Greenwich Insurance v. Oregon Improvement Co.

| N.Y. Sup. Ct. | Feb 16, 1894

VAN BRUNT, P. J.

This action was brought to recover from the defendants a pro rata or earned portion of a premium on 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 20th of March, 1891, when it was canceled 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 canceled at the request of the defendants. They also admit that the pro rata or earned portion of the premium was the sum of $1,503.76, which sum defendants promised and agreed 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 Saterlee, Bostwick & Martin, and that the plaintiff delivered the policies issued upon the defendants’ property to Saterlee & Co., and the defendants paid the premium upon said policies to said Saterlee & Co., who, after deducting their commissions, 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, Saterlee & Co. made application to the defendants for the sum required to enable them to pay the premiums thereon, together with the premium upon another policy obtained by them for the defendants in another insurance company; and the defendants thereupon, on the 13th of February, 1891, furnished Saterlee & Co. with the amount required to settle said account, and took their receipt in full. Saterlee & Co. did not, however, pay the premium on the policy, and on the 20th of March, 1891, when the policy in question was canceled at the request of the defendants, the pro rata or earned portion of said premium due to the plaintiff was $1,503.76, which the defendants promised and agreed to pay, as admitted in their answer. On the 28th of March, 1891, the plaintiff sent Saterlee & Co. a notice for the payment of this premium, and also that of another policy issued upon the 20th of March, 1891, but the same was not paid. On the 4th of May the treasurer of the defendant the Oregon Improvement Company went to see the president of the plaintiff, who informed him that the premium on the plaintiff’s policy had not been paid. The treasurer returned to the plaintiff’s office with Saterlee, in whose presence the president of the plaintiff again stated that the premium had not been paid, whereupon the treasurer stated that the defendants had paid it, on the 13th of February, to Saterlee & Co. At this interview Saterlee promised that his firm would send a check, which was to be held for a few days. On the 5th of May the defendants’ attorneys wrote a letter to Saterlee & Co., notifying them to produce at once, to the defendants, 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 Saterlee & Co. sent their check to the plaintiff 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 10 per cent., and entitling the defendant, 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 Saterlee & Co. by the plaintiff. Its receipt was also entered in the delivery book of the company. On the afternoon of May 5th the assistant secretary of the defendant called upon the plaintiff to ascertain whether the premiums had been paid by Saterlee & 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 time of the giving of the check until the 12th of May, Saterlee & 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 plaintiff could not properly look to them for payment thereof, having accepted Saterlee & Co.’s check and their obligation in payment of the original obligations of the defendant therefor. On the same day the plaintiff wrote to the defendants, in answer to their letter, that their messenger who called at the plaintiff’s office regarding the alleged payment by the brokers was informed that they had received a check from the brokers for the premium, and his attention was called to the fact that it was dated ahead, and that they should only consider the premiums paid when the check was honored, and, furthermore, that they should look to the assured under the policy for payment in the event of the failure of the brokers to make their check good. It was claimed upon the trial that Saterlee & 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 Saterlee & 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 Saterlee & 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 March, 1891, and that the pro rata or earned premium on said policy, up to the date of its cancellation, was the sum of $1,503.76, which they promised and agreed to pay. Now, if they had already, on the. 13th of February, 1891, paid the' full premium upon this policy, as was claimed upon the trial, how could it be possible that they should 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 the letter of May 11th by the defendants to the plaintiff, when they were notified as to the condition of affairs in reference to this nonpayment of the check of Saterlee & Co., that they did not consider that the payment to Saterlee & Co. of the 13th February had canceled any indebtedness of theirs to the plaintiff, because they say:

“On May 4th yon were fully notified of such payment, [referring to the payment of February 13th,] and on May 5th we made inquiries of Messrs. Saterlee, 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 Saterlee, Bostwick and Martin, we sent to your ofiice, and were informed by your officers that they had received a check from Messrs. Saterlee, Bostwick and Martin for the amount of the premiums, less amount of their commissions. 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 Saterlee, Bostwick and Martin’s check and their obligations in payment of the original obligation of this company therefor.”

Here is no pretense that there was any satisfaction of the indebtedness of the debt to the plaintiff on account of this transaction prior to the 5th of May, when it is alleged the plaintiff accepted Saterlee’s check in cancellation of that obligation. It was not the payment to Saterlee & Co. which was then claimed to have canceled the indebtedness, but the fact that they had accepted the check of a third party in cancellation of the indebtedness; and this undoubtedly was the position which the defendants took, and it was not until the failure of Saterlee & Co., and they began to think of the relations existing between them, Saterlee & Co., and the plaintiff, that the idea dawned upon them that • payment to Saterlee & Co. liquidated their indebtedness to the insurance company. ' But it is needless to discuss this proposition, in view of the condition of the pleadings as already suggested.

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 Saterlee & 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 plaintiff 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 Saterlee & Co. had satisfied their obligation. When they learned that it had not, they brought Mr. Saterlee'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 conceive how they would have made any such agreement, because they knew of the embarrassment of Saterlee &6 Co. The check was to be postdated, 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. 19, 27 N. E. 763, 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 represented by this check in Saterlee & 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 were not indorsers upon the check; and if the plaintiffs were guilty of negligence in respect to its collection, in order that the defendants should be discharged by reason thereof, it must be shown that they were damaged thereby. It appears that in any évent it would not have been paid, because there were no funds to meet it. 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. All concur.