Court Opinion

ID: 5475443
Source: CourtListenerOpinion
Date Created: 2022-01-09 20:53:26.769457+00
Date Added: 2024-06-11T08:33:28.400226
License: Public Domain

Mullet, P. J.
The Commonwealth and Excelsior companies must be deemed to concede their liability upon the policies issued by them to Mrs. C. It cannot be claimed, therefore, that those policies have ever been canceled or surrendered.
If the defendant’s policy is an operative, valid contract in the hands of the plaintiffs as assignees of Mrs. C., she had insured her interest in .the mills to the extent of $15,000, although she had in fact paid towards the mortgage but $7,500 up to the time of the fire, and we are not informed that she has paid anything since.
The agreement between Mrs. C. and Dows is not before us. We must assume that it was an agreement by Dows to sell, and, on payment of the purchase-money by Mrs. C., to assign the mortgages to her, and on her part a covenant to pay such purchase-price.
If this is the substance of the agreement, Mrs. O., by virtue of it, became the equitable owner of the mortgages, and entitled to insure them to the extent of her interest, which was the amount due or to become due on the mortgages. Her covenant to pay stood in lieu of the money, the legal title' to the mortgages being retained by Dows as security for the payment of the purchase-money. (Angel on Insurance, § 66, and cases cited.)
In the section cited the author speaks of insurance by the purchaser of real estate by contract; such- purchaser is inequity deemed the owner, and entitled to insure to the extent of the value, although he has not' paid the purchase-money, but only obligated himself to pay. The same doctrine must apply to the purchaser of personal property, who has an equitable title to it merely.
The defendant’s policy contained a provision that in case there should be any insurance in any other company extending to the property thereby insured, it (the defendant) should only be liable to pay its ratable proportion of the damage ascertained in accordance with the conditions of said policy.
The result is that, treating all these policies as valid, the *142insured could recover of the defendant but one-half of the amount of the loss. (Blake v. Exchange Mutual Ins. Co., 12 Gray, 265.)
To escape this result the plaintiffs’ counsel insists that the defendant is a re-insurer of the property, and in that character liable to the Commonwealth and Excelsior Insurance Companies for the whole amount of the loss.
The policy of the defendant does not purport to be, nor is it in its terms, a contract of re-insurance, but on tbe contrary is a contract for insurance between the defendant and the equitable owner of the property, of her interest in it.
But it is said that the plaintiffs’ agent applied for re-insuronce, and the policy was issued by defendant for the purpose of re-insuring the risk taken by the plaintiffs.
It is true that McCarthy, the agent for both the Commonwealth and Excelsior companies, applied to defendant’s agent to re-insure. The agents of defendant refused to re-insure, but expressed their willingness to issue a policy equal to the amount insured,in the other companies, and this was assented to by McCarthy. In making the application to re-insure and in obtaining the new policy McC. was not acting for any person. lie was disobeying the instructions of his principals in not canceling the policies issued in their names, and sought the re-insurance to protect his principal in case of loss, and in order to retain the custom of Connolly, who had been accustomed to do business with him as agent.
The defendant was not informed that a reinsurance had been applied for; its officers must have understood that the application on which they were called to act was for an insurance by Mrs. C.
If the defendant was chargeable with the acts of the agent not communicated to them, but which were wholly inconsistent with the knowledge communicated by him and with the act which he called on its officers to perform, it cannot be said on the proof in the case that the defendant’s agent understood that the policy issued by the defendant was to operate as a re-insurance. If they issued the policy for the purpose of *143taking the place of the two policies issued by the other companies, and these policies instead of being canceled were kept in life, one of two results would follow, either defendant’s policy would be void, or under the condition that if other insurance was effected on the same property, defendant’s would only be liable pro rata. It is not claimed that it is void, hence the other policies were not canceled. But if it was, the objection was waived by the receipt of the premium.
As between Mrs. C. and the plaintiff's it may well be that when Mrs. C. accepted the defendant’s policy as an operative instrument between her and the defendant, the plaintiffs might insist that they were entitled to the benefit of it as being made for their benefit in the case they paid in the event of loss such sum as they were liable for to her.
It seems to me the plaintiffs cannot recover on the first count in their complaint.
I am of opinion, however, that the plaintiffs are entitled to recover as assignees of Mrs. C. Notwithstanding the agent who effected the insurance with defendant was wholly unauthorized to act for her in the business with defendant, it was competent for her when it came to her knowledge to ratify the act and thus render the policy valid ab initia. (Finney v. Fairhaven Ins. Co., 5 Metc., 192; Thompson v. The American Tontine L. and S. Ins. Co., 46 N. Y., 674.)
And the ratification is sufficient if made after the happening of the loss. (Finney v. Fairhaven Ins. Co. supra; Routh v. Thompson, 13 East, 274; Hagedorn v. Oliverson, 2 M. & S., 485.)
It is not necessary to inquire whether the ratification would have been operative if the premium had not been paid to and received by the defendant. The fact of such payment is conceded, but the force of it is sought to be avoided, because :
1st. It was under protest; 2d. It was offered to be returned; 3d. Because when it was received the defendant’s agents did not know that the policies issued by the other two companies had not been canceled.
It is not true that when the money was paid by Mrs. O.’s *144agent it was not known to defendant’s agent that the other policies had not been canceled. That fact was known to them as early as noon of the day succeeding the fire.
The offer,to return could not deprive Mrs. C. of rights which had attached when the money was paid, nor of the benefit of any inference which resulted from defendant’s receipt of the money with knowledge of the non-cancellation of the other policies.
As to the payment under protest, it is affirmed on the one side and denied on the other. If it was important, it presented a question for the jury, but no request was made to submit it to the jury, and it was the province of the court under such circumstances to determine the fact, and its decision is final.
If the plaintiffs had purchased the policy in question of Mrs. 0., unconnected with their liability upon the policies issued by them, I should entertain doubts whether the purchase .would have been valid. But the policy was in fact procured by their agent for their benefit and protection, but in the name of Mrs. C., and for this purpose I do not doubt their right to take the policy by assignment. I intend to embrace in this proposition the receiver of the Commonwealth company.
It follows that the plaintiffs are entitled to recover one-half the amount insured by defendant’s policy, and if her counsel will stipulate to reduce the verdict to that sum judgment may be entered for it, but if he shall not so stipulate the verdict is set aside and a new trial ordered, costs to abide event.
Judgment accordingly.