Merchants' & Manufacturers' Insurance v. Curran

Currier, Judge, delivered the opinion of the court. This suit is brought to recover two assessments upon the defendant’s premium note, payable to the plaintiffs. The note was given in consi deration of a policy of insurance issued to the defendant by the plaintiffs, insuring certain property therein described. The answer admits the execution and delivery of the note and policy, and also the levying of the assessments, the latter facts not being specifically denied. The defense rests upon the affirmative ground that the note was given without consideration, the [144] policy being the only inducement to it, and that being, as is alleged, void and o£ no effect, constituted no consideration for the note. It is alleged that the policy was issued in violation of the company’s by-laws, and for that reason it is supposed to be void and not to bind the plaintiffs. The plaintiffs’ charter authorized the insurance of “ property of all kinds,” and provided that the “ business of the company should be conducted under such rules and regulations as might from time to time be adopted by the directors.” One of these rules provided that “ steam-mills, and other establishments where fire, heat, and steam” were employed, might be insured, “if approved, at special rates; ” another rule provided that these special risks should be approved by an executive committee of three directors before a policy thereon should be issued. An alleged violation of this rule is supposed to vitiate the policy. The property insured in the policy was used for distilling purposes, and “fire, heat, and steam power” were employed in operating the establishment, all of which wras known to the plaintiffs at the time the policy was issued, and a special rate was charged accordingly. The policy was signed by the president and secretary and verified by the company’s seal. What agency the executive committee had in issuing it does not distinctly appear. The pleadings made no issue on that specific subject; and the court, at the trial, gave and refused instructions upon the theory that the supposed non-action of this committee was immaterial to the validity of the policy. It is this action of the court that is complained of, and that is urged as the main reason for reversing the judgment. The point is not well taken. The policy was signed by the president and secretary, as the by-laws required; and the by-laws vested in the president the “general supervision of the affairs of the company.” The policy was issued by the duly authorized agents of the company, and upon a full knowledge of all the facts material to the risk. The company can not successfully deny its liability thereon. The executive committee, as agents of the plaintiff, had no official duty to discharge in the actual execution and delivery of the policy. Their action was prelimi [145] nary, and in this instance must be held to have been waived. They were but the subordinates of the board of directors, and held their positions under appointment of the board. Their duties were subordinate, and imposed for the convenient transaction of business. The non-action of this committee should be held no defense to a suit on the policy, and can, therefore, be no defense here. • The case at bar is wholly unlike Plahto v. the plaintiffs, 38 Mo. 248, and Mound City Ins. Co. v. the defendants, 42 Mo. 374; but the U. M. F. Ins. Co. v. Keyser, 32 N. H. 313, is in point as an authority adverse to the defendant. That was a suit on a premium note. The defense was that the note and policy were void because the risk had been taken in violation of the company’s by-laws; but it was held that this fact did not avoid the policy, or the note which was given in consideration of the policy. The defendant’s motion in arrest was properly overruled. Ik has no tenable ground to stand upon. Nor can we say that th® court erred in overruling the defendant’s motion for a new trial!* so far as that motion was based on an allegation of newly-discovered evidence. That was a matter resting in the sound! discretion of the judge trying the case; and there is nothing ter show that the action of the court in this particular was unwarranted. In fact, the alleged newly-discovered evidence hadilitüh or no bearing upon the issues made by the pleadings. Upon the whole, it is my opinion that the judgment should bet affirmed. The other judges concur.