Charles H. Dresser & Son, Inc. v. Allemannia Fire Ins. Co. of City of Pittsburgh, Pa.

• Decision Date: 12 December 1924
• Docket Number: 1012,1005,1016.,1007,1014
• Citation: 101 Conn. 626,126 A. 912
• Parties: CHARLES H. DRESSER & SON, INC., v. ALLEMANNIA FIRE INS. CO. OF CITY OF PITTSBURGH, PA., AND FOUR OTHER CASES.
• Court: Connecticut Supreme Court

126 A. 912

101 Conn. 626

CHARLES H. DRESSER & SON, INC., v. ALLEMANNIA FIRE INS. CO. OF CITY OF PITTSBURGH, PA., AND FOUR OTHER CASES.

Nos. 1005, 1007, 1012, 1014, 1016.

Supreme Court of Errors of Connecticut.

December 12, 1924

Appeals from Superior Court, Hartford County; William M. Maltbie Judge.

Separate actions by Charles H. Dresser & Son, Incorporated, against the Allemannia Fire Insurance Company of the city of Pittsburgh, Pa., against the Concordia Fire Insurance Company, against the North River Insurance Company, against the Royal Insurance Company, Limited, of Liverpool, England and against the United States Fire Insurance Company, and others. Judgments for defendants, and plaintiff appeals. Reversed and remanded, with directions.

Fire policy issued on condition that previously issued policy should be surrendered, did not come into force where previous policy was not surrendered.

These 5 cases, with 9 others involving similar questions of fact and law, were referred to Reed, State Referee, who filed a single comprehensive report stating the facts as to all the cases and concluded from the facts found that the respective underwriters, except the North River Insurance Company were liable to contribute proportionately to the payment of the plaintiff's admitted loss of $33,281.

The superior court accepted the report of the referee, but reached a different conclusion from the facts found, and gave judgment in 12 cases for the defendant underwriter and the defendant Woodford. Plaintiff has appealed in each of these cases; and the questions of law presented in the 5 appeals now before us include all questions raised in all 12 appeals. These 5 appeals have been covered by one presentation in briefs and arguments. All the policies cover the same risk, namely, a woodworking plant formerly owned by the Cairns Woodworking Company. Charles E Lord was appointed by the superior court receiver of the plant in February, 1917, and was appointed trustee in bankruptcy by the United States District Court in March, 1917. He held the property as receiver and trustee until April 20th, when it was sold by order of court to the plaintiff corporation.

All of the policies here in question had been obtained by Lord through the defendant Woodford, acting as broker in placing the insurance with other agents. The policies were never assigned to the plaintiff, and no written consent to their transfer to the plaintiff was ever given by the underwriters and indorsed upon or attached to the respective policies as required by their terms. The first question arising upon each appeal is whether, on the facts found by the referee, the superior court erred in holding that the policy in question was not in force at the date of the fire, and if the policy is not in force, a second question arises in each case (except No. 1012); whether the court erred in holding that the defendant Woodford was not liable in these actions for his admitted breach of an agreement to keep them in force.

The facts which are common to all these appeals may be summarized as follows:

Although the policies were never assigned to or delivered to the plaintiff, there was an understanding between the plaintiff and Lord that they were to remain on the property and that the plaintiff would pay his share of the current premiums. Pursuant to this understanding, and while the transaction of passing title to the plaintiff was in progress, on April 20, 1917, Lord called the defendant Woodford on the telephone and told him that the property had been transferred to the plaintiff corporation. At the same time, Dresser, president of the plaintiff corporation, asked Woodford over the telephone to arrange for the transfer of the policies to the plaintiff, and Woodford said he would attend to the matter. This was between 5 and 6 o'clock in the afternoon. Next morning Dresser met Woodford by appointment at his office, and Woodford handed him the following writing:

" April 21, 1917.

Messrs. C. H. Dresser & Son, Inc., 287 Sheldon street, City. Attention Mr. C. H. Dresser--Dear Sir: Re Transfer Insurance, Chas. E. Lord, Temporary Receiver, Cairns Woodworking Co. Agreeable to our understanding of even date, and confirming telephone request and order of last evening of your attorney, Mr. Broder, you will accept and hold this letter, please, as evidence of insurance written in the name of the receiver for the Cairns Woodworking Company, to wit: Fire, $75,000. Compensation, automobile, steam boiler, and all other lines that may have been underwritten, having been arranged and bound in your name, effective as of noon April 20th. Policies in due course, or to be rewritten to suit your pleasure or such arrangement as you desire to make at a later date.

