Durar v. Hudson County Mutual Insurance

Haines, J,

This case comes before us upon a special verdict, and upon the facts found by the jury it is to be determined whether the plaintiff has the right by law to recover.

The action is founded upon a policy of insurance effected by the defendants to William J. Cántelo, and by him assigned to the plaintiff' at the same time with the conveyance to him of the property insured.

The defendants resist the claim, upon the ground that there was no contract between them and the plaintiff; that the policy was not approved by the directors of the company, nor confirmed and ratified by the plaintiff; and that he did not give satisfactory security for the payment of the residue of the premium given for the policy.

The seventh section of the charter of the company declares, *200that on the alienation of the property insured the policy shall be void, and surrendered to the directors to be cancelled; but that the grantee or alienee, having the policy assigned to him, may have the same ratified and confirmed to him for his own use and benefit, upon application to the directors, and with their consent, within thirty days after such alienation, on giving security to the satisfaction of the directors for such portion of the deposit or premium as shall remain unpaid.

The fourteenth article of the by-laws provides, that if the assignee, who shall have purchased the whole property insured, shall within thirty days after the purchase present the policy and assignment to the secretary, he may have the same confirmed and ratified to him; and when the assignment shall be approved by the directors, the secretary shall record the same, and the confirmation thereof by order of the directors, when the grantee or alienee shall have given satisfactory security for the residue of the premium given for said policy.

If the plaintiff complied substantially with the requisites of the charter and of the by-laws, and the policy was ratified and confirmed to him, the defendants are liable for the loss sustained.

The conveyance was made to the plaintiff of all the property insured on the 22d day of October, 1844, and the policy of insurance duly assigned at the same time.

On the 23d day of October, the day following, the plaintiff, by his agent, presented the policy and assignment to the secretary of the company, and informed him of the conveyance and of his desire to have the insurance continued to him. The consent of the company, printed in blank on the policy, ivas then filled up by the direction of the secretary, and signed by him; and on being asked if any thing more was requested of the plaintiff to have him fully insured, he answered there was not: and on being further asked if the plaintiff was fully insured, he replied that he was.

The plaintiff took possession of the property, and, by his tenants, occupied it until the 16th day of September, 1S45, when the building and machinery were consumed by fire, and became a total loss.

*2011. The defendants insist that they are not responsible, because the directors never approved the assignment, nor ordered it and its confirmation to be recorded.

The objection is not sufficiently sustained, either by the law or by the facts, to afford a proper ground of defence.

The plaintiff had literally complied with the requisites of the charter and of the by-laws, by presenting the policy and assignment to the secretary, and procuring the endorsement of the assent of the company in the usual form. If any thing more was required in that particular, it was to have been done by the secretary. Ilis duty it was to lay the matter before the directors, for their approval. If they disapproved, they should have informed the plaintiff to that effect, and not have suffered him to rely upon a policy which without their consent to its approval would be void. But “the register book” of the company, the only record of assignments kept by them, contains, in connection with the registry of the policy to Cántelo, the following: “ Permitted to assign to Enoch Durar, of Philadelphia, 23d October, 1844.” This entry, made by the secretary in the books of the company, and subject at all times to their inspection, presupposes authority to make it. Whether the record was made by order of the directors in this particular case, or in pursuance of general instructions given to him, the authority is the same, and it binds the company. Bank of Columbia v. Patterson’s administrators, 7 Cranch 299; Peters v. Washington Insurance Co., 4 Cowen 645.

It is evidence, furnished by their own record, of the confirmation and ratification of the policy, and of their consent to its assignment to the plaintiff.

2. But it is further insisted that the defendants are not liable for the loss, because the plaintiff did not give some new security for the payment of the residue of the premium.

The company had a right to require satisfactory security, by a new note or otherwise. Neither the charter nor the by-laws require them to take the note of the assignee, nor prescribo what security they should take. The charter directs that it be “proper security to the satisfaction of the directors;” the bylaws expresses it to be “satisfactory security,” Cántelo had *202made the assignment without any agreement for the cancelling of his note. It was, consequently, left in the hands of the company by his consent, and the liability upon it was never removed. If the company were satisfied with the note, that was sufficient. It was “ security to the satisfaction of the directors,” and within the letter and spirit of the charter.

