Mercantile Mut. Ins. Co. v. Hope Ins. Co.

Decision Date02 March 1880
Citation8 Mo.App. 408
PartiesMERCANTILE MUTUAL INSURANCE COMPANY, Appellant, v. HOPE INSURANCE COMPANY, Respondent.
CourtMissouri Court of Appeals

1. The agent of both A. and B., having placed a risk in A., cannot reinsure in B. Such a policy is void unless subsequently ratified by B.

2. Evidence of former similar transactions is inadmissible to show the agent's authority.

APPEAL from the St. Louis Circuit Court.

Affirmed.

MARTIN & LACKLAND and LEE & CHANDLER, for the appellant: “Reinsurance effected by agents representing both sides is not void, but voidable, in the absence of previous authority.”-- Mitchell v. McMullin, 59 Mo. 252; Beeson v. Beeson, 9 Barr, 280; 20 Barb. 468. The evidence offered should not have been refused.-- Morse v. Diebold, 2 Mo. App. 163; Brooks v. Jamison, 55 Mo. 515; Cupples v. Whelan, 61 Mo. 583; Edwards v. Thomas, 66 Mo. 468; 62 Mo. 391; 57 Mo. 390.

H. T. KENT and J. A. SEDDON, JR., for the respondent: The contract of reinsurance made by the agent of the two contracting parties was void.-- Insurance Co. v. Insurance Co., 17 Barb. 132; Insurance Co. v. Insurance Co., 14 N. Y. 85; Michode v. Girard, 4 How. (U. S.) 513, cited and approved in Thornton v. Irwin, 43 Mo. 164; Davone v. Fanning, 2 Johns. Ch. 256; Beal v. Kirman, 6 La. 407; Broker v. Insurance Co., 2 Mason, 371; Church v. Insurance Co., 1 Mason, 345; 2 Rob. (La.) 1556; McDonald v. Wagner, 5 Mo. App. 56. Evidence of previous dealings of a like nature was inadmissible.--Story on Ag. (7th ed.) 210, 241, note; Insurance Co. v. Insurance Co., 14 N. Y. 85; 20 Barb. 470; Farnsworth v. Hemmer, 1 Allen, 495.

HAYDEN, J., delivered the opinion of the court.

This is an action upon an alleged policy of reinsurance, by which it is claimed that the defendant insured the plaintiff in the sum of $5,000, on certain cargo-risks which the plaintiff had upon goods on board the steamboat Belle of St. Louis, when at St. Louis and bound for New Orleans. This reinsurance, of date December 8, 1876, was made at St. Louis by Woods & Kennett, insurance agents, and in making it Woods acted for both parties, the plaintiff and the defendant. This firm had for some years been agents of the defendant at St. Louis, and were also agents for the plaintiff and for other companies.

It appears that on December 7, 1876, the plaintiff had over $16,000 insurance on cargo-risks on the boat, which left St. Louis on her voyage on that day, the weather being pleasant; that on the morning of the 8th the weather turned intensely cold; and that after the boat's departure, and on the 8th, this reinsurance was placed by Woods for the plaintiff with defendant company, he having in his possession blank policies of the defendant, signed by its president and secretary, one of which he filled up with this risk.

On the 9th of December the defendant telegraphed to Woods to take no more risks.

The defendant had not known that Woods had taken this particular risk for the company. On receiving the report of this risk, on the 14th of December, the defendant telegraphed disapproving Woods' conduct, and saying that his reports would not be accepted. Woods replied on the 15th, saying the certificates were out of his possession, and that he could not cancel the risks. On January 31, 1877, and while on the voyage, the steamboat was cut down by heavy floating ice. Proofs of loss were made, and the defendant denied its liability. The court below ruled that upon the evidence the plaintiff was not entitled to recover.

The antagonism which exists between the opposite parties to a bargain is generally recognized by law. Each acts, and has a right to act, with a view to his own interest, and they deal at arm's length. Accordingly, if one acts by an agent, that agent should be not nominally, but really in the place of his principal, with his self-interest undisturbed by calculations as to the interest of the opposing party. This, as well as the exercise of the best skill and judgment of his agent as to the contingencies of the bargain, the principal has a right to demand.

Accordingly a contrivance which reduces the two parties to one, and admits an agent, representing antagonistic interests, to make a bargain by himself, is so far against the policy of the law that the contract is held to be void, unless the principal chooses afterwards, and with a knowledge of all the circumstances that affect his possession, to ratify the act of his agent. This principle has a direct ...

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