20 Barb. 468 | N.Y. Sup. Ct. | 1854
This is an action upon a policy of reinsurance for $2000, executed by the defendants to the plaintiffs through their agent, Gr. W. Stevens, who was also the agent of the plaintiffs in making the contract of insurance. The risk was selected and the rates of insurance fixed by Stevens, and the question is, whether this action can be maintained upon the policy. It becomes important to inquire whether such a contract, made by an agent who acts as the agent of both parties in making the contract, is absolutely void at common law, or whether it is voidable in a court of law; or whether it is only voidable in a court of equity. The rule is well settled, both in England and this country, that such a contract is voidable in a court of equity at the election of the principal. The principle is illustrated in the case of an agent employed to sell. If such agent become himself the purchaser or the agent of another; or if he be an agent to buy, and he become himself the seller, or the agent of another in making the sale, the principal may avoid the sale or the purchase, in equity. If he come to the court upon a timely application, upon the fact being alleged and proved, the court will presume the transaction was injurious and consequently fraudulent; and this presumption cannot be overcome unless it can be shown that the principal, furnished with all the knowledge the agent possessed, gave him previous authority to become purchaser or seller, or afterwards assented to such purchase or sale. (Campbell v. Walker, 5 Ves. 678. 1 Ves.jun. 287. Massey v. Davies, 2 id. 317. 1 Russ. & Mylne, 58. 2 Myl. & K. 819. Story on Agency, §§ 9, 192, 211, 214, 210. Dunl. Paley on Agency, 33, 34. 1 Mason, 341. 6 Pick. 196. 2 John. Ch. 252. 5 id. 388. Hopk. Ch. 515. 9 Paige, 237. 4 Con. R. 717. 5 Lond. Jurist, 18. Smith’s Merc. Law, 101. 13 Ves. 103. 8 id. 502. 9 id. 234. 12 id. 355. 3 Bro. C. C. 119. 5 Paige, 650. 2 Mylne & Cr. 374. Liver on Agency, 423. 4 Mylne & Cr. 134. 6 Ves. 625. 1 Story’s Eq. Jur.
The next objection to the plaintiffs’ right of recovery in this case is, that the insurance policy was not binding upon the defendants for the reason that the premium was not paid. The conditions are, by an express provision in the policy, made a part of the contract. (6 Wend. 488.) And they have therefore, the same force and effect as if contained in the body of the policy. (2 Denio, 75.) The second condition annexed is, that “ no insurance whether original or continued, shall be binding until the actual payment of the premium.” This is a condition in the policy, and a condition in a fire no less than in a marine policy, not complied with, defeats the policy. (1 Phil. on Ins. 416. 2 Denio, 75, 81. 5 id. 326.) In the present case the premium was not in fact paid to Stevens till after the fire. The money was in the bank, under the control of Mr. Olcott, the cashier, deposited to the credit of the treasuer of the plaintiffs, and Mr. Olcott told Stevens he could have the money at the time the arrangement for the insurance was made, and Stevens told him to let it lie, and when he wanted the money he would draw for it. The money was not in fact drawn by him till after the fire, and from the 7th to the 10th of July. Olcott was in the habit, of receiving and paying out the premiums for the plaintiffs and acted in behalf of the company. He had therefore, I am inclined to think, authority to pay out the moneys in deposit belonging to the plaintiffs for such object, and would at any time have paid this premium upon Mr. Stevens’s check, had he wished to draw it; but Stevens preferred to have the money remain in the bank, as that was the place where he made his deposits, until he wished to make his remittance to the defendants. Stevens, therefore, chose to waive a strict compliance with this condition in the policy, and trust to the cashier paying his check, knowing that the cashier had money in deposit belonging to the plaintiffs which he was authorized to apply to such purposes. I think Stevens had authority to waive compliance with this condition in the policy. (1 Phil. on Ins. 22, 23, §§ 23, 24.) And that he did so is most manifest.
The defendants cannot avail themselves of the objection taken upon the trial that the plaintiffs did not give such notice of the loss to the defendants, as is required by the conditions of the policy; for the reason that no such issue is presented by the pleadings. The complaint alleges due and proper notice given of said loss to the defendants upon the receipt of notice thereof, by the plaintiffs, and this averment stands entirely undenied by the answer, and for the purposes of the action, therefore, is deemed admitted. But if we regard the issue as made by the pleadings, the notice was sufficient. The fire occurred on the 15th of June and the plaintiffs knew of it on the 18th and they sent notice to the defendants by mail on the 23d. This was a sufficient compliance with the condition of the policy requiring notice of the loss to be given “forthwith.” This provision has never been construed literally to require notice on the day. It has always been held that due diligence under all the circumstances was all that was required. There must not be any unreasonable delay or laches in giving the notice. (Inman v. The Western Fire Ins. Co. 12 Wend. 452.)
We will now proceed to consider the second point raised- by the defendants on their motion for a nonsuit, and which is that Stevens being the secretary of the plaintiffs they were chargeable with notice of his instructions from the defendants,
The only remaining question is, whether the defendants are liable upon this policy of reinsurance for the costs and expenses of the suit brought against the plaintiffs by the Etna Insurance Company. I am free to confessi that upon a fair construction of the defendants’ contract, I am at a loss to see upon what principle
Gray, Shankland. and Mason, Justices.]