Case Name: Jefferson Palm, Administrator of Frederick Bollmeyer, v. The Medina County Mutual Fire Insurance Company
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1851-12
Citations: 20 Ohio 529
Docket Number: 
Parties: *Jefferson Palm, Administrator of Frederick Bollmeyer, v. The Medina County Mutual Fire Insurance Company.
Judges: Judge Ranney did not sit in this case, having been of counsel for one of the parties.
Reporter: Cases decided in the supreme court of ohio : upon the circuit at the special sessions in Columbus
Volume: 20
Pages: 448–458

Head Matter:
*Jefferson Palm, Administrator of Frederick Bollmeyer, v. The Medina County Mutual Fire Insurance Company.
When a contract of insurance has been completed by the party applying for insurance, doing all that is required to be done on his part, although the agent contracting on the part of the company has not power to issue a policy, the risk commences from the time of making such contract, if there be no stipulation to the contrary.
When a contract of insurance has been made with an agent, and the applicacation, with the deposit note, has been sent on to the office of the company from which the policy is to issue, the company are liable, although the loss occurs before the arrival of the letter containing the application.
If the contract between the agent and the person applying for insurance be fair and strictly in accordance with the rules of the company, such liability will exist, although there be printed on the blank application the qualification that the policy will issue “if approved” by the company. Such qualification only saves the company the right to objectto an unfair or improper contract.
This is a bill in chancery, reserved in Summit county.
The principal facts in the case are stated in the opinion of the ¡court.
The pamphlet, “By-Law’s, Instructions to Agents, and Charter of the Insurance Company,” contains, in addition to the provisions referred to in the opinion of the court, and besides others, the following circular to agents:
“ To--, Agent of the Medina County Mutual Fire Insurance Company:
“ Sir : The Directors of the Medina County Mutual Fire Insurance Company wish yon to act as agent of this society. The duties of such agency are, to ascertain the value of property to he insured, the amount of risk, surveying, measuring, and making plan of building, and ascertaining the loss incurred in case of fire.”
“In all cases the applicant should describe the property to *be insured, and sign the description and application, as it forms an important part of the contract of insurance; for which purpose the necessary blank forms, and this circular of instructions, will be furnished.
“As to th & regulation of premiums or rates, no schedule can be given which will dispense with the exercise of a sound discretion on your part. The classes of hazards and schedules furnished you contain the rates of premium on the several kinds of property and trades, subject to the ordinary risks and exposures. But these are to be varied according to the increase of the risk attending the property insured, and the risk may be so unusually great as to prevent an insurance at all.
“ The rates herewith are estimated without regard to collateral or external danger.
“A brick building, with slated roof, would not be so much exposed at forty feet distance, as a wooden one of the same size at eighty feet; so that much depends, after all the directions that can be given, upon your own judgment as to the increase of premiums.
“ You will fix such rates of premium as you shall deem just and proper, fill up and take a note therefor, and receive and indorse on the back thereof, the three per cent, which you may forward from time to time, together with the fifty cents received for each policy,, not less frequently than quarterly, or when ordered by the treasurer.
“ You need not number the application nor note, and leave the day of the month in note blank. Let the indorsement be as fol-laws on the back : ‘ Received at date, one dollar’ (or such sum as may be paid).
“We trust you will use your best exertions to explain the principles upon which the company is formed, and to advance its interest in your town and vicinity.
“ It is requested that the advertisements furnished you should be posted up in public places in your vicinity.
^BY-LAWS.
“And the rates of insurance on all buildings differently situated, to be in proportion as agents shall think the situation and hazard require, not exceeding twenty-five per cent, on the amount insured for the deposit or premium note.
“Such buildings and goods as are particularly extra-hazardous, may be insured at the discretion of the board of directors, and not otherwise; and all such classes as are not named, may be insured at such rates as the board of directors may determine after application is made, and coming within the provisions of the act of incorporation.
“Three per'cent, of the premium note shall be paid and indorsed thereon at the time of making application, one dollar for each survey and application, and fifty cents for each policy, and recording the same by the person receiving it.
“ The general agent shall be authorized to appoint such agents to act for this company as he shall deem necessary, and take from -each agent, so appointed, a bond, with security to the directors of said company, in the sum, of $1,000, previously to acting as such, agent.”
The premium note given by Bollmeyer, was as follows:
“ $78. Por value received in Policy, No.-, dated the day of-, 1846, issued by the Medina County Mutual Pire Insurance Company, I promise to pay said company, or their treasurer for the time being, the sum of $78, in such portions, and at such time or times, as the directors of said company may, agreeably to their act of incorporation, require.
