Kings County Fire Insurance v. Swigert

Bailey, P. J. In this case the fact seems to be undisputed that the plaintiff, at the date of the policy in suit, and from that time up to the date of the loss, kept and used gasoline in considerable quantities on the premises insured, and the question is, whether his doing so vitiated his policy. While gasoline is not mentioned by name, or the keeping or use of it on the pz-emises forbidden in terms, yet, we think, it can scarcely be doubted that the language of the policy, when interpreted in the light of the evidence, includes gasoline among the articles which the plaintiff was prohibited from keeping or using. By the first specification of hazards contained in the conditions annexed to and forming a part of the policy, petroleum, benzine, benzole and naphtha, are classed as “ specially hazai’dous,” and it is there provided that keeping them on the premises without special permission should vitiate the policy. Evidence was introduced showing that gasoline is a product of petroleum, it being one of the most inflammable and explosive of the oils obtained from that substance. Crude petroleum consists of a number of different oils, all more or less volatile, which are separated from each other by a process of distillation, and of these, gasoline, being the most volatile, and consequently the most explosive, is the one driven off at the lowest temperature. We are inclined to the opinion that the prohibition against keeping petroleum on the preznises was, ex vi termini, a prohibition against keeping this, the most dangei’ous of the sevez’al oils of which that substance is composed. But there is a further condition that keeping on the premises any article denominated hazardous or extra hazardous, should avoid the insurance, and by the second specification of hazards, “ kerosene and other refined coal or earth oils,” when kept in quantities not exceeding five barrels, are classed as “ extz'a hazaz’dous.” That gasoline is like kerosene, a refined coal or earth oil, is abundantly shown by the evidence, and being kept, as is shown, in quantities less than five bazrels, was, according to the classification adopted by the policy, an “extra hazardous” ai’ticle, and so within the terms of the condition. The avoidance of the policy by reason of the breach of this condition is sought to be obviated, however, by showing that at the time the policy was issued, the insui’ance company, through its agent, had notice that gasoline was'being used on the premises in the manner shown by the evidence, and is thereby estopped from setting up or availing .itself of such breach. The policy was obtained for the plaintiff by Kennedy, and the evidence tends to show that, before applying for it, Kennedy made a personal examination and survey of the premises and was fully in formed of the plaintiff’s, keeping gasoline thereon, and of the various uses to which he was applying it. If, then, Kennedy was in fact the agent of the defendant, or if, under the circumstances of this case, he should, as between the parties, be deemed to be such agent, the defendant, upon principles of law now well established, must be held to be precluded from setting up in avoidance of the policy, a fact of which its agent had knowledge at the time the policy was issued. There is no evidence of any employment by the defendant of either Kennedy or his firm to act as its agents, and so far as there is any evidence on that subject, it shows affirmatively that the relation of principal and agent did not exist, and never had, in fact, existed between the defendant and them. They were insurance agents in the employ of one or more insurance companies, the defendant not being of the number. So far as they are shown to have dealt with companies other than those bv which they were employed as agents, they dealt as insurance brokers. They solicited applications for insurance from parties desiring to be insured, and having obtained such applications, took them to the agents of the companies in which they saw fit to place the insurance and obtained policies thereon. These policies they afterward delivered to their customers, collecting from them the premiums, and transmitting the same to the agents of the proper companies after deducting their commissions. In this way, and in this way only, are they shown to have had dealings with the defendant. It is claimed, however, that the defendant, by placing its policy in Kennedy’s hands, clothed him with such a badge of agency as must be held to raise a conclusive presumption in favor of the plaintiff that he was an authorized agent of the defendant. This circumstance alone might doubtless give rise to a presumption of agency, but such presumption can arise only where there have been no previous dealings between the broker and the assured, from which a contrary presumption arises. If, before the company places the policy in the broker’s hands, he is in fact employed by the assured as his ■ agent to procure for him the insurance, or is in any way clothed by the assured with the credentials of an agency for him, the company may deliver him the policy without being exposed to any presumption that in doing so it is making him its own agent. The evidence here tends to show that, in