Blanchard v. Waite , 28 Me. 51 ( 1848 )

The opinion of the Court was by

Wells J.

This action is assumpsit on a contract of insurance, and is submitted to the Court upon a statement of facts, with authority to make such inferences, from the facts, as a jury would be at liberty to do.

The application for the insurance, upon the schooner Oxford, was made by Loring, one of the plaintiffs, on the fifth of Nov. 1839, and was then accepted, the company agreeing to take $2000, at ten per cent, for one year, from Oct. 25, 1839, lost and not lost. He signed the terms on the proposition book, which was kept by the officers of a voluntary association, of which the defendant was a member, and which contained a description of the subject matter of insurance, the rate, time, &c. After signing the proposition book, Loring went away. Nothing was then said about a premium note. Subsequently a policy was duly executed and recorded. Four or five days afterwards, Loring came to the office, and inquired for the policy, and was informed, that it was ready. Gen. Smith, who was president and a director, and also acted as secretary and treasurer of the company, then filled up a joint note for the premium. Loring said, “ he had not authority to sign the note for the other owners,” and left the policy, saying, he would take the note, and get it signed, and return it in a few days. He took the note. On the sixth of December, Smith met Loring on the wharf, and requested him to go to the office and settle the business, meaning, to give the note, &c. Loring replied, he would call another time. The loss became known in Portland on the ninth of December, and on the eleventh of the same month, Loring called at the office, mentioned the loss, offered the note, and requested the policy. But the note was not received, nor the policy delivered. The note bore date Oct. 25, 1839, the time when it was agreed the risk should commence, and was signed by all the plaintiffs.

It appears, by the evidence, that in other cases, insurance had been effected with this company, in a similar manner; the applicant having signed the proposition book. Smith would then say, the insurance is complete, or the vessel is at the risk of the office, and the insured might call when it was convenient and take the policy. It is admitted the plaintiffs were the owners, when the application was made, and continued to be so, on the third day of December, when the loss happened.

A contract of insurance is completed, when there is an1 assent to the terms of it, by the parties, upon a valuable consideration. Neither the giving the premium note, nor the-reception of the policy by the insured, are prerequisites to its-consummation. In the case of Warren v. Ocean Ins. Co., 16 Maine R. 439, where liberty to deviate was indorsed upon the policy, the insured gave no premium note, and took from the company no evidence of the contract. But the plaintiff recovered. The course of business, testified to by the secretary of' that company, probably prevails in most, if not all, insurance companies. He said it was customary, to leave policies in the office, until the notes were nearly matured, before the assured-came in, to take the policies and sign the notes. If the applicant was satisfied with the terms, upon which the president was-willing to take the risk, the agreement was entered upon the proposal book, and signed by the applicant, and the risk was then considered as taken, and the policy made out after-wards. Usually when the assured took the policy, he signed the note.

Where the agent of the assured agreed for a policy, and for a note to be given with security for the premium, and left the-office before the policy was filled up, but it was filled up a few hours afterwards, and he was so informed ; and before it was-delivered or called for, intelligence of a loss was received,. Mr. Justice Washington held, that the contract was completed. 1 Phil. on Insurance, 9, where reference is made to Kohne v. Ins. Co. of N. A. 1 Wash. C. C. R. 93.

In the case of Perkins v. Washington Ins. Co., 6 Johns. Chan. R. 485, the premium was paid to a person, residing in Georgia, alleged by the plaintiff, to be the agent of the company ; but a loss happened, before the reception of the premium by the company in New York. Chancellor Kent was of opinion, that the person, receiving the premium, had not sufficient authority to bind the company, and that the proposal had not been accepted. The case was carried to the Supreme Court of Errors, and the judgment of the chancellor was reversed. The court were unanimously of opinion, that the plaintiff was entitled to recover. 4 Cowen, 645. The agent was considered as having authority to complete the contract of insurance, and that the company was bound by the reception of the premium, by the agent. In the case of Thayer v. Middle-sex Ins. Co. 10 Pick. 326, the contract of insurance was not considered as completed, because the papers, signed by the plaintiff, remained in the hands of his agent, until after the loss.

No copy has been furnished to us, of what was signed by Loring, but we understand from what facts are submitted, that he made himself liable for the premium, so that it could have been recovered of him.

We find then in the case, the terms of the insurance reduced to writing, in a book kept by the insurers for that purpose, and signed by one of the insured for the whole, a policy made and recorded, and ready for delivery before the loss. Was the contract at that time completed ? Here was a union of minds upon the contract, and the insurers had legal power to enforce the payment of the premium, against Loring.

But it is contended, that the subsequent facts impair the force of this conclusion. A few days after signing the proposition book, Loring called for the policy, and was told it was ready. A joint note for the premium, was then made. Loring said he had not authority to sign the note for the other owners and left the policy, saying he would get it signed, and return it in a few days. The inference, drawn from his declaration, that he had not authority to sign the note, is, that he had no authority to procure the insurance for tho other owners. But he did not say so. It might be, that he considered himself as fully authorized to procure the insurance for them, but that such an authority would not embrace the power of signing their names to a note. But we can only conjecture what were his views — they form no basis for our decision.

One part owner of a vessel has no authority, as such, to procure insurance for the other owners. It is incumbent on the plaintiffs to show an authority, on the part of Loring, to procure the insurance for the other owners or a subsequent ratification. Foster v. U. S. Ins. Co., 11 Pick. 85 ; Finney v. Fairhaven Ins. Co. 5 Metc. 192.

In the case last cited, one part owner procured the insurance for himself and the other owners, without their previous authority, but the bringing of an action on the policy, in their names, was held to be a ratification of his act. There was a mutuality in the contract, because the part owner, who effected the insurance, was liable for the premium. The case and the authorities bearing upon it, were very fully considered. If the insurers had brought an action against the plaintiffs, for the premium, no loss happening, and had failed of recovery, because Losing acted without authority, they would have then had a perfect right of action against him. No question was made about his authority, and it does not appear, but that he was in fact authorized. The company did not ask for any thing more than his individual responsibility; with that they remained satisfied, and it was only when he called for the policy, that the joint note was presented, for signature.

The note was signed by all the plaintiffs, but not presented at the office, until after the loss. This act, together with the commencement of the suit, must be considered a ratification of what Loring did, in procuring the insurance. Story on Agency, § 248; 3 Kent’s Com. 261.

Guided by the authorities, to which we have referred, and the principles applicáble to contracts of insurance, it is our conclusion, that the plaintiffs are entitled to recover.

It is agreed, that the defendant is liable for one twentieth part of the risk, and that the preliminary proofs were presented to the directors of the company, on the 14th of Dec. 1839; and an adjustment refused. The policies, used by the company, contained a provision, that losses should be paid in sixty days, after proof and adjustment thereof. A refusal to make an adjustment, when it ought to have been done, is to be viewed in the same manner, and to have the same effect, as if it had been completed.

The defendant’s proportion of the damages is one hundred dollars, from which should be deducted one twentieth part of the premium, and the balance, with interest from the thirteenth of February, 1840, will be the amount, for which the defendant is liable. By the agreement of the parties, a default is to be entered.