(Signed,)
“Dated, May —, 1846.”
The property to be insured, described in Bollmeyer’s application, was not of the class designated particularly extra-hazardous. The secretary of the company testified, that if a policy had been made on Bollmeyer’s application, it would have been dated, and taken effect at noon on the day the application *was re- [532 ceivod at the office of the company, in Medina, which was after the fire; the general practice of the company having been, to date policies the day the applications are received at the office, to take effect at noon on that day, unless the time for the date of the policy in the premium note had been filled up by the agents for the policy to date a different date.
R. P. Eannet, for complainant:
The solo ground of refusal to issue the policy, and pay the loss, was stated upon the single point, that the application did not reach Medina until after the fire.
The applicant had done everything on his part to entitle him to a policy. If the contract of insurance was completed before the loss, a court of equity has power to compel the issuing of the policy, and the adjustment of the loss. What, then, constitutes a contract for insurance? I answer, the same circumstances that will make a contract in any other ease, The minds of the parties must assent in person, or through agents. It may require more to be done to clothe it with the necessary legal forms, but the contract is back of, and precedes the mere final written evidence of the contract. Is the policy the contract ? No; it is only evidence-of it. If the policy were the contract, there never could be such a thing as a bill to enforce the specific performance of the contract by the delivery of the policy. The charter of the corn pany contemplates that membership, with all the rights and obligations growing out of it, may exist before the policy issues.
Section 5 provides, “That every person who shall become a member of said company, by effecting insurance therein, shall, before he receives his policy, deposit his promissory note for such a sum of money,” etc.
Section 6 provides, that “ every member” shall pay his share of all losses; and section 7, that “ every member ” shall be entitled to indemnity for losses. The policies that issue are all in *the past tense, and recite that the insured has become a member of the company, and obligated himself to pay the note, etc.
In this case, the facts show that the contract was complete. The only cases in which the directors reserve the right to determine on making the contract and fixing rates, is as to property “particularly extra-hazardous”—in all other cases, by the rules and intructions of the company, their agents make the contract. Take all the instructions and by-laws together, and they amount to a standing offer to the public to insure any one upon the terms specified in the offer. When any one accepts those terms with the assent of the agent, it is an acceptance of the offer of the company, and constitutes a contract.
The only control which the company retained in their own hands, was the same that every principal does over the contract of his agent, to see that it conforms to his instructions. If it does, he can not repudiate it; if not, he may.
Rut there is printed on the application these words:
“ All policies of insurance are issued from the office of the company, at Medina, upon applications sent in by agents and others; and, if approved, will bear the date of the reception of said application, unless requested by the applicant to bear date of some future day. It will be the duty of agents to make out the applications of persons who may apply to them for insurance in the company, and forward them per mail, or otherwise, to the office of the company.”
This is merely printed on the back of the application.
Now, it is evident that these are not the rules or by-laws of the ■company, but are intended as a condensed summary of the substance of their regulations, put in small space to be more generally circulated; and it is further evident that the clause relied upon by the defendant is an abridgment of the very by-law upon which I rely, and should receive the same construction. A reception by an Authorized agent is a reception by the company :
William H. Canfield and Whitman Mead, for defendants:
*It is insisted by defendants that the agent at Warren had no authority to make any contract, but that the application •was made by Bollmeyer and received by the agent of the company, to be forwarded to the office of the company, to be there approved or disapproved; and if approved, a policy to issue thereon, to take effect from the time it should be received at the office.
This was the almost invariable rule of the company, known to Bollmeyer both by the notice printed on the application, and by having been previously insured under two different policies, both dated, and to take effect at the time they reached the office of the company, and not at the date of the application.
McConnell, the agent at Warren, testifies that he had no power to bind the company, and frequently, and always when interrogated as to his power, said, that policies'could not issue until approved by the directors of the company.
There is no proof that ever Bollmeyer had notice of the by-laws in relation to the date of policies, but he had notice of what was printed on his application, as he must have seen it. If he .would avail himself of a contract, he must show that the company had given power to the agent to contract, and that the agent did contract ; which has not been done. The application was a mere proposition, and if a policy had issued, it could not'have taken effect earlier than the 2d or 3d day of June, after the fire. If the policy had issued, dated at the date of the application, and Bollmeyer had been required to pay an assessment on his premium note, to meet losses before the application .and note were received at the office, but after the date of the application, what would be the language of the complainant, in defense of a suit brought by the company for the collection of such an assessment? He would point, in emphatic language, to the notice printed on the application—that policies should date and take effect at the time the application was received at the office. He would point to the general practice of the company, and to his two prior policies, and thus be relieved from ^liability. This case is unlike the case of Perkins v. The Washington Ins. Co., 6 Johns. Ch. 485.
