McGraw v. Germania Fire Ins. Co.
| Decision Date | 18 June 1884 |
| Court | Michigan Supreme Court |
| Parties | MCGRAW v. GERMANIA FIRE INS. CO. |
An insurance company cannot treat a policy as valid so far as premiums are concerned, and bad as to their liability upon it.
Where the agent of a person desiring fire insurance went to the agents of certain companies and asked for a certain amount of insurance, not specifying the companies with which he desired to insure, and they, being unable to give him the amount required in the companies which they represented, went to the agents of another company and took out a policy for him doing all the business, the persons obtaining the insurance not being aware until after they received the policies that they were obtained through other insurance agents also, held that the first insurance agents to whom he went were the agents for all the insurers.
Where the effect of a written contract is made to depend upon contemporaneous verbal representations, they must be made by an actual agent, or one whose action is ratified with knowledge of what he has done.
An agreement partly in writing and partly in parol must stand as written unless varied by authority, and an assured party is not bound to inquire how far unauthorized persons have undertaken to represent him in matters of which he has no notice.
Error to Bay.
Hatch & Cooley and Isaac Marston, for plaintiff.
Hanchett & Stark, for defendant.
So far as the questions raised in the record refer to the proofs of loss, and the attempt at cancellation, we concur in the results arrived at by Judge CHAMPLIN, that there is no error. But we think there is no error in the rulings depending on the supposed agency of the firm of Knaggs, Clark & Plum, under which the court below properly, as we think, excluded any responsibility against McGraw for what they may have done or omitted. It is certainly worthy of some consideration how far those questions could be raised at all under the facts as shown by defendant. The policy in suit, if valid, covered a loss under a previous fire to the one now in question. The defendant's agent, Mr. Stringham, examined the property and risks, and advised the company, who determined and attempted not to repudiate the entire policy, but to cancel what was left of it; and the various notices which they gave, and the steps which they took, were inconsistent with any claim of its invalidity. If they proposed to repudiate, they could not treat it as good so far as premiums were concerned, and bad as to liability. It does not appear, but the inference is otherwise, that the first loss was treated as not binding defendant. The premium offered to be returned was only a portion of that paid for the whole period. Such a transaction would seem to be an affirmance, so far as it is significant at all; and there was never any attempt at rescission; but, as we do not know how far this matter may have been viewed below, we do not propose to do more than refer to it as an element which might have been significant if the other rulings were doubtful.
But, so far as the relations of McGraw with Knaggs, Clark & Plum became important, we do not think they involved such agency as defendant claims. The testimony tended, in our opinion, to prove distinctly that as between McGraw and that firm they represented the insurers and not him. He, by his agent, applied to them for insurance, and in answer to that application obtained the insurance. He paid them all the premiums required on all the policies, and they receipted for the whole in one receipt, and without other discrimination than separating the items belonging to the several policies. He did not become responsible for their compensation. There was nothing tending to show that any one but Mr. Curtis and Mr. Birdsall had authority to represent him. From the business in which this firm was engaged no one would have a right to suppose that they could possibly have personal knowledge of the exact condition of all property that they got insured, or that any policy valid on its face could be fairly charged with their failures in representations. If the policy in suit had been issued on written representations, those would no doubt have formed a part of it, if referred to, and there could then have been no ambiguity about the contract. But where the effect of a written contract is made to depend--if this can legally be done in all cases--upon contemporaneous verbal representations, those must, in our opinion, be made by an actual agent, or one whose action is ratified with knowledge of what he has done. We can see no good reason in law for applying to insurance business any different rules of agency from those which apply elsewhere. No one could contend that these persons were McGraw's agents in those insurances which were obtained from their own companies, although insurance policies sometimes attempt to put their agencies in this anomalous position, as binding the insured in all cases where their conduct might prejudice him, and only representing the company where it will benefit the company.
