Trustees of First Baptist Church v. Brooklyn Fire Insurance

By the Court, Mitchell, P. J. The defendants, by a policy of insurance dated August 9, 1845, insured the church edifice of the plaintiffs from loss by fire from the 22d of July, 1845, to July 22, 1846, with a clause that the insurance might be continued, provided the premium should be paid and indorsed on the policy, or a receipt given for it, and that no insurance should be binding until the actual payment of the premium. The application for insurance was made to the company in July, 1845. They said they would take a risk, and that the plaintiffs might consider their building insured. The policy was delivered after this application, and was made to commence from the time of the — 75 — application, July 22, previous. The premium was not paid, nor any thing said about it, when the policy was delivered. It was not paid until February 21, 1846. Before that time the president of the company called on the treasurer of the church, who told him that he would call and pay it: that as treasurer he was not always in funds. The president answered that he would prefer calling; that it was Ms business to attend to the collection of premiums in Few-York; that he would not give the treasurer the trouble of calling ; and he subsequently called on the treasurer again and was paid. This was the beginning of a system between the parties, in which from the start the defendants waived their printed rule, that the premium must be paid before the policy should be effectual, and gave credit for the premium and declared the building insured, before the premium was paid on any policy given, and on a mere parol agreement to insure. The defendants, after this, sent a notice to the plaintiffs that their policy would expire on the 21st of July, 1846.' Before that date the president of the company again called on Mr. Lewis, the treasurer of the church, and said that the policy would expire on that day. The treasurer said he had meant to call and renew the policy. The president replied in a way that must have been intended to waive the necessity of a previous payment of the premium before the renewal should take effect, -and must have been intended to be, and must have been, so understood. “ Mr. Lewis,” said he, “ I suppose your trustees intend to keep this policy with us as a permanent risk ; to let it remain with us.” Mr: Lewis answered, “ it certainly was.” The president replied he had hoped so, and supposed so; and that he would call on the treasurer with the annual receipts or certificates. The treasurer offered to call at the office and pay, but the president replied, he would prefer calling on the treasurer. This was an agreement that the risk should be permanent and the policy continued until either should vacate it: not for one year only, but for several—from year to year. The use of the word “ permanent,” as to the risk, and “ receipts or certificates,” in the plural, show that the arrangement was to be not for one year only, but for successive years. After — 76 — this it would be a breach of faith in the company to say that the policy should not be deemed in force unless they first gave notice to that effect. Their acts led the plaintiffs to rely on them, and to defer the payment of the premium for that and for successive years until they should be called on to pay it. The president of the company did not at this conversation ask for the premium, and did not call for it until 30 days afterwards, when he left the certificate; and being then told that the treasurer was not ready to pay, he said he would call again, and did not call again until 1st September, 1846, when he was paid. Thus by the parol agreement of the parties, made a second time, the building was deemed insured from July 22,1846, to July 22, 1847, although no certificate was given until 30 days after the first of those two dates, and no premium paid until about 8 days after the certificate was left. The company had the advantage of the agreement in 1845 and in 1846, holding the parties to pay the premium for the whole of each year, although the policy or the certificate was not given until a considerable period after the time when the policy began to run, and although the premium was not paid until a still further period. The original verbal agreement, and these acts, constituted clear evidence of a mutual understanding that each party should be bound by the agreement that the risk should be renewed at the office of the defendants, and by them, and the premium therefor paid by the plaintiffs, until either should notify the other that the agreement was to be rescinded, for the future. Again, in 1847, the treasurer of the church received a notice that the policy would expire, as he had in 1846. The president again called on the treasurer, after this notice, and after the first renewal had expired, and handed the treasurer a renewal receipt, dated July 21,1847. This was in August, and the receipt was for $30, instead of $25, as before. The president said he did not mean to charge more than before. The' treasurer called at the office of the defendants in September, 1847, saw their secretary, and stated to him the conversation with the president as to the rate of premium. But the secretary insisted on $30, and the treasurer paid the $25, having no more with — 77 — him, and said he would call and pay the $>5. The secretary replied, “ at any time, at your convenience.” Here again was the system of waiving immediate payment continued. The treasurer forgot about the $5, and did not call again. Again, in 1848 a like notice was served on the treasurer that the policy would expire on the 21st of July of that year, as he had received for the two preceding years. This was no notice that the company meant not to renew, any more than the other previous notices, served in 1846 and 1847, were meant to have that effect. -It was given as those were given, and as they always are given, to express the readiness of the company to renew the policy, and thus to secure the continuance of what is deemed a good customer. The treasurer, relying no doubt on the former arrangement made with the president of the company, that the risk should be permanent, and that the president would himself call for the premium, and on the former acts of the company treating the policy as really in force, from the 22d of July, in each year, although the premium was not paid until a considerable time afterwards, did not call to pay the premium, and get his renewal, and the president of the company did not call on him; and on the 10th of September, 1848, the church edifice was destroyed by fire. The witness said, in reply to a question by the defendants’ counsel, that by permanent risk was meant a continuous risk from year