New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1868-12-12
IMPORTANT INSURANCE CASE.

Tn tbe Supreme Court General Term a case
Of great importance 10 insurance brokers argued In
1904 the Minnesota Central Railway Company desiring
to purchase goo Of rails in England, applied toJ
p Morgan Co for credits on George Peabody &CO Inc
matter was arranged by the h.Iu'l o11,IPars,' ~"
plaintiffs depositing $4,000 with Morgan Co. anu e1
ing them lien on the IRON ana ls insurance lllo t
PENDANTS suggested 70 them few days after nsuug tHe
iron. and the Railroad Company directed lHenl 10 %
IL has been custom sauctoheu py .i' ~, =, 10 ont
mercc ~ lsl4, Tor te comm '.,uu ~ me f,r whom in
omen policies OF insurance 10 their Own name TOT "huh
may concern, and give premium notes ana noic on
policies the Risks oil th'f cus me- ~ i,,r-
premiums az the rates stated IN the policy, ana tahlH-
the chance oi obtaining piuIt N. IN, -, ,f,r',, q
the Insurance Company; IHuet tAIs 'tstu' - an
Co. took out, In the Atlantic Mutual INSURANCE, ~, an
open policy for S256OlO, which they CAV tAeir pr
MUM note for sl0il - ON thls ihey o ~ e. ~ ~
on which the premium, were Sl3J 81 or "l.u so%y -
less the cost Of the policy and portion OF the sdup
was FOR risks on inc pl!utH' IRON. I",s w., ~ AZ
the Company the balance Of unclrned premiums 90
aud CHARGED the plaintiffs with the w. y anu f
which amount was Dy hII4hEemtHJ uv.,,.'eu .t,.-
the $4,000 in their hands thus closing me inaiilet
In 1865 the Atlantic Mutual declared .erip Glylatna
of forty per cent, which on plaintu, premiums
would be $500 The plaintiffs claimed this scrip all
drnd. The defendants. relying on lhr tu,loI; "So ga
claimed n as theirs suit brought and the Court
aoSuCa IL t' o1 -e fl at there conII be no
doubt but that thc plaintiffs ought 10 have decree IN
their favor The defendants acted as tnelr agents IN
msuring ther property. w"' uuu,l ,"' mp eot ,bo
defendants used piainIHs motley 70 r"' - az ~,
or advantage that accrued under tHs poI,i
would cuure u the benefit OK their pTlhclpAh
namely. plaintiffs. NNAr however, OH itil
that defendants used their money and charged u 20
uflutif. That IL there had been Jos, under the Open
nDltrv defendants would have had tO pay the premium
note The Insurance Company could not nave cdlitu
upon plaintiff for payment as they hId never autAu
BED the properv % De- insured Mutual Insurance
Comnanv ana the Company had the individual note OF
dcfetdaIts" From this decision plaintiffs appeal lhty
argue Ia substance that all the acts we're paris
~ ono single arrangement ana III tAAt lly
relation OF the parties was that OF I.litlldt
made n Insurance for the PLAINTIFF for the pr mlun7 on
which the plaintiffs werc Liable that this nanny LOT OK
pcu.cs earned 90 them the title; that the alslnct'ou
made hy the court below was un-up'ta titl tHit ~
agent or trustee make profit Tor hlul out OF
the business % bis principal. nor oscichfEc BIN tV
tho dividends grew 0ut ~ the premium. fd1fd , inter-
est ont Of capital and belonged % those WHO iG so
principal but n they regarded IN the sht OF us
count or rebate, then they reduce the Hr1t
cost OF insurance for which the DEFENDANTS
have boon fully reimbursed and against which
they are not entitled 10 any further Ih1ehnlly'
That a, 10 the custom alleged, 10 Nas not proItu Dt
n froyed unreasonable and uuawfu, that te alntlAh
wer not informed OF this custom; ana II II were Gus
TAIN the PRINCIPALS property without informing MN OF ~
therefore custom 10 which only one SIDE hau ever NC
come a party ON the other hand u was argued that
the taking out OF insurance entirely distinct uoh
sysem perfectly established and was founded on reason
that commission merchant TOOK Out oIh POI
snotc risk which In certain contingencies
might extend the whole amount OF the note, ana not
merely fue premiums earned. and taking ia turn he
credit % persons who quite often could not themselves
Use their credit directly that for TINS Sk ana service ne
took "a, paymrUt Contingency or the insurance COM
many making profit that ths course ~ business was l
Insurance Company, and that the evidence OK the ciu
aud its n1Oroty gwen ia the Court below was Iuu anu
complete.
The Court reserved a. decision.