Their agent, the secretary, acting within the scope of his authority, said that every thing had been done by the plaintiff that was required of him, and his acts and declarations on that subject bind his principals.

If the proposition to assign the policy was submitted to the directors, they knew, or had the means of knowing, what security they had for the premium, and, if dissatisfied with it, should have so expressed themselves and informed the plaintiff. Their silence implies their assent. If the matter was not submitted to them, but the whole business as to assignments committed to the secretary, his assenting to this assignment, and his recording it, is evidence that he, as the authorized agent of the company, was satisfied with the security, and accepted it.

This view of the case is strengthened by the conduct of the directors themselves after the assignment. In March, 1845, one of the officers of the company procured the proxy of the plaintiff to vote for directors, in virtue of the policy; and votes were permitted to be east upon it in two several elections, the first having been set aside for irregularity.

It is true the election was conducted by inspectors, but they were chosen, doubtless, for their impartiality as well as for their capacity; and it was their duty to see that none but members of the company voted. They acted under the authority of the directors, and upon the evidence of membership furnished by them, which was the books of company containing the names of the members, and which the inspectors compared with the proxies.

In this transaction the plaintiff was treated as a member of the company, and consequently as a party insured.

Again, in July, 1845, when the fire occurred on the premises of Mr. Savoy, a party insured, and the loss was to be assessed *203apon all the members, in proportion to the amount of their premium notes, a list of all the notes was furnished by the secretary to the treasurer, who made the assessment. On that list was a statement of the note of William J. Cántelo, given on this policy; an amount was assessed upon it, and paid by the plaintiff.

The notice of the assessment, it is true, was not directly given to the plaintiff, but was formally made out to Mr. Cántelo, and in his absence served by delivering it to his son. But thisjffoes not relieve the defendants; on the contrary it strengthens the evidence against them, for it showed that they regarded Cántelo as still liable to them, and his note as a subsisting security iu their hands upon which they might assess a due portion of the losses. If the note had not been accepted as satisfactory security at the time of the assignment, they had no right to assess upon it any loss incurred after that time; and it is of no consequence whether the plaintiff was directly liable to the company for the residue of the premium or not: the note was left for their security, and they looked to that, and upon it assessed and received its due proportion of the loss. If the money assessed had not been paid, or if they had become dissatisfied with the security, they could have terminated the risk, and cancelled the policy according to the provisions of the 9th section of the charter, and as was done on Uvo other policies between the same parties.

Again, in April, 1845, the finance committee, duly appointed by the board of directors, reported that they had examined all the premium notes that belonged to the company, and found that certain persons, and among them William J. Cántelo, on this very policy and on two others, were insured too high; and that, as to certain other policies named by them, some of the premium notes were not legal, and that on one of them additional security should be required.

Here was the report of a committee specially appointed to examine the securities directly recognising the premium note and the policy in full force and effect, and that report presented to the directors, and accepted and voted upon by them.

But the evidence against the defendants does not stop even *204here. When notice of the loss in, this, case was given to the company, and the preliminary proofs delivered to, th.em, they did not deny their liability, or the existence of the policy, or that the plaintiff was a member of the company, on the contrary, they acted op the supposition of a subsisting valid policy ; they required a hill of the particulars and evidence of the amount o,f the loss, and evidence of the cost of the building and machinery. And they, moreover, appointed a committee to, view the premises where the fire occurred.

At the time of the assignment of the policy, two other policies, issued by the defendants to William J. Cántelo, were assigned to the plaintiff, and the like proceedings were had upon them in relation to. the assignment, confirmation, and security as upon this, and the defendants, treated those as policies confirmed to. the plaintiff, allowed him to vote upon them, assessed a loss upon them, and, in January, 1846, gave .notice to the plaintiff'to furnish further security for th.e premiums.: and, because he declined to furnish the security required* the directors declared the risk tapen upon them to be terminated and the policies cancelled,

The testimony clearly shows, that there was a contract of insurance existing between the parties at the time- of the loss* and I am fully satisfied that the plaintiff is. entitled by law to. recover, an,d that judgment should be entered in his favor, and against the defendants, for the amount of the. damages assessed by the jury,, with costs,

Ogden, J.* concurred.

Judgment, for the plaintiff.