109 U.S. 278 (1883), Grace v. American Cent. Ins. Co.

Citation:109 U.S. 278, 3 S.Ct. 207, 27 L.Ed. 932
Party Name:GRACE and others v. AMERICAN CENT. INS. CO. OF ST. LOUIS.
Case Date:November 19, 1883
Court:United States Supreme Court

Page 278

109 U.S. 278 (1883)

3 S.Ct. 207, 27 L.Ed. 932

GRACE and others

v.

AMERICAN CENT. INS. CO. OF ST. LOUIS.

United States Supreme Court.

November 19, 1883

In Error to the Circuit Court of the United States for the Eastern District of New York.

COUNSEL

[3 S.Ct. 207] Winchester Britton, for plaintiffs in error.

Geo. W. Parsons, for defendants in error.

OPINION

HARLAN, J.

This is an action upon a policy of fire insurance issued September 26, 1877, by the American Central Insurance Company of St. Louis to the firm of William R. Grace & Co. The circumstances under which it was issued are these: A

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clerk of William R. Grace & Co., charged with the duty of effecting insurance against loss by fire upon their property, employed one W. R. Moyes, a broker in the city of New York, to obtain insurance, in a specified amount, for his principals. Moyes instructed one Anthony, an insurance broker and agent in Brooklyn, who had on previous occasions obtained policies for Grace & Co., to procure the required amount of insurance. Anthony obtained the policy in suit from the general agents in New York city of the defendant company, mailed or delivered [3 S.Ct. 208] it to Moyes, and by the latter it was delivered to Grace & Co. not later than the day succeeding its date. On the morning of October 6th one Carrol, for the insurance company, verbally notified Anthony that the company refused to carry the risk and required the policy to be returned. There is some conflict in the testimony as to what occurred between Carrol and Anthony on this occasion. But, in the view which the court takes of this case, it may be conceded that Anthony gave Carrol to understand that the policy would be returned to the company or its agents. The property insured was destroyed by fire on the night of October 6, 1877, or early on the morning of the 7th. Prior totthe gire neither of the 7th. Prior to the fire neither by whose instructions the policy was obtained, had any knowledge or notice of the conversation between Carrol and Anthony, or of the fact that the company had elected not to carry the risk. At the trial it was admitted that the contract between the parties was fully executed upon the delivery of the policy to the insured.

The eighth clause of the policy is in these words:

'This insurance may be terminated at any time at the request of the assured, in which case the company shall retain only the customary short rates for the time the policy has been in force. The insurance may also be terminated at any time at the option of the company, on giving notice to that effect and refunding a ratable proportion of the premium for the unexpired term of the policy. It is a part of this contract that any person other than the assured, who may have procured the insurance to be taken by this company, shall be deemed to be the agent of the assured

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named in this policy, and not of this company, under any circumstances whatever, or in any transaction relating to this insurance.'

The court refused, although so requested by plaintiffs, to rule that Anthony was not, within the meaning of the policy, their agent for the purpose of receiving notice of its termination; but charged the jury, in substance, that Anthony was, for such purpose, to be deemed the agent of the insured. Exception was taken in proper form by plaintiffs, as well to the refusal to give their instruction, as to that given by the court to the jury. A verdict was returned for the company, and judgment thereon was entered.

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The charge, in connection with the opinion delivered by the learned judge who presided at the trial, indicates that, in his judgment, the words in the eighth clause--'It is a part of this contract that any person, other than the assured, who may have procured the insurance to be taken by this company, shall be deemed to be the agent of the assured named in this policy'--were intended to be qualified by the words 'in any transaction relating to this insurance.' Upon this ground it was ruled that notice of the termination of the policy was properly given to Anthony, who personally procured the insurance. We do not concur in this interpretation of the contract. The words in their natural and ordinary signification import nothing more than that the person obtaining the insurance was to be deemed the agent of the insured in all matters immediately connected with the procurement of [3 S.Ct. 209] the policy. Representations by that person in procuring the policy, were to be regarded as made by him in the capacity of agent of the insured. His knowledge or information, pending negotiations

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for insurance, touching the subject-matter of the contract, was to be deemed the knowledge or information of the insured. When the contract was consummated by the delivery of the policy he ceased to be the agent of the insured,...

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