Van Tassel v. Greenwich Insurance

FOLLETT, J. There is a distinction between a contract of insurance and a contract to insure. Union Mut. Ins. Ck>. v. Commercial Mut. Marine Ins. Co., 2 Curt. 524, affirmed 19 How. 318;. Insurance Co. v. Colt, 20 Wall. 560; Putnam v. Insurance Co., 123 Mass. 324. The complaint was evidently drafted with this difference in mind, and with the view of enabling the plaintiff to. recover on whichever kind of contract he should be able to establish. Was there a contract of insurance outstanding January 13, 1891, the date of the fire? The policy provides: “This policy may, by a renewal, be continued under the original stipulations in, consideration of premium for the renewed term.” The policy had: been once renewed for the year 1890 at the same rate of premium-, charged for the original policy, and the defendant understood from-the application filed that the plaintiff desired, not a new policy, but a renewal of the one outstanding for the year 1891. This-is apparent from defendant’s letter of January 7, 1891, in which it said, “Tour letter for renewal of insurance for E. M. Van Tassel,”' etc. The binding slip of January 1, 1891, continued the original policy for $10,000 in force, subject to "the original stipulation”' therein contained. It was provided in the policy that any renewal of it should be subject to its provisions, which is the legal 304 •effect of a “binding slip.” Lipman v. Insurance Co., 121 N Y. 454, 24 N. E. Rep. 699; Karelsen v. Sun Fire Office, 122 R Y. 545, 25 N. E. Rep. 921; May, Ins. (3d Ed.) §§ 44-59. By the binding slip the defendant contracted to continue its policy in force for $10,000 •during the year 1891. This slip bound the company as effectually as the usual renewal receipt issued by insurers, and there was no way in which the defendant could, without the plaintiff’s assent, terminate its contract, except in the mode provided in the policy. This it failed to do. The letter of January 7th was not effectual as a notice of cancellation, and at most it simply informed the insured that, unless he consented to accept a policy for $5,000 and surrender the contract which he then held, the insurance would be. canceled. To give this letter greater effect would be permitting the defendant to put an end to its contract in a way not provided for. The letter amounted only to a proposition by the defendant to the plaintiff to consent to a reduction of the amount insured. He had the right to accept the proposal or to stand by the contract then existing. He was not bound to take further action in the matter. Until the policy was canceled in accordance with its provision, it was in force, and the plaintiff was liable for the premium earned while the risk was covered. Had the plaintiff stood on this contract it is difficult to see how a recovery for the full amount insured by it could have been •defeated. But the difficulty with the plaintiff’s case is that his conduct shows that he elected to consider the original policy at an end. This intention was manifested (1) by claiming that the •defendant was liable for $5,000 when he gave notice of loss; (2) by tendering the premium on an insurance for $5,000; (3) by filing proofs of loss for $5,000; (4) by bringing this action for the recovery of $5,000. This conduct requires us to hold that the plaintiff acquiesced in the termination of the contract of insurance for $10,000, and it follows that there was no outstanding contract of insurance at the date of the fire, unless the sentence in the defendant’s letter of January 7th can be construed to be such. The sentence is: “You will therefore consider that the risk is not held binding by this company for more than $5,000.” A contract cannot be made without a meeting of the minds of the parties, and an agreement on its terms. The defendant could not impose on the plaintiff a new contract of insurance for $5,000, and at a higher rate of premium, without his assent. It is clear, we think, that the company could not have collected this premium •on this sum from the plaintiff without his acceptance of the new contract tendered. He did not. manifest Ms acceptance of the new contract offered by the defendant until after the fire. This was too late, provided a reasonable time had elapsed in which he should have signified his assent. An insurer is not bound by an offer to insure property unless it is accepted, and it cannot be maintained that an owner can delay Ms acceptance for six days under the circumstances disclosed by this case, and until the property is destroyed by fire, and then, by an acceptance, bind 305 the company. The plaintiff, his agents, and the defendant were engaged in business in' the same city, and the property to be insured was situated in that city. We think that permitting six days to elapse without accepting the defendant’s proposition was an unreasonable delay. When the facts are undisputed, the question what is a reasonable time is one of law for the court. Wiggins v. Burkham, 10 Wall. 129-132; May, Ins. (3d Ed.) § 368; Thomp. Trials, § 1530 et seq. There ■ was no contract of insurance outstanding when the building was burned. Was there a binding contract to insure the property for $5,000 when the fire occurred? As before stated, an insurance company is not bound by its offer to insure unless it is accepted, which, as we have held, was not done in this case within a reasonable time. No binding contract to insure existed when the loss occurred. The defendant’s motion for a new trial must he granted, with costs to it, to abide the event. All concur.