Goodall v. New England Mut. Fire Ins.

Eastman, J. Upon the facts set forth in the application of the plaintiff for insurance, and in the policy issued thereon, the defendants contend that their contract of insurance must be taken as made with the Lisbon Manufacturing Company, and not with the plaintiff, and that, consequently, this action cannot be maintained. The plaintiff, in his application to the defendants for insurance, commences by saying, that “ the undersigned, David G. Goodall, agent of the Lisbon Manufacturing Company, hereby requests insurance against fire by said company, in the sum of two thousand dollars, on the property herein specified,” setting it forth, and proceeds to state that he will be held responsible for the correctness of the application in answering interrogatories, &e. In the policy issued, the defendants allege that “whereas D. G. Goodall, agent of the Lisbon Manufacturing Company, has become a member of the New England Mutual Fire Insurance Company, and bound and obliged himself, his successors or assigns, to pay all such sum or sums of money as may be assessed, &c., and also secured to the company the sum of three hundred and twelve dollars, being the amount of the deposite or premium-note for insuring the sum of two thousand dollars unto the said D. G. Goodall, — 186 — his successors and assigns, to wit: on the building and fixed machinery of the Lisbon Manufacturing Company, one thousand dollars, and on the movable machinery therein one thousand dollars, now be it known that we, the members of said company, for and in consideration of the premises, do hereby certify that the said Goodall has become insured in and by said company, upon the property aforesaid, in the sum of two thousand dollars. And we do further promise to pay or satisfy the said Goodall, his successors or assigns, the aforesaid sum of two thousand dollars,” &c. Such are the facts upon which this first position of the defendants rests. Can it be sustained 1 " It is well settled that the interest of the assured in the property at risk need not be a legal one. A mere equitable title, or any qualified property in the thing insured, may be legally protected by insurance. Columbian Ins. Co. v. Lawrence, 2 Peters’ Sup. Court Rep. 25; Strong v. Manu. Ins. Co. 10 Pick. 40; Locke v. North American Ins. Co. 13 Mass. 61; Oliver v. Green, 3 Mass. 133. And it is .said that the term interest, as used in regard to the right to insure, does not necessarily imply any property in the subject of insurance. Buck v. Chesapeake Ins. Co. 1 Peters’ Rep. 163. A trustee who has no personal interest in the property, may procure the same to be insured in his own name. 2 Greenl. on Ev. § 379. So an agent or factor, who has the custody of goods for sale on commission, may also effect an insurance .upon them. 3 Kent’s Com. 371; DeForest v. Fulton Fire Ins. Co. 1 Hall’s (N. Y.) Rep. 84. In the last case cited, it was held that a commission merchant, consignee or factor, having goods of the consignor or principal in his possession., has an insurable interest therein ; not merely to the extent of his commissions, but to the full value of the goods, without reference to his lien. He was to be deemed owner as to all the world, except his principal, for the purpose of an insurable interest. — 187 — 3f the defendants in this case had intended to make a contract of insurance with the Lisbon Manufacturing Company, and with them alone, why did they not issue their policy in accordance with that intention? The plaintiff represented the situation of the property truly. His object was to effect an insurance, so that in case of loss all parties interested might be protected; and it could make no difference to him whether the policy run to the Lisbon company or to himself. It could certainly be no advantage to him to have the policy made out in his name. He could hold no more than his due share, upon a final settlement with his partners in the company; and he might, in the event of their failure, be subjected to the payment of assessments, which might not fall upon him were the policy issued to the Lisbon company. He was one of the firm of Ira Goodall & Son, and that firm owned one-third of the property of the Lisbon Manufacturing Company. As a private individual, he was interested to that extent, and no further. But as representing the interests of the whole manufacturing company, he had a sufficient interest in'the property, and a right, upon a true statement of its situation and ownership, to effect an insurance in his own name upon the whole prop-" erty, for the benefit of the company, if the insurance company would so agree. And the defendants could issue a policy to him or to the Lisbon company, as they might see fit. They chose to make the contract with him. They insured him and his successors and assigns; and having made the contract' with the plaintiff, the suit is properly brought in his name. Jefferson Ins. Co. v. Cotheal, 7 Wendell’s Rep. 72; Snyder v. Farmers' Ins. & Loan Co. 13 Wendell 92; Ward v. Wood, 13 Mass. Rep. 539. This view does injustice to no one. If the defendants have not insured Goodall, they must admit that they have the Lisbon Manufacturing Company, otherwise they have issued the policy in bad faith, which we will not suppose. To hold, then, that the plaintiff cannot sustain a suit upon — 188 — this policy, would only be to decide that the Lisbon Manufacturing Company can. And this can in no way be necessary for the protection of the defendants, since after judgment in favor of the plaintiff, a plea of such judgment, setting forth in due form the declaration upon which it was founded, would be a perfect answer to any action by the Lisbon Manufacturing Company. In the event of a recovery by the plaintiff, the disposition of the amount to be received would be a matter between him and the Lisbon Manufacturing Company. But should it be made to appear that he was about to appropriate the avails to his own private use, the court might perhaps make an order directing a proper disposition to be made. But there is no suggestion from the Lisbon company that they do not recognise the doings of their agent in effecting the insurance and bringing the suit; but