New Orleans Insurance v. Spruance

McAllister, J. The appellant’s counsel does not, as we understand him, make any question as to the right of an undisclosed principal to maintain an action upon a certain class of simple contracts made in the name of his agent on his behalf. Bat he contends that the general doctrine applicable to such cases can not apply to a contract of insurance under the circumstances of this case, because that contract is of a personal nature as regards the assured, and in this case Crosby, in whose name the contract was made, having no insurable interest in the property whose loss by fire was insured against, and ap. pellee, the owner and principal being unknown to appellant^ the contract is for that reason invalid. And counsel says that no case has been cited or can be found wherein it has been held that a recovery in the name of such undisclosed principal has been held sustainable, unless the agent had some insurable interest in the property. The law of a case arises upon the facts. What, then, are the material facts which the evidence upon the trial tended to prove ? It appears that the appellant, an insurance company had, before the transaction in question, issued the open policy in evidence, running in express terms, to whom it may concern, and placed it in the hands of Miller & Co. as its agents in Chicago, for the purpose of having the latter take risks thereunder and receive premiums on behalf of appellant, in sub stantially the same manner as was pursued in this case; that it was intended on the part of appellant, by this plan, to afford and to offer to commercial men like appellee, peculiar facilities for obtaining insurance for short periods of time, as the shifting exigencies of commerce in this city might require, it being well understood that insurance, taken under that plan, would almost universally be effected through the agency of insurance brokers acting for their respective patrons. It appears that Crosby, long before, and at the time of the contract in question, was carrying on the business of insurance broker in Chicago ; that such was his onjy business, and that it was well known to Miller & Co., that he was authorized by appellee to procure the insurance in question for him, and acted in procuring it solely on appellee’s behalf; that at the time Crosby made the application for this insurance at the office of Miller & Go., under said open policy, the latter well knew that he was acting only as broker, and for some third party as his principal; and the evidence tends to show that if Miller & Co. did not know at the time that appellee was, in fact, Crosby’s principal in the transaction, it was because they waived all information on that subject. Having by their plan and course of dealing, waived all information respecting for whom Crosby was acting, appellant must be regarded as having the knowledge that it was for appellee. Davis v. Boardman, 12 Mass. 80; 1 Phil. on Ins., p. 213, § 404. Mot to so hold and to permit appellant, after a loss, to question the. validity of the contract, on the ground that Crosby had no insurable interest, and appellee was unknown as principal, would he to allow appellant to use the plan which it had adopted and offered to the public as a snare for the unwary merchants who were foolish enough to confide in commercial honor. The case for appellee further shows that in the entry of the transaction in the books of registry, and upon the face of the certificate, Crosby’s agency is indicated. We are required, upon the facts, to hold that to all intents and purposes the contract of insurance involved in this case was with appellee, and is as valid as if his name had been inserted in the certificate in place of that of Crosby as agent. Taking the open policy and the certificate together as constituting the evidence in writing of the contract between these parties, we think it was competent for appellee to bring suit in his own name, and prove by parol his interest and relation to the contract the same as if the certificate, like the open policy, had run to whom it might concern. But authorities of the very highest character have held that where a broker or agent had taken insurance for Ms principal, who was undisclosed, and the policy or certificate was in the name of the agent and not disclosing his agency, and the agent having no insurable interest in the property, a recovery in the name of such undisclosed principal is sustamable. DeVinier v. Swanson, 1 Bos. & Pul. 346, note; Browning v. The Provincial Ins. Co. of Canada, 5 Law Rep., Privy Council Appeal Cases, 263. Upon the facts of this case and the authorities cited, we are of the opinion that the judgment below was right and should he affirmed. Affirmed.