Massasoit Steam Mills Co. v. Western Assurance Co.

Lord, J. There can be no doubt that the policy of the Revere Insurance Company had attached before the fire. On or before November 1, 1875, application was made in behalf of the plaintiff for insurance. This application was made to Jackson and Hinckley, who were agents of the defendant company, and agents also of the Revere Insurance Company. These agents had authority to issue policies of the Revere Insurance Company. They had no authority to issue policies of the defendant company, though they had authority temporarily to bind it. On November 1, such agents informed the agent of the plaintiff that they had taken the insurance in the amount requested, to wit, in the sum of $2500. They did not tell him in what office they had taken it. This, however, is what they had done: They had decided to insure in the Revere Insurance Company. They had written the policy in that office under the plaintiff’s application, and had notified the office to that effect. This was the precise condition of things from November 1 to the evening of November 2. If a loss had happened during that interval, there can be no doubt that the Revere Insurance Company would have been liable for it upon that policy. The Revere policy having attached, it could terminate only by the expiration of the risk, by the agreement of the parties, or by some means provided by the contract. The risk had not terminated at the time of the loss. The parties had not agreed to vacate the policy. The policy, however, provided for its determination at the will of the company ; this, however, was conditioned upon notice being given of the termination; no notice was given. The policy remained in force, and the Revere Insurance Company was liable upon it. On November 2, the Revere Insurance Company declined the risk. Upon the facts, as reported, the company could not decline the risk, except by terminating the same by notice, which was not given. Jackson and Hinckley, the agents of the Revere Insurance Company, concluded to put the risk in the defendant [115] company; this they had no authority to do. They had the option originally to insure in either company, but, having exercised that option in a mode which constituted a valid contract between the plaintiff and the Bevere Insurance Company, their power was exhausted. Bights had become fixed, which they could not at their will change. If, before the loss, there had been any evidence of the plaintiff’s assent to the change, it might have been made; but there was no such evidence. It appears as a fact, that Wood, who was the agen'- of the plaintiff to procure the insurance, and upon whose application the policy in the Bevere Insurance Company was written, knew before the fire that the policy had been made by the Bevere Insurance Company. He, having made the application to Hinckley for the insurance, and having left him the option of the office in which insurance should be effected, upon learning that the insurance was made in the Bevere Insurance Company, made no objection to it; his failure to do so would be a ratification of the selection, if such ratification were necessary; for, upon the determination of Jackson and Hinckley to insure in the Bevere Insurance Company, and upon the writing of the policy, the company in which insurance was to be made being wholly in their option, the contract was complete. There was no condition precedent to the taking effect of the contract The mode of payment of premium was understood by the parties, and no objection was then or is now made that either payment of the premium or delivery of the policy was a condition prece dent to the consummation of the contract. The loss was one, therefore, for which the Bevere Insurance Company was liable. There is no claim that insurance either was, or was contemplated to be, in more than one of the two companies; and we think that the report of the case shows that the exact legal effect of the acts in relation to the insurance was understood by the parties, and that all parties understood that, upon the facts, the Bevere Insurance Company was responsible to the plaintiff for the loss. Inasmuch, however, as Jackson and Hinckley, who completed the insurance for the Bevere Insurance Company, were also agents of the defendant ■ company, with power to bind it; and inasmuch as they had determined to vacate the insurance m the Bevere Insurance Company and to insure in the defendant office, it is supposed that this action is [116] brought because, as between the two companies, the equities are in favor of the Revere Insurance Company, and that equitably the defendant company should pay the loss; that as between the two companies equitably the insurance by the defendant company was a reinsurance in behalf of the Revere Insurance Company. The fire occurred on November 2, 1875. On December 2, following, the plaintiff made proof of loss to the Revere Insurance Company but not to the defendant. On June 5, 1876, the plaintiff demanded the policy declared on of the defendant, which did not deliver it; on June 14, 1876, proof of loss was made to the defendant company, and on September 18, 1876, this action was commenced. The report finds: “ It further appeared that the Revere Insurance Company was the party really interested as plaintiff in this suit, in consequence of an arrangement made between said company and the Massasoit Steam Mills Company, and that the Massasoit Steam Mills Company claimed to hold only one of the two companies, the Western Assurance or the Revere.” If the plaintiff under a mistake, whether of law or fact, made his claim against a company which was not liable, such mistake will not preclude it from recovering against a party who is liable. We do not, however, see that any such mistake was made, nor do we perceive that any party supposed any mistake was made. If the defendant company is liable, the Revere Insurance Company can have no possible interest in the plaintiff’s legal claim against the defendant; and we cannot see how the Revere Insurance Company can have a legal interest in the plaintiff’s claim against the defendant; and we can see no reason why the Revere Insurance Company should be interested except as above stated, and that, because of the relation of Jackson and Hinckley to each company, as between these two companies, the defendant should equitably bear the loss. But such a claim cannot be recognized in a suit at law in the name of the plaintiff against the defendant. The legal rights of the parties to this action are to be determined by the decision of the question whether at the time of the fire there was an existing contract covering the subject insured between the plaintiff and the Revere Company. There was no [117] agreement by the defendant to insure, except in substitution for the insurance by the Revere Insurance Company, or by insurance to take effect upon the termination of the Revere Company’s insurance. If the contract with the Revere Insurance Company was an existing contract, the agreement of the plaintiff was necessary in order effectually to substitute another insurance; of such agreement there is no evidence. If there was a subsisting agreement between the plaintiff and the Revere Insurance Company, that agreement was not terminated before the fire, and the other contingency to insure after the expiration of the Revere policy has not arisen. For the reasons before stated, it is clear that had the fire occurred at 10 o’clock in the morning instead of at 10 o’clock in the evening of November 2, the Revere Insurance Company must have been liable for the loss; but it could not have been liable unless there was, at that time, a subsisting contract between the parties; and that there was then a subsisting contract there can be no doubt. The result therefore is, that, according to the terms of the report, there must be Judgment for the defendant.