case both of the policy in suit and of the previous policy, Kennedy was act- • ually employed by the plaintiff to obtain the insurance, before any application was made by him to the defendant's agent for a policy. In case of the first policy, Kennedy came to the plaintiff, who was then acting as the agent of G-ewee & Davis, the owners, in reference to insuring the property, and a negotiation thereupon ensued between Kennedy and the plaintiff, which resulted in Kennedy’s béing employed to obtain the desired insurance. • Kennedy then drew up an application for the insurance agreed upon between him and the plaintiff, and by presenting such application to the defendant’s agent, obtained said policy. The plaintiff afterward purchased the property, and desiring to have the insurance transferred to himself, he went to Kennedy or some other member of his firm, and employed him to get such transfer made, at the same time delivering to him the old policy. On such employment, and bearing in his hands as a badge of his authority to act for the plaintiff the policy to be surrendered, he went again to the defendant’s agent and obtained for the plaintiff the policy in suit. The court, in the instructions to the jury, wholly' ignored these circumstances, which, if not conclusive in favor of the defendant, tend strongly to rebut the presumption that Kennedy or his firm were the defendant’s agents. Bv the first instruction for the plaintiff the court-held, in substance, that if Kennedy examined the premises with a view of insuring them, representing himself- to be an insurance agent, and afterward returned with the policy ready for delivery, and that the plaintiff accepted the policy and paid the premium in good faith, under the belief that Kennedy was the defendant’s agent, and that the premium was afterward paid to and accepted by the defendant, then the defendant is estopped to dispute the right of Kennedy to act as its agent. Here all the evidence tending to show that Kennedy was the plaintiff’s agent, thereby rebutting the presumption of agency for the defendant, is overlooked. Nor was there any other instruction given in which any proper hypothesis, based upon the evidence thus ignored, was submitted to the jury. The first instruction is also erroneous in directly asserting, and thereby assuming as proved, many of the facts which should have been left to the jury for their determination. After submitting the hypothesis that Kennedy examined the premises with a view of insuring them, representing himself to be an insurance agent, and afterward returned with the policy ready for delivery to the plaintiff, the language of the instruction is, “ who accepted the policy and paid the premium in good faith, under the belief that such person was an agent clothed with full power of defendant company who issued the policy, which premium was afterward received, paid to and accepted by the defendant company.” This is the language of assertion and not of hypothesis. It is erroneous for a court, in its instructions to the jury, to assume the truth of or assert as true any controverted fact, but such facts should in all cases be submitted to the jury to be found from the evidence. The main contest at the trial turned upon the question whether, in the light of all the evidence, Kennedy was to be deemed to have acted as the defendant’s agent in procuring the policy in suit; but the court, in the second instruction for the plaintiff, and in the modification of the defendant’s first, eighth, eleventh and twelfth instructions, virtually assumed that he was the defendant’s agent, and merely submitted to the jury the question, upon which there was but little controversy, whether he had notice of the fact that the plaintiff was keeping and .using gasoline on the premises. Thus, in the plaintiff’s second instruction, the jury were told, in substance, that when it is known to the insurance agent, at the time the policy is issued, that the assured keeps an article prohibited by the policy, and intends to keep it on the premises insured such act of the assured will not render the policy void, whether permission to keep such article on the premises is indorsed on the policy or not, and if the jury believe, from the evidence in this case, that the agent of the defendant knew, at the time the policy was issued, that gasoline was kept on the premises in question, and that the assured intended so to keep it, such keeping or use would not render the policy void. The term “agent,” as employed in this instruction, can refer to no other person than Kennedy, or some member of his firm, and the fact that the agency contended for by the plaintiff existed, instead of being submitted to'the jury, is here tacitly assumed, and the question of notice to such agent only is submitted. The same error, in perhaps even a balder form, appears in each of the modifications which the court made to the defendant’s instructions, and no instruction was given except the plaintiff’s first instruction, in which the question whether Kennedy or his firm were the defendant’s agents, was submitted to the jury in any form. For the errors in the instructions to the jury above pointed out, the judgment will be reversed and the cause remanded. ‘Judgment reversed.