Case Name: The Etna Life Insurance Company, Appellant, v. Eugene T. Pelham, Respondent
Court: New York Supreme Court, Appellate Term
Jurisdiction: New York
Decision Date: 1908-05
Citations: 59 Misc. 225
Docket Number: 
Parties: The Etna Life Insurance Company, Appellant, v. Eugene T. Pelham, Respondent.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 59
Pages: 225–226

Head Matter:
The Etna Life Insurance Company, Appellant, v. Eugene T. Pelham, Respondent.
(Supreme Court, Appellate Term,
May, 1908.)
Principal and agent — Rights and liabilities of agent as to third parties — In general—'Unauthorized contracts.
Damages — Particular contracts and relations — Contracts with agents, brokers and factors — Taking out insurance without authority.
Where an insurance broker obtains from an insurance company policies of insurance to one whom the broker claims to represent, but the alleged principal repudiates his authority and refuses to accept the policies, the broker is liable to the company for the amount of the premiums which would have been payable to it under the policies if the broker had possessed the authority which he claimed.
Appeal by the plaintiff from a judgment in favor of the defendant, rendered in the Municipal Court of the city of New York, first district, borough of Manhattan.
Winter & Winter, for appellant.
John F. Joyce, for respondent.

Opinion:
Gildersleeve, J.
The defendant is an insurance broker and represented to the plaintiff that he had received an order from John P. Kane Company for the issuance of liability insurance policies, and procured the plaintiff to write three policies. The Kane Company refused to accept the policies and pay the premiums. It turned out that the defendant had no authority from the Kane Company to obtain the policies, and they were surrendered and cancelled. The policies were in force for two months; and the plaintiff brought this action to recover from defendant the proportion of premium earned while the policies were in force, to wit: $153.94. Judgment was for the defendant. Upon a previous trial plaintiff obtained judgment for $51.66, upon the assumption, apparently, that the plaintiff was bound by a letter in which it claimed only that sum. The judgment was reversed by this court for the reason that there was proof tending to show that the letter erroneously stated the amount. 52 Misc. Rep. 658. It seems plain that the defendant rendered himself liable for the damages suffered by the plaintiff on account of the breach of warranty that he. was the agent of the assured. White v. Madison, 26 N. Y. 111. The measure of damage is the amount of premiums that could have been recovered under the policies, had the defendant had authority to bind the Kane Company. As we have seen, that is $153.94. The claim of defendant/ that the action cannot he maintained because founded upon an oral promise to pay the debt of another, cannot he sustained. The action is not brought on the promise of the defendant to pay the premium. It is for damages arising from the false representations of the defendant that he was the agent of the assured. The facts are practically undisputed, and it is manifest that there could be no change'in the evidence upon another trial.
The judgment must be reversed and judgment directed in favor of the plaintiff and against the defendant for $153.94, with interest from March 21, 1906, together with costs in this court and the court below.
Giegerich and Greenbaum, JJ., concur.
Judgment reversed and judgment directed in favor of plaintiff and against defendant for $153.94, with interest from March 21, 1906, with costs in this court and the court below.