In re Pelican Insurance

•The opinion of the court was delivered by McEnery, J. To the account of the liquidators of the Pelican In - suranee Company, several oppositions were filed, as follows: W. F. Grubbs, for one thousand dollars. Mrs. M. W. Smith, for one thousand, nine hundred and thirty dollars. The State of Louisiana, for taxes. The city of New Orleans, for taxes. The civil sheriff of New Orleans, for costs. There was judgment maintaining the oppositions. The liquidators appealed. W. F. Grubbs & Co., doing business in North Carolina, insured a stock of Goods in the Pelican Insurance Company. There was a total loss by fire. W. F. Grubbs was the only member of W. F. Grubbs & Co., and he claims as beneficiary. For the reason that he was the sole member of said firm the liquidators oppose his demand, and invoke the provisions of Sec. 2668, Revised Statutes, which says: “No person shall transact business in che name of a partner not interested in his firm, and when the designation ‘ and Company, or & Co.’ is used, it shall represent an actual partner or partners.” An interpretation has been placed upon this section in the cases of Kent & Co. vs. Mojonier, 36 An. 259; Miller & Co. vs. Creditors, 37 An. 604, and Wolfe vs. Joubert, 45 An. 1100; in all of which it was held that Sec. 2668 was intended to prevent the use of the name of a person not evidently interested in the firm, thus inducing a false credit to which it was not entitled, and which the section was intended to prohibit the obtaining. It does not forbid the giving of credit. The section of the Revised Statute does not pronounce the contract entered into with a firm composed [937] solely of one member null and void. The debtor of such a partnership or firm can not plead the nullity of his engagement on account of the creditor’s violation of the statute where the only penalty affixed to its violation is making it a misdemeanor and subjecting the offender to a fine. Wolfe vs. Joubert, 45 An. 1100. But the contract of insurance was made in North Oarolina, and there was no violation of the statute in Louisiana. We are not informed that a similar statute exists in North Oarolina. Id. The liquidators affirm that there was a false representation to the insurance company when W. F. Grubbs & Co. took out the policy, as that firm was supposed to have entered into the contract with the insurance company, and not with W. F. Grubbs individually. We do not think that the withholding of this knowledge from the insurance company, that W. F. Grubbs was the only member of the firm, was the omission of a fact material to the risk. It had no reference to the valuation, situation or occupancy of the property insured, and the title to the same was really in the party effecting the insurance. The agent, however, who issued the policy was aware of the fact that W. F. Grubbs was the sole member of the firm. It does not appear from the testimony that W. F. Grubbs used the name of W. F. Grubbs & Co. for the purpose of obtaining any advantage over the company. W. F. Grubbs acted in good faith in obtaining the policy, and no fact was withheld by him which it was essential for the insurance company to know. In the case of Pelican Insurance Company vs. Smith, 92 Ala. 428, to which we have been referred, the issue in the case was not the same as in this. Smith & Co., which was composed only of M. A. Smith, took a policy on a storehouse and goods. Before the application for the insurance, M. A. Smith sold the storehouse and all goods to his wife. No disclosure was made to the company that Mrs. Smith was owner- of the property insured. In the opinion, the Supreme Oourt cf Alabama said: “Under the evidence as it now appears in the record, it is clear that defendant’s agent had no information or notice that plaintiff was the owner of the property, and it is equally clear that M. A. Smith, by his statements and answers, induced the defendant’s agent to believe he (M. A. Smith) was insuring his own property and goods, and that he owned the same in fee simple.” In another part of the opinion the court; said: “If M. A. Smith [938] was plaintiff in this action, and the defence set up was that defendant issued the policy upon the belief that some other person asso - ciated with M. A. Smith constituted the firm of Smith & Co., the failure to make the inquiry might be fatal to the defence.” The agent in North Carolina failed to make any inquiry as to the composition of the firm of W. F. Grubbs & Co. But it is a fact that the agent knew that W. F. Grubbs was the sole member of the firm. The Pelican Insurance Company had a general agent at Raleigh, in North Carolina, who appointed the sub-agent, with whom the opponent, Grubbs, did business. The company withdrew from the State, and so informed its general agent, who was instructed to return to the home office all blank policies, etc. No public notice was given of this withdrawal, nor was any informatio a conveyed directly or constructively to W. F. Grubbs that the company had ceased business in North Carolina. The agent who issued the policy to W. F. Grubbs & Co., and with whom said firm, or W. F. Grubbs, had been doing business, swears that he had never received any notice of the withdrawal of the company from North Carolina. He still had in his possession the blank applications and p.licies. The possession of these blanks by the agent would lead one, not informed otherwise, who had been in the habit of insuring with the agent, that he was still in the service of the company. It is urged by the liquidators that the names of the officers attached to the policy were not in fact officers of the company, and had ceased to be such long before the policy issued. But it was used by the company, and when issued by the agent, became properly an authenticated policy of the company. One of the liquidators and ex-president of the company says that when new officers were elected, it was not usual to call in blank policies signed by their predecessors. They were still used. Through error, a credit of eighteen dollars and eighty cents, paid after the sheriff’s cost bill was filed, was not allowed in the judgment, although it was presented to the court below. The civil sheriff prays for an amendment of the judgment allowing the credit, and for a release from the tax for costs of appeal. The error should have been corrected below, or a release before .appeal was taken given to the liquidators. In order to correct the error, an appeal became necessary. [939] It is therefore ordered, adjudged and decreed, that the judgment appealed from be amended so as to reduce the sheriff’s costs to twelve dollars and fifty cents, and in all other respects it is affirmed, the sheriff and the liquidators to pay equally the costs of this appeal. On Rehearing. We will amend the judgment in this case as to costs, and a rehearing is not necessary for this purpose. The attorney of the sheriff directed our attention to the case of Succession of Mansion, 34 An. 1246, and the costs were assessed in accordance with the decree in that case. But we think the circumstances of the case will fully justify an amendment of the decree, fixing the costs to be paid by the sheriff at one-fifth of the amount of costs of appeal. It is therefore ordered that the decree heretofore rendered be amended so as to read: “ The sheriff to pay one-fifth of the costs of appeal and the liquidators to pay the other four-fifths. In other respects the decree to remain undisturbed.” Rehearing refused.