4 F. 753 | U.S. Circuit Court for the District of Northern New York | 1880
1. The defendants contend' that the evidence shows that the insured property was burned by the fraudulent practices of the assured. The question is one of fact. The referee has found that the fire arose “from some •cause unknown.” His finding will not be disturbed except in a case where the finding of a jury on the same question would be disturbed. This is not such a case. On the contrary, on the evidence, a finding that the property was burned by the fraudulent practices of the assured would be set aside by the court.
2. The defendants contend that the plaintiff, through his authorized agent, was guilty of fraud in swearing to and presenting the proofs and claim that he did, in respect to the value of the goods burned. The evidence does not establish that the plaintiff knew that the goods were worth less than the value of them stated in the proofs of loss.
The referee has found, in the first case, that the value of the goods at the time of the fire was “upwards of $12,000,” and, in the second case, that their value at that time was
3. The defendant, in the first ease, contends that its policy was void when issued. It contains a printed provision that “if the assured shall have, or shall hereafter make, any other insurance on the property hereby insured, or any part thereof, without the consent of the company written hereon, * * * this policy shall be void.” The policy contains this clause in writing: “$3,000 other concurrent insurance permitted.” When the policy was issued there was $6,000 other insurance on the property, which continued in force until the fire. The application for the policy in suit was made to an agent of the company in Utica, N Y., the company being established in Boston, Mass. The policy was signed by the officers in Boston, and was countersigned by the agent in Utica, and was delivered in Utica by him to the agent of the assured.
The policy contains this attestation clause: “In witness whereof, the Commonwealth Insurance Company have caused these presents to be signed by their president, and attested by their secretary, in the city of Boston. But this policy shall not be valid unless countersigned by the duly authorized agent of said Commonwealth Insurance Company.” Below that are these words: “Countersigned at Utica, this sixteenth day of October, 1877. J. Carr & Son, agents.” The policy contains this provision: “11. It is a part of this contract that any person othor than the assured, who may have procured this insurance to be taken by this company, shall be deemed to be the agent of the assured named in this policy and not of this company, under any circumstances whatever, or in any transaction relating to this insurance.” The plaintiff claims that the evidence shows that the policy was issued and delivered by J. Carr & Son, with full knowledge that there was already $6,000 other insurance on the goods; that the issuing and delivery of the policy with such knowledge was a waiver of any prohibition against more than §3,000 other insurance; and that J. Carr & Son had author
The defendant contends that the finding that the agent knew of $6,000 other insurance was not warranted by the evidence. The plaintiff’s agent, A. S. Putnam, who applied for the insurance, says that at the time he did so he told the defendant’s agent, Carr, that the plaintiff already had $6,000 insurance, and wanted $2,000 more. Two policies, of $1,000 each, were then issued by Carr & Son to the plaintiff on these goods; one by the defendant and the other by a Pennsylvania company, each dated October 16, 1877. A month or less after that the two policies of $1,000 each were given up by the plaintiff to Carr & Son, and the policy in suit was issued in their place, bearing the same date and running for the same time from October 16, 1877. The $1,000 policy issued by the defendant, and so given up, contained the words, “$3,000 other concurrent insurance permitted.” It also contained the same clauses as to the policy becoming void, and as to agency and as to countersigning, as the $2,000 policy afterwards did, and it was countersigned “J. Carr & Son, agents, October 16,1877, at Utica.” Carr testifies that when the original application was made, which resulted in' the two $1,000 policies “nothing particular was said;” except that A.
