Perkins v. Washington Insurance

Woodworth, J. On the 5th of January, 1830, the appellant paid to Henry P. Russell $106 25 for the purpose of insuring $5000 on his stock of dry goods and groceries, in the city of Savannah, against loss or damage by fire. Russell subscribed a receipt describing himself as agent of the respondents; and acknowledged that he 'had received fifty cents for the expense of the policy, and three dollars for taking the survey and transacting the business. On the 11th of January, 1820, the goods were consumed by fire. The respondents deny that, on the facts appearing in this cause, there is any liability on their part to compensate for the loss. The material question is, whether Henry P. Russell was the agent of the respondents, and in that capacity had the authority to bind them to insure the appellant’s goods ? and a concise view of some of the leading facts becomes necessary, in order to arrive at a correct conclusion. On the 11th of Decémber, 1818, the respondents app0jnted Russell surveyor. The power was limited to this object solely. On the 10th of February, 1819, Russell caused to be published in a newspaper printed at Savannah the proposals of the company; and added that insurance might be effected by application to him; and that he would obtain policies from the office with the least possible delay.' To this notice Russell subscribed his name as agent for the city of Savannah. It appears by the depositions, that subsequently, and previous to the 5th of January, 1820, he agreed to insure for a number of individuals, and received the premiums, which were transmitted to the respondents; and that in every instance, save one, the company, confirmed the insurance, and transmitted policies bearing date at the time the receipt was given to the applicant for insurance. It also appears, that Russell applied to the respondents for an enlararement. of [655] 9th, 1819, to Mr. Hawes, the secretary, he observes, “ There is a difficulty, owing to the distance from New York, in getting along with insurances here. Unless 1 am furnished with blank policies, ready signed, or unless my receipt for the premiums, as agent, is binding upon the company until the policies can be obtained from the office, I suspect but little can he done in the way of insuring; for I find that applicants want the risk to commence as soon as the premium is paid.” On the 28th of April, 1819, Mr. Hawes writes in reply, that “ the directors are aware of the difficulty of making insurance at a distance, and will obviate it, as far as consistent with the principle they had adopted, which was that no insurance shall be binding, until the premium is received at their office in New York.” He assigned as the reason of the rule, that the company would not be responsible, “ for the risk of sending the premium cither by land or water;” and that in all cases when the risk is accepted, the policy is to take effect from the time when the premium was received by the agent. [654] The Case. R. appointed surveyor. His acts, [655] Secretary’s letter. President’s letter. On the 27th of April, 1819, Mr. Swords, president of the company, wrote to Russell as follows : “ All insurances that you may agree to make, and for which such premiums as you may deem proper to charge, shall be actually paid, and shall be received here, the office will consider as enuring at the time of the payment to you; so that in case of accident between such time of payment, and the receipt of the money here, the company will indemnify such loss ; provided, however, the office shall recognize the rate of premium which you shall charge, and shall be otherwise satisfied with the risk..” R.’s original power, that of surveyor only; but enlarged afterwards. After this review, we may safely dismiss the inquiry what were the original powers conferred on the agent ? It may he conceded that they were no greater than those of surveyor, strictly; and that he could not, in that capacity, bind his principal by an agreement to insure. The limited nature of such an appointment, it was soon perceived, could answer no beneficial purpose. It is to he presumed that very few, if any, would be disposed to advance the premium, and wait an indefinite period before the policy should attach. Russell communicates the difficulty to the president, who [656] is to be considered the organ of the company commumca ting their assent to the enlarged powers of the agent; and particularly, as it is not pretended that his letter to Russel l was unauthorized. wha^cases^iis agreements They depended upon three contingencies: According to the instructions thus given to the agent, when and in what cases were his agreements to insure bind-011 the respondents ? Upon the payment of the premi um to the agent, the applicant for insurance was subject to ^2e following contingencies: first, that the premium should ]3e received at the office in New York : seco?idly, that the . ' rate of premium should be recognized at the office ; and lastly, that the company should be otherwise satisfied with the risk. His agree-case, was binding ; all the upon which depondedChá™ ing been com* plied with, As to the first, no doubt can arise ; for it depends on the fact whether the money has been received or tendered at the office in New York. As to the second, it was undoubtedly intended that if the rate of premium taken by the agent conformed to the rules and regulations of the company, and was not less than the uniform rate before taken in other and similar cases which -had invariably received the sanction of the respondents, the applicants would be entitled to a policy of insurance, commencing on the day the premium was paid; for, although it is provided, that the office shall recognize the rate of premium, it must be understood as having referred to the rules and regulations sanctioned by the board of directors, and the powers vested in the agent. The right of the company' to exercise their judgment whether