Pratt v. Dwelling-House Mut. Fire Ins. Co.

• Decision Date: 01 December 1891
• Citation: 130 N.Y. 206,29 N.E. 117
• Parties: PRATT v. DWELLING-HOUSE MUT. FIRE INS. CO.
• Court: New York Court of Appeals Court of Appeals

130 N.Y. 206

29 N.E. 117

PRATT

v.DWELLING-HOUSE MUT. FIRE INS. CO.

Court of Appeals of New York,

Second Division.

Dec. 1, 1891.

Appeal from supreme court, general term, fifth department. Reversed.

Action by George L. Pratt against the Dwelling-House Mutual Fire Insurance Company of Orleans, Niagara, and Monroe Counties. Defendant obtained judgment, which was affirmed by the general term. Plaintiff appeals.

The other facts fully appear in the following statement by VANN, J.:

This was an action upon a policy of fire insurance alleged to have been issued by the defendant upon certain real and personal property belonging to the plaintiff. The answer denied that the defendant issued the policy in question, and alleged that the same was issued by the plaintiff, as secretary of the defendant, to himself, without authority, and that it was therefore void. It was further alleged that the real property covered by the policy was subsequently incumbered by a mortgage, given by the plaintiff, in violation of a clause in the contract prohibiting subsequent incumbrances without the consent of the company, and that the policy thereupon became void. The defendant was organized under chapter 362 of the Laws of 1880, as amended by chapter 171 of the Laws of 1881. The business of the company, as stated in its by-laws, which are annexed to and made a part of every policy, is the ‘insurance of city and village dwellings and their accompanying outbuildings and their contents, farm houses and their accompanying outbuildings and their contents, and other property not more hazardous, against damage by fire or lightning.’ The powers of the company, as the by-laws further provide, are vested in a board of 12 directors, who elect from their own number a president, vice-president, secretary, and treasurer. In addition to the usual duties imposed on such officers, it is the duty of the president, or, in his absence, the vice-president, to sign all policies, which are to be written and countersigned by the secretary, who keeps the accounts, books, and papers of the company, and acts as its general agent during his term of office. These three officers constitute an executive committee, possessing ‘all the powers of the board of directors, when they are not in session;’ and are required to hold stated meetings on the second Saturday of January, April, July, and October, to ‘examine and approve all applications on which policies have been written during the quarter next preceding, and cancel or modify all policies which they do not approve.’ Applications for insurance can be made to any director, but must be approved by one member of the executive committee before a policy can be issued. Any person insured by the company becomes a member thereof, and, on sustaining a loss, is required to ‘notify the secretary without delay, and give any information required by the adjusting officers, and submit to examination under oath.’ The executive committee is authorized to adjust and settle all losses. ‘All applications for insurance, taken by a person duly authorized, take effect at noon of the date of the same, provided that the premium is actually paid. The property shall be held insured until the applicant is notified of its modification or rejection by the secretary.’ On the 1st of each month agents and directors are required to report ‘to the office’ the business done by them during the preceding month, and pay over the amount due to the company, and on the 15th of each month the secretary is required to pay over all funds on hand to the treasurer. The premiums charged are expected to pay all ordinary losses and expenses, but, in case of an unusual loss, an assessment upon members may be made by the directors, who are to be convened for that purpose. The statute requires the president and secretary to make an annual report, under oath, showing the number of policies issued, the amount and kind of insurance, and an itemized account of the moneys received by the company during the year. Laws 1881. c. 171, § 10. A supervisory committee, elected by the members, is required by the by-laws to examine the books and vouchers, ‘and report their opinion thereon, verify the annual reports of the president and secretary made under the requirement of the statute, and certify to the facts in the case as found by them under their hands, and report the same to each annual meeting of the members.’ A copy of the annual report is mailed to each member of the company. The by-laws also provide that ‘applications for insurance and membership’ must be made on ‘printed blanks prepared by the executive committee * * * without ‘blanketing’ for one member more than another.'

John J. Ryan, for appellant.

% s. e. f/ilkins, for respondent.

VANN, J., ( after stating the facts.)

