Idaho Forwarding Co. v. Fireman's Fund Ins. Co.

• Decision Date: 01 April 1892
• Citation: 29 P. 826,8 Utah 41
• Parties: IDAHO FORWARDING COMPANY, RESPONDENT, v. FIREMAN'S FUND INSURANCE COMPANY, APPELLANT
• Court: Utah Supreme Court

29 P. 826

8 Utah 41

IDAHO FORWARDING COMPANY, RESPONDENT, v. FIREMAN'S FUND INSURANCE COMPANY, APPELLANT

Supreme Court of Utah

April 1, 1892

APPEAL from a judgment of the district court of the first district and from an order refusing a new trial. The opinion states the facts.

Reversed.

Messrs Bennett, Marshall and Bradley, for the appellant.

Mr Albert R. Heywood, for the respondent.

ZANE C. J. ANDERSON, J., and BLACKBURN, J., concurred.

OPINION

ZANE, C. J.:

The respondent alleged in its complaint that on the 1st day of February, 1889, in consideration of $ 46.20 paid as premium, its stock of goods at Hailey, Idaho, was insured in the sum of $ 2,000 by appellant, for one year from the 13th day of the same month, and that on the 2d day of the following July the goods were destroyed by fire. The plaintiff relies upon a contract in proesenti, not a contract to thereafter insure. Albert Kiesel, who had an interest in plaintiff's business, and manager thereof, testified that B. M. Mallory, the agent of both parties, said to him about the last of January or the first of February, 1889, that $ 5,000 of the insurance would expire; that witness told him to renew the insurance, and that he said he would; that the policies of the North British & Mercantile and Fireman's Fund & Commercial Union were about to expire; that Mallory said he would reinsure him in the Fireman's Fund for $ 2,000, in the North British & Mercantile for $ 1,000, and in the Commercial Union for $ 2,000. Witness also said that the insurance was to be for one year, and that the premium was to be $ 2.20 per $ 100. B. M. Mallory, the agent of both plaintiff and defendant, testified that, soon after his employment as bookkeeper, Albert Kiesel, manager of the plaintiff, instructed him to renew all policies upon expiration, and to keep the amount of insurance to $ 14,500, and to pay premiums 60 days after issuance of policies; that he was under the impression that the lapsed policies had been renewed; that his intention was to renew them, but he negligently had allowed them to lapse; that, as cashier of the plaintiff, he was authorized to use its funds to pay premiums, and was directed by plaintiff's manager to do so, and to keep the insurance to $ 14,500. The premium was not paid, but was tendered six days after the stock of goods had been consumed by fire.

The proof is that Mallory, who was cashier of the plaintiff, and who was authorized and instructed by its manager to have its stock of goods insured, and who was also the agent of the defendant, and authorized by it to make contracts of insurance and to issue policies, neglected to do as he was instructed, and what he promised plaintiff's manager he would do. He had an impression, as he said, that the property was insured, and neglected to issue the policy. He was authorized to appropriate plaintiff's money, in his hands as its cashier, to the payment of the premium, but neglected to do that. If he had done so, he would have acted as plaintiff's agent in so doing. At the time of the conversation, about the 1st of February, relied upon to establish the contract declared on, insurance then on the property to be renewed had not expired. It did not expire until the 13th day of that month. It was the duty of Mallory, under the instructions of plaintiff's manager, to continue the risk after the old policy expired by reinsuring, but the evidence shows that he neglected to do this. For the failure to follow plaintiff's orders the defendant cannot be held responsible. It is apparent that Mallory failed to make the contract that he was authorized and instructed by plaintiff to make. An agreement to make a contract at a future day is not the equivalent of the one to be made, or of a present contract, though all the terms to be put in the latter are agreed upon. If one of the parties to the first agreement refuses to bind himself when the time comes, the court may compel a specific performance of it, if from the facts it would be equitable to do so; and if performance is decreed a judgment may be entered in the same case for the amount found to be due the plaintiff on the contract, if any amount is then due the plaintiff by its terms, or an action may be instituted on it if either party refuses to comply with it. By the language used on the 1st of February the defendant did not assume the risk the plaintiff contends that he did. That language had reference to insurance thereafter to be made.

The plaintiff has set up in his complaint a contract in praesenti. This action is not for specific performance. Taylor v. Insurance Co., 47 Wis. 365, 2 N.W. 559, and 3 N.W. 584; Sargent v. Insurance Co., 86 N.Y. 626; Dinning v. Insurance Co., 68 Ill. 414; Markey v. Insurance Co., 118 Mass. 178; Myers v. Insurance Co., 121 Mass. 338; O'Reilly v. Corporation, 101 N.Y. 575, 5 N.E. 568; Commercial National Marine Ins. Co. v. Union Mut. Ins. Co., 60 U.S. 318, 19 HOW 318, 15 L.Ed. 636, cited by counsel for respondent...