the agreement of the agent to insure, corresponded with the instructions givenj cannot be questioned. But from the nature of the case it seems necessarily confined within such limits. It cannot be urged that the company reserved or intended to reserve the right of arbitrarily refusing to subscribe a policy, when every prerequisite which they had themselves prescribed, had been fairly and honestly complied with. It must then be confined within the bomids I have already traced ; and if so, when tira agent presents a case, having received the premium, thy the fair implication of the proviso is, that the company shall act upon it; and if they decline to act, or point out any objection, the presumption is, that none exists, with [657] in the true intent of the proviso inserted in the instructions: It is very evident to my mind, that the respondents did not repose themselves on any objectionable features in the conduct of the agent, but on an absolute right of refusal, which they conceived was vested in them, without assigning any cause. This is inferable from that part of their answer wherein they state, “ that not considering themselves bound by any such alleged agreement for insurance, they did not examine into, and, therefore, neither they nor their officers or agents did at any time object to the sufficiency of the proofs; nor did they, in any way, intimate or pretend that there had been any unfairness or fraud on the part of the appellant in obtaining the insurance.” It is also remarkable that no suggestion is made, that the rate of insurance was not conformable to the general usage of the company. Can it be doubted that, had the loss not have happened, previous to the time when the premium was offered to be paid in the city of New York, that this policy would have been signed as readily as others which had been transmitted by the agent? These remarks are equally applicable to the third and last proviso, “ that the company shall be otherwise satisfied with the risk.” The question upon this should be considered in the same manner, as if application had been made for the policy before any loss sustained. What reasons could have been assigned for dissatisfaction with the risk ? If any existed, it was the duty of the respondents to point them out. Not having done so, it is not uncharitable to suppose that they declined acting as in ordinary cases, in consequence of the loss, erroneously supposing that a literal adherence to the words ojj the instructions would shield them against the appellant’s claim to compensation. It is not unnatural, in controversies between individuals, for them, however upright, to seize on every plank that may possibly lead to safety. Hence it comes that no man is a proper judge in his own cause; and that Courts are established to measure out equal and exact justice to contending parties. And the agent having conformed to his instructions, and acted agreeable to their rules ana regulations. The only remaining inquiry is, whether the agreement to insure, between the appellant and Russell, the agent, was within the instructions given by the respondents, and agree [658] able to their rules and regulations. The insurance was ai 2¡r PPr cent- premium, on dry goods and groceries. It does not appear whether the store house which contained the. goods, was included in the first, second or third class of hazards. Supposing it to have been the last, the rate of insurance on such buildings, not having goods hazardous therein, is stated at from 175 to 200 cents on the 100 dolT lars. Goods hazardous, which includes groceries, are charged with 12| cents in addition to this premium. The rate, then, paid by the appellant was equal to the highest sum claimed by the respondents in their proposals for insurance. ' I apprehend, therefore, that there is no well founded objection to the rate of insurance. This is evident from the acts of the respondents in uniformly accepting former risks, upon contracts of - insurance made on the same, or not more favorable terms. The only risk rejected was not on the ground that the premium Avas too small, but that the application was for six months insurance and the premium paid for that time only; Avhereas an insurance for six months is always chargeable Avith three quarters of a year. If, then, we look at the instructions given, the proposals issued containing the rates of insurance, and the acts of the respondents in reference to similar cases, the conclusion seems to be irresistible, that the risk and rate of premium Avere entirely satisfactory. The premium Avas also tendered in New York and refused, Avhich is a compliance with the first part of the proviso. This, in thy vieAV, removes every obstacle in the appellant’s Avay. I am of opinion that the decree of his honor the Chancellor be reversed •, and that the respondents be decreed to pay to the appellant, the amount agreed to be insured. Woodworth, J. for reversal. Savage, Ch. Justice, and Sutherland, Justice, concurred. The question. Colden, Senator. The question in this case is, AAdiether Russell was so far the agent of the respondents, as to bind them to an insurance for which he was paid a premium by the appellant, on the 5th of January, 1820. For this premium he then signed, as agent for the respondents, a receipt, [659] purporting that they should insure the appellant; and that the insurance should take effect from the date of the receipt, I believe it is now perfectly well settled, that a person may become the agent of a corporation, as he may of an individual, without any deed or writing. Were it not so, there could be no safety in dealing with a corporation, unless it were with a full board of directors. They would have all tho advantages of employing agents and be under no responsibility for their acts. The cases cited by the appellant’s counsel seem to me to be conclusive on this point, and to render any further discussion or illustration of it unnecessary. One may boof a