It is a well-settled rule that the report of a referee as to the facts is, like the verdict of a jury, conclusive, as a general rule, in a case of conflict of evidence, and is, like such verdict, to be set aside only where the finding of fact is clearly against the weight of evidence. There is here one witness on each side. The burden is on the defendant to set aside the finding of the referee. The referee liad the witnesses before him. On the part of the defendant it is urged
The case of Whited v. Germania Fire Ins. Co. 76 N. Y. 415, decided in March, 1879, is a direct authority in point. The policy there contained provisions that if the property should be sold, or if the interest of the assured should not be truly stated, the policy should become void; that any less than a distinct specific agreement, indorsed on the policy, should not be construed as a waiver of any condition therein; and “that any person other than the assured, who may have procured the insurance to be taken, shall be deemed to be the agent of the assured, and not of the company, under any circumstances whatever, or in any transaction relating to this insurance.” The policy was issued in 1869, signed by the officers of the company, and countersigned “O. J. Harmon, agent,” and was for one year. In 1870 it was renewed for one year, the renewal certificate being signed by the officers, and containing the words “not valid unless countersigned by the duly authorized agent of the company at Oswego,” and being countersigned there “O. J. Harmon, agent.” Like proceed
In the Whited Case the interest plaintiff had in the premises as a mortgagee was not stated in the policy or in the renewal certificates. The defendant contended that the policy was void. The plaintiff contended that there had been a waiver of the requirement that the change of interest of the plaintiff should be indorsed on the policy. The defendant replied that Harmon could not bind the defendant by any such waiver. The court say: “Upon the facts in the case, as settled by the verdict, there was a parol waiver of the conditions rested upon by the defendant, and a parol consent to keep on foot the insurance of the plaintiff, in his new status of mortgagee, if Harmon was the agent of the defendant in the dealing for the last renewal, and not the agent of the plaintiff. Fish v. Cottenet, 44 N. Y. 538; Shearman v. Niagara Fire Ins. Co. 46 N Y. 526; Pechner v. Phœnix Ins. Co. 65 N Y. 195; Van Schoick v. Niagara Fire Ins. Co. 68 N Y. 434; Bidwell v. N. West. Ins. Co. 24 N. Y. 302.” Then, referring to the clause respecting agency, the court say:
“That clause we have held to. be forceful in Rohrback v. Germania Fire Ins. Co. 62 N. Y. 47, and Alexander v. Same, 66 N. Y. 464. We have not held it so, as.yet, further than the scope of the facts in those cases. The case in 66 N. Y. hangs upon the case in 62 N. Y. In the latter case it was held that, as the*760 insured bad contracted that the person who procured the insurances hould be deemed his agent, he must abide by his agreement ; and that though, through fault or mistake, that person had, in the application for a policy, misstated to the company the declarations of the assured, whereby there had been brought an untrue representation, yet that, as he had been agreed upon as the agent of the insured, the insured must suffer for the error or the wrong. That case dealt with matters before the issuing of the policy. It is so that the clause in the policy is broad, and takes into the fold of its wording any circumstances whatever, and any transaction relating to the insurance. In its verbal scope it has to do with acts, as well after as before and at the time of the giving out of the policy. But, if the insured is .to be now bound as having tints contracted, there must be mutuality in the contract. No man can serve two masters. If the procurer of the insurance is to be deemed the agent of the insured, and Harmon is to be deemed such procurer, he may not be taken into the service of the insurer as its agent also; or, if he is so taken, the insurer must be bound by his acts and words when he stands in its place, and moves and speaks as one having authority from it; and, pro hac vice at least, he does, then, rightfully put off his agency for the insured, and put on that for the insurer.
“Hence it was that in Sprague v. Holland Purchase Ins. Co. 69 N. Y. 128, we held that the same clause, in the policy there put out by that defendant, did not make the insured the principal. * * * In the case in hand the defendant has declared, over the hands of its president and secretary, that a renewal certificate from it will not be valid unless countersigned by the duly-authorized agent of the company at Oswego, New York. It had before sent two such certificates to Harmon, which he had countersigned as such agent and delivered to the plaintiff. The plaintiff had paid to him the premium for those renewals, and he had sent them to the defendant. The defendant treated these two certificates as valid, because countersigned by Harmon. Thereby it asserted that Harmon was its duly-authorized agent. It held*761 him up to the plaintiff as such. It knew, then, that those certificates had been put out and taken as valid; and it must have known that it was so because Harmon thought, and the plaintiff thought, — and that both had reason, from the conduct of the defendant, to think, — that Harmon was the duly-authorized agent of the defendant. It is too late, after letting those two go out as valid, and the third like certificate has been issued and premium paid, for it to say that Harmon is not the agent of the defendant therein, and that he is the agent of the plaintiff. The defendant must have some living, sentient touch of those doing business with it; and when it reposes confidence in the acts therein, and gives him discretionary power to bind and loose, it is idle to say that he is not its agent thereto. The law is too severe to brook such an absurdity; nor will it hold the plaintiff so strictly to the contract he made, as to permit the defendant to ignore it and take his agent as its agent, and yet make him suffer for all the shortcomings of that person while acting between them, and while under authority from the defendant to act for it. Should it be granted that Harmon was the agent of the plaintiff, even then comes in the rule that pne employing the agent of another cannot take advantage from the acts and omissions of that agent to the harm of its principal. It is a rule that if one principal to a contract deal surreptitiously with the agent of the principal, it is a fraud upon the other principal. The defrauded one, if he comes in time, is entitled, at his option, to have the contract rescinded; or, if he elects not to have it rescinded, to have such other adequate relief as the court may think right to give him. P. & S. P. Tel. Co. v. Ind. Rub., Gut. Perch. & Tel. W. Co. 10 Ch. Appeal Cases, 526. The principle should be applied, in the case in hand, to the aid of Whited. The case, then, is that of the holder of: a policy asking for a renewal of it, and making known to the agent of the insurer the facts which have made or will make a breach of some of the conditions in it, and thereupon receiving from that agent a written renewal certificate, after payment and receipt of the premium, and,having from him a promise that he would ‘make it all right.’ The*762 powers of the agon’s were such as that the transaction with, him was the same as if clone with the defendant; it is bound as fully as if it were so. There was thus a perfect waiver of those conditions of the policy, and it remained a valid contract for another term. When the loss insured against happened, the defendant became liable to pay, and has shown no real defence against the action.”
