Davis v. Ætna Mut. Fire Ins. Co.

• Decision Date: 17 March 1893
• Citation: 67 N.H. 335,39 A. 902
• Parties: DAVIS v. ÆTNA MUT. FIRE INS. CO.
• Court: New Hampshire Supreme Court

39 A. 902

67 N.H. 335

DAVIS

v. ÆTNA MUT. FIRE INS. CO.

Supreme Court of New Hampshire. Merrimack.

March 17, 1893.

Action by one Davis against the Ætna Mutual Fire Insurance Company. There was a judgment on a verdict directed for plaintiff, and defendants except Verdict set aside.

Assumpsit, upon a policy of insurance, Issued by the defendants, a corporation formed under the laws of this state, and located here, to the plaintiff, a woman residing in Massachusetts, insuring her against loss by fire upon a mill building in that state. The policy does not conform to the standard form prescribed by the statutes of New Hampshire or Massachusetts, but is the form used by the defendants in insuring property located outside this state. It contains the following provisions: "(1) The assured, by the acceptance of this policy, hereby warrants that any application, survey, plan, statement, or description connected with procuring this insurance, or contained or referred to in this policy, is true, and shall be a part of this policy; that the assured has not overvalued the property herein described, nor omitted to state to the company any information material to the risk. (2) If any broker or other person than the assured has procured this policy, or any renewal thereof, or any indorsement thereon, he shall be deemed to be the agent of the assured, and not of the company, in any transaction relating to the insurance. (3) It is hereby understood and agreed by and between the company and the assured that this policy is made and accepted with reference to the foregoing terms and conditions, and those printed on the back hereof, which are hereby declared to be a part of this contract, and are to be used and resorted to in order to determine the rights and obligations of the parties hereto in all cases not herein otherwise specially provided for in writing, and indorsed hereon." The plaintiff applied to an insurance broker in Boston for the insurance, and he applied to a firm of general insurance brokers in Indianapolis, who sent the application to the defendants. The defendants sent the policy to the Indianapolis brokers, who forwarded it to the Boston broker, and he delivered it to the plaintiff. The defendants allowed a commission to the Indianapolis brokers, who allowed a portion of it to the Boston broker. The only information the defendants had relative to the location of the risk was contained in the application and a diagram sent to them by the Indianapolis brokers. The diagram represented a part of the buildings of a foundry as located on one side of the risk, but in a way that showed the representation was incomplete. A one-story building, with an iron roof, used for the storage of paints, etc., located within a few feet of the risk, on the opposite side from the foundry buildings, and a railroad track passing near the risk, were not represented. The building insured was represented as located upon a street, when in fact it was 130 feet or more distant from the street, with buildings between. The application stated that the building was insured in the Hartford and other companies, and did not state that the applicant was a woman. At the time the application was made, the Hartford Company's policy had been canceled. The plaintiff claimed that the contract was made in this state; that the Indianapolis brokers were the agents of the defendants by force of section 3, c. 172, Gen. Laws; and that their representations with reference to the risk did not bind the plaintiff. The court ruled in accordance with the plaintiff's claims, and, as the defendants offered no evidence, ordered a verdict for the plaintiff, and the defendants excepted.

Samuel C. Eastman, for plaintiff.

Streeter, Walker & Chase, for defendants.

PER CURIAM.¹ it has already been decided that this contract of insurance is to be construed in accordance with the laws of Massachusetts. Davis v. Insurance Co., 67 N. H. 218, 34 Atl. 464. Hence the plaintiff's contention that the statutes of this state (Gen. Laws, c. 172, § 3; Laws 1879, c. 13) charging an insurance company with knowledge of the risk possessed by a third party who prepares the application, whether technically its agent or not, apply to this contract, cannot be sustained. These statutory provisions were not embodied in, and do not control, the Massachusetts contract. The parties intended that their contract should be construed by the laws of the state where the plaintiff resided, and where the property insured was situated. "All contracts of insurance on property in this commonwealth shall be deemed to be made therein." Laws Mass. 1887, c. 214, § 3. The ruling that the Indianapolis brokers were agents of the defendants, and that their knowledge of facts or their representations relating to the risk bound the defendants, is erroneous, under the statutes of that state. The agreement between the parties contained in the policy was that, "if any broker or other person than the assured has procured this policy, * * * he shall be deemed to be the agent of the assured, and not of the company, in any transaction relating to the insurance." This is evidence that the brokers, in negotiating for the insurance, and procuring the policy, were acting as the plaintiff's agents; and the question is whether a finding of fact that they sustained that relation to her can be sustained under Massachusetts law. The question relates to the capacity of the parties to bind themselves by this provision of the contract. If it is not opposed to the statutes of that state, there is no reason why it was not competent for them to make it. Whether a similar provision in a New Hampshire contract of insurance would be held invalid under our statutes is immaterial. An "insurance broker" is defined to be a person who, "for compensation, acts or aids in any manner in negotiating contracts of insurance or reinsurance, or placing risks or effecting insurance or reinsurance for a person other than himself, and not being the appointed agent or officer of the company in which such insurance or reinsurance is effected." Laws Mass. 1887, c. 214, § 93. Section 90 of the same chapter provides that "an insurance agent or broker who acts for a person other than himself in negotiating a contract of insurance by an insurance company shall, for the purpose of receiving the premiums therefor, be held to be a company's agent, whatever conditions or stipulations may be contained in the policy or contract; and such agent or broker knowingly procuring, by fraudulent representations, payment or an obligation for the payment of a premium of insurance shall be punished, etc. Our attention has not been called to any other...