so far as we can judge from the case, the whole has been done with their decided approval. The second position taken by the defendants against the plaintiff’s right of recovery is this, that the plaintiff obtained another insurance upon the same property in the Union Mutual Fire Insurance Company, without giving any notice to the defendants thereof, or obtaining the consent of the directors therefor, and that thereby the policy declared on became void. This objection is founded upon the twelfth section of the defendant’s charter, which is as follows; “ That all applicants for insurance shall give notice to the secretary of any existing policy on the property to be insured; and if any other insurance shall be obtained on any property insured by this company, notice shall be given to the secretary, and the consent of the directors obtained, otherwise the policy issued by this company shall be void.” By an examination of the papers which make a part of the case, it appears that the policy in suit was issued October thirty-first, 1846, and was to continue three years. On — 189 — the fourteenth of February, 1849, the plaintiff procured a policy from the Union company, insuring one thousand dollars, eight hundred of which was upon the same property insured by the policy issued by the defendants. This second insurance would, by the twelfth section of the defendant’s charter, which formed a part of the policy issued by them, render that policy void, unless notice of the insurance was given to the secretary, and the consent of the directors obtained. The soundness, then, of this second position of the defendants, depends upon the fact of notice and consent, according to the requirement of this twelfth section. There is no pretence that any formal written notice was given, or any written consent of the directors obtained; but the plaintiff contends that the twelfth section was substantially complied with by what transpired between him and Darling, the agent, and the directors of the company. The evidence offered by the plaintiff upon this point is fully reported in the case, and from the statement of facts there made, it cannot be doubted that the secretary of the New England company was fully aware of the second insurance in the Union company. He was, in fact, the very person who not only issued the Union policy, but suggested the manner in which it could be done. Being secretary of both companies, he as well knew of the double insurance as though a written notice had' been served upon him, and it would seem to be entirely a work of supererogation to do it. Neither can it be doubted that there was in fact, though not of strict record, a consent by at least two of the directors of the New England company to the insurance in the Union company. CoL Barton examined the matter when Darling first brought in the application, and Dr. Prescott afterwards approved of the issuing of the Union policy. These gentlemen were directors of both companies. By the ninth section of the by-laws of the New England company, two directors could approve of applications, and we — 190 — discover no good reason for requiring a larger number to consent to a second insurance. We think, too, that were it necessary, we might hold the evidence competent for the jury to find an approval, by a majority of the directors, at the time the application was passed round the room and examined by Barton and others. It is to be observed that the twelfth section does not require that the notice to the secretary, or the consent of the directors, shall be in writing; but even were it so, it might well be argued that the secretary and directors had by their acts waived the requirement. In Roumage v. Insurance Co. 1 Green’s Rep. 110, it was held that where the conditions of insurance required that notice of loss should be given forthwith, and it appeared that officers of the insurers were on the ground of the fire the day after the fire, for the purpose of examining into the matter, that this was sufficient evidence of notice. And where a policy required notice of further insurance to be given, and the assent of the company to be indorsed on the policy, or otherwise acknowledged and approved by them in writing, it was held that a letter from the secretary of the company, saying, “I have received your notice of additional insurance,” was a sufficient approval and acknowledgment in writing. Potter v. Ontario Ins. Co. 5 Hill’s (N. Y.) Rep. 147. In McEwen v. Montgomery Ins. Co. 5 Hill 101, it was held that a parol notice of a prior insurance, given to a company before a second insurance, is a sufficient notice, where . the policy does not require such notice to be Jin writing. And in this case it was further held that such verbal notice was sufficient, if given to the travelling agent of the company, though it never reached the company. But without recurring specially to authorities, as we are aware that in many instances there is a material difference in the particular provisions of the charters and by-laws of different mutual insurance companies, which form the basis of — 191 — the decisions, it appears to us that, upon general principles, we ought to hold that the defendants should not be permitted to avail themselves of this defence. They stood by and saw all that was taking place and actually took part therein, and they should be estopped by their conduct and demeanor from saying that they had no notice of the second insurance, and did not consent thereto. These general principles may be found in Runlet v. Otis, 2 N. H. Rep. 167; Morse v. Child, 6 N. H. Rep. 521; Eaton v. Rice, 8 N. H. Rep. 378; and Thompson v. Sanborn, 11 N. H. Rep. 201. We entertain no doubt that the ruling of the court upon this point was correct, and that the evidence was competent to show both notice and consent within the requirements of the twelfth section of the charter. The answers of Prescott reported in the case were properly ruled out. They were not pertinent or material to the issue to be settled. What the practice of the company was so far as his knowledge went, could not be binding upon this plaintiff. A practice, to be binding, must be such and so known to the parties as to lead to the belief that