McLean v. Republic Fire Insurance

By the Court — Ingalls, P. J. It is very clear that there was a valid renewal, by the defendant, of the policy in question ; and hence the important question is, whether such policy7 was canceled previous to the fire and subsequent to the renewal. There is some conflict between the agents of the [425] plaintiffs and defendant, in their evidence in regard to the transaction, and it was the province of the jury to settle that question, and we must assume that they found the facts favorably to the plaintiffs. The defendant negotiated with the plaintiffs through Messrs. Tillinghast & Son, who were the general agents of the defendant, in effecting insurance, and in doing whatever was necessary in transacting such business. The authority of a general agent in effecting insurance, and the extent of the responsibility of the principal for the acts of such agent, is well defined by repeated adjudications. (Boehen v. Williamburgh Ins. Co., 35 N. Y., 131; Trustees of First Baptist Church v. The Brooklyn Ins. Co., 19 N. Y., 305; Goit v. The N. P. Ins. Co., 25 Barb., 189; Carroll v. The C. O. Ins. Co., 40 Barb., 292.) The defendant did not unconditionally refuse to continue the risk, but gave its agents the following direction: “ Office of Republic Insurance Company, ) 153 Broadway, New York, 27th February, 1867. j “ B. A. Tillinghast & Son : “ Gentlemen. — Report No. 8173 is received. The rate on steamboats is two per cent here, and we, of course, cannot take a risk for less than the rate. Please cancel, or get two per cent. We don’t care about insuring steamboats any way, but when we do, we must get full rates. “ Very respectfully, “D. F. CURRY.” Tillinghast, the defendant’s agent, called upon Rogers, the plaintiffs’ agent, on the 28th of February, 1867, and informed-him of the directions which he had received from the company, and Rogers declined to pay the premium required, but, owing to the pressure of business, requested a delay until the following day, “ to get up the policy,” viz., to relieve the company of the risk; which was granted by Tillinghast. And there was a further extension until the 2d day of March, and the vessel was destroyed by fire on the night of the 1st of March. The court charged the jury as follows: “ The question is, did he (the defendant’s agent) give him (the [426] plaintiffs’ agent) time first, for one day, and then next, for another day, to procure the renewal certificate, and to continue the risk in the mean time? If he did, the defendants are liable; for, before those two days had expired, the property burned up, and the loss was sustained. If, on the contrary, on the 28th of February, the defendants’ agent gave him explicit notice, whether verbally or in writing, whether by showing the letter or said so orally, that the risk must be considered at an end, and the cancellation was to take effect from that time, the defendants are not at all liable, and there would be no propriety in rendering a verdict against them.” This was substantially the ground upon which the case was submitted to the jury, and upon which it was disposed of at the circuit. The ease is therefore, in my judgment, reduced to this single proposition, whether what occurred between Tillinghast and Rogers at the interview on the 28th of February had the effect absolutely to cancel the insurance at that time. While I do not regard the question entirely free from difficulty, yet I am inclined to the conclusion that the ruling of the court is defensible. The defendant did' not, in the letter of instruction to the Tillinghasts, prescribe the time within which the business should be transacted by which the policy was to be canceled, unless the increased premium should be paid, nor the manner in which the same was to be performed by the agent, but evidently left that to the discretion of such agent, who had the power to issue and renew policies of insurance, and to do any act within the scope of such general agency. The tendency of recent adjudication is to regard with considerable liberality the acts of such agents in binding the principal, when fraud is not imputed. In Boehen v. Williamsburgh Ins. Co. (35 N. Y., 131), the court sustained the insurance, although the insured did not pay the premium when the certificate of renewal was delivered, and the policy éxpressly provided that the same should not be considered binding until the premium was paid. It is clear from the evidence of Rogers that he did not understand that the policy was canceled at the first interview with Tillinghast, who [427] informed him of the instruction received from the defendant, and consented to the delay in getting up the policy. Under all the circumstances I do not think the delay granted was unreasonable or an abuse' of discretion1 on the part of the defendant’s agent. It did not amount strictly to an agreement to continue the insurance; but rather had the effect to prolong the period within which the process of cancellation should be accomplished. The certificate of renewal was to be procured and surrendered, which was not done until the 2d of March, and the policy was not in fact marked canceled until that day. Until there was an actual cancellation of the insurance it continued, not by force of any agreement made by the agent on the 28th February, but by force of the renewal of the policy which had been previously delivered. When an insurance company has accepted a risk, it is but just to hold that the insured is entitled to reasonable notice of the determination of the company to cancel such risk; and when the company omits to prescribe the time within which the process of cancellation shall be perfected, and intrusts the same to its agent, nothing short of an absolute abuse of discretion by the agent, or fraud on his part, should relieve the principal of liability. If the agent of the defendant intended to pronounce the risk at an end on the 28th February, he should have so stated to Rogers, and absolutely refused to allow any time within which to get up the policy. He had no right to trifle with the plaintiffs through their agent. We must assume that the jury accepted Rogers’ version of the transaction, which shows pretty clearly that neither agent understood the insurance terminated on the 28th February. We are of opinion that the defendant was bound by the act of its agent, who is not shown to have transcended the authority conferred, or to have been guilty of fraud. A new trial should be denied with costs, and the plaintiffs allowed to enter judgment. New trial denied.