Eastern Railroad v. Relief Fire Insurance

Ames, J. The policy under which the plaintiffs claim does not apply to any particular building or to any specific or definite description of property. It was a contract of indemnity against loss or damage by fire occasioned by sparks from locomotives b property of others on lands not owned or occupied by the assured Under the provisions of the Gen. Sts. c. 63, § 101, railroad cor porations were made hable for all such losses, and were declared to have an insurable interest in all property exposed to injury of that kind from its proximity to their respective routes. The policy is therefore substantially a contract of reinsurance against such losses as the assured may be required to pay by virtue of the statute. Eastern Railroad Co. v. Relief Insurance Co. 98 Mass. 420. It appears from the auditor’s report that fires along the line of the road were frequent, the damage in some cases being small in amount, and these fires might and probably did occur in places remote from each other. In each case, it was necessary for the plaintiffs to first ascertain whether they were themselves responsible under the statute, before they could make any claim under the policy. Each case therefore would require a full investigation into the cause and origin of the fire, before the assured could be in condition to give the preliminary notifications and proofs required by the policy; and in such a state of things, and under the special circumstances of this policy, the time allowed and the [578] mode prescribed for furnishing such notice and proof might be found to be inconvenient and inappropriate. If they so considered them, and saw fit to propose any modification of the policy in that respect, the general agent "of the defendants, and their only representative, -in this state, was the proper person to receive the proposition. The case finds that, so far as he had power to do it, he waived the requirements of the policy as to the time and maimer of giving notice and furnishing evidence of the loss, and assented to another mode of proceeding, which the plaintiffs considered and urged as more convenient in this special case. It appears that the defendants, being a foreign corporation, in order to entitle themselves to transact business as an insurance company in this state, had appointed him their agent to represent and act for them, according to the regulations of the Gen. Sts. o. 58, §§ 66-78. He was their agent not only for the purpose of being served with process in order to bring the company under our jurisdiction, but also for the purpose of doing their general business in this state. He was employed not merely to receive and transmit applications for them to accept or reject, but apparently to take risks, to settle the rates of premium, and to issue policies at his discretion, on their account. For this purpose blank policies, signed by the proper officers of the company, were intrusted to him to countersign and issue. So long as he remained their agent, he seems to have superintended and carried on one entire local branch or department of their business. He was the only man with whom the plaintiffs dealt or were expected to deal; and if there were any special instructions intended to limit the apparent extent of his authority, there is nothing in the case to show that they were made known to the plaintiffs. So far as the Massachusetts business of the company was concerned-, he, while his agency lasted, stood in the place of a. representative or officer of the company, and the only one to whom the plaintiffs had access, or with whom they had any communication. It is true, that, in his character of representative and agent of the company, it would not be in his power to dispense with or modify the essential character or substance of the contract. It is well settled, however, even in the case of a mutual insurance com [579] pony, in which greater strictness is required, that the officers oí the company may in any particular case waive or modify the stipulations of the policy as to the preliminary proofs of loss, or the form and mode in which the liability of the company shall be ascertained and made known. Underhill v. Agawam Insurance Co. 6 Cush. 440. Brewer v. Chelsea Insurance Co. 14 Gray, 203. Priest v. Citizens’ Insurance Co. 3 Allen, 602. Blake v. Exchange Insurance Co. 12 Gray, 265. In the case at bai, all that the agent was requested to do was to waive the prescribed form and mode in which the liability of the company was to be ascertained and reported, for the purpose of substituting another mode of proceeding, about which he was consulted, and which he agreed to be reasonable under the circumstances of this special case. This agreement certainly made no change in the substance of the contract, and extended only to the preliminary proofs of the loss, and the form and mode of ascertaining and giving notice of its extent. It appears to us, on taking into consideration his relation to the company, the mode in which their business was done in this state, and the exigent of his apparent powers as their sole agent and representative, that the modification in the directions of the policy as to notice and proof of loss, to which he assented, was binding upon the defendants ; that he may fairly be considered for this purpose as an officer of the company ; that the plaintiffs were justified in acting and relying upon the agreement, and that it cannot now be repudiated without a breach of faith which the law cannot allow. Judgment for the plaintiffs according to the auditor’s report,