Am. Cent. Ins. Co. v. McCrea, Maury & Co.
| Decision Date | 31 December 1881 |
| Citation | 76 Tenn. 513 |
| Court | Tennessee Supreme Court |
| Parties | American Central Insurance Company v. McCrea, Maury & Co. |
Appeal in error from the Law Court of Davidson County. J. C. GUILD, J.
DEMOSS & MALONE, R. MCPHAIL SMITH and E. H. EAST for Insurance Co.
SMITH & ALLISON and ED. BAXTER for McCrea, Maury & Co.
The American Central Insurance Company has appealed in error from a judgment recovered against it by McCrea, Maury & Co. on one of its policies insuring against loss by fire.
McCrea, Maury & Co. were distillers at Nashville, having a large stock of liquors, and valuable machinery in the building in which the business was carried on and the liquors stored. The building, stock and machinery were destroyed by fire on January 28, 1873. McCrea, Maury & Co. held, claimed and sued upon the following policies. of the following insurance companies, issued at the times and for the amounts specified:
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¦May 15, 1872. ¦
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¦1. Liverpool, London & Globe, with privilege of $10,000 additional,¦ ¦
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¦2. Franklin, with privilege of $10,000 additional, ¦ ¦
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¦3 American Central, with privilege of $10,000 additional, ¦ ¦
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¦January 7, 1873. ¦
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¦4 Royal, ¦with privilege of $25,000 additional, ¦5,000¦
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¦5. Boatman. ¦with privilege of $25,000 additional, ¦2,500¦
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¦6 Citizens, ¦with privilege of $25,000 additional, ¦2,500¦
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¦January 10, 1873. ¦
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¦7 Equitable, ¦with privilege of $25,000 additional, ¦5,000¦
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¦January 14, 1873. ¦
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¦8 Louisiana Mutual, with privilege of $15,000 additional, ¦ ¦
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These policies were all issued for one year from their respective dates. The first seven of them covered both stock and machinery, one half of the amount called for being on each. The last policy, that of the Louisiana Mutual, was exclusively on the stock of liquors. The insurance on stock was, therefore, in the sum of $20,000, and on machinery $15,000, in all $35,000.
McCrea, Maury & Co. brought separate suits on each one of these policies. The suit on the first policy against the Liverpool, London & Globe Insurance Company was compromised before the trial. Judgment was recovered on the second policy, against the Franklin Insurance Company, and compromised. Judgment was also recovered on the last policy, against the Louisiana Mutual, which was acquiesced in. The Boatman and Citizens companies were corporations of the State of Missouri, having their principal place of business at St. Louis. The suits on these policies were brought in the United States Court at St. Louis, and resulted in verdicts and judgments in favor of the insurance companies. The suits against the American Central, the Royal, and the Equitable were brought in the circuit court at Nashville, and resulted in judgments against each of the companies, which were reversed, upon appeal in error, by this court. Upon the second trial, judgments were again recovered against the companies, and these judgments are now before us by appeal in error. The case of the American Central will be first considered.
The policy of the American Central was issued May 15, 1872, for one year, in the sum of $5,000, one-half on the stock of liquors, and one-half on the machinery, with the privilege of $10,000 additional insurance. It contained the following provisions: “If the assured shall have, or shall hereafter make any other insurance on the property hereby insured, or any part thereof, without the consent of the company written hereon; or if the above-mentioned premises shall be occupied or used so as to increase the risk, or the risk be increased by any means whatever within the control of the assured, without the assent of the company endorsed hereon; or, if a manufacturing establishment, running at night, then in every such case the policy shall be void.” It also contained this condition: “The use of general terms, or anything less than a distinct, specific agreement, clearly expressed and endorsed on this policy, shall not be construed as waiver of any printed or written condition or restriction therein.” It further provided: “This 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.”
The insurance on the property was, after the issuance of this policy, increased, as we have seen, to $35,000. There was proof also tending to show that, in the months of October, November and December, 1872, the building, in which the stock and machinery were located, was changed so as to increase the risk. It was admitted, moreover, that the distillery had always been run at night, and was so run before, at the time of, and after the issuance of the defendant's policy. No endorsement of the consent of the company to the additional insurance, change of risk, or running at night had ever been made upon the policy. The policy was, however, issued at the same time with the policies of the Liverpool, London and Globe and the Franklin companies, and by the same agents, Peck & Cahill, who were the agents of all three of the companies, these companies being foreign corporations. The defendant, the American Central, was a corporation chartered by the State of Missouri, and having its principal place of business at St. Louis. It was doing business in this State under our insurance laws, through Peck & Cahill as their agents, under a power of attorney which appointed them “agents and attorneys of the said company to countersign and issue the policies of the company, and otherwise to do and perform the customary acts and duties of insurance agents.”
During the year 1872, and probably before the issuance of the policies of May 15, 1872, although the fact does not distinctly appear, McCrea, Maury & Co. had taken out polices of insurance on their stock to the extent of $5,000, through other agents, in the Aetna and Queen's companies, one-half the amount in each. These companies declined to continue the risks after the changes made by the insured in the building in the latter part of the year, and, at the instance of the agents of these companies, the policy of the Louisiana Mutual was taken out on January 14, 1873, for the same amount on the stock alone. Peck & Cahill knew of the original insurance for this sum, although they seem to have thought that it was exclusively in the Aetna. They did not know of the policy of the Louisiana Mutual until after the fire At their solicitation, they were authorized by McCrea, Maury & Co., early in January, 1873, to place $15,000 more of insurance on the property, and undertook to do so with the knowledge that, if effected, the entire insurance would be $35,000. Under this authority, Peck & Cahill did obtain the additional insurance in the Royal, the Boatman, the Citizens and the Equitable companies, in all $15??000. These policies were received by them before the fire, but were not delivered to McCrea, Maury & Co. until after the fire. The premiums were paid and received after the fire. Peck & Cahill procured the policies of the Boatman and Citizens companies through the secretary of the American Central, by letter which gave such information that those companies wrote their policies so as to give the privilege of $25,000 additional insurance. The Central company itself seems to have had no notice of the increase of risk in the building, nor of the other insurance of the 7th, 10th and 14th of January, except the notice implied from the foregoing facts.
No endorsement of the additional insurance was made upon the policy of the American Central. There is proof, however, that Peck & Cahill, a week or two before the fire, requested McCrea, the active member of McCrea, Maury & Co., to bring up the policies held by the firm to be endorsed with the additional insurance, and that only a few days before the fire McCrea proposed, at the office of Peck & Cahill, to go after the policies for the purpose of having the endorsements made on them, and was requested not to do so because of some repairs then being made in the office.
Each of the other policies of January 7th, and the two policies of the 10th and 14th of January, contained the same provisions as those of the American Central policy touching over insurance, increase of risk, running at night and waiver of conditions. No endorsement was made on any of them of the consent of the company to the previous or subsequent insurance, as the case may be. The records of the suits on the Boatman and Citizens' policies, introduced in evidence, show that they were avoided on the ground of over insurance.
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