50 F.2d 747 (9th Cir. 1931), 6262, Norwich Union Fire Ins. Soc. v. Paramount Famous Lasky Corp.

Docket Nº:6262.
Citation:50 F.2d 747
Party Name:NORWICH UNION FIRE INS. SOCIETY, v. PARAMOUNT FAMOUS Limited, et al. LASKY CORPORATION.
Case Date:June 15, 1931
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 747

50 F.2d 747 (9th Cir. 1931)

NORWICH UNION FIRE INS. SOCIETY,

Limited, et al.

v.

PARAMOUNT FAMOUS

LASKY CORPORATION.

No. 6262.

United States Court of Appeals, Ninth Circuit.

June 15, 1931

Rehearing denied July 22, 1931.

Page 748

Redman, Alexander & Bacon, Orrick, Palmer & Dahlquist, and Herbert Chamberlin, all of San Francisco, Cal., for appellants.

Gavin McNab, Schmulowitz, Wyman, Aikins & Brune, Nat Schmulowitz, Ernest L. Brune, Miller & Thornton, and H. B. M. Miller, all of San Francisco, Cal., for appellee.

Before RUDKIN, WILBUR, and SAWTELLE, Circuit Judges.

WILBUR, Circuit Judge.

The appellee suffered a loss by reason of the partial destruction of premises owned by it in the vicinity of Los Angeles. The fire occurred at 6 o'clock p.m. on January 16, 1929. On that morning the appellants, upon the application of James & Co., insurance brokers at San Francisco, issued, respectively, two instruments, each of which was designated 'covering memorandum' (such instruments being otherwise termed, in the insurance world, as 'binders '), covering the property which was later on the same day destroyed by fire. The two covering notes were in the same form, one of them specifying insurance in the sum of $25,000 in one of three appellant companies, and the other specifying insurance in the sum of $50,000 in another of said companies; the 'covering memorandum' specifying insurance in the sum of $50,000 in still another of said companies. Each of said covering notes stated that 'insurance against loss or damage is thereby kept covered in the above named company and for the amount given above, subject to the printed conditions' of the California standard statutory form of fire insurance policy, in favor of appellee corporation, on its properties of designated character and location, at Los Angeles, 'from Jan. 16, 1929, at 10 a.m. To cease Feb. 16, at noon, or such time prior thereto as the Company's policy may be issued on above described risk in lieu hereof.' The 'covering memorandum' was shorter, merely stating that 'insurance against fire is hereby 'kept covered"' in favor of the same insured and upon the same property, 'from Jan. 16, 1929, at noon M.' and that 'Insurance under this Covering Note is subject to all the printed conditions of policies now in use by the above named Company, and is to cease March 1, 1929, at noon, or at such time prior thereto as the Company's policy may be issued.'

The only question in the case is as to whether or not James & Co., insurance brokers by whom said insurance was placed, were authorized by the appellee to secure such binder agreements, and, if not, whether the ratification of their act after the fire was sufficient to obligate the appellant companies under the binder contracts procured by James & Co.

The case was tried without a jury, pursuant to stipulation. The trial court denied a motion made by defendants (appellants) at the close of all the evidence for judgment in favor of defendants and a request for special findings. This ruling is assigned as error.

It appears from the evidence that the appellee usually procured insurance upon its Pacific Coast properties through the Behrendt-Levy Insurance Agency of Los Angeles, acting as insurance brokers. The Behrendt-Levy Agency, in placing large lines of insurance for the appellee, were in the habit of acting with and through James & Co., insurance brokers at San Francisco, as placing agents. According to a course of dealing for five or six years, it appeared that the appellee's customary method of procuring insurance was for A. C. Martin, manager of appellee's accounting department, having general charge of insurance matters for appellee on the Pacific Coast, to notify the Behrendt-Levy Agency that appellee desired a certain amount of insurance. In pursuance of this general instruction, the Behrendt-Levy Agency, either directly or through James & Co., procured the desired insurance in such amounts and in such individual companies as their judgment dictated. Before the procurement of the insurance contracts which are involved in this action, Martin, on January 11th, requested the Behrendt-Levy Agency to procure increased insurance by the following letter:

'Gentlemen: Will you kindly increase the coverage on the new four-unit sound stage, monitor room, et cetera, from $150,000 to $470,000; the sound-proofing building from $66,000 to $70,000; and the sound recording building from $90,000 to $110,000. I believe that these figures will represent the final coverage required on these three buildings.

'Would you also please increase the coverage on the sound-recording and reproducing equipment belonging to the Electrical Research Products, Inc., from $175,000 to $183,000. We are still short $7,500 of the coverage which we previously requested December

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11th. Would you please check up on this.

'I would ask that you please arrange to submit a list of the companies with which you expect to place this additional coverage, for my approval.'

In pursuance of this request the Behrendt-Levy Company telegraphed from their Los Angeles office to James & Co., at San Francisco, a request to place $320,000 additional insurance upon the property which was subsequently...

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