Yours very truly,

AEW/M A. E. Woodford."

On the same day, after the talk with Dresser, Woodford made, signed, and placed on file in his office the following memorandum:

" Memorandum.

Building and transfer to C. H. Dresser & Son, Inc., all insurance written in name and for C. E. Lord, Rec. Cairns Woodworking Co."

During the conversation of April 21st Dresser told Woodford that he thought there was too much fire insurance on the plant, but that the plaintiff proposed to take an inventory and would discuss with Woodford later the amount to be permanently carried on the plant. Plaintiff commenced to take an inventory on April 21st, and was still working on it, but had not completed it, when the plant was almost completely destroyed by fire about 9 o'clock on the morning of April 26th.

It was the custom among local fire insurance agents in Hartford that, in cases of transfer of the title of an insured risk, the agent who dealt directly with the insured should notify other agents who had issued policies on the property of the transfer by letter or telephone; it was also customary for the agent who dealt directly with the owner to make out " transfer slips" and send them to the other agents interested. These were signed within a few days as the convenience of the office permitted. Oral consent was regarded as binding in the meantime. A delay of a few days in giving notice of the transfer was not unusual as between local agents. The policy sued on in No. 1005 was issued through Woodford, as broker, by Horace S. Howe, as general agent for the Allemannia Fire Insurance Co.; the policy sued on in No. 1014 was so issued by Wakefield, Morley & Co., as general agent for the Royal Insurance Company; and the policies sued on in Nos. 1007, 1012, and 1016 were so issued by the George B. Fisher Company, as general agents for the Concordia Fire Insurance Company, the North River Insurance Company, and the United States Fire Insurance Company, respectively.

All of the policies were written to cover the risk in question with the knowledge that the property was then in bankruptcy, and as such considered by the various companies as an undesirable risk, and with the knowledge and understanding that the property was to be transferred, and that the receiver or trustee in whose name the policies were written was merely the nominal owner for a short time, " and it was agreed by and f, Wakefield, Morley & Co., and Horace S. Howe, and Alton E. Woodford, a defendant herein, that, as a consideration for the issuance of said policies hereinbefore set forth they should have continued the said policies of insurance on the risk in question either in full or in a porportionate amount to the insurance which the new owner should finally determine and carry," in case Woodford then controlled the placing of the fire insurance.

The dealings between Woodford and each of the above-named agents are set forth in the finding of fact as follows:

Wakefield, Morley & Co.:

" About March 9, 1917, Mr. Curtis Case, an employee of Mr. Woodford, requested Wakefield, Morley & Co. to issue insurance, for companies of which they were the agents, on the property in question and was told by Mr. Walter L. Wakefield, a member of the firm of Wakefield, Morley & Co., that that firm would issue such insurance provided there was an understanding that when the plant of the Cairns Woodworking Company was transferred from the trustee in bankruptcy to another and more permanent owner, if Mr. Woodford then controlled the fire insurance on said plant, Wakefield, Morley & Co. should have a share of the fire insurance in proportion to the share which they were then taking.

After the issuance of policies by Wakefield, Morley & Co. and shortly after March 9, 1917, Mr. Wakefield told Mr. Woodford and Mr. Case that the policies issued by Wakefield, Morley & Co. were issued with the understanding that when the Cairns Woodworking Company plant was transferred by the trustee in bankruptcy to another and more permanent owner, if Mr. Woodford then controlled the fire insurance on the plant, Wakefield, Morley & Co. were to have their proportionate share of the fire insurance.

On May 10, 1917, after all the insurance companies involved had received notice of the fire, and after the special agents of the insurance companies had talked to the officers of the plaintiff corporation, Wakefield, Morley & Co. rendered a bill to Mr. Woodford for the premiums for one year on the policies issued by the British American Insurance Company, the People's National Insurance Company, and the Royal Insurance Company, as aforesaid, and on June 15, 1917, this bill was paid by Mr. Woodford by his check payable to Wakefield, Morley & Co., and this check was collected in due course by Wakefield, Morley & Co.

Previous to the happening of the fire resulting in the loss of the insured premises, the said Wakefield, Morley & Co., through Walter Wakefield, had actual notice of the transfer of the insured property to ...