. The case of Whited was decided with the concurrence of all the judges of the court of appeals. The present case cannot be distinguished from it. The fact that in the Whited Case Harmon said that he “would make it all right” does not make this case any weaker than that one. The delivery of the policy by Carr to the plaintiff as a valid contract of insurance was an act of Carr, as the agent of the defendant, asserting such validity, and asserting, in effect, that the policy was issued in view of the statement of A. S. Putnam that there was $6,000 other insurance, and that any'statement of a different amount of other insurance, in the policy, was a mistake, and not in accordance with the fact, as known to both parties, and that any provision in that policy making it void because the $6,000 was not written on it was then and there waived. Carr had authority to issue policies without writing to the defendant, and must be held to have been the agent of the defendant in receiving the information as to the $6,000 other insurance, and in making the waiver which on the facts was made.
No distinction can be drawn between this case and a ease where, under like circumstances, a party might have stated to the agent correctly the amount of other insurance, and yet nothing was said in the policy as to how much other insur-rance was permitted. In the Whited Case there was, it is true, an entire absence from the policy of any statement of the change of interest, while here there is a statement permitting $3,000 other insurance. But the absence of the statement of the true other insurance is no different from the absence of the statement of the true interest of the insured, although some sum be named in the policy for other insurance. Nor does it make a distinction that the other insur-
4. The defendant, in the second case, contends that its policy was avoided “by the use of naphtha and gasoline.” The policy contains these provisions: “If, in said premises, there, be kept gunpowder, fire-works, nitro-glycerine, phosphorus, saltpeter, nitrate of soda, petroleum, naphtha, gasoline, benzine, benzole, or benzine varnish, or there be kept or used therein, camphene, spirit gas, or any burning fluid, or any chemical oils, without written permission in this policy, then and in every such case this policy shall become void. (4,) If, during this insurance, the above-mentioned premises shall be used for any trade, business, or vocation, or for storing, using, or vending therein any of the articles, goods, or merchandise denominated hazardous, or extra hazardous, or specially hazardous, in the class of hazards adopted by the New York board of fire underwriters, and printed on the back of this policy, * * * then and from thenceforth, so long as the same shall be so appropriated, applied, or used, this policy shall cease, and be of no force or effect.”
