Gibson v. Connecticut Fire Ins. Co.

• Decision Date: 11 November 1896
• Docket Number: 3,973.
• Citation: 77 F. 561
• Parties: GIBSON v. CONNECTICUT FIRE INS. CO.
• Court: U.S. District Court — Eastern District of Missouri

77 F. 561

GIBSON v. CONNECTICUT FIRE INS. CO.

No. 3,973.

United States Circuit Court, E.D. Missouri, Eastern Division.

November 11, 1896

Campbell & Ryan, for plaintiff.

Boyle Priest & Lehmann, for defendant.

PHILLIPS District Judge.

This cause was tried before a jury. There being practically no dispute between the parties as to the controlling facts of the case, it was suggested to counsel by the court that, as the determination of the case turned entirely upon the law arising from the conceded facts, the jury should, by consent be discharged, to afford the court an opportunity for investigation of the questions of law involved. This suggestion not being accepted by the plaintiff, the court directed the jury to return a verdict for the plaintiff stating counsel at the time that this action was not to be taken as the conclusive judgment of the court as to the law of the case, and that, therefore, the defendant could file a motion for a new trial, which the court would take under advisement, so that, if the verdict should be approved on further investigation by the court, it would obviate the necessity of a new trial; otherwise a new trial would be ordered.

The material facts of the case are sufficiently stated in the following discussion: The controlling question to be answered is, is the contract of insurance a Missouri or a Minnesota contract? If the right of recovery is determinable by the statute law of the state of Missouri, the plaintiff is entitled to recover the whole amount of insurance expressed in the policy, but if it is a Minnesota contract the finding must be for the defendant, as the action in the latter case should have been predicated upon the award of arbitrators, duly made, instead of upon the contract for the whole amount of the insurance expressed in the policy. The evidence showed that one Windmuller, residing and doing business at St. Louis, in the nature somewhat of an insurance broker, had been for some time insuring property situate in St. Louis for the plaintiff, and being aware of the fact that the plaintiff owned a house and lot situate at Lake Minnetonka, Hennepin county, Minn., suggested to him that he procure insurance thereon, to which the plaintiff assented, whereupon Windmuller wrote to one Gilbert, an insurance agent at St. Paul, Minn., asking him if he could place $5,000 of insurance on this property in companies represented by him. Gilbert, who was the local agent for the defendant company at St. Paul, forwarded an application to the company at Hartford, Conn., for a risk of $2,500 on this property, which was accepted by the company, and a policy made out signed by the president of the company on the 18th day of July, 1893, and forwarded to Gilbert to be countersigned by him. The policy thus forwarded to Gilbert contained this clause: 'This policy shall not be valid until countersigned by the duly authorized agent of the company at St. Paul, Minn.' On receipt thereof, Gilbert sent the policy by mail to Windmuller at St. Louis, accompanied by a letter stating the amount of the premium, and directing him to deliver the policy to the plaintiff, if acceptable. The policy was accordingly delivered to the plaintiff, who accepted the same without demur.

It is to be observed, in the first place, that Windmuller was not the agent of the defendant company, authorized by it to solicit or make insurance contracts on any property in the state of Minnesota. It was not represented by Windmuller to plaintiff that he had any such agency, nor is there any evidence whatever of any holding out by the defendant Of windmuller as its agent for any purpose. Nor had the plaintiff any ground for supposing that Windmuller was clothed with any such authority. So far as the officers of the company were concerned, there was no recognition of Windmuller in the transaction. And, so far as anything appears on the face of the policy, or from any evidence in this case, it does not appear that the defendant company, at the time it accepted the policy, even knew that the plaintiff was a resident of Missouri. To maintain the proposition that the policy nevertheless became a Missouri contract, it is contended by plaintiff that, as nothing was said between him and Windmuller, at the time of the interview respecting the procuring of this insurance, as to the amount of the premium, and inasmuch as the company wrote into the policy a different rate from that suggested by Windmuller to Gilbert, and inasmuch as Gilbert, after the countersigning, forwarded the policy to Windmuller, to be delivered to plaintiff, if acceptable to him, the contract of insurance did not become consummated until accepted by plaintiff at St. Louis, whereby his acquiescence in the amount of the premium was manifested. This may be conceded; but the question remains, did this mere act of acceptance by plaintiff at St. Louis have the effect in law to make the policy a Missouri contract? I hold that when plaintiff accepted the policy he thereby ratified the acts of Gilbert, the Minnesota agent, and by relation it became operative as a Minnesota contract. The case is distinguishable in its facts from cases like those relied upon by plaintiff's counsel, such as life policies where the assured lived in Missouri, and the insurance was effected through a soliciting agent of the nonresident company where the assured resided, when the policy was forwarded to the local agent to be countersigned and delivered by him to the assured, to become operative on payment of the first premium; as, also, to the class of cases of fire insurance effected through a local agent to be countersigned by him and delivered to the insured. There being nothing on the face of the policy, and the attending circumstances of the transaction, indicating a purpose not to regard it as a contract subject to the laws of the state where the subject-matter of the insurance is situated, the policy providing on its face that it should not be valid until countersigned by the duly-authorized agent of the company at St. Paul, Minn. without any condition respecting the payment of the first premium, why should it be regarded as a Missouri contract? In Golson v. Ebert, 52 Mo. 260-271, it is held that, where the contract is made with an agent in one state, subject to the ratification of the principal in another state, when so ratified it becomes a contract of the state, to be interpreted by its laws where the agent resides. 'It would become binding, not as a new contract made at St. Louis but the contract would become binding as made and where made by the agent, and would have just the same effect as it would have if the agent had been fully authorized to make the contract before it is made, and no ratification is necessary. ' The court further say: 'This contract was made in New Orleans was to be performed in New Orleans, and if it is ratified by defendant it is the contract made and to be performed. Hence we must look to the laws of Louisiana to ascertain its validity. ' Windmuller, as already stated, was not the agent of the insurance company, but acted rather for the plaintiff in sending his application to the company's agent at St. Paul, who countersigned it for the company as its agent, and forwarded it to Windmuller, to be delivered to the plaintiff. Windmuller was thus the mere conduit of delivery, and made so by the plaintiff. The delivery, therefore, was the same in law as if made by Gilbert directly to plaintiff, and therefore the transaction stands in law the same as if plaintiff had made his application directly to the Minnesota agent, and received from him the policy. Hicks v. Insurance Co., 9 C.C.A.215, 60 F. 690; Schwartz v. Insurance Co., 18 Minn. 448 (Gil. 404).

Be this as it may, the further controlling fact appears in this case that the subject of insurance is real property situated in the ...