Karelsen v. Sun Fire Office of London (Ltd.)

The action was brought upon an alleged contract of fire insurance to recover $2,500 for loss sustained by the burning of certain stock and machinery belonging to the plaintiffs. It appears that on September 2, 1885, the plaintiffs directed Pell, Wallack Co., insurance brokers, to procure for them a line of insurance amounting to $10,000. They applied to defendant and it agreed to take $2,500 of the amount and signed and delivered to the brokers what is known as a "binding slip," in which it agreed to insure plaintiffs for twelve months from September 2, 1885. The slip to be binding until the regular policy of insurance was made out and delivered. Later in the day, defendant sent a messenger to the office of the brokers to inform them that the defendant declined to take the risk, but the office was closed. The day following, notice was duly given the brokers, but the time of giving it was a matter of controversy on the trial. On the part of the plaintiffs, the brokers testified that the notice was not given until about 4 o'clock, while the defendant's evidence was to the effect that it was given not later than half past one. This discrepancy was of moment because the fire which consumed the plaintiffs' property broke out shortly after three o'clock, and by four o'clock had spent its force.

The appellant insists that the trial court erred in refusing to dismiss the complaint on the ground that "the policy if it existed at all was canceled on the third of September before the fire."

The trial court adopted the view that defendant was powerless to cancel the policy except by giving notice to the plaintiffs; that notice to the brokers was not sufficient. We do not agree with the learned judge in that respect, for, while the binding slip contained none of the conditions usually found in insurance policies, the contract evidenced by it was the ordinary policy of insurance issued by the company. So that, in any construction of the contract, it must be regarded as "though it had expressed that the present insurance was under the terms of the usual policy of the company to be thereafter delivered." (Lipman v.Niagara Fire Ins. Co., 121 N.Y. 454.) By the terms of the regular policy of the company it is agreed that the insurance may be terminated at any time at the option of the society on giving notice to that effect and refunding a ratable proportion of the premium for the unexpired term of the policy. As the premium had not been paid, the company had but to give notice of termination to the plaintiffs or their authorized agents. The policy further provides "that if any broker or other person than the insured has procured this policy or any renewal thereof, or any indorsement thereon, he shall be deemed to be the agent of the insured, and not of the society in any transaction relating to the insurance." This clause in the policy, together with the facts proven as to the relations existing between the plaintiffs and the brokers, bring this case within the authority of Stone v. Franklin FireIns. Co. (105 N.Y. 543), and establishes that notice of cancellation could have been effectually given to the brokers.

The Hermann case (100 N.Y. 411) is not applicable, for in that case the policy had been delivered to the assured and the authority of the brokers was at an end. While here the brokers had not, as yet, obtained the policies, and in the Stone case had not made delivery to the assured. Consequently their right as well as their duty to represent the plaintiffs in all matters necessary to accomplish that which they had undertaken, remained. Notice of cancellation to the brokers, therefore, at any time before the happening of the fire, would have terminated defendant's contract with the plaintiffs. And if plaintiffs' evidence as to the time of giving notice had not been contradicted the defendant's motion for a nonsuit would have been well founded. But the broker's testimony fixed the time as later than the commencement of the fire and, if true, too late to terminate the contract, for the contingency on which the liability was made to depend had occurred and the company was an absolute debtor to the plaintiffs. A question of fact was, therefore, presented for determination by the jury and the ground assigned for nonsuit under consideration was not well taken. In his charge to the jury, the court, instead of submitting the question of fact which we have specified, erroneously instructed them that the broker had fulfilled his duty and that if the company desired to cancel the policy it was bound to notify the principal. But no exception was taken to the charge in such respect, nor any reference made to it except by the following request: "I also ask your honor to charge directly the converse of what your honor has charged — that if the jury believe that on the third of September notice was sent to the brokers canceling the policy, that such notice was a good notice and did cancel and terminate the risk." The request was declined, and the defendant excepted. The request was too broad, in that it ignored the dispute as to the time of serving the notice on the brokers. It was the defendant's right to have had the jury instructed that if they believed the notice of cancellation to have been given at or before half-past one on the third, as testified to by the defendant's manager, then the policy was cancelled. No such request was made. The instruction asked for necessarily assumed the facts to have been as asserted by the defendant. Had it been granted it would have required the jury to find for the defendant whether they believed the plaintiffs' or defendant's witnesses correctly stated the time at which the notice was given, for all agreed that it was given on the third of September.

The defendant's counsel, in his motion to dismiss the complaint, assigned as further ground "that there was no proof of loss." Proofs of loss were served upon the defendant, but it is asserted that they were insufficient in that, (1) they were not properly signed; and (2) that they omitted to state the interest of the plaintiffs therein. The plaintiffs were partners doing business under the name of the Shaped Seamless Stocking Company. In that name application was made for insurance and granted. When the proofs of loss were prepared the firm name was also used throughout and signed at the end thereof, and underneath was the signature "Jaques E. Karelsen, Treas." Karelsen was one of the partners, and made oath to the truth of the statement furnished as proof of loss. True, he added to his signature the word "Treas." What may have been his reason for it was not disclosed. It does not appear to have been done to mislead the defendant in any way, or that such was its effect. Without the word "Treas." the signing and verification seem to have been in compliance with the requirements of the policy, and it should be treated as surplusage. The proofs stated with great clearness the interest of the insured. True, the partnership name rather than that of each individual member of it was used, but this was not error. The policy does not object to it. It does not suggest that in describing the interest of the insured that each partner's name should be given rather than the firm name.

There are no other exceptions requiring consideration.

The judgment should be affirmed.

All concur; POTTER, J., in result.

Judgment affirmed.