#### AMERICAN CENT. INS. CO. v. HAGERTY et al.

(Supreme Court, General Term, Fourth Department.

December 26, 1895.)

Insurance—Cancellation oe Policy—Evidence.

In an action by a fire insurance company against its agent for his failure to cancel a policy as instructed by plaintiff, it appeared that when the instruction was given, defendant wrote V., plaintiff’s general agent, recommending that the policy be allowed to stand, and that V., in reply, wrote that he preferred not to carry the risk, and afterwards wrote defendant to return the policy, but defendant did not answer either of the *559letters. After instructing the cancellation, V. drew on defendant for a balance due plaintiff, including the premium on the policy, and defendant’s monthly reports to V. for the following eight months showed what policies defendant canceled, but V. did not again ask that the policy be canceled, though he wrote defendant for other canceled policies. It was the custom, when a policy was canceled, to return it to plaintiff. When defendant left plaintiff’s employ, after the loss on the policy, his accounts were settled, but no allowance was made him for the premium paid plaintiff on the policy. In other instances plaintiff had, at defendant’s suggestion, withdrawn requests that policies be canceled. *Held,*that whether plaintiff acquiesced in defendant’s failure to cancel the policy was a question of fact.

Appeal from, circuit court, Chenango county.

Action by American Central Insurance Company against John B. Hagerty and another for damages from defendants’ failure to cancel a fire insurance policy as instructed. From a judgment entered on a verdict in favor of plaintiff for $1,056.71, and from an order denying a motion for a new trial made on the minutes, defendants appeal.

Reversed.

Plaintiff is a foreign corporation, haying its principal place of business in the state of Missouri, and duly authorized to transact business in this state as a fire insurance company. Defendants were its local agents at the village of Plattsburgh, and, while acting as such agents for the plaintiff, they issued to Phillips & Gasey, of Rouse’s Point, a policy of fire insurance, known as “No. 450,825,” on certain personal property mentioned in the policy, by means of which the plaintiff became an insurer to the said Phillips & Gasey for the sum of $1,000 against loss and damage by fire for the term of one year, in consideration of a premium of $16.50. It is alleged in the complaint that on July 19, 1891, by virtue of the terms and conditions of the policy, the plaintiff directed the defendants to cancel and discontinue the said policy, and that the defendants failed to carry out the directions thus given, by continuing, or permitting to be continued, the policy, and that on March 4, 1892, the property mentioned in the policy was destroyed by fire, and the plaintiff became liable to and did pay to Phillips & Gasey the sum of $977.15; and it is alleged that the defendants, by reason of the failure to obey the said orders and directions, have caused an injury to the plaintiff to the extent of the sum so paid, less the amount of the premium. The answer contains several denials, and also avers: “Plaintiff afterwards, and prior to the fire and loss of the insured property, withdrew and waived such direction or request, and continued, and authorized defendants to continue, the policy in question in force, and accepted the premium paid by the insured, and also settled, adjusted, and paid the loss under the policy.” At the close of the plaintiff’s case the defendants moved for a nonsuit, which was denied, and an exception taken; and at the close of the proof in the case the motion was renewed and denied, and an exception taken. The defendants asked “to go to the jury upon the question whether the receipt of the premium, and the ratification, and the other facts of the case, the correspondence and general course of business between the parties, do not show, or would not show, and whether the jury should not find, a ratification of the failure to cancel, if such order was given, and a waiver of it or withdrawal of it. Upon all the facts of the case, we ask to go to the jury. Also that the making of the proof of loss itself, which perfected the claim against the defendants, or had that effect, would estop the plaintiff from claiming damages in this suit.” Thereupon the motion for a nonsuit was denied, and the defendants excepted. Whereupon the court directed the jury to find a verdict for the plaintiff, and the defendants excepted.

Argued before HARDIN, P. J., and MARTIN and MERWIN, JJ.

Weeds, Smith & Conway, for appellants.

Eugene Clinton, for respondent.

*560HARDIN, P. J.

