Essington Enamel Co. v. Granite State Fire Ins. Co.
Decision Date | 03 March 1911 |
Docket Number | 236-1910 |
Citation | 45 Pa.Super. 550 |
Parties | Essington Enamel Company v. Granite State Fire Insurance Company, Appellant |
Court | Pennsylvania Superior Court |
Argued November 25, 1910 [Syllabus Matter] [Syllabus Matter]
Appeal by defendant, from judgment of C.P. Delaware Co.-1909, No 382, on verdict for plaintiff in case of Essington Enamel Company, Inc., v. The Granite State Fire Insurance Company, of Portsmouth, N.H.
Assumpsit on a policy of fire insurance. Before Broomall, J.
In addition to the facts stated in the opinion of the Superior Court it appears that the certificate of authority from the defendant company to their agent at Warren read in part as follows:
" Be it known, That W. F. Henry, of Warren, in the County of Warren and State of Pennsylvania, is appointed, and by these presents duly constituted agent of the Granite State Fire Insurance Company of Portsmouth, New Hampshire, with full power to receive proposals for insurance against loss or damage by fire in Warren, Warren County, Pennsylvania, and vicinity, to receive moneys, and to countersign, renew and consent to the transfer of policies of insurance, signed by the President and attested by the Secretary of the said Granite State Fire Insurance Company, subject to the rules and regulations of said company, and to such further instructions as may from time to time be given by its officers."
The defendant at the trial offered certain points, the sixth of which with the court's answer thereto, was as follows:
If the jury find that Henry was only a local agent of the defendant company and that the territory within which he was authorized to represent said defendant was limited to Warren county and its vicinity, such authority did not vest him with powers of a general agent or authorize him to transact business for defendant company outside of the territorial limits designated. Answer: That is true if he was appointed agent as between him and the company only for a territory which did not include Delaware county. His authority, then, so far as the paper here has bearing upon that question, limits him to the district of his appointment. But, as I have said before, if he acted within the scope of his authority and there was no custom which prevented, then so far as this plaintiff is concerned, this contract became a binding contract.
Verdict and judgment for plaintiff for $ 803.39. Defendant appealed.
Errors assigned were in discharging rule for judgment for defendant n. o. v.; in refusing binding instructions for defendant; in qualifying defendant's sixth point, as above; in admitting certificate of the insurance department.
Affirmed.
Arthur S. Arnold, with him O. B. Dickinson, Thomas O. Pierce, and Frank R. Shattuck, for appellant. -- The local agent was without authority to bind the insurance company: Quinlan v. Ins. Co., 133 N.Y. 356; Gibson Co. v. Carlisle, 3 Ohio Decisions, 27; American Car & Foundry Co. v. Water Co., 221 Pa. 529; Interstate Securities Co. v. Natl. Bank, 35 Pa.Super. 277; Insurance Co. of No. America v. Thornton, 130 Ala. 222 (30 So. 614).
The presence of benzine avoided the policy, whether the benzine caused the loss or not: Heron v. Ins. Co., 180 Pa. 257; Whitmarsh v. Ins. Co., 84 Mass. 581.
Failure to pay the premium rendered the contract a nudum pactum: Gosch v. Ins. Co., 33 Pa.Super. 496.
The overvaluation in this case was so grossly excessive that the court should have set aside the verdict: Furlong v. Ins. Co., 64 Hun, 632 (18 N.Y.S. 844); Sternfeld v. Ins. Co., 50 Hun, 262 (2 N.Y.S. 766).
William I. Schaffer, with him W. U. Hensel, for appellee. -- A practice among agents, as distinguished from a custom among insurance companies, cannot affect a policy. The usages of a particular trade or a particular place or of a particular individual, must be known to both parties to a contract; and must be certain, uniform and general: Chicago & Alton R. R. Co. v. Harrington, 192 Ill. 9 (61 N.E. 622); Adams v. Pittsburg Ins. Co., 76 Pa. 411.
An insurance company is bound by the acts of a general agent in the absence of knowledge by the insured of limitations of his authority: Continental Ins. Co. v. Ruckman, 127 Ill. 364 (20 N.E. 77); German Fire Ins. Co. v. Columbia Tile Co., 15 Ind.App. 623 (43 N.E. 41); American Employers' Liability Ins. Co. v. Barr, 68 F. 873.
Where an agent is authorized to take a risk in one place, it is presumed that he has authority to take them anywhere, and a risk taken by him outside of his real jurisdiction will be binding upon the company: Hahn v. Guardian Assur. Co., 23 Ore. 576 (37 Am. St. Rep. 709); Walker v. Lion Fire Ins. Co., 175 Pa. 345.
