Conover v. . Insurance Company

Whether there was a variance between the declaration and proof is not material to enquire, as it was at most only such an one as the Circuit Judge might properly *Page 291 disregard on the trial, and upon which no bill of exceptions will lie. (Herk. Ins. Co. vs. Mann, 4 Hill 187; Mappa vs.Pearce, 15 Wend. 669.) The more material inquiry in this case is whether the consent to the assignment by the Secretary, Joice, to enable the plaintiff to procure a loan by a mortgage upon the insured property, was binding upon the company. For if that is not so, there is an end to this suit. The facts are briefly that the agent or attorney of Gridley, the party in interest, called at the company's office upon Joice, the Secretary, the person regularly in attendance there to transact their business, and stated to him that Gridley proposed to loan to the plaintiff, Conover, $500, and take a mortgage upon the insured property, provided he could obtain the consent of the company to the assignment of the policy as security. That to enable the parties to carry out their arrangement, the Secretary endorsed the consent upon the policy. Whereupon the $500 were advanced, and the mortgage and assignment executed. Joice testifies that he was in the habit frequently of giving consent to the assignment of policies for the same purpose, and always supposed he was authorized to do so by the by-laws or some resolution of the directors; though on looking into the by-laws and minutes, as it would seem for the first time on the trial, for some evidence of such authority, he was unable to find it, and thence concluded none such had been given. It further appeared on the trial that the policy of the President of the company had also been assigned to secure the payment of a mortgage upon his property given after the insurance, and that the consent was endorsed upon it in the same manner as the one in question. Also upon producing the book of policies where memorandums are entered of such as have been assigned, the consent in every instance was found to have been endorsed by the Secretary, Joice. Most of this evidence was objected to as improper. But I think it was properly admitted, for the purpose of showing not only who was entrusted with the company's business, but the manner *Page 292 in which transactions of this character had been uniformly conducted. Some evidence was introduced on the part of the defendant below to show that these acts of their Secretary were never brought to the knowledge of the Board of Directors, or received their formal ratification. And it is insisted that inasmuch as the Board never, by any formal act, gave their sanction, and the by-laws required the consent in writing of the Directors to any conditional alienation by mortgage subsequent to the insurance, the consent in this case was unauthorized and void. I cannot subscribe to this doctrine. The Directors were bound to know the uniform course pursued by their sole agent in the transaction of their business at their office, especially where regular entries of his acts were made in their books, and they must be held responsible on the ground of a tacit assent and approval unless they can show that by a strict vigilance and scrutiny into his acts they were unable to ascertain the course he was pursuing, and could not therefore arrest it or put the public upon their guard. It is enough, it seems to me, that here the party in interest went to the sole place where the business of the company was transacted, and procured what was intended on all hands to be, and I think in effect was, an assent to the execution of the mortgage, as well as the assignment of the policy from one of the principal officers having the sole charge of the business, and that too in the same form as it had been frequently done there. (Bank of Vergennes vs Warren, 7 Hill 91.) Incorporated companies whose business is necessarily conducted altogether by agents, should be required at their peril, to see to it that the officers and agents whom they employ, not only know what their powers and duties are, but that they do not habitually and as a part of their system of business transcend those powers. How else are third persons to deal with them with any degree of safety? They can have no access to the by-laws and resolutions of the board, and no means of judging in the particular instance whether the officer is or is not within the prescribed limits. *Page 293 All that Gridley can be supposed to have known in the case before us would be derived from the face of the policy. There he would only learn that the interest of the insured therein, was not assignable without the consent of the company manifested in writing in pursuance of the by-laws and endorsed upon the policy. He accordingly repairs to the office where he had a right to suppose he could have the consent manifested and endorsed in the proper form. It is done according to the system and in the form adopted and uniformly pursued there by an officer having charge of the business and who supposed this peculiarly within his province. In the faith that all is right, he advances his money and receives his mortgage and assignment. No objection is made to this or numerous similar transactions, and even after the fire, payment is refused upon an entirely different ground. Clearly, as it seems to me, the company are not now at liberty to dispute or deny the authority of their Secretary to endorse the consent in question. The objection that the execution of the mortgage avoided the policy, was not distinctly made on the trial. But had it been made there as distinctly as it is here it could have been of no avail, as it sufficiently appears that the only object the company could have in giving the consent was to enable Conover to borrow money by a mortgage upon the insured property. Nor are we called upon to decide whether the absolute alienation by Conover after the assignment of the policy is a good defence, as the point was not raised on the trial. But if we were, I do not see how the interest of Gridley, the assignee, could be affected by it. (Traders Ins. Co. vs. Roberts, 9Wend. 404.) The judgment, I think, should be affirmed.