Imperial Shale Brick Co. v. Jewett

Hash, J. :

The action is brought to recover upon a policy of insurance the value of a cargo of brick shipped by the plaintiff on the 2d of October, 1895, at Cleveland, Ohio, on board a lake schooner and lost on. Lake Michigan some time during the same month. The defendants were underwriters, conducting a fire and marine insurance business as Lloyds insurers, having their office at Buffalo, N. Y., at which place they commenced business in the year 1895 under the name of the “ Buffalo Fire and Marine Underwriters,” and were successors of an association of. underwriters of tire same character who-had, in March, 1892, associated themselves together as Lloyds insurers in Hew York city under the name of the Pacific Fire Lloyds of Hew York.

A day or two prior to such shipment the plaintiff applied to C. R. Jones & Co., vessel and insurance agents at Cleveland, Ohio, for marine insurance on said cargo.

About October fifth or sixth said agents delivered to plaintiff, in. Ohio, a certificate of marine insurance in the sum of $2,000, said certificate reading as follows:

“Ho. 363. Inland Marine Certificate of Insurance. $2,000.00
“ Buffalo, N. Y., Oct. 5, 1895.
“ This is to certify that The Imperial Shale Brick Co., insured under and subject to the conditions of Open Policy No. 4007, issued by the Buffalo Fire and Marine Underwriters of Buffalo, N. Y., at the Buffalo, N. Y., agency, in the sum of two thousand dollars, on paving brick, in board cargo of schooner John- Magee, at^ and from Cleveland, Ohio, to Waukegan, Mich. Loss, if any, payable to order of assured hereon, and return of this certificate. Valid when countersigned by the authorized agent of this company at
Buffalo, N. Y. HENRY S. McFALL,
“ Countersigned by : Attorney.
“ Hiram H. Smith,
AgentP

*590Upon the delivéry of this certificate the plaintiff paid C. R. Jones & Co., at Cleveland, Ohio, thirty dollars as the premium for the said insurance.

The open policy Ho. 4007 mentioned in the certificate was an -open policy of insurance by which the defendant, in due form of policies of marine insurance, on accoimt of Hiram H. Smith, or whom it might concern, did by its terms, make insurance, and cause the several persons indorsed thereon, or in books attached thereto, to be insured upon all kinds of lawful ¡goods, wares and merchandise, laden on board vessels or lawful or regular route and voyage, for the several amounts and at the rates indorsed .thereon, subject to the conditions thereof, and in extenso set out the premiums and terms of an open policy of marine insurance, which enables the said Hiram H. Smith to issue certificates of insurance of the character of the' one issued to the plaintiff, so that the holder thereof would- be insured by the defendants as underwriters in the sum named in the ■certificate, but upon the terms and conditions of said open policy.

The said open policy, after stating the terms, conditions and manner of insurance, contained further: conditions limiting the liability of the defendants as underwriters in the manner of Lloyds insurers, providing, among other things, that: “ This policy is made and accepted upon the following further conditions : The liability of each of the underwriters in ease of any loss, and the amount insured by each underwriter, shall be his proportionate part of the aggregate amount payable to the insured upon such loss, and no one of the underwriters shall be in any event liable under this policy for an amount exceeding the sum of five hundred dollars. In no event or contingency shall any underwriter hereon be liable for any part of any other underwriter’s liability hereon, the liability assumed hereby by each underwriter being separate and individual only, as if each -underwrite had" issued to the assured herein a separate policy, their liability being several and not joint.; * * * .

“Ho-action shall be brought to enforce the provisions of this policy except against the general manager, as attorney in fact, and representing all of the underwriters, and each of the underwriters hereby agrees to abide the result of any suit so brought as fixing his individual responsibility hereunder. * * *

“ It is understood and agreed that each underwriter hereby *591assumes his proportionate share of the liability on all certificates hereinafter issued under this policy.”

That said open policy bore date-June 19, 1895, and was executed by the defendants, by Henry S. McFall, their attorney and manager.

It is' not questioned but that insurance may be made by parties as Lloyds insurers and the underwriters limit their liability as in the -open policy of the defendants provided. It has been recently so held. (Concentrating Works v. Ackermann, 6 App. Div. 540 ; Lawrence v. Schaefer, 20 id. 80.)

But it is alleged and the findings of the court are that Mr. Keplinger, who alone acted for the plaintiff in the matter, did not know that the Buffalo Fire and Marine Underwriters was a Lloyds association ; did not know that this certificate was issued on behalf of nineteen individual underwriters, but supposed from the language contained in it that it was issued by a corporation; did not know to whom open policy Ho. 4007 was issued or where it was; none of these matters were called to his attention by any one, and he had no notice or knowledge of any sort of any attempt on the part of the insurers to restrict or limit their liability as attempted in the last four paragraphs of the policy; and plaintiff never assented to such attempted restrictions and limitations. He did not see the policy which was at all times in the defendants’ safe at their home office in Buffalo, while he was at all times either at Cleveland or Canton, Ohio. And it does not appear that C. R. Jones & Co. had any knowledge or notice of the terms of this policy, or that defend-' ants were doing a Lloyds business, or that the Buffalo Fire and Marine Underwriters was an unincorporated association.”

These are findings of want of actual knowledge, as distinguished from the knowledge furnished by the certificate delivered to the plaintiff, and the notice there given in express terms that the plaintiff was thereby “ insured under - and subject to the conditions of open policy Ho. 4007 issued by the Buffalo Fire and Marine Underwriters, at Buffalo, H. Y., at the Buffalo, H. Y., agency.” There was no fraud or misrepresentation of any kind. It is found that it does not appear that during the entire transaction anything was said to any one of the persons who took part in it as to what sort of an association or company the Buffalo Fire .and Marine Underwriters was. It was taken for granted that every one understood the nature of the *592business that was being transacted. The plaintiff had before taken several of these certificates of insurance from the defendants. The defense is that the plaintiff’s agent, Mr. Keplinger, did not know that the Buffalo Fire and Marine. Underwriters was a Llovds assov ciation ; did not know what a Lloyds asociation was, but supposed from the language of the certificate that it was issued by a corporation, and did not know to whom open policy Ho. 4007 was issued or where it was. He knew, or he was bound .to know, that the certificate stated that' there was such a policy, and that it was referred to for the conditions of the insurance! They were not in the certificate; that he knew, and, also, that he must look to the open policy for the conditions of his insurance. If he wished to- know with whom, or the character of tire company with which, he was insured, that was a proper subject of inquiry. He could not shut his eyes,, remain silent and be permitted to say he did not know. In a case similar to this it was held that ignorance of the limitations in the policy did not excuse the insured. The plaintiffs had taken a. mere receipt entitling them to the policy. It was said that the defendant was in no way responsible for the' plaintiff’s ignorance. It was their business to know what was contained in their contract of insurance. (De Grove v. Metropolitan Ins. Co., 61 N. Y. 594, 605.) So here the plaintiff cannot be allowed to plead ignorance of the character of the insurance' it. obtained, or of the terms and conditions of the policy to which the certificate referred.

The point is made by the respondent that the defendants were unlawfully engaged in business as insurers, and that by reason of that fact and their methods of business they became and were common-law partners, .jointly liable as such. The difficulty with this proposition is that the plaintiff contracted with the, defendants in. their capacity as Lloyds insurers, and expressly stipulated with the defendants as to the measure and extent of their liability.

■The judgment should be reversed and a new trial ordered, with costs to the appellants to abide the event.

All concurred, Spuing, J., not sitting.

Judgment reversed and a new trial ordered, with costs to the appellants to abide the event.