corpora-as "of* an vidual, with- or writiug. Warrant of surrey. Long before the premium in question was paid'to Russell, he had received from the respondents, what their president, in his letter enclosing it, called, “ a warrant,” under the corporate seal, whereby Russell was appointed surveyor of The Washington Insurance Company, of such buildings as should bo offered for insurance in the said company.” Did not, per to do any act Wndingupdonia. respondents. If this were the extent of the authority given by the respon dents to Russell, then unquestionably no act of his. would be binding on tho company; for I do not see that a survey made by him could be in any wise obligatory. But he oxotl^y their consent, But most certainly he exercised other powers, not only with the consent and approbation of the respondents, hut by the direction of their president. These powers were such as well warranted him in assuming the title of agent, and such as leave us no reason to be surprised that the respondents should have known that he was in the habit of calling and signing himself their agent, without their objecting to his doing so until the present controversy arose. Two of the letters of Russell to the respondents, which are exhibits in the cause, are signed by him as agent. These letters relate to premiums received and transmitted by Russell. And the receipt of the letters and of the premiums are acknowledged in subsequent letters of the respondents. So little wore the acts of Russell directed by the power given to him by the warrant, that it is hardly necessary to refer to that instrument in the further examination of the cause. [660] President’s letter of April 27th, 1819. Russell was acknowledgedly not only the agent of the respondents, to make surveys, but to agree to make in sur anees, to charge such premiums as he should think proper, to receive the premiums, and to remit them to the respondents at New York. That he was the agent of the respondents, for these purposes, appears from the letter of the president of the 27th of April, 1819, which is an answer to the one from Russell of the 9th of the same month applying for signed blank policies, which were refused. It is true that, by the same letter, it appears that the company intended to reserve a right to judge of the rate of premium and of the risk. I shall in the sequel advert to this part of the letter. I only refer to it at this time, to" show that the respondents never intended to confine the powers of Russell to those of a surveyor, or supposed that they were limited to those conferred by the warrant. Agency acknowledged by the answer. That Russell was the agent of the respondents to receive premiums and to transmit them to the company, not only appears from the letters already mentioned, but is acknowledged in the answer. The words of the answer to which I now refer, are as follows : “ They permitted him as in their said answer afterwards particularly mentioned, to receive from such persons as were willing to pay the same to him, the sums which he might think fit to name as the probable premiums, and to transmit the same to the respondents in the city of New York, in order to prevent any unnecessary delay in effecting the insurance.” If they permitted Russell to receive and remit premiums, they authorized him to do so. This acknowledgment of the respondents is not qualified by any subsequent part of the answer, farther than by' a denial that they authorized, or intended Russell to be their agent to make insurances. But on the contrary, they aver, that they refused to give him such powers when he applied for them. The question is not, merely, what powers the company intended to confer on R. but what were [661] the citizens of Savannah, and tho appellant as one of them, authorized to consider his powers to be as derived from his acts and those of tho respondents. If the respondents have given to or suffered R. to ex-must bear tho conseiucllceSi [660] This would be conclusive against the appellant, if the points were, what powers the respondents intended to give to Russell. But that is not the case. The question is, what powers were the citizens of Savannah, and the appellant, as [661] one of them, justified from the acts of Russell, and of tit e respondents, in presuming he possessed. It might have been very far from the intention of the respondents, to authorize their agent to bind them to an insurance at his pleasure. It might have been very imprudent in the company, to have renounced the important right of deliberating on the expediency of a risk. To keep these matters under the control of the directors, may be very essential to the credit and safety of every insurance company. In all this I entirely agree with his honor the late Chancellor. But if the directors have incautiously given to their agent, or suffered him to exercise too large a power, they must bear the consequences of their own imprudence. I am not disposed to sacrifice the just claims of one who confided in the respondents, to their safety or to the support of their credit. I will presume that it is established, that Russell was the agent of the respondénts to receive premiums, and to remit them to the company at New York. Then we are to inquire, whether the respondents were bound by the receipt as if the payment had been made to themselves. It will not be questioned, that if the premium had been paid at the office of the company in New York, and the president or secretary had signed the receipt which was given by Russell, the insurance would have been as binding as if a policy had been executed. Receipts of this nature are in common use. Much of the insurance made in this city is done, in the first instance, by similar receipts signed by some officer of the corporation. They are intended to give immediate effect to the insurance, and supply the place of a formal policy, until one can be prepared. It has been decided that these receipts are as binding as a policy could