While considering the refusal of the court to submit any question of fact to the jury, we must give the appellants the benefit of any evidence which would have justified the jury in finding favorably to the defendants, and, in that connection, to any and all inferences that might legitimately be drawn from the evidence produced. McNally v. Insurance Co., 137 N. Y. 389, 33 N. E. 475. Appellants were local agents of the plaintiff at Plattsburgh, acting under a written commission, and as such they issued the plaintiff’s policy to the insured, which contained a provision, viz., “This policy shall be canceled at any time at the request of the insured, or by the company, by giving five days’ notice of such cancellation.” It seems, the premium for the policy was paid to the agents, and by them paid over to the plaintiff. On July 9, 1891, plaintiff’s general agents, Van Valkenburg & Hall, wrote to the defendants, asking to be relieved of the risk, because of certain reports of the financial standing of the insured. To that communication, on the 13th of July, 1891, the defendants replied, recommending that the policy be allowed to stand, on the ground that they thought the risk a good one, but adding that, if it was insisted on, the policy would be canceled. To that letter the general agents replied on the 16th of July, stating that they preferred not to carry the risk, and asking the return of the policy, assigning that its rule was not to carry mortgaged property, as one of-the reasons; and a somewhat similar letter was written again, on July 31st, asking for a return of the policy “to the files of the agents.” The defendants did not answer the last two letters. It seems by the evidence that on August 26, 1891, the general agents of the plaintiff drew upon the defendants for balances, and that in the draft was included the premium on the policy in question. It appears from the evidence that no further demand or claim was made on the part of the general agents, upon the defendants, for a return of the policy, to be entered in the files of the plaintiff’s general agents; and there was quietude and acquiescence on the part of the general agents in respect to' the policy in question, which continued for a period of time between July 31st and the date of the fire, which was in March following. "The reports for the months of August, September, October, November, and December, 1891, and for January and February, 1892, were made, and on the face of the reports there was a recital of what policies were canceled; the report for June showing no policy canceled, and the report for July showing policy No. 450,683 canceled. The report of August shows no policy canceled. The report for September shows policy No. 450,693 canceled. The report for October shows no policy canceled. The report for November shows policy No. 450,698 canceled. The report for December shows two policies canceled,—Nos. 450,709 and 450,711. The report for January, 1892, shows two policies canceled, viz. Nos. 450,724 and 450,725. The report for February, 1892, shows two policies canceled, viz. Nos. 450,731 and 450,732. The report for March shows three policies canceled,—Nos. 450,735, 450,741, and 450,742. It is to be observed that each of these re*561ports shows that the particular policy in question, to wit the one issued to Phillips & Casey, was not canceled, and that the reports were all sent to the general agents to whom the monthly reports were made, and to whom remittances were sent, and who had power to cancel policies, including the specific policy mentioned. ■ Some evidence was given tending to show that in the course of the business, if instructions were given to cancel policies, unless the same were immediately obeyed, the company’s habit was to renew its call or “dun” from time to time for the return of what they called a “canceled policy,” until such time as they “actually got it,” and then the unearned part of the premium was included in the account current. There was some conflict in respect to the custom or habit of the parties in respect to transactions relating to canceled policies. It is apparent from the reports that we have already alluded to that the premium in this case was never charged back to the plaintiff, and that the policy was never actually canceled. The general agent admits that, “when a policy of insurance was canceled pursuant to one of my instructions or directions, it was the custom to return it to the office, when the daily report went to New York to be put on file.” It seems the agents went out of business in April, 1892, and were succeeded by Platt, and the plaintiff about that time wrote for a full settlement, specifying the amounts due it, and that amount was ascertained and paid, but in the general settlement and at no other time were the defendants allowed or credited with the premium on the Phillips & Casey policy. This settlement was after the loss occurred under the policy, as that occurred March 4, 1892. On the 8th of March, 1892, the plaintiff, having received notice of the loss under the policy, admitted the same, and stated that “General Agent Van Valkenburg will be advised and requested to adjust.” On the 18th of March, 1892, Van Valkenburg wrote to the defendants in reference to it, and among other things he stated:

> “I inclose a blank proof of loss, and would thank you to return it to me, when properly executed, for the loss of Phillips & Casey, at Rouse’s Point. By the way, there is a talk about this having been a ‘queer’ loss, and some Field men are crowing over their smartness in getting off shortly before the fire. What do you know in this direction? Thanking you in advance for attending to this matter, and with strongest assurances that you can count on me at all times to do anything possible to promote our mutual interests, I remain,” etc.

Subsequently the general agent acknowledged the proofs of loss, and on May 9th the general agent, Van Valkenburg, stated that he had asked the general office to send a draft in payment of the loss. It seems that the claim was made in behalf of the defendants that the defendants were in no way liable in the premises until June, 1892. It also appeared in the evidence, affirmatively, by the testimoney of Platt, that subsequent to July 31st he received requests to return other canceled policies, and nothing more was said about the Phillips & Casey policy. It appeared from the evidence that there were instances in which policies were directed to be canceled, with suggestions as to moral hazard, and that subsequently they *562were withdrawn, at the suggestion of the defendants. Upon all the evidence, we are inclined to the opinion that a fair question of fact was presented for the consideration of a jury, as to whether the plaintiff, by reason of the circumstances disclosed, waived the request to have the policy canceled. We are inclined to think that such waiver might have been found by the jury upon the evidence given at the trial, and that it was not necessary, in order to support such a waiver, that it should be based upon any new agreement or an estoppel. Titus v. Insurance Co., 81 N. Y. 419; McNally v. Insurance Co., 137 N. Y. 402, 33 N. E. 475; Cairnes v. Bleecker, 12 Johns. 300; Jervis v. Hoyt, 2 Hun, 637. From the course of business disclosed by the evidence, it is quite apparent that Van Valkenburg had notice of the noncancellation and nonreturn of the policy to the files in his office, and that notice to him of that fact was notice to the principal. Cox v. Pearce, 112 N. Y. 641, 20 N. E. 566. The nonaction, therefore, of Van Valkenburg, in the premises; his acquiescence, as well as the acquiescence of the plaintiff, in the noncancellation and nonproduction of the policy,—were pertinent facts for the consideration of a jury in determining the question whether the plaintiff had acquiesced in the existence of the policy, and the omission of the defendants to procure a cancellation of the same by the return of unearned premiums, and a delivery of. the policy to the defendants, to the end that it might be returned to the files of the plaintiff, whether kept by the general agent, Van Valkenburg, or kept by the plaintiff itself. While it may be said the circumstances are slight, we are inclined, as already intimated, to hold that a question of fact was presented, which should have been submitted to the jury, and that the exception taken to the refusal to submit the question of fact to the jury presents an error which should lead to a new trial.

Judgment and order reversed, and a new trial ordered, with costs to abide the event. All concur.