51 Ill. 342 (Ill. 1869), Aetna Ins. Co. v. Maguire

Citation:51 Ill. 342
Opinion Judge:Mr. Chief Justice Breese.
Party Name:AETNA INSURANCE COMPANY v. TERRENCE MAGUIRE et al
Attorney:Messrs. SLEEPER, WHITON & DURHAM, for the appellants. Messrs. GOOKINS & ROBERTS, for the appellees.
Court:Supreme Court of Illinois

Page 342

51 Ill. 342 (Ill. 1869)

AETNA INSURANCE COMPANY

v.

TERRENCE MAGUIRE et al

Supreme Court of Illinois, Third Grand Division

September, 1869

Page 343

APPEAL from the Circuit Court of Cook county; the Hon. ERASTUS S. WILLIAMS, Judge, presiding.

The opinion states the case.

Judgment affirmed.

Messrs. SLEEPER, WHITON & DURHAM, for the appellants.

Messrs. GOOKINS & ROBERTS, for the appellees.

OPINION

Mr. Chief Justice Breese.

Page 344

This was an action of assumpsit, brought to the Circuit Court of Cook county, by Terrence Maguire, Ludwig Wolf and William Barry, against the AEtna Insurance Company, upon a policy of insurance No. 320, and a verdict and judgment for the plaintiffs. An appeal was taken to this court at the September term, 1868, and the judgment reversed.

Upon the petition of the plaintiffs, and on the suggestion this court had not given sufficient consideration to some important facts in the case, a rehearing was ordered.

A rehearing has been had, and we will consider the case as one now before us for the first time.

The policy was written by James Sweet, an agent of defendants, at Nebraska City, on the 6th of September, 1865, and by him countersigned on that day.

By this policy, the defendants, in consideration of $ 175, insured the plaintiffs against loss or damage by fire, to the amount of $ 2,500 for one year, as follows: $ 1,000 on their two and one-half story frame distillery building and one story saw mill building attached, known as the Patterson Mills, occupied by the assured as a distillery and saw mill, and situated in the Rock Bluff precinct, in Cass county, Nebraska territory; $ 500 on boiler, engine, &c.; $ 500 on distillery fixtures, tubs, &c., and $ 500 on stock of liquors and grain, all contained in said buildings.

On the same day, an insurance, to the same amount, was effected in the Phoenix Insurance Company, of which Sweet was also the agent.

Eighteen conditions were annexed to the policy, as part thereof, and after stating what goods were not hazardous, what were hazardous, and what extra hazardous, to this latter clause is this: "The following are not to be be insured at any rate of premium, viz: brimstone works, distilleries, flax mills, gun powder, &c., steam saw mills, &c." Condition 5 of the policy, provides that, for any cause the company shall elect, it shall

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be optional with the company to cancel this policy, after notice given to the assured, or his representative, of their intention so to do, in which case the company will refund the premium for the unexpired term. There was another clause, to the effect that the policy should not be valid until countersigned by the duly authorized agent of the company at . It was duly countersigned by James Sweet, agent at Nebraska City.

On the 20th of November, 1865, an assignment of the interest of Maguire, Wolf and Barry, was endorsed on the policy to Terrence Maguire.

On the 29th of January, 1866, the premises were destroyed by fire. After the fire, Sweet, the agent, endorsed on the policy the assent of the company to the assignment, his assent bearing the same date as the assignment.

The first point made by appellants is, that Sweet, the agent, had no power to write this policy and bind the company. It is said he was a special agent, and exceeded his authority in taking a risk on a distillery and steam saw mill, risks specially forbidden by the very terms of the policy, and further, that the policy was subject to the approval of the general agent at Cincinnati; that it never received his approval, and therefore is not binding on the company.

Upon the first proposition, it is true, the policy enumerates distilleries and steam saw mills as property on which no risks will be taken; but what was understood and contemplated by the use of those terms? Most clearly, it seems to us, distilleries and saw mills in operation. This policy does not purport to be upon such, but upon the buildings, inactive, unused, not exposed to the hazards of such buildings in active operation. Should they be put in operation after the delivery of the policy, provision is made for that in the policy, in these terms: "And it is agreed and declared to be the true intent and meaning of the parties hereto, that in case the above mentioned buildings shall, at any time after the making, and during the continuance of this insurance, be appropriated, applied or used to or for the purpose of carrying on or exercising therein any trade,

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business or vocation, denominated hazardous, extra hazardous, or included in the memorandum of special rates, or in the conditions annexed to this policy, or for the purpose of stowing or vending therein any of the articles, goods or merchandize in the conditions aforesaid, denominated hazardous, extra hazardous, or included in the memorandum of special rates, unless herein otherwise specially provided for or hereafter agreed by this company in writing, and added to or endorsed upon this policy, then and from thenceforth, so long as the same shall be so appropriated or used, these presents shall cease, and be of no force or effect."

So, far, then, as the subject matter of the policy is concerned, the agent had full power to take the risk. It is to be presumed, either he knew the buildings were not being used for the purposes for which they were erected, or if they should be, after the delivery of the policy, they would come under the operation of the condition above quoted. The premium was a heavy one, seven per cent. of the amount insured, and but a trifling risk. If appropriated, afterwards, to a hazardous business, without the assent of the company, the policy would be null and void. Insurance companies, anywhere, would be much gratified at opportunities to take such risks, and would eagerly embrace them, as their object is to make money--to receive large profits from small hazards.

As to the other branch of the proposition, is it true the general agent disapproved this policy?

It was sent him, in due course of business. The premium was paid by the assured about September 10th or 12th, 1865, and the agent, in making his monthly returns to the general office, included it in his returns for that month, and it was paid over to that office, and a credit given Sweet, the agent therefor, on the books, and it is in their treasury now.

What did the general agent do when he saw this risk on the monthly account of his agent? Did he repudiate it? Did he order an instant return of the whole premium? He

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did neither. He merely said, under...

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