be. In truth, the receipt answers all the use of a policy, except that the latter authorizes the assured, in case of loss, to sue in a Court of law, instead of being obliged to resort, as in this case, to a Court of Chancery. Had the receipt been signed by tho president or secretary, it would havo been as binding as a policy; and it is a common habit in New York, to insure by receipts of this nature. Tho only differenco betvi een their effect, and that of a policy, is, that the former must bo enforced in chancery, and tho latter at law. The letter from the president of the company to Russell, xvhich enclosed his appointment as surveyor, also covered the printed proposals of the company. From these, Russell, as he says,' in his answer to the second direct interro [662] gatory, framed an advertisement, which is one of the ap ■ pellant’s exhibits, inviting the citizens of Savannah to make insurance through him, with the respondents. To this advertisement he put the names of the president and secretary. [661] Tho printed proposals sent to R. His advertisement at Savannah [662] The respondents aver in their answer, and we must therefore believe, that this advertisement was unauthorized by them, and that they never had knowledge of it till after this controversy arose. But although they disclaim the advertisement, yet they admit in their answer that they sent the printed proposals, which are an exhibit to Russell. And he testifies that these proposals, together with the letter, which was written on the back of them, he pasted on a piece of pasteboard, and hung it in his store for the information of those who might choose to read it. These proposals, after a preface which gives assurances of the solidity of the company, and of the fairness, candor and liberality which the directors meant to practice, proceeds to state a number of articles, for the information and government of those who meant to do business with the company. The fifth of these articles is in the following words: “No insurance is to be considered as made or binding until the premium is paid.” It is to be observed that here is no intimation, as to where, or to whom the premium is to be paid. There is nothing from which those who read the proposals as they were stuck up in the office of Russell, could understand that the payment of a premium to an agent of the company authorized to receive the same, would not be as binding as if it had been paid at the office of the respondents, in New York. I presume it will be admitted, that all persons dealing with the respondents, and who had knowledge of this article of the proposals, would be authorized to infer from it, a converse proposition, to wit, that every insurance would be considered as made and binding when the premium was paid. How then does the case stand 1 The appellant found Russell the agent of the respondents, to accept propositions to insure his property, and to receive payment of the premium. He also found a declaration of the respondents [663] which was in effect, that when the premium was paid, the insurance was to be considered as binding. I think the appellant was authorized to conclude, when he had paid the premium to the agent of the respondents in Savannah, that the respondents were bound to make good to him any loss he might subsequently sustain. I cannot think that any thing was communicated to him, from which he was to understand that his property was to remain uninsured, until Russell should have collected so large an amount of premiums as he might think worth while to remit to his constituents. Russell says it was not his practice to send on these premiums immediately; that with respect to the premium in question, he pursued his usual course of waiting until he had got a considerable sum of money for the purpose of purchasing a bill of exchange to make the remittance. In my view of the subject, it is entirely immaterial how far the respondents intended to limit the agency of Russell. If they meant that those who dealt with him should understand that he had a limited agency, it was their business to have made known the bounds which they had proscribed to him. But, on the contrary, their authority to him to receive premiums, and their notice that the payment of a premium should be binding, I think, left them without the power to disavow Russell’s acts. If the respondents had intended a limited agency, they should have made this known. It appears to me, however, that the case may be put on another footing no less unfavorable to the defence of the respondents. I apprehend it is a well settled rule of the Court of Chancery, that whatever a party was under a legal obligation to perform, shall, as to all persons who had a right to claim the performance, be considered as having been performed. In other words, no person shall be allowed any advantage from his' own, or his agent’s laches. It is a well settled rule in chancery, that what one is legally bound to do, shall bo ■considered as done, as to all those having a right to claim its performance. As the respondents admit Russell was authorized to receive premiums, and to remit them, it was his duty to remit the premium he received from the appellant without delay. If he had done so, the respondents must have received it before they had news of the fire, which did not happen till the 11th of January. Had the premium been duly remitted, there is no doubt but that the policy would have been made; [664] because there is no intimation.on the part of the respondents> that there was any objection to the risk, or to the premium. I think, therefore, the Court of Chancery would have been well warranted in considering the case as if the Premium had been transmitted to the respondents in due time, and had, as it must have been, received by them before they had news of the fire. [663] This rule applied. [664] An action lain against R. for not remit-mg m time, if tho obligation ¡Mndedon this" Suppose an action had been brought