Hamilton v. Lycoming Mutual Insurance

5 Pa. 339 | Pa. | 1847

Gibson, C. J.

In commercial towns, where the members of the profession are familiar with the law of insurance, actions on mere agreements to insure, whether against fire or perils of the sea, are not uncommon. They are noticed in 1 Phillips on Insurance, § 3, p. 9; but it. appears that the terms of the contract must have been settled by the concurrent assent of the parties, and that nothing must have remained to be done but to deliver the policy, else the risk will not have been begun: in other words, that the agreement must have had, at some particular instant, that aggregatia mentium which is indispensable in the constitution of every contract. But what are the tests of its presence ? In McCulloch v. The Eagle Insurance Co., 1 Pick. Rep. 278, the plaintiff wrote to learn the terms on which the defendant would be willing to insure his vessel on a particular voyage, and was answered that it should be done for a particular premium. He immediately sent an order for insurance on the terms proposed; but before it was written, the defendant had despatched another letter, declining to take the risk: and it was held, that at no instant had there been a simultaneous expression of assent. On a principle somewhat analogous, stands Cooke v. Oxley, 3 Term Rep. 653, in which it appeared, by the declaration, that the defendant had offered the plaintiff a commodity at a particular price, provided the latter would give notice of his acceptance before a particular hour of the day; that the .notice had been given within the time, but that the article had not been delivered : but judgment was arrested because the plaintiff had not-laid a cause of action. This last case is resolvable into the principle that either party may retract his offer while the matter is pending, just as a bid at auction may be retracted before the hammer is down. Such, too, is the principle of Routledge v. Grant, 3 Car. & P. 267; and it is a very practicable one where the negotiation is not carried on through the post-office. But the last case upon the point has overruled McCulloch v. The Eagle Insurance Company. In Adams v. Lindsell, 1 Barn. & Ald. 681, the defendants Jiad offered to sell the plaintiffs a parcel of wool on terms expressed in their letter, « receiving an answer in the course of post.” The letter, being misdirected, did not go by course of post; but the plaintiffs wrote, as soon' as it was received, that they would take ’the wool on the terms proposed. The defendants, however, not having received the answer when they expected it, sold the wool to another. The court said, that if a bargain could not be closed by letter before the answer was received, no contract could be completed through the medium of the post-office. That if the defendants were not bound by their offer when it was accepted, then the plaintiffs ought not to be bound till after they had received a notification that the defendants had received their answer and assented to it, and that so it might go on ad infinitum. That the defendants must be considered, in law, as making, diming every instant their letter was travelling, the same offer to the plaintiffs, and that the contract was completed by the acceptance of it: and that, as the'delay in notifying it arose from the mistake of the defendants themselves, it was to be taken against them, that the answer had been received by course of post. I am unable to see how .this conclusion can be resisted. The learned reporter of McCulloch v. The Eagle Insurance Company, has attempted to distinguish it from. Adams v. Lindsell, principally on the ground that a treaty respecting insurance is necessarily subject to contingencies whilst it is forming. Undoubtedly. But the question remains; when is it entirely formed ? Had their ship returned before the( plaintiffs, in the former case, had answered, they would have been at liberty to decline the offer; but it follows, not that they would have been at liberty to retract an actual acceptance before the defendant hac^ received it. The truth is, the two eases are not to be reconciled, and the conclusion is inevitable that an actual concurrence of assent, at any particular moment, is the ruling circumstance, the time of communicating it being comparatively unimportant.

But the contract before us was not negotiated by letter. The plaintiff applied to the defendant’s agent for a policy on the Clinton Academy, then occupied by him; paid the requisite proportion of the premium; executed a premium note for the residuo; and had a survey made according to the regulations, at his' own expense: all which was laid before the company, and referred to its executive committee. The secretary subsequently wrote to the agent, requiring the plaintiff to substitute an earthenware stove-pipe collar for bis sheet-iron one, and to procure the assent of the trustees of the academy, who held the title, to the contract of insurance; and saying that being duly certified that these things were done, he would send on the policy. Tbe plaintiff accordingly made tbe substitution, procured the written assent of tbe trustees; told tbe agent wbat bad been done, and repeatedly urged bim to call at tbe plaintiff's house, and “ attend to the matter.” Tbe agent replied, that “be must first bring bim that paper of tbe trusteesbut, being requested to call and get it, be promised to do so, yet never did.

It is clear, that tbe company is to be affected by tbe acts of its agent within tbe scope of bis authority, as acts done by itself. It appears by the eleventh by-law, that his business was to receive applications, take surveys, and forward them, with the cash received and premium note, to the company; and it appears by tbe letter of the secretary, that it was the practice to negotiate tbe terms ofbinsurance through him, standing in the attitude of an insurance broker. Tbe case, then, stands thus. Tbe company offered to effect insurance for a certain premium, on performance, by tbe plaintiff, of two conditions. These were performed; and tbe company bad notice of it. Tbe company was subsequently requested to call by its agent at tbe plaintiff's house, to see that tbe substitution was made, and receive tbe written assent of tbe trustees, which it promised to do but did not, and in tbe mean time tbe building was burned down. There was no supineness on tbe part of the plaintiff — at least none which bad not been induced by tbe agent — while tbe company, on tbe other band, was chargeable with positive negligence. Now if I promise to reward a man if be will do me a particular service, and be does it, I am bound to reward bim for it, though be had not engaged to do it. Tbe nature of a conditional promise resting on an executory consideration, was explained in Clark v. Russel, 3 Watts, 217; arid it may be seen from it, that tbe plaintiff, having actually performed wbat be bad been requested to do, was entitled to have tbe policy. The terms of tbe contract -were matured when tbe company bad notice that its conditions were performed; aiid, from that moment, the risk was incurred. It would be unconscionable in it to insist upon its own omission to execute the policy, on the ground that tbe resolution of tbe trustees bad not been banded to its agent, especially as be bad prevented the plaintiff from tendering it by promising to call and get it. A parol agreement for a policy, therefore, was complete.

After the decision of tbe Supreme Court at Washington, in The Bank of Columbia v. Patterson’s Administrators, 7 Cranch, 299, sanctioned by this court in tbe Chestnut Hill and Spring-House Turnpike Company v. Rutter, 4 Serg. & Rawle, 16, and by many courts in our sister states, it is too late to insist that a corporation can contract only by an instrument under its corporate seal. “ When a corporation,” said Judge Story, “ is acting within the scope of ■the legitimate purposes of its institution, all parol contracts made by its authorized agents, are express promises of the corporation; and all duties imposed on them by law, and all benefits conferred at their request, are implied promises for which an action lies.” It has become a familiar principle, that a corporation may, by the instrumentality of its agents, contract within the sphere of its proper functions, pretty much as a natural person may. The action in the very case of McCulloch v. The Eagle Insurance Co., was founded, like the present, on a corporation’s parol promise; and some years ago, an action on an agreement for a poliey against fire, was tried before me, and a recovery had without objection on that ground, though the counsel retained by the corporation were among the soundest lawyers at the Philadelphia bar. We say, therefore, that the agreement was complete, and that the plaintiff is entitled to recover on it to the extent of the loss, if the sum insured will reach so far; to be liquidated, if the parties cannot agree, by a writ of inquiry of damages.

Judgment of the Common Pleas reversed, and judgment quod recuperet, rendered by this court.