As to the alleged presence of benzine the case is ruled by Lancaster Silver Plate Co. v. National Fire Ins. Co., 170 Pa. 151, and Citizens' Ins. Co. v. McLaughlin, 53 Pa. 485.
Payment for the premium was not a condition precedent to the validity of the contract and the countersigning agent may extend credit to the insured or not as he chooses: Lebanon Mutual Ins. Co. v. Hoover, 113 Pa. 591; Healy v. Ins. Co., 50 A.D. 327 (63 N.Y.S. 1055); Weisman v. Commercial Fire Ins. Co., 3 Pa. (Del.) 224 (50 A. 93); Elkins v. Susquehanna Mut. Fire Ins. Co., 113 Pa. 386; Arthurholt v. Susquehanna Mutual Fire Ins. Co., 159 Pa. 1; Universal Fire Ins. Co. v. Block, 109 Pa. 535; Snyder v. Life Ins. Co., 202 Pa. 161; Gosch v. Ins. Co., 33 Pa.Super. 496.
A mere discrepancy in valuation will not in itself constitute sufficient evidence to establish fraud: Insurance Co. of No. America v. Melvin, 1 Walker (Pa.), 362; Huchberger v. Ins. Co., 12 F.Cas. No. 6821; Commercial Ins. Co. v. Friedlander, 156 Ill. 595 (41 N.E. 183).
Before Rice, P. J., Henderson, Morrison, Orlady, Head, Beaver and Porter, JJ.
The plaintiff was engaged, at North Essington, Delaware county, Pennsylvania, in the business of enameling leather for its own use, and for trade purposes. It applied for insurance on its stock, machinery and byproducts, to Clarke & Cortis, insurance agents and brokers of New York city, and employed them as its brokers to place $ 17,000 of insurance on the named property. These brokers made a specialty of lumber and tannery insurance; and after placing $ 4,000 of the amount in New York city, on May 13, 1908, wired to William T. Henry (who was a well-known insurance agent and broker at Warren, Penna.) to bind $ 10,000 on the machinery and stock of the plaintiff company at Essington, Delaware county, in this state, and the same day received a wire reply binding the risk, and asking for a diagram and amount of other insurance. After some correspondence between these parties, the amount was increased to $ 13,000 and Henry sent to Clarke & Cortis the policy in suit, which policy, with others, Clarke & Cortis transmitted, on May 27, 1908, to the plaintiff at Essington. On June 9, following, the plant was entirely destroyed by fire, and so far as the defendant's rights are concerned, it was a total loss.
It clearly appears that when Mr. Adams, who represented the plaintiff, solicited the insurance through Clarke & Cortis, he did not know the names of the companies in which it would be placed; he did not know Henry, the defendant's agent at Warren, nor did he know of any custom, trade relation or business understanding between insurance agents or brokers in regard to the time when premiums were to be paid; he only knew that Clarke & Cortis, his brokers, extended to him a credit of thirty days, within which he was to pay his premiums to them, and it as clearly appears, that between Clarke & Cortis and Henry there was a business understanding and agreement, that had been in force for quite a while previous to issuing this policy, by which Clarke & Cortis had a credit of sixty days in their settlements with him. The defendant company supplied blank policies to Henry, which were signed by the president and secretary of the company, on which, immediately preceding their signatures, was the printed statement, " This policy shall not be valid until countersigned by the duly authorized agent of the company at Warren, Penna." The concluding statement on the policy as delivered to the plaintiff being, " Countersigned by W. F. Henry, Agent." It is admitted that W. F. Henry was the legally authorized agent of the defendant at Warren, Penna., to solicit insurance, transact business, deliver policies and collect premiums. The policy is dated May 14, 1908, for $ 1,000, the term mentioned being for one year from May 13, 1908.
It is urged that the authority of Henry was limited to Warren and vicinity, but there is nothing in the request of the defendant to the insurance commissioner, by which Henry had been appointed its agent for the transaction of business in this state, to qualify or limit his authority as to the amount, locality or character of risk, save in the words, " in accordance with the powers and instructions given to them (him) by this company."
This request to the insurance commissioner embraced a list of seventy-four other persons, as agents of the defendant in this state, who were indicated by name and the place of their residences, but none of whom resided in Delaware county. In some counties there is named one person, in others two three, four, five and seven. If Henry had been known to be a local agent, with authority limited to Warren and vicinity, it is strange that so effective a defense would not have been urged by direct proof rather than by inference and construction of an alleged custom. But there is nothing to indicate that he was a local agent with limited authority. He was certified by the defendant (and so far as the plaintiff could have knowledge on that subject), as a general agent with statewide authority. By the company's...
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