The companies always have it in their power to have everything material reduced to writing. It is contrary to general practice in other cases to have an agreement partly in writing and partly in parol. If this can lawfully be done, as perhaps it may be, it must nevertheless stand as written, unless varied by authority, and an assured party is not bound to inquire how far unauthorized persons have undertaken to represent him in matters of which he has no notice. The policy refers to property fully identified. He could not be bound to assume or imagine that anything further had been represented about it, except by his own agents, of whose acts he is bound to inform himself. No one would be safe in taking out insurance under any other rule. The insured has a right to know where he stands, and while he takes the risk of his own representations, he cannot be subjected to those of persons whom he has never appointed or recognized.
If we thought there was anything tending to show that Clark and his firm were plaintiff's agents, we could not pass upon the weight of testimony; but we think there is nothing from which any such inference could be raised.
The judgment must be affirmed.
This is an action of assumpsit brought by plaintiff to recover damages upon a policy of insurance. On the twenty-first of April, 1882, the plaintiff and one Charles Wartrous were copartners, composing the firm of T.H. McGraw & Co., which firm were the owners of some 18,000,000 feet of pine saw-logs, then cut and skidded in Bay county, Michigan. The firm had in their employment one Charles C. Curtiss, who was the superintendent of T.H. McGraw & Co. in looking after their affairs generally, and had entire charge of their insurance business. The partners resided in the state of New York, but they had a place of business and an office at Portsmouth, in Bay county, Michigan. About the twenty-first of April, 1882, Curtiss called upon Messrs. Knaggs, Clark & Plum, a firm of insurance agents in Bay City, and requested insurance for T.H. McGraw & Co. upon their saw-logs to the amount of $100,000. They informed him that they did not know what amount they could take, but would write to their companies and ascertain, and take what they could. The Hanover Fire Insurance Company and the Germania Fire Insurance Company were doing business in this state, and were insuring property against loss or damage by fire under what they denominated "Underwriters Policy," and they had an agency at Bay City, and were represented there by Daniel Shannon. The firm of Knaggs, Clark & Plum did not represent the Underwriters, but they applied to Shannon and placed a portion of the risk applied for by T.H. McGraw & Co., through Curtiss, in companies represented by Shannon; and they afterwards delivered to T.H. McGraw & Co. policies of insurance upon their logs to the amount of $50,000, of which the policy in suit was one. Curtiss had no dealings whatever with Shannon, with reference to the issuing of the policy or the risk covered thereby. He paid Messrs. Knaggs, Clark & Plum the premiums upon all the policies received from them, including the policy in suit; and at or previous to applying for the insurance he made no written application, and made no verbal representations, as to the exposure or risk to fire of the property insured. On May 6, 1882, a fire occurred which burned a portion of the logs. Notice was given to the companies of the loss, and adjusters were sent, representing all the companies, defendant included, to adjust the loss, and the adjuster representing the defendant company made out and forwarded to his company proofs of such loss. On May 9, 1882, Wartrous sold his interest in the firm of T.H. McGraw & Co. to his copartner; and on the twenty-fourth of the same month Daniel Shannon, the agent of the Underwriters, indorsed the following consent upon the policy in question, viz.: "The insurance companies within named hereby consent that the interest of Thomas H. McGraw & Co., in the within policy, be assigned to Thomas H. McGraw, subject to all the terms and conditions therein mentioned and set forth." On the same day Curtiss signed the firm name of T.H. McGraw & Co. to the indorsement on the policy as follows: "For value received, we hereby assign, transfer, and set over to Thomas H. McGraw all our right, title, and interest in and to the within policy, and all benefit and advantage to be derived therefrom."
The defendants sent Joseph H. Stringham to ascertain the amount of the loss occasioned by the fire of May 6th. He adjusted the loss for defendant, and made report thereof to...
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McGraw v. Germania Fire Ins. Co.
...54 Mich. 14519 N.W. 927MCGRAWv.GERMANIA FIRE INS. CO.Supreme Court of Michigan.Filed June 18, An insurance company cannot treat a policy as valid so far as premiums are concerned, and bad as to their liability upon it. Where the agent of a person desiring fire insurance went to the agents o......