Ætna Insurance v. North-Western Iron Co.

Downer, J. 1. Was there any evidence (excluding that on the part of the defendant below) that the agents of the plaintiff in error had authority to make a parol contract of marine insurance ? What authority are they presumed to have when they are proved to be the sole insurance agents of the company at Milwaukee ? Of course, authority to do such business as such agents ordinarily do, the corporation of which they are agents being incorporated, as is admitted by the pleadings, by the legislature of the state of Connecticut. In this case the question whether a parol contract of marine insurance is valid, was argued at [464] great length, by the counsel for the respective parties ; and the authorities by them cited show that the ordinary mode of such insurance is by written policies ; and the counsel of each party conceded this to be so. We might perhaps take judicial notice of the ordinary mode of insurance. If, then, the ordinary mode is by written policies, the presumption is that the agents at Milwaukee had. a right to issue such policies, and to make, perhaps, a parol agreement to issue. But this, it appears to us, is the extent of the authority or presumption of authority The declaration of Belden to May. that it was not customary to give policies upon such insurances, is not sufficient to prove the authority of the agents to insure by parol. If it were, an agent might, by his own declaration, without the knowledge of his principal, increase his authority as to third persons to any extent. We are of opinion that the evidence (excluding that on the part of the defendant below) is not sufficient to prove that the agents had any authority to insure except in the ordinary mode, by issuing written policies. 2. It was proved on the part of the defendant below, that the money received for insurance on the iron was by the agents at Milwaukee transmitted to Mr. Dorr, the general agent of the company at Buffalo. And the receipt of the money is admitted in the answer; but the defendant denies that it was the premium for insurance under, the contract set out in the complaint. Is this sufficient evidence of the ratification of the contract to authorize the positive instruction to find for the plaintiff? The ratification by a principal of the unauthorized act of his agent, to be binding, must be made with a full knowledge of the material facts. The receipt and retaining of the money by the company would not ratify the unauthorized contract, unless the company knew on what account the money was paid, and the terms of the contract on which it was re-received. Steam Navigation Co. v. Dandridge, 8 Gill & Johns., 248. If the evidence tended to prove those facts, and was [465] sufficient to sustain a verdict of the jury finding them (of which we have some doubt), then the county court should have submitted the case to the jury with instruction that if they found these facts, their verdict should he for the plaintiff:! It erred in giving the positive instruction to find for the plaintiff. 3. The defendant below offered to prove that the usual course of business of marine insurance companies, through their agents in Milwaukee, is to receive propositions for insurance by parol or verbally; and that when accepted, the transaction is entered and recorded in the books of the company as an agreement between the parties for insurance upon the terms and conditions-of the policies in use by the companies — a policy to issue at any time upon request; and that the parties contracted in like- manner in the present instance — the contract having reference to. the printed policies of the company. The testimony so offered the court held inadmissible. Did the court err ? The testimony of Mr. May as to the conversation between him and Mr. Belden preceding the first shipment of iron tends to prove that he expected his company to be insured in the ordinary mode, by a written policy. And at the time he gave notice of the first shipment, he says he' asked Mr. Belden if he was to have a policy. There is reason, therefore, to believe that up to that point of time he expected a policy to issue in the ordinary form. And whether the parties made an agreement for issuing such a policy, or made a parol agreement of insurance, is not entirely certain from the evidence of the plaintiff below. The testimony offered tended to prove the understanding of the parties, and that no such contract as that alleged was made; and it appears to us it should have been received. By the Court. — Judgment reversed.