the brewery. The referee expressly finds that the cancelling of the policy was from this cause alone. There was nothing in this important to be told to Wilbur, the agent, or that should excite suspicion in the mind of the plaintiff, or justify him in a direct application to the company for his policy. The plaintiff did, from time to time, call upon Wilbur for his policy; who told him not to be uneasy, that it would soon arrive, and that he was safe in any event.

It is said, again, that the agent had no power to bind the company for risks of this character, for a longer time than was necessary to transmit the application to Albany and to receive a reply.

This argument is not sound. By his first instructions, the agent was authorized "to bind the company during the correspondence." This means during the negotiations, until the company decide whether they will or will not take the risk, and inform the appellant of their decision. Delays of agents, negligence in the home office, irregularity in the mail, are all included in this time. Mr. Wilbur was authorized to receive the application, and to bind the company until they announced that they declined the risk. A few days, or a few weeks, ought to give time enough for this. The applicant, however, cannot hasten the action of the company. He can only wait, and if in good faith, he may wait, as in this case, from October until January.

By his instructions of 1864, the agent was authorized to insure $5,000 in one risk on specially hazardous property. The brewery was of that character, and the agent did not exceed the amount authorized to be taken. These instructions modify those of 1862, and give the agent authority to take risks of a character specially hazardous.

The appellant also insists that the recovery is erroneous, because the agreement was not in writing and signed by the parties or their agents. There was doubt at one time on this point. It is, however, no longer doubtful in this State, that a good agreement for insurance may be made by parol. (TrusteesBaptist Church v. Brooklyn, 19 N.Y.R., 305; Audubon v.Excelsior Ins. Co., 27 id., 216.) But one further objection is now urged, to wit: that the contract is void for want of a stamp.

Contracts of this character, when put in writing, certainly require a stamp. If the defendant had performed its agreement and issued a policy, the government would have received the aid to its revenue, which is so much required. It is not the making of the agreement that defrauds the revenue, but its breach by the defendant. Agreements, when in writing, must be stamped. A stamp upon an oral agreement is an impossibility. The passing words cannot be caught and subjected to a material process. A stamp, indeed, might be purchased and cancelled, whenever parties shall make an oral contract. If congress shall so enact, the work can probably be performed. They have as yet enacted only that agreements in writing and instruments shall be thus dealt with.

The judgment should be affirmed.

All concur. Judgment affirmed with costs.