against Russell for not sending the premium in due time, can there be a doubt but that the appellant would have recovered in a Court of ±jr law; and that the measure of damages would have been t^le amomlt which was to have been insured, and for which the premium was paid. The plaintiff, in such an action, would only have had to have shown that if the premium had been duly forwarded, the risk would have been taken, and he would have had the benefit of an insurance. And so in this case, when Russell, who rvas the agent of the respondents to receive and remit the premium, has with- • held it, I think the respondents are to be held responsible, as they would have been, if he had performed his duty. It will be seen, that I take but little notice of the corres-, pondence between Russell and the respondents, by which it may appear that they intended to limit his agency. I disregard it, because it does not appear that the appellant ever had any knowledge of this correspondence. R. was an-contract by the correspondence of the company with him. His Letter of April 9th, 1819. But if we regard this correspondence, I confess I find myself entirely at a loss to reconcile the defence which .the respondents have made in the court below, with principles of justice and equity. President’s answer of the 28th. Russell’s letter of the 9th April, 1819, he applies for ready signed blank policies, or to have his receipt for premiums made binding on the company, until policies could . be obtained from the office. The answer to this letter is fi'om the president of the company, and is dated the 28th of the same month. In this answer the president, after objecting to furnishing blank policies, “ says the most and best that can be done, I think, is this, that all insurances that you may agree to make, and for which such premiums as you may think proper to charge, shall be actually paid, and received here, the office will consider as enuring at the time of [665] the payment to you, so that in case of accident between such time of payment, and the receipt of the money here, the company will indemnify such loss, provided, however, the office shall recognize the rate of premium which you shall charge, and shall be otherwise satisfied with the risk.’ Now what is the actual state of things ? Russell has agreed to make an insurance for the appellant, for which he has thought proper to charge a certain premium, which has been actually paid, and which has been received at the office of the respondents. I say received there, because it has been tendered to them. But an accident between the date of the receipt and the tender of the money here has happened. What then can the defendant say, consistently with the president’s letter, why they" should not make a policy which shall enure at the time of the payment to Russell ? All that this letter of the president will permit them to say is, that the office did not recognize the rate of premium, and were not otherwise satisfied with the risk. But can they honestly and conscientiously say this ? Was this the truth? Was it not the truth that the loss had intervened, and therefore they would not make the policy ? If they may make the excuse they offer in this case, then they might have made it in every case where a loss happened between the payment of the premium to their agent, and the receipt of the money here. In other words, whenever they received an account of a loss before the premium came into their hands, however long their agent might have chosen to retain it, they would not make a policy; and so, it will be seen, that the president’s undertaking that a policy should enure from the time of the payment to the agent, if we give to.his letter the construction the respondents contend for, is a perfect fallacy. ' But the respondents should, in my opinion, be obliged to recognize the rate of premium which was charged and to be satisfied with the risk, unless they can show some objections to the one or the other. This they do not pretend to do. There is not the least pretence that if the loss had not [666] happened, they would, not have taken the premium, and made the policy. I cannot consent to suffer the respondents thus to evade the spirit of the agreement, made with their express authority by their agent. I am sure the equity of the case is against them: and I do believe that this in an instance where law and equity coincide. I confess, it is with much diffidence, that I dissent from the great legal authority by which the decree in this case was pronounced. Were I in a situation to ask advice, instead of being obliged to render a judgment, I might be governed by an opinion deserving such high consideration. But as it is, 1 am not at liberty to yield to feelings of respect; and must decide according to my own convictions. Golden, senator, concludes that the decree should be reversed. Decree reversed unanimously My opinion is, that the decree of the- Chancellor should be reversed. The Court concurring unanimously in the result of these opinions, it was thereupon ordered, adjudged and decreed, that the decree of the Court of Chancery be reversed and vacated. And it was further ordered, adjudged and decreed, that it be referred to one of the masters of that Court, to ascertain and report the balance justly due to the appellant in this cause, for the amount insured on the stock of dry goods and groceries, &c. belonging to the appellant, mentioned in the pleadings in this cause, and interest on the same to be calculated from the 15th day of April, 1820. And it was further ordered, adjudged and decreed, that upon the coming in and confirmation of the report, the respondents be decreed to pay to the solicitor of the appellant, the appellant’s costs in the Court of Chancery, to be taxed, and also the balance reported to be due to him on account of said insurance and interest, together with the interest on the same from the date of the report • and that the record be remitted, &c.