On the hack of the policy is a list of articles under the head of “Classes of Hazards,” the word “special” meaning “specially hazardous.” The following are marked “special:” “Oil, petroleum, and products, other than specified;” “naphtha, benzine, and benzole;” “gunpowder;” “fire-works;” phosphorus;” “saltpeter;” “nitrate of soda, when stored with other merchandise;” “camphene, stocks of;” “spirit gas, making or selling, or use of;” “burning fluid, stocks of.” The following is on the hack of the policy: “The use of kerosene oil permitted, on condition that the same be drawn and the lamps be trimmed and filled by daylight only, provided tho quality is of the standard required by the laws of the state in
As conclusions of law on this subject the referee found: “(2) The use of naptha or gasoline and kerosene on the premises in question, in the manner herein before described, ^vas not a violation of any of the conditions of said policy. The use of kerosene, if of a certain quality, is expressly permitted. There is nothing in the case to show that the kerosene was not of the quality allowed. The clause under which it is claimed the articles were prohibited is as follows: ‘ If, in said premises, there be kept * * * petroleum, naphtha, gasoline, benzine,- benzole, or benzine varnish, or there be kept or used therein camphene, spirit gas, or any burning fluid, or any chemical oils.’ The said articles were not kept on the premises, within the true intent and meaning of the first part of said clause, as the term ‘ kept ’ is clearly employed in contradistinction to the term ‘used,’ in the concluding portion of the clause, and evidently means the keeping of such articles as objects of merchandise or manufacture. It is quite obvious that the last part of the clause, in speaking of ‘ camphene, spirit gas, or any burning fluid,’ does not refer to the products of rock or mineral oil, such as naphtha, kerosene, etc. The terms, ‘camjphene,’ ‘spirit gas,’ and ‘burning fluid,’ are well known to commerce and chemistry, and have a well-understood meaning. Thus, ‘ camphene ’ is turpentine purified by repeated distillation; ‘burning fluid’ is a mixture of camphene and alcohol; and ‘spirit gas’ is a mixture of the same ingredients in different proportions. This clause should be
The defendant excepted to the finding of fact “that there was no naphtha or kerosene oil on the premises at the time of the fire, except a small quantity of kerosene;” and to the second conclusion of law “that the use of naphtha or gasoline on the premises, in the manner described, was not a violation of any of the conditions of its policy; that the articles vere not kept on the premises within the meaning and intent of the condition of its policy; that the term ‘any burning fluid/ used in its policy, does not refer to naphtha;” and, generally, “to the whole of the second conclusion of law, and each part thereof.” The exception as to the finding of fact in respect to naphtha and kerosene oil is not insisted on. The referee does not find, as a fact, that any kerosene or naphtha was ever kept on the premises, other than such keeping as is necessarily involved in the facts found — that kerosene and naphtha were used, as found, to light the store, and that naphtha was twice used in the store to show off a naphtha-burning stove. There is no exception by the defendant to a failure to find any other keeping or any other use of kerosene or naphtha. The question is whether the use in fact found avoided the policy. The policy permits the use of kerosene oil of a cer
“Burning fluid, stocks oí,” is indorsed on the policy as specially hazardous. It does not mean any fluid which will burn, but it means a recognized article known as “burning fluid,” and a different article from naphtha or kerosene. Nor does the word “any” change the meaning. There may be several articles, each known as “burning fluid” or “aburning fluid,” and each not naphtha or kerosene so as to make it proper to say “any burning fluid.” Naphtha being specified in the first description it should have been shown that it was known as “burning fluid” in order to bring it within the second description. Kerosene being allowed to be used, the same thing should have been shown and found as to the particular kerosene used there. Further, the whole policy must be con. strued together. Although naphtha was indorsed as specially hazardous, and was used, and so was within clause 4, its use both for lighting the store and for showing off the stove had ceased before the fire occurred, and there was no naphtha on the premises at the time of the fire. By clause 4 the policy was to be of no force so long as the forbidden use continued,
o. A. S. Pnfuam, the plaintiff’s agent, was asked on his direct examination as to what was said between him and Carr, the defendant’s agent, as to the an mnt of insurance A. S. Putnam wished on the property at the time he applied for insurance, when the two $1,000 policies were issued to him by Carr. The question was objected to by the defendant on the ground that the conversation was in reference to a surrendered policy, not the policy in suit, and was therefore immaterial. The question was allowed and answered. The evidence was competent. It tended to show the knowledge professed by Carr as to the prior amount of insurance on the goods in question, and to prove the defence which is held good.
A. S. Putnam was allowed to give evidence, under the defendant’s objection, showing that he did not read the two $1,000 policies when they were delivered to him; that he did not examine the policy in suit when it was delivered to him; and that he first noticed the provision as to other insurance, in the policy in suit, after the fire. This evidence was competent, as, if he did not road and know the contents of the defendant’s $1,000 policy and $2,000 policy in respect to other insurance, his prior communication of the amount of other insurance to Carr was loft to operate in full force. The natural inference that he would have read the policies and thus have seen the mistake was negatived, and it was proper thus to negative it.
The contents of the Hoyt & Butler policy were properly excluded. No other exceptions in regard to evidence seems to bo insisted on by the defendant.
The motion for a new trial is denied in each case, and judgment is ordered in each case on the report of the referee, with costs.