Brown v. Dutchess County Mutual Insurance

Rumsey, J.: The action was brought upon an alleged parol agreement for insurance made with one O’Shea, the plaintiff’s assignor; by which it is claimed that the agent of the defendant, on the. 26th- of May, 1898, agreed to issue to O’Shea a policy of insurance for one year, to take effect on the 19th of March, 1899, upon certain property situated upon Main street, Youngstown, Niagara county, in this State. The premises were destroyed by fire on the 14th of April, 1899, and, a^ter giving notice of the fire and serving proofs of loss, the claim against the defendant was assigned to the plaintiff, who thereupon brought this suit upon it. The defense is a denial that the person claimed to be the agent of the defendant was such or that he made the contract or had any authority to make it. In March, 1898, one Edwards was the agent of the defendant, and on the nineteenth day of that month he issued a policy of insurance for $1,000 upon the premises in question in the defendant company. The property thus insured seems to have been sold to O’Shea, in the month of May, 1898, and' the fact of that transfer was indorsed upon the policy. On the day when the indorsement was made O’Shea testified to a conversation with Edwards, out of which the parol contract of insurance by the defendant is claimed to have accrued. It was submitted by the court to' the jury whether this conversation took place substantially as testified to by O’Shea, the jury being told that, if O’Shea’s story was true and if he and - the people interested in the property relied upon the defendant to renew the policy and keep the property insured, then the plaintiff was entitled to a verdict.. At the close of the plaintiff’s case and again at the close of the evidence the court was requested to nonsuit or to order a verdict for [11] the defendant, upon the ground that no case was proved against the defendant; that whatever case was proved was not against the defendant, whoever else it might be against. These motions were denied and the defendant duly excepted. When the case was submitted to the jury the court was requested to charge that the agreement testified to by O’Shea did not bind the company, which was refused and an exception taken. The court was then asked to charge that the agreement for renewal testified to by O’Shea as having been made with Edwards was an act distinct from his relations with the company, which was refused and the defendant excepted. The court was further requested to charge that, under the evidence in the case, Edwards had no authority to agree to the renewal testified to, which was also denied and an exception taken. A motion for a new trial was denied, and from the judgment thereupon entered and from the order denying the new trial this appeal is taken. The policy of insurance upon which the defendant was undoubtedly bound, was made on the 19th day of March, 1898, and expired on the 19th day of March, 1899. The conversation which is claimed to have created the parol contract by reason of which the defendant is said to be bound for another year from the expiration of the written policy on the 19th of March, 1899, was had between O’Shea and Edwards on the 26th of May, 1898. It is quite possible that proof might be given which would establish a contract of that kind, made nearly a year before the policy expired, to renew it for another year after its expiration, and by virtue of which the company would be bound to issue a new policy upon the expiration of the former one, but no such contract was established in this case, and it was error, therefore, on the part of the court, not only to refuse to non-suit or direct a verdict for the defendant, but to refuse the requests to charge made by the defendant. It was shown that Edwards was the agent of the company, but no written appointment was offered in evidence, nor was there any proof from the beginning to the end of the case that he had ever done anything for the company, except to countersign and deliver the written policy of the 19th of March, 1898. There was no proof frcm which the extent of his powers could be inferred, or that he had any authority to make this contract of renewal, or ever did any [12] thing more than the mere countersigning of policies which had been sent to him. It does not even appear that he was intrusted with policies which he could deliver upon contracts made by himself. The original written contract of insurance was not made with O’Shea, but with one Gibbons, who then appeared to be the owner of the property. The failure to prove the authority of the agent to make this contract,. or any other contract, would be sufficient to require the reversal of the judgment, not only .within the well-settled and ordinary rules which govern the relations of principals and agents, but within the case of Shank v. Glens Falls Ins. Co. (4 App. Div. 516), in which case it was held that the authority there shown Was not sufficient to charge the insurance company with liability upon such a contract as is sworn to here. But even if there had been proof of the agency, there is not sufficient proof of the making of the contract. The talk between Edwards and O’Shea took place on the 26th of May, 1898. The story is that on that day O’Shea said to Edwards that he would rely upon him to see that the policy should be renewed at the end of the year as he was not able to get a policy upon the property for three years, and Edwards replied that when the time came, he would get the policy renewed and that O’Shea need Care no more about It. O’Shea further testified that Edwards recommended the defendant company to him as he was especially interested in it, and said again that as representative of it he would see that the property was insured. To this it was said by O’Shea that in case the rates were higher on the. policy when it came to be reinsured, to let him know; but that if the rates were no higher he accepted the insurance as it was. Edwards replied that if the 'rates were higher he would let him know; if they were no higher he would reinsure; O’Shea then testified that afterwards he saw him again and asked him if there was. any danger of the reinsurance being neglected if he went away, to which Edwards answered, “ I will attend to.it.” O'Shea then continued to testify that “ Then I think there was. a conversation if he insured it in any other company he would inform me about it; but I wanted this company as long as he recommended it. He said he would renew that policy.” There were other conversations after-wards to the same effect. [13] We do not think that this testimony establishes any agreement on the part of Edwards to issue a policy of insurance for any particular, time, or at any particular rate, or in any. particular company. The most that can be said as the result of this conversation was, that Edwards understood that when the policy in the defendant company expired he was to see that the insurance was renewed; that he was to renew the insurance in the defendant company if the rates were no higher, but if he saw fit to place it in any other company he was at liberty to do.so. This clearly did not constitute a binding contract with the defendant company, because Edwards was at liberty, as the result of that conversation, to insure that property in any other company he wished. That being so, the effect of the conversation was simply to make a parol agreement on the part of Edwards to see that this property was kept insured, leaving it to him to renew it with the defendant company if the rates were no higher, or to place it in some other company if he saw fit. So even if the evidence of O’Shea be accepted, as the jury did accept it as representing the truth in the matter, yet1 it was not sufficient to charge the defendant with any liability for the insurance upon this property. In addition to these reasons why the plaintiff cannot recover against the defendant upon the proof as it stands here, there was serious error in the admission of evidence. It is undisputed that Edwards ceased to be the agent of the company on the 17th of September, 1898. The fire took place on the 13th of April, 1899, some months after Edwards had ceased to be the agent of the defendant, of represent it in any way. The evidence of a witness was offered as to a conversation with Edwards on the 14th of April, 1899, as to the insurance upon this property. This was objected to by the defendant upon the ground that at that time Edwards was not the agent of the company, and, therefore, that the evidence was incompetent and immaterial. Over that objection, the witness gave testimony from which it might possibly be inferred that Edwards had made the parol agreement to insure the property as testified to by O’Shea. In our judgment this testimony was absolutely incompetent. The declarations of an agent are admissible against his principal only when made during the continuance of the agency and in regard to transactions depending at the time. (1 Greenl. Ev. [14] §§ 113, 114; Anderson v. R., W. & O. R. R. Co., 54 N. Y. 334.) Within the rules there laid down these declarations of Edwards were absolutely immaterial and should- have been excluded. Eor these reasons the judgment arid order should be reversed and a new trial granted, with costs to th'e appellant, to abide the result of the action. All concurred. Judgment and order reversed upon questions of law and of fact and new trial ordered, with costs to the appellant to: abide event.