to year until one party or the other gave notice of the discontinuance of the agreement. The witness stated on his direct examination that he charged the whole $>30, in his account with the church, and that it was allowed to him; that he reported to the church the arrangement made by him with Mr. Ellsworth, the president of the company, and that it was approved by the trustees. This was objected to. It was admissible for the purpose' of showing that the trustees of the church ratified the agreement made by him; and as that was a material purpose, the objection was properly overruled. The plaintiffs proved that the defendants had permanent policies, made verbally by the president and secretary with other parties, and which were entered in the books of the company — 78 — submitted to the directors. This was proper, as it showed that the company had authorized their officers to make such contracts. The secretary of the company was called by the defendants to prove facts intended to show that the company had not considered the plaintiffs as permanently insured; and on his cross-examination he was asked if on the day after the fire he had not said to Mr. Lewis that he did not deny the insurance on the church. The question was proper, as tending to discredit his direct examination; and if it had been improper it became unimportant, as the answer made was favorable to the defendants as far as it was credited, “ that the church had not been insured since July last,” and that the policy then expired. , If the president of the company testified to anything different from the above it was for the jury' to determine who, on the whole, had best recollected the facts. He admitted that the treasurer said to him that he always wanted the policy renewed, in an interview in 1847. This, being assented to, was an agreement in that year to renew the policy for the next year also; which would cover the year of the fire. The president’s notions of law probably misled him. He said a permanent insurance was a term he did not understand, and that he did not agree with Lewis to keep the church insured. Yet he says that in 1847 he asked Lewis if he wished the church policy renewed, and that Lewis answered yes, and that he always wanted it renewed. To this the president does not state that he objected. And he admitted that afterwards they made arrangements with persons who had an understanding with the company and promised to pay the premium. And he says these arrangements were made with the directors, and they knew of them, but the board did not. If he meant, as he probably did, that these arrangements were made with all the directors, it would be such knowledge of the practice, by the directors, as would bind the board. But the board had also the books before them, showing like arrangements with others. Testimony was also received of what the secretary of the company said when called upon on the day after the fire, in relation to the liability of the company on their agreement. The company — 79 — must act and speak by its officers; and what the officers say when in discharge of their duty as officers, and in relation to that duty, is evidence against the company. If the officer in a steamboat, whose duty it is to receive and deliver merchandise to be transported, is asked for an article said to have been delivered to him shortly after the arrival of the vessel at its place of destination, and he admits the receipt of the article, and makes an excuse for its non-delivery, that is legal evidence against the owners of the boat. The president and secretary of an insurance company are the officers to whom the preliminary proofs of loss are to be presented, and if after the loss and when notice of it is given, they promptly admit that they had agreed to insure the property, or to keep it insured, it is a statement made in the course of their duties, and binds the company as much as their certificate of premium paid and of a renewal would bind the company. The complaint proceeds against the company as on an insurance effected. It should have been on an agreement to insure; but as the variance did not in any way injure the defendants, or surprise them, it was proper to treat the complaint as if it were amended, and to allow the plaintiffs to recover if they had established a valid contract to insure. It is not necessary to inquire whether a policy of insurance must be in writing, as the plaintiffs did not, at the trial, rely on proof of a policy for the year 1848, but on the proof of an agreement to insure, or to execute a policy for that year. The question whether such an agreement was proved was fairly submitted to the juryit must be assumed, therefore, to have been proved. Such an agreement may be by parol, and the reasons why a policy must be in writing do not apply to the mere agreement. It is said the agreement was executory, and not to be fulfilled within a year, and so void by the statute of frauds. If the analogy as to a parol lease of lands for several years be applied, the agreement would be valid as an agreement to insure from year to year until notice were given of its intended termination for the future. The agreement also was that the policies should be permanently renewed; that is, as explained, from year to year. And this was repeated in September, 1847 : so that in — 80 — Sept. 1847, there was an agreement to renew the insurance on the 22d of July, 1848. That agreement was to be perfected by giving a certificate of renewal, on the 22d of July, 1848, for a year from that date, and so it was to be fulfilled within a year. The thing to be done within the year was the giving of the written agreement or certificate to insure, and then when it was given, the obligation to pay for the loss occurring within a year after the 1st of July, 1848, would accrue. The company neglected to give this certificate, and for that neglect the plaintiffs are entitled to recover an amount equal to that which they would have been entitled to if the company had given the certificate which it agreed to give. [New-York General Term, May 1, 1854. This was in effect the law as laid down at the trial. There was evidence enough of the usage of the company to make these permanent arrangements through their officers, and that such arrangements were known to the board and approved by them, to justify the charge of the judge on that subject. The clause in the policy, as to the mode of renewal, relates only to policies or certificates of renewal, and not to agreements to insure, and it may be, and was, waived. The other points of the defendants, although enlarged upon in extenso at the trial, are covered by those here stated. The judgment for the plaintiffs should be affirmed, with costs. Mitchell, Roosevelt and Clerke, Justices.]