Case Name: BELT et al. v. AMERICAN CENT. INS. CO.
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1893-12-15
Citations: 26 N.Y.S. 692
Docket Number: 
Parties: BELT et al. v. AMERICAN CENT. INS. CO.
Judges: 
Reporter: West's New York Supplement
Volume: 26
Pages: 692–694

Head Matter:
BELT et al. v. AMERICAN CENT. INS. CO.
(Supreme Court, General Term, First Department.
December 15, 1893.)
Insurance—Modification of Contract—Ratification.
Plaintiff, who held a policy containing an 80 per cent, coinsurance clause, applied for reduction of premium, and accepted a policy containing a 100. per cent, coinsurance clause. After the fire he filed proofs of loss on the 100 per cent, basis, was paid the amount thereof, and surrendered the policy. Held, that plaintiff ratified the substitution of the 100 per cent, coinsurance clause.
Appeal from special term, New York county.
Action by Washington Belt and others against the American Central Insurance Company. From a judgment in favor of defendant, plaintiffs appeal.
Affirmed.
The defendant is a corporation organized under the laws of the state of Missouri, and in July and August, 1892, Ackerman, Deyo & Hilliard were its general agents in the city of New York, with power to bind it by contracts of insurance. During this period, Brown & Skinner were insurance brokers in the city of New York, who were employed by the plaintiffs to procure insurance on their property. July 14, 1892, the defendant, in consideration of $52.50, through Ackerman, Deyo & Hilliard, insured the plaintiffs’ wool, under policy No. 5,934,416, for one year, against loss by fire, in a sum not exceeding $5,000. Attached to the policy was a stipulation called an “Eighty per Gent. Coinsurance Clause,” of which the following is a copy:
“N. Y. Standard. Percentage Coinsurance Clause.
“If, at the time of the fire, the whole amount of insurance on the property covered by this'policy shall be less than eighty per cent, of the actual cash value thereof, this company shall,' in case of loss or damage, be liable for only such portion of such loss or damage as the amount insured by this policy shall bear to the said eighty per cent, of the actual cash value of' such property.”
The policy, .with the clause attached, was delivered to Brown & Skinner, the agents of the plaintiffs. Afterwards, the plaintiffs improved the building wherein the property was stored, by reason of which they claimed that they were entitled to have the premium reduced; and on the 26th of August, 1892, their agents, Brown & Skinner, delivered this and other policies issued by Ackerman, Deyo & Hilliard to them for the purpose of having the premium reduced. On the delivery of the policy, Ackerman, Deyo & Hilliard delivered a binding slip, of which the following is a copy:
“New York, August, 1892.
“We, the undersigned insurance companies, do hereby insure Belt, Barber & Co. for the amount set opposite our respective names, subject to the conditions of standard fire insurance policy of the state of New York, on stock of wool contained in 120 and 122 Wooster St, N. Y. city, as per policies left with companies for a reduction of the rate. Binding this 26 day of August at noon. (This memo, to be void on delivery of policies at this office.)
Company. Amount. Accepted.
5,934,416. American Central. $5,000."
August 27, 1892, the property insured was burned. About 10 days after the fire the policy was returned to Brown & Skinner, who delivered it to the plaintiffs. When returned, it was indorsed as follows:
“Aug. 22, ’92, rate reduced to 63% for improvements under slip No. 1,485, return premium $18.78 therefor. A., D. & H.”
The 80 per cent, coinsurance clause was detached, and the following clause substituted in its place:
“N. Y. Percentage Coinsurance Clause.
“If, at the time of the fire, the whole amount of insurance on the property covered by this policy shall be less than the actual cash value thereof, this company shall, in case of loss or damage, be liable for such portion only of such loss or damage as the amount insured by this policy shall bear to the actual cash value of such property. Attached to and forming part of policy No. 593,416. • A., D. & H., Agts.
“(Signature for Company.)”
When the policy was returned, the binding slip was surrendered to Ackerman, Deyo & Hilliard. On the 26th of October the plaintiffs and the several insurance companies interested agreed that the damage occasioned by the fire was $87,000. On the 27th of October, 1892, the plaintiffs verified and served upon the defendant proofs of loss, by which they claimed $3,294.-88, which the defendant on the 7th of November, 1892, paid, less a reduction for interest, and surrendered the policy, giving the following receipt:
“3,294.88. New York City, Nov. 7, 1892.
“Received from American Central Insurance Company, of St. Louis, through Ackerman, Deyo & Hilliard, agents, the sum of thirty-two hundred ninety-four and 88/100 dollars in full settlement, compromise, and discharge of all claims and demands for loss and damage by fire on the 27th day of August, 1892, to the property insured by policy No. 593,416, Renewal No. -, is-
sued at the agency of said company at New York city, and said policy is hereby surrendered and canceled.
Amount of loss.............................................$3,294 88
Discount ................................................... 32 94
Net draft............................................... $3,261 94
“Belt, Butler & Co.
“W. H. Goldstein & Co."
The loss was adjusted upon the basis of a 100 per cent, coinsurance clause, but, had it been adjusted upon the basis of an 80 per cent, coinsurance clause, the plaintiffs would have been entitled to receive $4,118.60, a difference of $823.72, to recover which sum this action was brought.
Argued before VAN BRUNT, P. J., and FOLLETT and PARKER, JJ.
Booraem, Hamilton & Beckett, (William H. Hamilton, of counsel,) for appellants.
Billings & Cardozo, (Michael H. Cardozo, of counsel,) for respondent.

Opinion:
FOLLETT, J.
When the policy was issued, the plaintiffs' agents an per what they knew the plaintiffs are deemed in law to have known. Knowing this, the plaintiffs subsequently received the policy with the rate of premium reduced, a 100 per cent, coinsurance clause substituted, thereafter filed proofs of loss claiming on the basis of the 100 per cent, coinsurance clause, were paid the full amount of their claim, and surrendered the policy. This, we think, amounted to a ratification of the substitution of the 100 per cent, coinsurance clause for the 80 per cent, coinsurance clause, even if there were no previous authority to make the change, of which there is some evidence in the case. The presumption arising from the evidence is that the change was either authorized or ratified. There was indorsed on the policy this memorandum:
"68 c.
"Full Coin. CL
' "Build., 65.
"Stock, 10.
"Co. full clause."
The evidence tended to show that this indorsement was made by the clerk of Brown & Skinner before the policy was delivered to Ackerman, Deyo & Hilliard for a change of rate. If it were so made by the plaintiffs' agents, it authorized the substitution of a full, or 100 per cent., coinsurance clause for the 80 per cent, coinsurance clause. There is no evidence in the case which would sustain a finding that the change was secretly or fraudulently made. What negotiations, if any, were had between the agents, which led to the reduction of the premium, do not appear. We think the evidence fails to establish a cause of action in favor of the plaintiffs, and that the judgment dismissing the complaint was right, and should be affirmed, with costs. All concur.