Pratt v. Dwelling-House Mut. Insurance

Dwight, J.

The defendant is a “county co-operative insurance company” *80utive committee for examination and approval, as required by section 8 of article 2 of the by-laws as above quoted. That the policy had been written before the quarterly meeting in January appears from the testimony of the plaintiff that on the 2d day of December he wrote on the face of both the policy and the application a memorandum: “Loss, if any, on the building payable to S. Salisbury, as his mortgage interest may appear. ” There is every reason to suppose that the policy was written immediately after the so-called approval by Brown; and the allegation of the complaint is that it was issued on or about the 11th day of July, 1885. If so, there were two stated meetings of the executive committee, while the plaintiff was a member of it, at which it was his duty to present his application for examination and approval by the committee, and his policy for cancellation or modification, if not approved by them. As we have seen, a policy might be issued upon the approval of the application by a single member of the executive committee; but such issuance is clearly provisional, and subject to the action of the executive committee at its next stated meeting. We think the statement of facts so far made sufficient to demonstrate that the policy issued by the plaintiff, as agent of the insurer, to himself as the insured, had no valid inception as a contract, and cannot be the basis of a recovery by the plaintiff. It is a truism of the law that no man can make a valid contract with himself, as the agent of another. It is equally impossible that a trustee should secure a benefit to himself by the neglect or violation of his duty to his cestui que trust; and both of these propositions must be negatived in order to maintain the validity and binding force of the policy of insurance in this case.

But the plaintiff contends that, granting the invalidity of the policy, he may^ still insist upon a contract of insurance effected by the acceptance of his application. In support of this proposition he refers to--a provision of the by-laws of the company contained in section 7 of article 5, which is as follows: “All"applications for insurance taken by a person duly authorized shall take effect at noon of the date of the same, provided the premium is actually paid. The property shall be held insured until the applicant is notified by the secretary of its modification or rejection.” But the claim of the plaintiff, based upon this provision, is subject to the same objections as those which we sustain to his claim on the policy. In the first place, the secretary, though authorized in general to receive (or take) applications for insurance, cannot properly take an application from himself, any more than he could approve his own application or issue his own policy. In taking, accepting, or receiving the application he acts for the company, and he cannot'act for himself and for the company in the same transaction. There was no reason in the necessity of the case for his taking his own application, because any one of the 12 directors of the company was authorized to receive it. By-Laws, art. 2, § 7. But if it be contended that the approval of the application by Brown was the taking referred to, or in any way satisfied the requirement of the provision quoted, and thus an insurance was effected from the date of such approval, how long did sucii insurance continue in force? The language of the provision is, “ until the applicant is notified of its modification or rejection,” i. e., the modification or rejection of his application; and by whom? Clearly by the executive committee at its next quarterly meeting. But we have already seen that the plaintiff was guilty of a neglect or violation of his duty as secretary and member of the executive committee, in withholding the application from, or failing to bring it to, the attention of the committee for their action at any meeting after the issuance of the policy; and he could not by his own fault gain an extension of his own insurance. And if it were contended—as we do not understand it is—that the approval of the application by the plaintiff and Brown, on the 11th of July, constituted the action of the executive committee required by the provision of the by-laws last referred to, the answer to the contention would be twofold: First, that such *81pretended action was not taken at a meeting of the committee, but after the meeting had dissolved; and, second, that upon the principles here recognized the plaintiff was disqualified to act upon his own application, and therefore the approval did not receive the assent of a majority of the committee. Neither do we find in the case facts to support the contention of the plaintiff that the contract of insurance, though invalid in its inception, was ratified by the acts of other officers of the company. There is no evidence that any other officer of the company knew of the existence of the policy until after the fire, which occurred August 7, 1887. Chamberlain was elected secretary in January, and the books and papers of the company were turned over to him; but his attention was not called to the application or record of the policy of the plaintiff, and he testifies that he never knew or heard of either of them until after the fire. So far as the evidence shows, the same is true of the other officers of the company, unless it were to be found that Brown knew of the application in July; but, if that were true, he had a right to suppose, from the fact that it was not presented to the executive committee at the next or any subsequent meeting, that no policy had been issued upon it. The fact that the application was on its files, and the policy entered in its records, might constitute constructive notice to the company of the existence of both, for some purposes; but constructive notice is not sufficient to charge a party with the ratification of a void contract. Actual notice and full knowledge of all the facts are necessary conditions of a ratification.

One other ground upon which the plaintiff seeks to avoid the objections to his policy is that of waiver, on the principle recognized in the case of Titus v. Insurance Co., 81 N. Y. 410. In that case a provision of the policy required the insured, at the request of the company, to submit to an examination on oath concerning his loss and its circumstances, under the penalty of forfeiture of his policy. There it was held that to insist upon and enforce such a provision was to affirm the validity of the contract in which it was contained. In this case there was a provision of the by-laws that members sustaining loss should “ give any information required by the adjusting officers, and submit to examination under oath,” but no condition of the avoidance of the policy for refusal to do so was attached to it, and the provision of the bylaws, such as it was, was not insisted upon by the officers of the company. Some questions were asked by them, and answered by the plaintiff, in respect to the particulars of his loss, but he was not required to submit to an examination under oath. Blanks for proof of loss were furnished to him at his request, and all the steps towards the establishment of his claim were voluntary on his part. We find no evidence of facts in the case which preclude the defendant from insisting upon the invalidity of the alleged contract of insurance; and we are of the opinion that the court below was right in holding that such alleged contract was invalid, and in granting the defendant’s motion for a nonsuit. The plaintiff’s exceptions should be overruled, and judgment ordered for the defendant dismissing the plaintiff’s complaint. All concur. So ordered.