Again: the complainant did not expect his insurance to commence at the time of making his application, because his premium note was not filled up, showing the time the policy was to be dated. That was left to be done by the company, according to their custom.
M. Birchard, for complainant, in reply:
The real issue is, what shall be the true date of the policy? The by-law, not any departure from, it, speaks the answer. Corporations speak only by their by-laws.
It was a matter of no moment, whether the loss occurred before the papers reached Medina or not. McConnell, the agent at Warren, might have kept them several days before sending them; and when sent, if nothing variant from his instructions had been done—■ if, when sent, they were such as the directors were bound to approve, they must have issued the policy, fire or no fire. 4 Cow. 650, Woodworth’s opinion. When Bollmeyer made his application, he was bound from that date; and it is absurd to say that one party shall be bound and not the ether. 4 Cow. 645; Law Reporter, vol. 10, No. 11, p. 499.
The date of the policy is regulated by a by-law of the company, not by any arbitrary exercise of discretion on the part of the company^ Bollmeyer was never informed by McConnell, that he could not bind the company. Bollmeyer had a right to rely upon the by-laws of the company. 9 Howard, 390.
Suydam v. Columbus Ins. Co., 18 Ohio, 459; Neville v. Cincinnati Ins. Co., 19 Ohio, 452.

Opinion:
Caldwell, J.
This is a bill filed for the purpose of charging the defendant, as insurer, for a loss occasioned by fire, sustained by Frederick Bollmeyer.
*The facts of the case, as appear from the pleadings and evidence, are these: The Medina County Mutual Insurance Company had an agency at Warren, in Trumbull county, the place of residence of said Frederick Bollmeyer. On the 27th of May, 1846, Bollmeyer applied to McConnell, the agent of the company, for an insurance on his stock of goods and groceries in Warren. The amount of insurance fixed upon the stock was $600. Bollmeyer made his deposit or premium note, for $78, with security to the company, paid $1.67, the per cent, required to be paid down, which Avas passed by the agent to the credit of the company, and at the same time paid for a policy. The application of Bollmeyer, together Avith the premium note, was mailed on May 27 or 28 (not certain, from the evidence, which of these days), to the office of the company, at Medina. The application and note reached Medina on the 2d of June, and were taken out of the office by the agent of the company, at that place, on the same clay. The property was destroyed by fire on the night of the first of June. Information of the destruction of the property reached Medina about the same time that the application and note were received by the agent at Medina, and was about the same time communicated to him. Bollmoyermade out an authenticated statement of his loss, and through their agent, presented it to the company. The company refused to issue the policy or pay the loss. McConnell, the agent at Warren, within a few days after the loss, tendered to Bollmeyer the amount he had paid, which he refused to receive. The bill prays that the company be decreed to issue a policy, and for general relief. It is contended, in the first place, on the part of defendant, that the agent had no authority to bind the company. The agent, in his deposition, states, that he never pretended, by anything that he did, to bind the company; and that whenever he was interrogated on the subject, he always stated that he had no such authority. The obligation of an agent's acts is not to be determined so much by his own or his principal's ^opinion, as by the acts themselves. What were the acts which the agent of the company was authorized to do ?
He was authorized to receive applications, to examine the promises, determine the character of the risk, agree upon the amount to be insured and the amount of premium, receive such portion of the premium as was to be paid in hand, and take the obligaof the party insured, with such security as he might approve, for any future liability.
The agent is the only person, from the very nature of the case, that can be presumed to have the information necessary to act for the interest of the company, and is the only person with whom the party applying has anything to do. In this instance, Bollmeyer had done everything that it was possible for him to do, on his part; all of which had been agreed upon with the agent. It is not necessary, to perfect a contract of insurance, so as to bind the parties, that a policy should have issued; indeed it is not necessary that any writing whatever should have been executed, by the signature of the parties. Like any other contract, it is only necessary that the minds of the parties should have fully met. See Duer on Insurance, vol. 1, pp. 66, 67.