Upon the trial of this action there was a sharp conflict of testimony, but at the close of all the evidence the court granted a nonsuit on motion of the defendant, and the plaintiff excepted. As was said by the court in Clemence v. City of Auburn, 66 N. Y. 334, 338, ‘the plaintiff did not assent to any proposition of fact assumed either by the counsel for the defendant or the court, and is not concluded by omitting to request that the whole case, or any particular question, should have been submitted to the jury. If, in any view of the evidence, a verdict might have been rendered for the plaintiff, or if there were questions of fact which might have been determined for the plaintiff, and which, if determined in his favor, would have entitled him to recover, the case should not have been taken from the jury.’ Sheridan v. Railroad Co., 36 N. Y. 39;Colt v. Railroad Co., 49 N. Y. 671;Train v. Insurance Co., 62 N. Y. 598. For the purpose of this review, therefore, all questions involving the credibility of witnesses must be resolved in favor of the plaintiff, and such facts deemed established as, upon any reasonable view of the evidence, the jury could have found in his interest.

The facts, as the jury might have found them had the case been submitted to them for decision, are as follows: On Saturday. July 11, 1885, the plaintiff, who had been the secretary of the defendant ever since its organization, filled out a blank application for insurance upon his own property, intending to present it to the executive committee, which was required by the by-laws of the company to meet in quarterly session on that day. The application was for insurance to the amount of $500 on a wine-house and cellar belonging to the plaintiff, and $1,500 on his personal property kept stored therein; and was in the usual form, except that the custom of the company did not permit personal property to be described by a blanket clause. The application was signed by the plaintiff, who by the last clause thereof agreed to pay to the defendant the sum of $11, and bound himself to pay it such further sums as should be necessary to meet all legitimate losses and expenses, according to its rules and by-laws. The executive committee, which was at this time composed of Edward E. Russell, George Brown, and the plaintiff, by virtue of the offices then held by them, respectively, of president, vice president, and secretary, held no meeting that day, as no one attended except the plaintiff. Within a day or two the plaintiff met Mr. Brown, and, handing him the application, told him that he wished to apply for insurance on his wine-house. Mr. Brown took the application in his hands, opened it, looked it through as if reading it, and then indorsed his approval thereon as a member of the executive committee, by writing his name in the proper blank space, as the plaintiff had done before him. The plaintiff then went to the office of the company, filled out a policy to himself according to the application, and signed it as secretary, Mr. Brown having already signed it with others, in blank, as vice-president. At the same time the policy was entered on the ‘policy register’ by Mr. Pratt, as follows, the heads of the columns and the entries beneath being given as if continuous: ‘Number of policy, 747; name of insured, George L. Pratt; post-office, Ridgeway, Orleans county; date, July 11, 1885; term, three years; amount insured, third class, $2,000; amount of premium, $10; total amount insured, $2,000; total amount of premium, $10.00.’ He also charged himself on the ledger with the amount of the premium, $10, and credited himself with $1 as the commission on the same to which he was entitled according to the by-laws. He filed the application with the papers of the company, took the policy home, and put it with his other policies, one, at least, of which was issued by the defendant, but under what circumstances, or by whom signed, did not appear. The first policy ever issued by the defendant was to the plaintiff on this same wine-house and cellar. It was based on an application approved by the plaintiff, Mr. Brown, and one Downey, who was president at the time, was written and countersigned by the plaintiff as secretary, and continued in force for three years, and until it expired by limitation. The next quarterly meeting of the executive committee, after the application in question had been made, was held October 10, 1885, and all of the members were present. According to the testimony of the plaintiff, 11 applications, including his own, were presented to and approved by the committee at that meeting, and were so recorded on the minutes of its proceedings, as kept by him. Some of the applications were approved by the indorsement of names thereon, but none in the bundle containing the plaintiff's were so indorsed. Mr. Russell, the president, when requested by the plaintiff to look over those applications, said: ‘If they have two names on, I won't bother with them. I want to make this next train.’ The application in question was not otherwise shown to Mr. Russell at that time, and he did not examine it, or any other in the package...