Karelsen v. Office

• Citation: 122 N.Y. 545,25 N.E. 921
• Parties: KARELSEN et al. v. SUN FIRE OFFICE.
• Decision Date: 02 December 1890
• Court: New York Court of Appeals

122 N.Y. 545

25 N.E. 921

KARELSEN et al.

v.SUN FIRE OFFICE.

Court of Appeals of New York,

Second Division.

Dec. 2, 1890.

Appeal from a judgment of the general term on the supreme court in the first department, entered on an order affirming a judgment entered after a trial at circuit in favor of plaintiff.

L. L. Richards, Jr., for appellant.

Adolph L. Sanger, for respondent.

PARKER, J.

The action was brought to recover $2,500 for loss sustained by the burning of certain stock and machinery belonging to the plaintiffs. It appears that on September 2, 1885, the plaintiffs directed Pell, Wallack & Co., insurance brokers, to procure for them a line of insurance amounting to $10,000. They applied to defendant, and it agreed to take $2,500 of the amount, and signed and delivered to the brokers what is known as a ‘binding slip,’ in which it agreed to insure plaintiffs for twelve months, from September 2, 1885, the slip to be binding until the regular policy of insurance was made out and delivered. Later in the day, defendant sent a messenger to the office of the brokers to inform them that the defendant declined to take the risk, but the office was closed. The day following notice was duly given the brokers, but the time of giving it was a matter of controversy on the trial. On the part of the plaintiffs the broker testified that the notice was not given until about 4 o'clock, while the defendant's evidence was to the effect that it was given not later than half past 1. This discrepancy was of moment, because the fire which consumed the plaintiffs' property broke out shortly after 3 o'clock, and by 4 o'clock had spent its force. The appellant insists that the trial court erred in refusing to dismiss the complaint on the ground that ‘the policy, if it existed at all, was canceled on the 3d of September before the fire.’ The trial court adopted the view that the defendant was powerless to cancel the policy except by giving notice to the plaintiffs; that notice to the brokers was not sufficient. We do not agree with the learned judge in that respect, for, while the binding slip contained none of the conditions usually found in insurance policies, the contract evidenced by it was the ordinary policy of insurance issued by the company. So that, in any construction of the contract, it must be regarded as ‘though it had expressed that the present insurance was under the terms of the usual policy of the company to be thereafter delivered.’ Lipman v. Insurance Co., 121 N. Y. 454, 24 N. E. Rep. 699. By the terms of the regular policy of the company it is agreed that the insurance may be terminated at any time, at the option of the society, on giving notice to that effect, and refunding a ratable proportion of the premium for the unexpired term of the policy. As the premium had not been paid, the company had but to give notice of the termination to the plaintiffs or their authorized agents. The policy further provides ‘that if any broker or other person than the insured has procured this policy, or any renewal thereof, or any indorsement thereon, he shall be deemed to be the agent of the insured, and not of the society, in any transaction relating to the insurance.’ This clause in the policy, together with the facts proven as to the relations existing between the plaintiffs and the brokers, bring this case within the authority of Stone v. Insurance Co., 105 N. Y. 543, 12 N. E. Rep. 45, and establishes that notice of cancellation could have been effectually given to the brokers. The Hermann v. Insurance Co., 100 N. Y. 411, 3 N. E. Rep. 341, is not applicable, for, in that case, the policy had been delivered to the assured, and the authority of the brokers...