Dodd v. Gloucester Mutual Fishing Insurance , 120 Mass. 468 ( 1876 )

Lord, J.

We think that, upon the evidence in this case, if believed, the jury would be authorized to find that the parties’ minds were in accord in these particulars: the subject matter, the risk insured against, the amount, the duration of the risk and the premium. We think they would be authorized further to find that the parties did not contemplate anything further to be done by the plaintiffs: there was no note to be given, nor cash to be paid, as a condition precedent to the attaching of the insurance proposed; nor was there, on the part of the defendant, any policy to be made or delivered; indeed, there were not in contemplation of either party any further negotiations to be had, nor any other thing further to be done between the parties in order to make the contract of insurance complete.

It is said, however, by the defendant, that the negotiation was had when both parties were laboring under a mistake of fact; and the defendant contends that such mistake, the agreement being made in consequence of it, prevents the contract from being effectual. It therefore becomes important to inquire to what the mistake, thus alleged by the defendant to exist, related. There was no mistake between the parties as to the subject matter ; that being the schooner W. J. Dale; there was none as to the risk, both parties understanding that the last known of the Dale was that she was at Newfoundland for herring; there was none as to the amount, both parties understanding that it was the sum of fifty-five hundred dollars ; there was none as to the duration of the risk, both understanding the risk to continue till her arrival at Gloucester; there was none as to the premium, both parties understanding that to be provided for by the bylaws of the company. The mistake, as contended, was that each party supposed that a previous risk, which the defendant had assumed, was to expire on that day, when, in point of fact, it had expired several months before. If such mistake existed, each party was equally at fault with the other. Each had equal means of detecting it. The policy which the defendant had issued lay before the company; upon the back of that policy • were the words, printed in conspicuous letters, “Expires Nov. 30th, 1872.” If the plaintiffs had opened the policy, it would have appeared that the risk had terminated several months before, Had the defendant referred to its books, the same knowledge would have been imparted. The jury might have been warranted in finding further that both parties rested in the belief, and both parties acted on the conviction, that the vessel was insured until the middle of January, 1873, after which date the plaintiffs were informed by an officer of the defendant company that upon examination he had found that the vessel was not insured.

Although the jury would be warranted in finding these facts, we do not see that they would be required to find them precisely as contended for by the defendant. It is the province of the jury not only to consider the actual facts proved by direct evidence, but all the facts which may be properly and legitimately inferred from such as are thus proved. It is to be observed that the only reported evidence, competent or incompetent, tending to show that the defendant was under a mistake in reference to the matter, is that of the plaintiff Dodd, who testifies that after January 15, 1873, the president of the company came to his (Dodd’s) house and said that “upon examination he had found that the Dale was not insured.” How far such evidence is competent to prove the fact, it is not necessary to consider; for, assuming it to be competent, and assuming it to have a tendency to prove the fact, it is to be taken in connection with all the other evidence in the case. There was evidence also tending to show that the secretary of the company was to attend to the matter and “ see the entries made and the insurance effected.” The jury would have been authorized to find that this was done, and that attention to the matter disclosed the facts as they existed. The evidence tends also to show that the application of ¡November 30 was countersigned by each of the ten directors. It is true that the names were printed and were on the application at the time when made, (which is also true of the original application,) but they may be presumed to be there for some purpose. Upon the evidence as it stands, in connection with the by-law, we think the jury would be authorized to find that the directors’ names were there de bene, and that unless notice was given according to the by-laws, within a reasonable time, their approval was to be inferred, and the signatures thus attached were then to be taken as evidence of such approval.

We think the ]ury would have been warranted in finding that the directors had done their duty, and that in doing it they necessarily became acquainted with the facts, as they actually existed. One of the duties incumbent upon them by the bylaws was “ to decide how much extra premium shall be charged and paid by the assured for such extension.” If the jury should draw the inference that in the discharge of their duty the directors became acquainted with the facts, it would be competent foi them also to find that good faith upon their part required either reasonable notice to the plaintiffs as they found the facts to be, or acquiescence in the arrangement made between their secretary and the plaintiffs. Fraud would not be presumed, but acquiescence might be; and acquiescence would more readily be inferred, if non-acquiescence might suggest or imply bad faith. It is not necessarily the case of an executive officer of the company attempting to do an act in conflict with the by-laws. It is' the action of the entire board of directors, who, by the by-laws, “ shall superintend the concerns of the company, and have the management and direction of all things not otherwise herein provided for.” There is nothing in the by-laws that forbids the insurance, under the sanction of the directors, of this vesse. against the risk insured against, either by original insurance or by extension of existing insurance.

There are other facts appearing which, in the estimation of the jury, might have an important bearing upon the question. The association is a peculiar one; one of the provisions, quite unusual, is, that every member of the company is required to effect insurance, under the penalty of being compelled to pay a premium, though he has no insurance. This provision carries with it the right to have insurance upon such reasonable terms as should be concurred in by the subscriber to stock and the directors. There is evidence tending to show that the plaintiffs on November 80, 1872, had not exhausted their right, but that their subscription was such as to entitle them to the insurance applied for by them. These considerations, in the opinion of the jury, might have had weight with the directors in determining not to disapprove the application, regarding it in either light, as a new insurance, or as an extension of existing insurance.

We see no evidence which would forbid the jury to conclude that, when the subject came before the directors for their action in the ordinary and proper performance of their duty, they decided that, although it was evident that the plaintiffs were labor* ing under a mistake, they, the directors, might deem the mistake an unimportant and immaterial one, and, knowing that the purpose of the plaintiffs was to have the vessel insured, they might have thought it unnecessary to take any other action, but acquiesce in deeming the contract complete and the insurance effectual. In that case, we think the plaintiffs would clearly be entitled to recover, and it would be immaterial whether under the one form of new insurance, or under the other as adopting the language upon the back of the policy as continuing the former risk to that time and extending it. Without, however, discussing the evidence minutely, we are of opinion that the facts proved, with such inferences from the facts as the jury would be justified, in the absence of all other evidence, in drawing, would warrant the jury in finding that a contract of insurance existed between the parties. We do not mean to say that the jury would be required to find such a contract, but that it is a question of fact to be found by them.

Although a considerable portion of the argument of counsel on both sides was based upon the assumption of a mutual mistake as to the time when the former policy expired, we do not deem it necessary to decide whether, as matter of law, such mistake would avoid the contract, because it is hardly probable that, when the whole evidence shall be before the jury, the same question will be presented, except as modified, qualified or controlled either by the conduct or duty of the defendant. The verdict, which was ordered upon the plaintiffs’ evidence alone, must therefore be set aside and a New trial granted.