It is said, however, that it is one of their rules, that the company are to approve the applications sent in by their agents, before such applications and contracts are binding, and that Bollmeyer had notice of that fact. This is based on the fact, that on the blank application, with many other stipulations, is printed the following: " All policies of insurance are issued from the office of the company at Medina, upon applications *sent in by agents and others, and if approved, will bear date of the reception of such application, unless requested by the applicant to bear date of some future day." We do not think the qualification, "if approved," here inserted, reserves to the company the arbitrary right of setting aside, at pleasure, any contract that their agents may make, no matter how fair it may be, or how strictly it may comply with their terms of insurance, or with their directions to their agents. Such a construction would permit them to trifle with the community to a most glaring extent.
The company, in a case where their agent had been imposed upon, or where a contract had been made by him that would operate as a fraud on their rights, would have a right to refuse to ratify such contract, and thus clear themselves from incurring liability. And we suppose this phrase merely refers to such a state of caso. They, no doubt, like any other party, have the right to defend themselves against fraud or' mistake, and in such a case, they would not bind themselves by ratifying such contract by issuing a policy. We think this is what is referred to, and nothing more. In the case now under consideration, it is not contended that everything was not fair, and strictly in accordance with the rules of the company.
We are of opinion that the contract made between McConnell and Bollmeyer was a valid contract, binding on both parties; and that it did not require the ratification of the company.
But it is said that the contract was not, by its terms, to take effect until after the fire occurred ; in other words, that the risk had not commenced, when the loss took place. Amongst the general rules of the company, printed in a pamphlet, which contains instructions to the agents, the by-laws, charter and general rules, is the following provision, which is one of the by-laws of the company:
"All policies issued shall take effect from the day on which the application shall be dated, and the premium note deposited, unless directed by the applicant to be dated on a future day."
Now, as seen above, the policies are to be issued from Medina ; *but by the terms of this rule, to take effect from the time the application is dated, the application is dated on the 27th of May, before the loss occurred. It is said, however, that by the stipulation, which we have given above, from the printed matter on the blank application, it is required that the policy shall have date from the time of reception of the application at Medina. Taken in the connection in which this is found, it may read either to the reception at Medina, or to the first reception of it by the agent; but when we take it in connection with the general rule, which requires that the policy shall take effect from the time the application is dated, which clearly refers to the time when it is made to the agent, we think there can be little doubt that the reception spoken of on the blank application, refers to the first reception by the agent—this requires no forced construction, and makes the two provisions harmonize. But even if such contradiction existed, it would not avail the defendant. The principle of the rule, that as between parties contracting, in a doubtful case, the construction shall be taken which'is against the party creating the writing, would apply here with peculiar force. It is said, however, and the evidence appears to warrant it, that the custom of the company was to issue the policy, to take effect on the day that tho application was received at Medina; that the defendant had received policies previously, dated in that way, and must have known such custom. This, however, does not appear to have been a universal custom, and would not do' away with the effect of their printed rules, if it were.
This case bears a very strong analogy to the case of Tayloe v. The Merchants' Fire Insurance Company of Baltimore, 9 How. 390.
In that case, the agent of the company wrote to Tayloe, he being in Alabama, stating the terms on which the comjiany would take the risk, and stating that if Tayloe was agreed to the terms, and would send his check for the amount of the premium, that the matter would be concluded. Tayloe, on receipt of the letter, mailed his check for the amount of the ^premium. Before the letter with the check reached the company, the property was destroyed by fire. The court held, that the contract of insurance took effect from the mailing of the letter with the check, and that the company were liable for the loss.
We think in this case that the contract of insurance took effect from the 27th of May, the time of its being entered into between Bollmeyer and the agent, McConnell, and. that the company are therefore liable for the loss.
Decree accordingly.
Judge Ranney did not sit in this case, having been of counsel for one of the parties.
Corporations may contract, by parol, within the sphere of their proper functions. Hamilton v. Lycoming Mut. Ins. Co., 10 Law J. 498; 5 West. Law J. 419; Ang. & Ames on Corp., chap. 8, sec. 7. A policy of insurance must be in writing. Cockerill v. Cin'ti Mut. Ins. Co., 16 Ohio, 164, per Bead, J. All the books upon the subject, and decisions, unite in declaring that a policy must be in writing. To hold that there could be such a thing as a verbal policy, would be contrary to all eomme rcial usage and the authority of all the books and decisions. Ib.; Stark Co. Mut. Ins. Co. v. Hurd, 19 Ohio, 149; 2 Cush. 439; 19 Law J., n. s., E. P. 222; 7 West. Law J. 529; 17 Ohio, 192.