the contract was made with reference to it. But even were the evidence admitted, it would make quite as much for the plaintiff as for the defendants. . Prescott says that the consent is given by one or more of the directors; and in this instance there was the positive assent of one, the constructive consent of two, and the probable consent of even more. Having decided these several questions in favor of the plaintiff, the only remaining inquiry is, to what amount are the defendants liable ? It is said in argument that the plaintiff cannot recover for the machinery placed in the building in 1848, because there is no count in the declaration under which it can be recovered. But on looking into the declaration, we find it stated in the first count, that the defendants promised, on the 13th of June, 1848, that the policy might be continued — 192 — and might cover new machinery, wheels, drums and flume, according to the memorandum attached to the policy. The memorandum was in these words : “ New England Mutual F. I. Compcmy. Concord, Jume 13, 1848. An additional representation having been received this day, and attached to the original application of D. G. Goodall, agent, No. 2323, the directors consent to the continuance of this policy^ and may cover new machinery, wheels, drums and flume. J. B. LANG, Secretary.” “ Affix this to your policy.” There is no specific independent count for a recovery for the loss of the new machinery, but the whole is set forth in one count as upon one policy. The memorandum being attached to the policy in the, manner in which it was, we see no objection in declaring as was done by the plaintiff. At all events, we think the declaration sufficient after verdict. It is further said that there is no contract of insurance in regard to this machinery, in conformity to the charter and by-laws of the corporation. This raises the question whether the memorandum which is affixed to the policy can or not be regarded as a contract on the part of the defendants to make an insurance on this machinery. The memorandum is a certificate under the hand of Lang, the secretary. The genuineness of the paper is not called in question, nor is any evidence offered to show that it does not truly state the facts. It must therefore be regarded as at least prima facie evidence of the statements it contains. These are, that an additional representation or application had been made by the plaintiff, and that the directors consented to the continuance of the policy, and that it might cover new machinery, wheels, drums and flume. A policy is but the evidence of a contract of insurance. The risk commences from the time of the approval of the — 193 — application and the payment or security of the premium. The policy usually bears date on the day of the approval or date of the application. In this case the application and policy are of the same date. But after the approval of the application and the payment or security of the premium, the party is insured and can recover for his loss, though no policy may have been made out. And this memorandum is competent evidence to show that the defendants contracted to insure and did insure the new machinery, wheels, drums and flume. But further, the issuing of this certificate or memorandum is sanctioned by the by-laws of the company. By the fourth section it is provided that the directors may, in their discretion, grant certificates of insurance before the papers are formally made out. The new machinery, then, must be considered as covered by the contract of the defendants; so that we again come to the question, to what amount are the defendants liable ? There was insured on the building and fixed machinery, at the time of the fire, in both companies, the sum of sixteen hundred dollars, viz : one thousand dollars in the New England company and six hundred in the Union. This appears from an examination of the applications and policies in both companies. The defendants, by the fourth section of their charter, could insure only to the amount of two-thirds of the value of the property insured. The charter formed a part of the policy, and both parties are therefore governed by it. The jury have found the value of the building and fixed machinery at the time of the loss, to be nineteen hundred and seventy dollars and fifty-four cents. And it is at the time of the loss that the valuation must be made in a policy of this kind. It is not a valued policy. Two-thirds of the value found by the jury is thirteen hundred and thirteen dollars and seventy cents ; of course more than sufficient to make the thousand dollars insured by the defendants on that property. They would then be — 194 — liable for the thousand dollars, were it not for the insurance in the Union company. But, in case of a double insurance, the defendants were liable for a ratable proportion only of the loss sustained. This is provided for by the eleventh article of the by-laws. Consequently they were liable for ten sixteenths of thirteen hundred and thirteen dollars and seventy cents, which is eight hundred and twenty-one dollars. On the movable machinery the defendants insured one thousand dollars and the Union company two hundred, being twelve hundred in all. The jury have found the value of this to be two thousand and sixty-one dollars. Applying the same principles as in the case of the building and fixed machinery, and two thirds of two thousand and sixty-one dollars are thirteen hundred and seventy-four dollars; being one hundred and seventy-four dollars more than the whole amount insured upon the movable machinery in both companies. Consequently the defendants are liable for the full amount insured by them on the movable machinery. Putting the two sums together, the eight hundred and twenty-one dollars, the amount due for the loss of the building and fixed machinery, and the one thousand for the loss of the movable machinery, and they amount to eighteen hundred and twenty-one dollars. On this sum let interest be cast from the expiration of three months after notice of the loss, according to the provisions of the charter, and after amending the verdict to conform thereto, as provided in the transfer, let there be Judgment on the verdict.